A.M. No.
RTJ-92-876 September 19, 1994 Philippines of the lifting by the government of all foreign
STATE PROSECUTORS, complainants,
vs.
JUDGE MANUEL T. MURO, Regional Trial Court, Branch 54,
Manila, respondent.
PER CURIAM:
In assaying the requisite norms for qualifications and eminence of a magistrate,
legal authorities place a premium on how he has complied with his continuing duty
to know the law. A quality thus considered essential to the judicial character is that
of "a man of learning who spends tirelessly the weary hours after midnight
acquainting himself with the great body of traditions and the learning of the law; is
profoundly learned in all the learning of the law; and knows how to use that
learning." 1
Obviously, it is the primary duty of a judge, which he owes to the public and to the
legal profession, to know the very law he is supposed to apply to a given
controversy. He is called upon to exhibit more than just a cursory acquaintance
with the statutes and procedural rules. Party litigants will have great faith in the
administration of justice if judges cannot justly be accused of apparent deficiency
in their grasp of the legal principles. For, service in the judiciary means a
continuous study and research on the law from beginning to end. 2
In a letter-complaint 3 dated August 19, 1992, respondent Judge Manuel T. Muro of
the Regional Trial Court (RTC) of Manila, Branch 54, was charged by State
Prosecutors Nilo C. Mariano, George C. Dee and Paterno V. Tac-an with ignorance
of the law, grave misconduct and violations of Rules 2.01, 3.01 and 3.02 of the
Code of Judicial Conduct, committed as follows:
1. That on August 13, 1992, respondent judge issued an Order
dismissing eleven (11) cases (docketed as Crim. Cases Nos. 92-
101959 to 92- 101969, inclusive) filed by the undersigned
complainant prosecutors (members of the DOJ Panel of
Prosecutors) against the accused Mrs. Imelda Romualdez
Marcos, for Violation of Central Bank Foreign Exchange
Restrictions, as consolidated in CB Circular No. 960, in relation
to the penal provisions of Sec. 34 of R.A. 265, as amended, . . .;
2. That respondent Judge issued his Order solely on the basis of
newspaper reports (August 11, 1992 issues of the Philippine
Daily Inquirer and the Daily Globe) concerning the
announcement on August 10, 1992 by the President of the
exchange restrictions and the arrival at such decision by the
Monetary Board as per statement of Central Bank Governor Jose
Cuisia;
3. That claiming that the reported announcement of the Executive
Department on the lifting of foreign exchange restrictions by two
newspapers which are reputable and of national circulation had
the effect of repealing Central Bank Circular No. 960, as
allegedly supported by Supreme Court decisions . . ., the Court
contended that it was deprived of jurisdiction, and, therefore,
motu, prop(r)io had to dismiss all the eleven cases
aforementioned "for not to do so opens this Court to charges of
trying cases over which it has no more jurisdiction;"
4. That in dismissing aforecited cases on August 13, 1992 on the
basis of a Central Bank Circular or Monetary Board Resolution
which as of date hereof, has not even been officially issued, and
basing his Order/decision on a mere newspaper account of the
advance announcement made by the President of the said fact of
lifting or liberalizing foreign exchange controls, respondent judge
acted prematurely and in indecent haste, as he had no way of
determining the full intent of the new CB Circular or Monetary
Board resolution, and whether the same provided for exception,
as in the case of persons who had pending criminal cases before
the courts for violations of Central Bank Circulars and/or
regulations previously issued on the matter;
5. That respondent Judge's arrogant and cavalier posture in taking
judicial notice purportedly as a matter of public knowledge a
mere newspaper account that the President had announced the
lifting of foreign exchange restrictions as basis for his assailed
order of dismissal is highly irregular, erroneous and misplaced.
For the respondent judge to take judicial notice thereof even
before it is officially released by the Central Bank and its full text
published as required by law to be effective shows his precipitate
action in utter disregard of the fundamental precept of due
process which the People is also entitled to and exposes his gross
ignorance of the law, thereby tarnishing public confidence in the
integrity of the judiciary. How can the Honorable Judge take
judicial notice of something which has not yet come into force
and the contents, shape and tenor of which have not yet been
published and ascertained to be the basis of judicial action? The
Honorable Judge had miserably failed to "endeavor diligently to
 ascertain the facts" in the case at bar contrary to Rule 3.02 of the
Code of Judicial Conduct constituting Grave Misconduct;
6. That respondent Judge did not even ha(ve) the prudence of
requiring first the comment of the prosecution on the effect of
aforesaid Central Bank Circular/Monetary Board resolution on
the pending cases before dismissing the same, thereby denying
the Government of its right to due process;
7. That the lightning speed with which respondent Judge acted to
dismiss the cases may be gleaned from the fact that such
precipitate action was undertaken despite already scheduled
continuation of trial dates set in the order of the court (the
prosecution having started presenting its evidence . . .) dated
August 11, 1992 to wit: August 31, September 3, 10, 21, & 23
and October 1, 1992, all at 9:30 o'clock in the morning, in brazen
disregard of all notions of fair play, thereby depriving the
Government of its right to be heard, and clearly exposing his bias
and partiality; and
8. That, in fact, the motive of respondent Judge in dismissing the
case without even waiting for a motion to quash filed by the
counsel for accused has even placed his dismissal Order suspect.
Pursuant to a resolution of this Court dated September 8, 1992, respondent judge
filed his comment, 4 contending, inter alia, that there was no need to await
publication of the Central Bank (CB) circular repealing the existing law on foreign
exchange controls for the simple reason that the public announcement made by the
President in several newspapers of general circulation lifting foreign exchange
controls was total, absolute, without qualification, and was immediately effective;
that having acted only on the basis of such announcement, he cannot be blamed for
relying on the erroneous statement of the President that the new foreign exchange
rules rendered moot and academic the cases filed against Mrs. Marcos, and which
was corrected only on August 17, 1992 but published in the newspapers on August
18, 1992, and only after respondent judge had issued his order of dismissal dated
August 13, 1992; that the President was ill-advised by his advisers and, instead of
rescuing the Chief Executive from embarrassment by assuming responsibility for
errors in the latter's announcement, they chose to toss the blame for the
consequence of their failures to respondent judge who merely acted on the basis of
the announcements of the President which had become of public knowledge; that
the "saving clause" under CB Circular No. 1353 specifically refers only to pending
actions or investigations involving violations of CB Circular No. 1318, whereas the
eleven cases dismissed involved charges for violations of CB Circular No. 960,
hence the accused cannot be tried and convicted under a law different from that
under which she was charged; that assuming that respondent judge erred in issuing
the order of dismissal, the proper remedy should have been an appeal therefrom but
definitely not an administrative complaint for his dismissal; that a mistake
committed by a judge should not necessarily be imputed as ignorance of the law;
and that a "court can reverse or modify a doctrine but it does not show ignorance of
the justices or judges whose decisions were reversed or modified" because "even
doctrines initiated by the Supreme Court are later reversed, so how much more for
the lower courts?"
He further argued that no hearing was necessary since the prosecution had nothing
to explain because, as he theorized, "What explanation could have been given?
That the President was talking 'through his hat' (to use a colloquialism) and should
not be believed? That I should wait for the publication (as now alleged by
complainants), of a still then non-existent CB circular? . . . As it turned out, CB
Circular No. 3153 (sic) does not affect my dismissal order because the said
circular's so-called saving clause does not refer to CB Circular 960 under which the
charges in the dismissed cases were based;" that it was discretionary on him to take
judicial notice of the facts which are of public knowledge, pursuant to Section 2 of
Rule 129; that the contention of complainants that he acted prematurely and in
indecent haste for basing his order of dismissal on a mere newspaper account is
contrary to the wordings of the newspaper report wherein the President announced
the lifting of controls as an accomplished fact, not as an intention to be effected in
the future, because of the use of the present perfect tense or past tense "has lifted,"
not that he "intends to lift," foreign exchange controls.
Finally, respondent judge asseverates that complainants who are officers of the
Department of Justice, violated Section 6, Rule 140 of the Rules of Court which
provides that "proceedings against judges of first instance shall be private and
confidential" when they caused to be published in the newspapers the filing of the
present administrative case against him; and he emphasizes the fact that he had to
immediately resolve a simple and pure legal matter in consonance with the
admonition of the Supreme Court for speedy disposition of cases.
In their reply 5 and supplemental reply, 6 complainants aver that although the saving
clause under Section 16 of CB Circular No. 1353 made specific reference to CB
Circular No. 1318, it will be noted that Section 111 of Circular No. 1318, which
contains a saving clause substantially similar to that of the new circular, in turn
refers to and includes Circular No. 960. Hence, whether under Circular No. 1318 or
Circular No. 1353, pending cases involving violations of Circular No. 960 are
excepted from the coverage thereof. Further, it is alleged that the precipitate
dismissal of the eleven cases, without according the prosecution the opportunity to
file a motion to quash or a comment, or even to show cause why the cases against
accused Imelda R. Marcos should not be dismissed, is clearly reflective of
respondent's partiality and bad faith. In effect, respondent judge acted as if he were
the advocate of the accused.
On December 9, 1993, this Court issued a resolution referring the complaint to the
Office of the Court Administrator for evaluation, report and recommendation,
pursuant to Section 7, Rule 140 of the Rules of Court, as revised, there being no
factual issues involved. The corresponding report and recommendation, 7 dated
February 14, 1994, was submitted by Deputy Court Administrator Juanito A.
Bernad, with the approval of Court Administrator Ernani Cruz-Paño.
The questioned order 8 of respondent judge reads as follows:
These eleven (11) cases are for Violation of Central Bank Foreign
Exchange Restrictions as consolidated in CB Circular No. 960 in
relation to the penal provision of Sec. 34 of R.A. 265, as
amended.
The accused Mrs. Imelda R. Marcos pleaded not guilty to all
these cases; apparently the other accused in some of these cases,
Roberto S. Benedicto, was not arrested and therefore the Court
did not acquire jurisdiction over his person; trial was commenced
as against Mrs. Marcos.
His Excellency, the President of the Philippines, announced on
August 10, 1992 that the government has lifted all foreign
exchange restrictions and it is also reported that Central Bank
Governor Jose Cuisia said that the Monetary Board arrived at
such decision (issue of the Philippine Daily Inquirer, August 11,
1992 and issue of the Daily Globe of the same date). The Court
has to give full confidence and credit to the reported
announcement of the Executive Department, specially from the
highest official of that department; the Courts are charged with
judicial notice of matters which are of public knowledge, without
introduction of proof, the announcement published in at least the
two newspapers cited above which are reputable and of national
circulation.
Per several cases decided by the Supreme Court (People vs.
Alcaras, 56 Phil. 520, People vs. Francisco, 56 Phil. 572, People
vs. Pastor, 77 Phil. 1000, People vs. Crisanto Tamayo, 61 Phil.
225), among others, it was held that the repeal of a penal law
without re-enactment extinguishes the right to prosecute or
punish the offense committed under the old law and if the law
repealing the prior penal law fails to penalize the acts which
constituted the offense defined and penalized in the repealed law,
the repealed law carries with it the deprivation of the courts of
jurisdiction to try, convict and sentence persons charged with
violations of the old law prior to its repeal. Under the aforecited
decisions this doctrine applies to special laws and not only to the
crimes punishable in the Revised Penal Code, such as the Import
Control Law. The Central Bank Circular No. 960 under which the
accused Mrs. Marcos is charged is considered as a penal law
because violation thereof is penalized with specific reference to
the provision of Section 34 of Republic Act 265, which penalizes
violations of Central Bank Circular No. 960, produces the effect
cited in the Supreme Court decisions and since according to the
decisions that repeal deprives the Court of jurisdiction, this
Court motu proprio dismisses all the eleven (11) cases as a
forestated in the caption, for not to do so opens this Court to
charges of trying cases over which it has no more jurisdiction.
This order was subsequently assailed in a petition for certiorari filed with the Court
of Appeals, entitled "People of the Philippines vs. Hon. Manuel T. Muro, Judge,
RTC of Manila, Br. 54 and Imelda R. Marcos," docketed as CA-G.R. SP No.
29349. When required to file her comment, private respondent Marcos failed to file
any. Likewise, after the appellate court gave due course to the petition, private
respondent was ordered, but again failed despite notice, to file an answer to the
petition and to show cause why no writ of preliminary injunction should issue.
Eventually, on April 29, 1993, the Court of Appeals rendered a decision 9 setting
aside the order of August 13, 1992, and reinstating Criminal Cases Nos. 92-101959
to 92-101969.
In finding that respondent judge acted in excess of jurisdiction and with grave
abuse of discretion in issuing the order of dismissal, the appellate court held that:
The order was issued motu proprio, i.e., without any motion to
dismiss filed by counsel for the accused, without giving an
opportunity for the prosecution to be heard, and solely on the
basis of newspaper reports announcing that the President has
lifted all foreign exchange restrictions.
The newspaper report is not the publication required by law in
order that the enactment can become effective and binding. Laws
take effect after fifteen days following the completion of their
publication in the Official Gazette or in a newspaper of general
circulation unless it is otherwise provided (Section 1, Executive
Order No. 200). The full text of CB Circular 1353, series of 1992,
entitled "Further Liberalizing Foreign Exchange Regulation" was
 published in the August 27, 1992 issue of the Manila Chronicle,
the Philippine Star and the Manila Bulletin. Per certification of
the CB Corporate Affairs Office, CB Circular No. 1353 took
effect on September 2 . . . .
Considering that respondent judge admittedly had not seen the
official text of CB Circular No. 1353, he was in no position to
rule judiciously on whether CB Circular No. 960, under which
the accused Mrs. Marcos is charged, was already repealed by CB
Circular No. 1353. . . .
xxx xxx xxx
A cursory reading of the . . . provision would have readily shown
that the repeal of the regulations on non-trade foreign exchange
transactions is not absolute, as there is a provision that with
respect to violations of former regulations that are the subject of
pending actions or investigations, they shall be governed by the
regulations existing at the time the cause of action (arose). Thus
his conclusion that he has lost jurisdiction over the criminal cases
is precipitate and hasty. Had he awaited the filing of a motion to
dismiss by the accused, and given opportunity for the prosecution
to comment/oppose the same, his resolution would have been the
result of deliberation, not speculation.
I. The doctrine of judicial notice rests on the wisdom and discretion of the courts.
The power to take judicial notice is to be exercised by courts with caution; care
must be taken that the requisite notoriety exists; and every reasonable doubt on the
subject should be promptly resolved in the negative. 10
Generally speaking, matters of judicial notice have three material requisites: (1) the
matter must be one of common and general knowledge; (2) it must be well and
authoritatively settled and not doubtful or uncertain; and (3) it must be known to be
within the limits of the jurisdiction of the court. 11 The provincial guide in
determining what facts may be assumed to be judicially known is that of
notoriety. 12 Hence, it can be said that judicial notice is limited to facts evidenced
by public records and facts of general notoriety. 13
To say that a court will take judicial notice of a fact is merely another way of
saying that the usual form of evidence will be dispensed with if knowledge of the
fact can be otherwise acquired. 14 This is because the court assumes that the matter
is so notorious that it will not be disputed. 15 But judicial notice is not judicial
knowledge. The mere personal knowledge of the judge is not the judicial
knowledge of the court, and he is not authorized to make his individual knowledge
of a fact, not generally or professionally known, the basis of his action. Judicial
cognizance is taken only of those matters which are "commonly" known. 16
Things of "common knowledge," of which courts take judicial notice, may be
matters coming to the knowledge of men generally in the course of the ordinary
experiences of life, or they may be matters which are generally accepted by
mankind as true and are capable of ready and unquestioned demonstration. 17 Thus,
facts which are universally known, and which may be found in encyclopedias,
dictionaries or other publications, are judicially noticed, provided they are of such
universal notoriety and so generally understood that they may be regarded as
forming part of the common knowledge of every person. 18
Respondent judge, in the guise of exercising discretion and on the basis of a mere
newspaper account which is sometimes even referred to as hearsay evidence twice
removed, took judicial notice of the supposed lifting of foreign exchange controls,
a matter which was not and cannot be considered of common knowledge or of
general notoriety. Worse, he took cognizance of an administrative regulation which
was not yet in force when the order of dismissal was issued. Jurisprudence dictates
that judicial notice cannot be taken of a statute before it becomes effective. 19 The
reason is simple. A law which is not yet in force and hence, still inexistent, cannot
be of common knowledge capable of ready and unquestionable demonstration,
which is one of the requirements before a court can take judicial notice of a fact.
Evidently, it was impossible for respondent judge, and it was definitely not proper
for him, to have taken cognizance of CB Circular No. 1353, when the same was not
yet in force at the time the improvident order of dismissal was issued.
II. Central Bank Circular No. 1353, which took effect on September 1, 1992,
further liberalized the foreign exchange regulations on receipts and disbursements
of residents arising from non-trade and trade transactions. Section 16 thereof
provides for a saving clause, thus:
Sec. 16. Final Provisions of CB Circular No. 1318. - All the
provisions in Chapter X of CB Circular No. 1318 insofar as they
are not inconsistent with, or contrary to the provisions of this
Circular, shall remain in full force and effect: Provided, however,
that any regulation on non-trade foreign exchange transactions
which has been repealed, amended or modified by this Circular,
violations of which are the subject of pending actions or
investigations, shall not be considered repealed insofar as such
pending actions or investigations are concerned, it being
understood that as to such pending actions or investigations, the
regulations existing at the time the cause of action accrued shall
govern.
Respondent judge contends that the saving clause refers only to the provisions of
Circular No. 1318, whereas the eleven criminal cases he dismissed involve a
violation of CB Circular No. 960. Hence, he insists, Circular No. 960 is deemed
repealed by the new circular and since the former is not covered by the saving
clause in the latter, there is no more basis for the charges involved in the criminal
cases which therefore warrant a dismissal of the same. The contention is patently
unmeritorious.
Firstly, the second part of the saving clause in Circular No. 1353 explicitly provides
that "any regulation on non-trade foreign transactions which has been repealed,
amended or modified by this Circular, violations of which are the subject of
pending actions or investigations, shall not be considered repealed insofar as such
pending actions or investigations are concerned, it being understood that as to such
pending actions or investigations, the regulations existing at the time the cause of
action accrued shall govern." The terms of the circular are clear and unambiguous
and leave no room for interpretation. In the case at bar, the accused in the eleven
cases had already been arraigned, had pleaded not guilty to the charges of
violations of Circular No. 960, and said cases had already been set for trial when
Circular No. 1353 took effect. Consequently, the trial court was and is supposed to
proceed with the hearing of the cases in spite of the existence of Circular No. 1353.
Secondly, had respondent judge only bothered to read a little more carefully the
texts of the circulars involved, he would have readily perceived and known that
Circular No. 1318 also contains a substantially similar saving clause as that found
in Circular No. 1353, since Section 111 of the former provides:
Sec. 111. Repealing clause. - All existing provisions of Circulars
365, 960 and 1028, including amendments thereto, with the
exception of the second paragraph of Section 68 of Circular
1028, as well as all other existing Central Bank rules and
regulations or parts thereof, which are inconsistent with or
contrary to the provisions of this Circular, are hereby repealed or
modified accordingly: Provided, however, that regulations,
violations of which are the subject of pending actions or
investigations, shall be considered repealed insofar as such
pending actions or investigations are concerned, it being
understood that as to such pending actions or investigations, the
regulations existing at the time the cause of action accrued shall
govern.
It unequivocally appears from the section above quoted that although Circular No.
1318 repealed Circular No. 960, the former specifically excepted from its purview
all cases covered by the old regulations which were then pending at the time of the
passage of the new regulations. Thus, any reference made to Circular No. 1318
necessarily involves and affects Circular No. 960.
III. It has been said that next in importance to the duty of rendering a righteous
judgment is that of doing it in such a manner as will beget no suspicion of the
fairness and integrity of the judge. 20 This means that a judge should not only
render a just, correct and impartial decision but should do so in such a manner as to
be free from any suspicion as to its fairness and impartiality and as to his integrity.
While a judge should possess proficiency in law in order that he can competently
construe and enforce the law, it is more important that he should act and behave in
such a manner that the parties before him should have confidence in his
impartiality. Thus, it is not enough that he decides cases without bias and
favoritism. Nor is it sufficient that he in fact rids himself of prepossessions. His
actuations should moreover inspire that belief. Like Caesar's wife, a judge must not
only be pure but beyond suspicion. 21
Moreover, it has always heretofore been the rule that in disposing of controverted
cases, judges should show their full understanding of the case, avoid the suspicion
of arbitrary conclusion, promote confidence in their intellectual integrity and
contribute useful precedents to the growth of the law. 22 A judge should be mindful
that his duty is the application of general law to particular instances, that ours is a
government of laws and not of men, and that he violates his duty as a minister of
justice under such a system if he seeks to do what he may personally consider
substantial justice in a particular case and disregards the general law as he knows it
to be binding on him. Such action may have detrimental consequences beyond the
immediate controversy. He should administer his office with due regard to the
integrity of the system of the law itself, remembering that he is not a depository of
arbitrary power, but a judge under the sanction of the law. 23 These are immutable
principles that go into the very essence of the task of dispensing justice and we see
no reason why they should not be duly considered in the present case.
The assertion of respondent judge that there was no need to await publication of
Circular No. 1353 for the reason that the public announcement made by the
President in several newspapers of general circulation lifting foreign exchange
controls is total, absolute, without qualification, and immediately effective, is
beyond comprehension. As a judge of the Regional Trial Court of Manila,
respondent is supposed to be well-versed in the elementary legal mandates on the
publication of laws before they take effect. It is inconceivable that respondent
should insist on an altogether different and illogical interpretation of an established
and well-entrenched rule if only to suit his own personal opinion and, as it were, to
defend his indefensible action. It was not for him to indulge or even to give the
appearance of catering to the at-times human failing of yielding to first
impressions. 24 He having done so, in the face of the foregoing premises, this Court
is hard put to believe that he indeed acted in good faith.
IV. This is not a simple case of a misapplication or erroneous interpretation of the
law. The very act of respondent judge in altogether dismissing sua sponte the
eleven criminal cases without even a motion to quash having been filed by the
accused, and without at least giving the prosecution the basic opportunity to be
heard on the matter by way of a written comment or on oral argument, is not only a
blatant denial of elementary due process to the Government but is palpably
indicative of bad faith and partiality.
The avowed desire of respondent judge to speedily dispose of the cases as early as
possible is no license for abuse of judicial power and discretion, 25 nor does such
professed objective, even if true, justify a deprivation of the prosecution's right to
be heard and a violation of its right to due process of
law. 26
The lightning speed, to borrow the words of complainants, with which respondent
judge resolved to dismiss the cases without the benefit of a hearing and without
reasonable notice to the prosecution inevitably opened him to suspicion of having
acted out of partiality for the accused. Regardless of how carefully he may have
evaluated changes in the factual situation and legal standing of the cases, as a result
of the newspaper report, the fact remains that he gave the prosecution no chance
whatsoever to show or prove that it had strong evidence of the guilt of the accused.
To repeat, he thereby effectively deprived the prosecution of its right to due
process. 27 More importantly, notwithstanding the fact that respondent was not sure
of the effects and implications of the President's announcement, as by his own
admission he was in doubt whether or not he should dismiss the cases, 28 he
nonetheless deliberately refrained from requiring the prosecution to comment
thereon. In a puerile defense of his action, respondent judge can but rhetorically
ask: "What explanation could have been given? That the President was talking
'through his hat' and should not be believed? That I should wait for the publication
of a still then non- existent CB Circular?" The pretended cogency of this
ratiocination cannot stand even the minutest legal scrutiny.
In order that bias may not be imputed to a judge, he should have the patience and
circumspection to give the opposing party a chance to present his evidence even if
he thinks that the oppositor's proofs might not be adequate to overthrow the case
for the other party. A display of petulance and impatience in the conduct of the trial
is a norm of conduct which is inconsistent with the "cold neutrality of an impartial
judge." 29 At the very least, respondent judge acted injudiciously and with
unjustified haste in the outright dismissal of the eleven cases, and thereby rendered
his actuation highly dubious.
V. It bears stressing that the questioned order of respondent judge could have
seriously and substantially affected the rights of the prosecution had the accused
invoked the defense of double jeopardy, considering that the dismissal was ordered
after arraignment and without the consent of said accused. This could have
spawned legal complications and inevitable delay in the criminal proceedings, were
it not for the holding of the Court of Appeals that respondent judge acted with
grave abuse of discretion amounting to lack of jurisdiction. This saved the day for
the People since in the absence of jurisdiction, double jeopardy will not set in. To
stress this point, and as a caveat to trial courts against falling into the same judicial
error, we reiterate what we have heretofore declared:
It is settled doctrine that double jeopardy cannot be invoked
against this Court's setting aside of the trial court's judgment of
dismissal or acquittal where the prosecution which represents the
sovereign people in criminal cases is denied due process. . . . .
Where the prosecution is deprived of a fair opportunity to
prosecute and prove its case, its right to due process is thereby
violated.
The cardinal precept is that where there is a violation of basic
constitutional rights, courts are ousted of their jurisdiction. Thus,
the violation of the State's right to due process raises a serious
jurisdictional issue . . . which cannot be glossed over or
disregarded at will. Where the denial of the fundamental right of
due process is apparent, a decision rendered in disregard of that
right is void for lack of jurisdiction . . . . 30
It is also significant that accused Marcos, despite due notice, never submitted either
her comment on or an answer to the petition for certiorari as required by the Court
of Appeals, nor was double jeopardy invoked in her defense. This serves to further
underscore the fact that the order of dismissal was clearly unjustified and
erroneous. Furthermore, considering that the accused is a prominent public figure
with a record of influence and power, it is not easy to allay public skepticism and
suspicions on how said dismissal order came to be, to the consequent although
undeserved discredit of the entire judiciary.
VI. To hold a judge liable for rendering a manifestly unjust order through
inexcusable negligence or ignorance, it must be clearly shown that although he has
acted without malice, he failed to observe in the performance of his duty that
diligence, prudence and care which the law is entitled to exact in the rendering of
any public service. Negligence and ignorance are inexcusable if they imply a
manifest injustice which cannot be explained by a reasonable interpretation, and
even though there is a misunderstanding or error of the law applied, it nevertheless
results logically and reasonably, and in a very clear and indisputable manner, in the
notorious violation of the legal precept. 31
In the present case, a cursory perusal of the comment filed by respondent judge
reveals that no substantial argument has been advanced in plausible justification of
his act. He utterly failed to show any legal, factual, or even equitable justification
for the dismissal of the eleven criminal cases. The explanation given is no
explanation at all. The strained and fallacious submissions therein do not speak
well of respondent and cannot but further depreciate his probity as a judge. On this
point, it is best that pertinent unedited excerpts from his comment 32 be quoted by
way of graphic illustration and emphasis:
On the alleged ignorance of the law imputed to me, it is said that
I issued the Order dismissing the eleven (11) cases against Mrs.
Imelda R. Marcos on the basis of newspaper reports referred to in
paragraph 2 of the letter complaint without awaiting the official
publication of the Central Bank Circular. Ordinarily a Central
Bank Circular/Resolution must be published in the Official
Gazette or in a newspaper of general circulation, but the lifting of
"all foreign exchange controls" was announced by the President
of the Philippines WITHOUT QUALIFICATIONS; as published
in the Daily Globe, August 11, 1992" the government has lifted
ALL foreign exchange controls," and in the words of the
Philippine Daily Inquirer report of the same date "The
government yesterday LIFTED the LAST remaining restrictions
on foreign exchange transactions, . . ." (emphasis in both
quotations supplied) not only the President made the
announcement but also the Central Bank Governor Jose Cuisia
joined in the announcement by saying that "the Monetary Board
arrived at the decision after noting how the "partial liberalization"
initiated early this year worked."
Therefore, because of the ABSOLUTE lifting of ALL restrictions
on foreign exchange transactions, there was no need to await the
publication of the repealing circular of the Central Bank. The
purpose of requiring publication of laws and administrative rules
affecting the public is to inform the latter as to how they will
conduct their affairs and how they will conform to the laws or the
rules. In this particular case, with the total lifting of the controls,
there is no need to await publication. It would have been different
if the circular that in effect repealed Central Bank Circular No.
960, under which the accused was charged in the cases dismissed
by me, had provided for penalties and/or modified the provisions
of said Circular No. 960.
The Complainants state that the lifting of controls was not yet in
force when I dismissed the cases but it should be noted that in the
report of the two (2) newspapers aforequoted, the President's
announcement of the lifting of controls was stated in the present
perfect tense (Globe) or past tense (Inquirer). In other words, it
has already been lifted; the announcement did not say that the
government INTENDS to lift all foreign exchange restrictions
but instead says that the government "has LIFTED all foreign
exchange controls," and in the other newspaper cited above, that
"The government yesterday lifted the last remaining restrictions
on foreign exchange transactions". The lifting of the last
remaining exchange regulations effectively cancelled or repealed
Circular No. 960.
The President, who is the Chief Executive, publicly announced
the lifting of all foreign exchange regulations. The President has
within his control directly or indirectly the Central Bank of the
Philippines, the Secretary of Finance being the Chairman of the
Monetary Board which decides the policies of the Central Bank.
No official bothered to correct or qualify the President's
announcement of August 10, published the following day, nor
made an announcement that the lifting of the controls do not
apply to cases already pending, not until August 17 (the fourth
day after my Order, and the third day after report of said order
was published) and after the President said on August 17,
reported in the INQUIRER's issue of August 18, 1992, that the
"new foreign exchange rules have nullified government cases
against Imelda R. Marcos, telling reporters that the charges
against the widow of former President Marcos "have become
moot and academic" because of new ruling(s) which allow free
flow of currency in and out of the country" (Note, parenthetically,
the reference to "new rules" not to "rules still to be drafted"). The
INQUIRER report continues: "A few hours later, presidential
spokeswoman Annabelle Abaya said, RAMOS (sic) had
"corrected himself'." "He had been belatedly advised by the
Central Bank Governor Jose Cuisia and Justice Secretary
Franklin Drilon that the Monetary Board Regulation excluded
from its coverage all criminal cases pending in court and such a
position shall stand legal scrutiny', Mrs. Abaya, said."
I will elaborate on two points:
1. If the President was wrong in making the August 10
announcement (published in August 11, 1992, newspapers) and in
the August 17 announcement, SUPRA, and thus I should have
 relied on the Presidential announcements, and there is basis to
conclude that the President was at the very least ILL-SERVED by
his financial and legal advisers, because no one bothered to
advise the President to correct his announcements, not until
August 17, 1992, a few hours after the President had made
another announcement as to the charges against Imelda Marcos
having been rendered moot and academic. The President has a lot
of work to do, and is not, to my knowledge, a financier,
economist, banker or lawyer. It therefore behooved his subalterns
to give him timely (not "belated") advice, and brief him on
matters of immediate and far-reaching concerns (such as the
lifting of foreign exchange controls, designed, among others to
encourage the entry of foreign investments). Instead of rescuing
the Chief Executive from embarrassment by assuming
responsibility for errors in the latter's announcement, these
advisers have chosen to toss the blame for the consequence of
their failing to me, who only acted on the basis of announcements
of their Chief, which had become of public knowledge.
xxx xxx xxx
The Court strongly feels that it has every right to assume and expect that
respondent judge is possessed with more than ordinary credentials and
qualifications to merit his appointment as a presiding judge in the Regional Trial
Court of the National Capital Judicial Region, stationed in the City of Manila itself.
It is, accordingly, disheartening and regrettable to note the nature of the arguments
and the kind of logic that respondent judge would want to impose on this Court
notwithstanding the manifest lack of cogency thereof. This calls to mind similar
scenarios and how this Court reacted thereto.
In one case, an RTC Judge was administratively charged for acquitting the accused
of a violation of CB Circular No. 960 despite the fact that the accused was
apprehended with US$355,349.00 while boarding a plane for Hongkong,
erroneously ruling that the State must first prove criminal intent to violate the law
and benefit from the illegal act, and further ordering the return of US$3,000.00 out
of the total amount seized, on the mistaken interpretation that the CB circular
exempts such amount from seizure. Respondent judge therein was ordered
dismissed from the government service for gross incompetence and ignorance of
the law. 33
Subsequently, the Court dismissed another RTC judge, with forfeiture of retirement
benefits, for gross ignorance of the law and for knowingly rendering an unjust
order or judgment when he granted bail to an accused charged with raping an 11-
year old girl, despite the contrary recommendation of the investigating judge, and
thereafter granted the motion to dismiss the case allegedly executed by the
complainant. 34
Similarly, an RTC judge who was described by this Court as one "who is ignorant
of fairly elementary and quite familiar legal principles and administrative
regulations, has a marked penchant for applying unorthodox, even strange theories
and concepts in the adjudication of controversies, exhibits indifference to and even
disdain for due process and the rule of law, applies the law whimsically,
capriciously and oppressively, and displays bias and impartiality," was dismissed
from the service with forfeiture of all retirement benefits and with prejudice to
reinstatement in any branch of the government or any of its agencies or
instrumentalities. 35
Still in another administrative case, an RTJ judge was also dismissed by this Court
for gross ignorance of the law after she ordered, in a probate proceeding, the
cancellation of the certificates of title issued in the name of the complainant,
without affording due process to the latter and other interested parties. 36
Only recently, an RTC judge who had been reinstated in the service was dismissed
after he acquitted all the accused in four criminal cases for illegal possession of
firearms, on the ground that there was no proof of malice or deliberate intent on the
part of the accused to violate the law. The Court found him guilty of gross
ignorance of the law, his error of judgment being almost deliberate and tantamount
to knowingly rendering an incorrect and unjust judgment. 37
ACCORDINGLY, on the foregoing premises and considerations, the Court finds
respondent Judge Manuel T. Muro guilty of gross ignorance of the law. He is
hereby DISMISSED from the service, such dismissal to carry with it cancellation
of eligibility, forfeiture of leave credits and retirement benefits, and disqualification
from reemployment in the government service. 38
Respondent is hereby ordered to CEASE and DESIST immediately from rendering
any judgment or order, or continuing any judicial action or proceeding whatsoever,
effective upon receipt of this decision.
SO ORDERED.
G.R. No. 104235 November 18, 1993

SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA

ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD AIRLINES,
INC., respondents.

Sycip, Salazar, Hernandez, Gatmaitan for petitioners.

Quisumbing, Torres & Evangelista for private-respondent.

NOCON, J.:

Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate them in TWA

Flight 007 departing from New York to Los Angeles on June 6, 1984 despite
possession of confirmed tickets, petitioners filed an action for damages before the
Regional Trial Court of Makati, Metro Manila, Branch 145. Advocating petitioner's
position, the trial court categorically ruled that respondent TransWorld Airlines
(TWA) breached its contract of carriage with petitioners and that said breach was
"characterized by bad faith." On appeal, however, the appellate court found that
while there was a breach of contract on respondent TWA's part, there was neither
fraud nor bad faith because under the Code of Federal Regulations by the Civil
Aeronautics Board of the United States of America it is allowed to overbook
flights.

The factual backdrop of the case is as follows:

Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter,

Liana Zalamea, purchased three (3) airline tickets from the Manila agent of
respondent TransWorld Airlines, Inc. for a flight to New York to Los Angeles on
June 6, 1984. The tickets of petitioners-spouses were purchased at a discount of
75% while that of their daughter was a full fare ticket. All three tickets represented
confirmed reservations.

While in New York, on June 4, 1984, petitioners received notice of the

reconfirmation of their reservations for said flight. On the appointed date, however,
petitioners checked in at 10:00 a.m., an hour earlier than the scheduled flight at
11:00 a.m. but were placed on the wait-list because the number of passengers who
had checked in before them had already taken all the seats available on the flight.
Liana Zalamea appeared as the No. 13 on the wait-list while the two other
Zalameas were listed as "No. 34, showing a party of two." Out of the 42 names on
the wait list, the first 22 names were eventually allowed to board the flight to Los
Angeles, including petitioner Cesar Zalamea. The two others, on the other hand, at
No. 34, being ranked lower than 22, were not able to fly. As it were, those holding
full-fare tickets were given first priority among the wait-listed passengers. Mr.
Zalamea, who was holding the full-fare ticket of his daughter, was allowed to board
the plane; while his wife and daughter, who presented the discounted tickets were
denied boarding. According to Mr. Zalamea, it was only later when he discovered
the he was holding his daughter's full-fare ticket.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could
not be accommodated because it was also fully booked. Thus, they were
constrained to book in another flight and purchased two tickets from American
Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners filed an action for damages based
on breach of contract of air carriage before the Regional Trial Court of Makati,
Metro Manila, Branch 145. As aforesaid, the lower court ruled in favor of
petitioners in its decision 1 dated January 9, 1989 the dispositive portion of which
states as follows:
WHEREFORE, judgment is hereby rendered ordering the
defendant to pay plaintiffs the following amounts:
(1) US $918.00, or its peso equivalent at the time of payment
representing the price of the tickets bought by Suthira and Liana
Zalamea from American Airlines, to enable them to fly to Los
Angeles from New York City;
(2) US $159.49, or its peso equivalent at the time of payment,
representing the price of Suthira Zalamea's ticket for TWA Flight
007;
(3) Eight Thousand Nine Hundred Thirty-Four Pesos and Fifty
Centavos (P8,934.50, Philippine Currency, representing the price
of Liana Zalamea's ticket for TWA Flight 007,
(4) Two Hundred Fifty Thousand Pesos (P250,000.00),
Philippine Currency, as moral damages for all the plaintiffs'
(5) One Hundred Thousand Pesos (P100,000.00), Philippine
Currency, as and for attorney's fees; and
(6) The costs of suit.
SO ORDERED. 2
On appeal, the respondent Court of Appeals held that moral damages are
recoverable in a damage suit predicated upon a breach of contract of
carriage only where there is fraud or bad faith. Since it is a matter of record that
overbooking of flights is a common and accepted practice of airlines in the United
States and is specifically allowed under the Code of Federal Regulations by the
Civil Aeronautics Board, no fraud nor bad faith could be imputed on respondent
TransWorld Airlines.
Moreover, while respondent TWA was remiss in not informing petitioners that the
flight was overbooked and that even a person with a confirmed reservation may be
denied accommodation on an overbooked flight, nevertheless it ruled that such
omission or negligence cannot under the circumstances be considered to be so
gross as to amount to bad faith.
Finally, it also held that there was no bad faith in placing petitioners in the wait-list
along with forty-eight (48) other passengers where full-fare first class tickets were
given priority over discounted tickets.
The dispositive portion of the decision of respondent Court of Appeals3 dated
October 25, 1991 states as follows:
WHEREFORE, in view of all the foregoing, the decision under
review is hereby MODIFIED in that the award of moral and
exemplary damages to the plaintiffs is eliminated, and the
defendant-appellant is hereby ordered to pay the plaintiff the
following amounts:
(1) US$159.49, or its peso equivalent at the time of the payment,
representing the price of Suthira Zalamea's ticket for TWA Flight
007;
(2) US$159.49, or its peso equivalent at the time of the payment,
representing the price of Cesar Zalamea's ticket for TWA Flight
007;
(3) P50,000.00 as and for attorney's fees.
 (4) The costs of suit.
SO ORDERED.4
Not satisfied with the decision, petitioners raised the case on petition for review
on certiorari and alleged the following errors committed by the respondent Court
of Appeals, to wit:
I.
. . . IN HOLDING THAT THERE WAS NO FRAUD OR BAD
FAITH ON THE PART OF RESPONDENT TWA BECAUSE IT
HAS A RIGHT TO OVERBOOK FLIGHTS.
II.
. . . IN ELIMINATING THE AWARD OF EXEMPLARY
DAMAGES.
III.
. . . IN NOT ORDERING THE REFUND OF LIANA
ZALAMEA'S TWA TICKET AND PAYMENT FOR THE
AMERICAN AIRLINES
TICKETS.5
That there was fraud or bad faith on the part of respondent airline when it did not
allow petitioners to board their flight for Los Angeles in spite of confirmed tickets
cannot be disputed. The U.S. law or regulation allegedly authorizing overbooking
has never been proved. Foreign laws do not prove themselves nor can the courts
take judicial notice of them. Like any other fact, they must be alleged and
proved.6 Written law 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 with a certificate that such officer has custody. The certificate
may be made by a secretary of an 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.7
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its
customer service agent, in her deposition dated January 27, 1986 that the Code of
Federal Regulations of the Civil Aeronautics Board allows overbooking. Aside
from said statement, no official publication of said code was presented as evidence.
Thus, respondent court's finding that overbooking is specifically allowed by the US
Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not
applicable to the case at bar in accordance with the principle of lex loci
contractus which require that the law of the place where the airline ticket was
issued should be applied by the court where the passengers are residents and
nationals of the forum and the ticket is issued in such State by the defendant
airline.8 Since the tickets were sold and issued in the Philippines, the applicable law
in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith,
entitling the passengers concerned to an award of moral damages. In Alitalia
Airways v. Court of Appeals,9 where passengers with confirmed bookings were
refused carriage on the last minute, this Court held that when an airline issues a
ticket to a passenger confirmed on a particular flight, on a certain date, a contract of
carriage arises, and the passenger has every right to expect that he would fly on that
flight and on that date. If he does not, then the carrier opens itself to a suit for
breach of contract of carriage. Where an airline had deliberately overbooked, it
took the risk of having to deprive some passengers of their seats in case all of them
would show up for the check in. For the indignity and inconvenience of being
refused a confirmed seat on the last minute, said passenger is entitled to an award
of moral damages.
Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where private
respondent was not allowed to board the plane because her seat had already been
given to another passenger even before the allowable period for passengers to
check in had lapsed despite the fact that she had a confirmed ticket and she had
arrived on time, this Court held that petitioner airline acted in bad faith in violating
private respondent's rights under their contract of carriage and is therefore liable for
the injuries she has sustained as a result.
In fact, existing jurisprudence abounds with rulings where the breach of contract of
carriage amounts to bad faith. In Pan American World Airways, Inc. v. Intermediate
Appellate Court, 11 where a would-be passenger had the necessary ticket, baggage
claim and clearance from immigration all clearly and unmistakably showing that
she was, in fact, included in the passenger manifest of said flight, and yet was
denied accommodation in said flight, this Court did not hesitate to affirm the lower
court's finding awarding her damages.
A contract to transport passengers is quite different in kind and degree from any
other contractual relation. So ruled this Court in Zulueta v. Pan American World
Airways, Inc. 12 This is so, for a contract of carriage generates a relation attended
with public duty — a duty to provide public service and convenience to its
passengers which must be paramount to self-interest or enrichment. Thus, it was
also held that the switch of planes from Lockheed 1011 to a smaller Boeing 707
because there were only 138 confirmed economy class passengers who could very
well be accommodated in the smaller planes, thereby sacrificing the comfort of its
first class passengers for the sake of economy, amounts to bad faith. Such
inattention and lack of care for the interest of its passengers who are entitled to its
utmost consideration entitles the passenger to an award of moral damages. 13
Even on the assumption that overbooking is allowed, respondent TWA is still guilty
of bad faith in not informing its passengers beforehand that it could breach the
contract of carriage even if they have confirmed tickets if there was overbooking.
Respondent TWA should have incorporated stipulations on overbooking on the
tickets issued or to properly inform its passengers about these policies so that the
latter would be prepared for such eventuality or would have the choice to ride with
another airline.
Respondent TWA contends that Exhibit I, the detached flight coupon upon which
were written the name of the passenger and the points of origin and destination,
contained such a notice. An examination of Exhibit I does not bear this out. At any
rate, said exhibit was not offered for the purpose of showing the existence of a
notice of overbooking but to show that Exhibit I was used for flight 007 in first
class of June 11, 1984 from New York to Los Angeles.
Moreover, respondent TWA was also guilty of not informing its passengers of its
alleged policy of giving less priority to discounted tickets. While the petitioners had
checked in at the same time, and held confirmed tickets, yet, only one of them was
allowed to board the plane ten minutes before departure time because the full-fare
ticket he was holding was given priority over discounted tickets. The other two
petitioners were left behind.
It is respondent TWA's position that the practice of overbooking and the airline
system of boarding priorities are reasonable policies, which when implemented do
not amount to bad faith. But the issue raised in this case is not the reasonableness of
said policies but whether or not said policies were incorporated or deemed written
on petitioners' contracts of carriage. Respondent TWA failed to show that there are
provisions to that effect. Neither did it present any argument of substance to show
that petitioners were duly apprised of the overbooked condition of the flight or that
there is a hierarchy of boarding priorities in booking passengers. It is evident that
petitioners had the right to rely upon the assurance of respondent TWA, thru its
agent in Manila, then in New York, that their tickets represented confirmed seats
without any qualification. The failure of respondent TWA to so inform them when
it could easily have done so thereby enabling respondent to hold on to them as
passengers up to the last minute amounts to bad faith. Evidently, respondent TWA
placed its self-interest over the rights of petitioners under their contracts of
carriage. Such conscious disregard of petitioners' rights makes respondent TWA
liable for moral damages. To deter breach of contracts by respondent TWA in
similar fashion in the future, we adjudge respondent TWA liable for exemplary
damages, as well.
Petitioners also assail the respondent court's decision not to require the refund of
Liana Zalamea's ticket because the ticket was used by her father. On this score, we
uphold the respondent court. Petitioners had not shown with certainty that the act of
respondent TWA in allowing Mr. Zalamea to use the ticket of her daughter was due
to inadvertence or deliberate act. Petitioners had also failed to establish that they
did not accede to said agreement. The logical conclusion, therefore, is that both
petitioners and respondent TWA agreed, albeit impliedly, to the course of action
taken.
The respondent court erred, however, in not ordering the refund of the American
Airlines tickets purchased and used by petitioners Suthira and Liana. The evidence
shows that petitioners Suthira and Liana were constrained to take the American
Airlines flight to Los Angeles not because they "opted not to use their TWA tickets
on another TWA flight" but because respondent TWA could not accommodate them
either on the next TWA flight which was also fully booked. 14 The purchase of the
American Airlines tickets by petitioners Suthira and Liana was the consequence of
respondent TWA's unjustifiable breach of its contracts of carriage with petitioners.
In accordance with Article 2201, New Civil Code, respondent TWA should,
therefore, be responsible for all damages which may be reasonably attributed to the
non-performance of its obligation. In the previously cited case of Alitalia Airways
v. Court of Appeals, 15 this Court explicitly held that a passenger is entitled to be
reimbursed for the cost of the tickets he had to buy for a flight to another airline.
Thus, instead of simply being refunded for the cost of the unused TWA tickets,
petitioners should be awarded the actual cost of their flight from New York to Los
Angeles. On this score, we differ from the trial court's ruling which ordered not
only the reimbursement of the American Airlines tickets but also the refund of the
unused TWA tickets. To require both prestations would have enabled petitioners to
fly from New York to Los Angeles without any fare being paid.
The award to petitioners of attorney's fees is also justified under Article 2208(2) of
the Civil Code which allows recovery when the defendant's act or omission has
compelled plaintiff to litigate or to incur expenses to protect his interest. However,
the award for moral damages and exemplary damages by the trial court is excessive
in the light of the fact that only Suthira and Liana Zalamea were actually "bumped
off." An award of P50,000.00 moral damages and another P50,000.00 exemplary
damages would suffice under the circumstances obtaining in the instant case.
WHEREFORE, the petition is hereby GRANTED and the decision of the
respondent Court of Appeals is hereby MODIFIED to the extent of adjudging
respondent TransWorld Airlines to pay damages to petitioners in the following
amounts, to wit:

(1) US$918.00 or its peso equivalent at the time of payment representing the price
of the tickets bought by Suthira and Liana Zalamea from American Airlines, to
enable them to fly to Los Angeles from New York City;

(2) P50,000.00 as moral damages;

(3) P50,000.00 as exemplary damages;

(4) P50,000.00 as attorney's fees; and

(5) Costs of suit.

SO ORDERED.

G.R. Nos. 172760-61 October 15, 2007
KAREN and KRISTY FISHING INDUSTRY and SPS. HELIODORO
TUVILLA and AQUILINA TUVILLA,Petitioners,
vs.
THE HONORABLE COURT OF TINGA, and APPEALS, Fifth Division and
VELASCO, JR., NATIONAL LABOR RELATIONS COMMISSION, Third
Division, Respondents
DECISION
TINGA, J.:
This is a special civil action for certiorari under Rule 65 of the Rules of Civil
Procedure which seeks to nullify two resolutions of the Court of Appeals in CA-
G.R. SP No. 63286 and 63750 for having been issued without or in excess of
jurisdiction and/or with grave abuse of discretion. The 06 March 2006
Resolution1 denied petitioners’ motion for time to file a motion for reconsideration
of the Court of Appeals Decision2 dated 29 December 2005 in the aforementioned
cases. The 10 April 2006 Resolution3 denied petitioners’ motion for reconsideration
of the 06 March 2006 Resolution.
The following factual antecedents are undisputed.
Petitioners spouses Heliodoro Tuvilla, now deceased, and Aquilina Tuvilla
("spouses Tuvilla") were the proprietors of Karen & Kristy Fishing Industry which
operated the fishing vessels M/V Karen and M/V Kristy. On 11 August 1998,
several fishermen-crew members of said vessels filed a complaint for illegal
dismissal, unfair labor practice and money claims against Spouses Tuvilla and
Karen & Kristy Fishing Industry (herein collectively referred to as petitioners).
4
The Labor Arbiter rendered a Decision on 1 December 1999 ordering petitioners to
pay the money claims but dismissed the complaint for illegal dismissal and unfair
labor practice. Petitioners elevated the matter to the National Labor Relations
Commission (NLRC) which affirmed 5 the Labor Arbiter’s ruling, except for the
computation of the salary differentials, 13th month pay and service incentive leave.
Both parties sought reconsideration of the NLRC decision but were rebuffed.
Both parties again filed separate petitions for certiorari with the Court of
Appeals.6 In view of the substantial identity of the parties and the issues, the
separate petitions were ordered consolidated. During the pendency of the appeal,
petitioner Heliodoro Tuvilla passed away.7
On 29 December 2005, the Court of Appeals rendered a Decision the dispositive
portion of which reads:
WHEREFORE, the petition of Karen & Kristy and the Tuvillas docketed as CA-
G.R. SP No. 63286, is DENIED DUE COURSE and DISMISSED. On the other
hand, the petition of the Employees docketed as CA-G.R. SP No. 63750 is GIVEN
DUE COURSE and GRANTED. Accordingly the assailed Decision dated
September 29, 2000 and Resolution dated January 19, 2001 of the NLRC are SET
ASIDE and VACATED while the Decision of the Labor Arbiter is REINSTATED.
SO ORDERED.8
A copy of the said decision was sent by registered mail to Atty. Eugenio Dela Cruz,
petitioners’ counsel of record, but it was returned as said counsel had moved out of
the address of record. Thus, the Court of Appeals Clerk of Court resent another
copy of the decision by registered mail to spouses Tuvilla. The registry return
receipt showed that the copy was delivered to their address in Olongapo City on 27
January 2006.
On 6 February 2006, petitioner Aquilina Tuvilla filed with the Court of Appeals a
motion captioned "Motion to Allow Petitioner/Movant a Period Within Which to
Search for Her Counsel; In the Alternative to Look for a New Counsel and Time to
File Necessary Pleading or Motion for Reconsideration of the Decision Received
by the Movant/Petitioner last January 27, 2006,"9 manifesting that she had
difficulty finding their counsel of record as it was her deceased husband who was
handling the case prior to his death.
The following day, she filed a notice of appearance and urgent motion for extension
of time to file motion for reconsideration,10 asking for an additional 15 days within
which to file a motion for reconsideration.
On 8 February 2006, she filed a motion captioned "Application for Substitution of
Counsel or Employment of New Counsel with Notice to the Original Counsel of
Record,"11 asking that petitioners’ counsel of record be replaced by Atty. Rutillo B.
Pasok.
On 21 February 2006, petitioners filed a Motion to Admit Attached Motion for
Reconsideration and Notice of Death of Petitioner, Heliodoro Albotra Tuvilla. 12
On 6 March 2006, the Court of Appeals issued the first assailed
Resolution,13 denying the first three motions. The appellate court ruled that a
motion for extension of the period to file the motion for reconsideration is not
allowed by the Rules of Court. Petitioners’ failure to file a motion for
reconsideration of the 29 December 2005 Decision within the reglementary period
rendered said decision final and executory, the Court of Appeals stated. Petitioners
filed another motion for reconsideration but it was denied in a Resolution dated 10
April 2006.
Petitioner Tuvilla elevated the denial of her motions to this Court via a special civil
action for certiorari, raising the following grounds in support of her petition:
1. THE HONORABLE COURT OF APPEALS, FIFTH DIVISION
GRAVELY ABUSED ITS DISCRETION WHICH IS TANTAMOUNT
TO LACK OF JURISDICTION WHEN IT REFUSED TO SEE THE
LIGHT THAT THE TIME AND PERIOD TO FILE A MOTION FOR
RECONSIDERATION BY THE PETITIONER HAS NOT YET
STARTED TO RUN FOR REASON THAT THE DECISION WAS NOT
YET SERVED OR RECEIVED BY HER COUNSEL OF RECORD AS
MANDATED BY THE RULES AND, IT PREFERRED TO APPLY THE
TECHNICALITIES OF THE RULES OF COURT IN EXCHANGE OF
SUBSTANTIAL JUSTICE AND THE RIGHT OF THE PETITIONER TO
BE ASSISTED BY A COUNSEL;
2. THE DEATH OF MOVANT’S HUSBAND REQUIRES THE
SUBSTITUTION OF THE HEIRS, AND WITHOUT THE PROPER
SUBSTITUTION AS REQUIRED BY THE RULES, THE HEIRS ARE
BASICALLY DENIED OF THEIR CONSTITUTIONAL RIGHT TO
THEIR PROPERTY WITHOUT DUE PROCESS;
3. THE NEGLIGENCE AND LACK OF INTEREST OF HER
PREVIOUS COUNSEL OF HIS DUTY AS THE COUNSEL OF THE
MOVANT CANNOT BIND THE MOVANT, AS SHE HAS NO WAY
UPON WHICH SHE CAN CONTROL THE ACTS OF HER COUNSEL;
4. THE MOVANT RAISED A VALID AND SUBSTANTIALLY NEW
ISSUES IN HER MOTION FOR RECONSIDERATION AND THAT
THE LIBERAL INTERPRETATION OF THE PROCEDURAL RULES
WILL BE IN KEEPING THE DEMANDS OF SUBSTANTIAL JUSTICE
CONSIDERING THE AMOUNT OF THREE MILLION TWO
HUNDRED THIRTY THOUSAND FIVE HUNDRED TEN AND 46/100
PESOS (₱3,235,510.46), PHILIPPINE CURRENCY WOULD BE A
WINDFALL AND UNJUST ENRICHMENT AT THE EXPENSE OF
THE MOVANT.14
Petitioner Tuvilla argues that the reglementary period for filing a motion for
reconsideration of the Court of Appeals decision had not commenced because Atty.
Dela Cruz, petitioners’ counsel of record at the time of the promulgation of the
decision, did not receive a copy of said decision. Petitioner Tuvilla adds that neither
should the reglementary period be counted from the date of receipt of the decision
by petitioners in view of the rule that where a party appears by attorney in an action
or proceeding in a court of record, all notices and orders must be given to the
attorney of record.15
The records show that the failure of Atty. Dela Cruz, petitioners’ counsel of record,
to receive a copy of the Court of Appeals decision was caused by his failure to
inform the appellate court of the change of his address of record. Thus, the Clerk of
Court had to resend a copy of the decision, this time to the address of record of
spouses Tuvilla.
If counsel moves to another address without informing the court of that change,
such omission or neglect is inexcusable and will not stay the finality of the
decision. The court cannot be expected to take judicial notice of the new address of
a lawyer who has moved or to ascertain on its own whether or not the counsel of
record has been changed and who the new counsel could possibly be or where he
probably resides or holds office.161âwphi1
Jurisprudence is replete with pronouncements that clients are bound by the actions
of their counsel in the conduct of their case. If it were otherwise, and a lawyer’s
mistake or negligence were admitted as a reason for the opening of a case, there
would be no end to litigation so long as counsel had not been sufficiently diligent
or experienced or learned.17
In Macondray & Co., Inc. v. Provident Insurance Corporation,18 petitioner’s
previous counsel moved to a new address without informing the appellate court,
eventually causing the appellate court’s decision to become final and executory.
The Court ruled that the counsel’s omission was an inexcusable neglect binding
upon petitioner therein for the following reasons:
In the present case, there is no compelling reason to overturn well-settled
jurisprudence or to interpret the rules liberally in favor of petitioner, who is not
entirely blameless. It should have taken the initiative of periodically keeping in
touch with its counsel, checking with the court, and inquiring about the status of its
case. In so doing, it could have taken timely steps to neutralize the negligence of its
chosen counsel and to protect its interests. Litigants represented by counsel should
not expect that all they need to do is sit back, relax and await the outcome of their
case.19
As pointed out by respondent, after the death of petitioner Tuvilla’s husband, more WHEREFORE, the instant petition for certiorari is DISMISSED. Costs against
than a year had elapsed before the promulgation of the Court of Appeals decision, petitioners.
but she failed to coordinate with the counsel of record and check the status of the
case in the interim. SO ORDERED.

Moreover, the general rule is that when a party is represented by counsel of record,
service of orders and notices must be made upon said attorney and notice to the
client and to any other lawyer than the counsel of record is not notice in law.20 The
Court of Appeals did not strictly apply this rule and was even liberal when it did
not consider the service on the counsel of record as notice to petitioner. It even
counted the 15-day reglementary period for filing a motion of reconsideration from
the later receipt by petitioner Aquilina Tuvilla of a copy of the decision instead of
from the earlier service on petitioners’ counsel of record. Unfortunately, she
squandered the new period as she failed to file the motion for reconsideration
within the said period.1âwphi1

Thus, the Court of Appeals did not commit grave abuse of discretion when it denied
petitioners’ motion for additional time to file the motion for reconsideration in
accordance with the well-settled principle that no extension for filing said motion
may be granted. As a rule, periods prescribed to do certain acts must be followed
with fealty as they are designed primarily to speed up the final disposition of the
G.R. No. 124642 February 23, 2004
case. Such reglementary periods are indispensable interdictions against needless
delays and for an orderly discharge of judicial business. Deviations from the rules
cannot be tolerated. More importantly, their observance cannot be left to the whims ALFREDO CHING and ENCARNACION CHING, petitioners
and caprices of the parties. What is worrisome is that parties who fail to file their vs.
pleading within the periods provided for by the Rules of Court, through their THE HON. COURT OF APPEALS and ALLIED BANKING
counsel’s inexcusable neglect, resort to beseeching the Court to bend the rules in CORPORATION, respondents.
the guise of a plea for a liberal interpretation thereof, thus, sacrificing efficiency
and order.21 DECISION

On the merits, petitioners contend that the motion for reconsideration raised
substantially new issues. Suffice it to say that a petition for certiorari is not a
remedy to correct errors of judgment. Certiorari will issue only to correct errors of
jurisdiction. As already pointed out, the Court of Appeals did not commit any grave
abuse of discretion in denying a motion for reconsideration which was filed out of
time. In any case, the Court of Appeals did not commit grave abuse of discretion in
setting aside the decision of the NLRC on the ground that the latter’s ruling to
remand the case to the Labor Arbiter for the recomputation of the monetary award
was tainted with grave abuse of discretion. As found by the appellate court, the
NLRC had no basis in ruling that petitioners paid monthly allowances and
commissions to their workers because no proof to this effect was adduced by
petitioners.
CALLEJO, SR., J.:
This petition for review, under Rule 45 of the Revised Rules of Court, assails the
Decision1 of the Court of Appeals (CA) dated November 27, 1995 in CA-G.R. SP
No. 33585, as well as the Resolution2 on April 2, 1996 denying the petitioners’
motion for reconsideration. The impugned decision granted the private
respondent’s petition for certiorariand set aside the Orders of the trial court dated
December 15, 19933 and February 17, 19944 nullifying the attachment of 100,000
shares of stocks of the Citycorp Investment Philippines under the name of
petitioner Alfredo Ching.
The following facts are undisputed:
On September 26, 1978, the Philippine Blooming Mills Company, Inc. (PBMCI)
obtained a loan of ₱9,000,000.00 from the Allied Banking Corporation (ABC). By
virtue of this loan, the PBMCI, through its Executive Vice-President Alfredo
Ching, executed a promissory note for the said amount promising to pay on
December 22, 1978 at an interest rate of 14% per annum.5 As added security for the
said loan, on September 28, 1978, Alfredo Ching, together with Emilio Tañedo and
Chung Kiat Hua, executed a continuing guaranty with the ABC binding themselves
to jointly and severally guarantee the payment of all the PBMCI obligations owing
the ABC to the extent of ₱38,000,000.00.6 The loan was subsequently renewed on
various dates, the last renewal having been made on December 4, 1980.7
Earlier, on December 28, 1979, the ABC extended another loan to the PBMCI in
the amount of ₱13,000,000.00 payable in eighteen months at 16% interest per
annum. As in the previous loan, the PBMCI, through Alfredo Ching, executed a
promissory note to evidence the loan maturing on June 29, 1981.8 This was
renewed once for a period of one month.9
The PBMCI defaulted in the payment of all its loans. Hence, on August 21, 1981,
the ABC filed a complaint for sum of money with prayer for a writ of preliminary
attachment against the PBMCI to collect the ₱12,612,972.88 exclusive of interests,
penalties and other bank charges. Impleaded as co-defendants in the complaint
were Alfredo Ching, Emilio Tañedo and Chung Kiat Hua in their capacity as
sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the Regional Trial Court of
Manila, Branch XVIII.10 In its application for a writ of preliminary attachment, the
ABC averred that the "defendants are guilty of fraud in incurring the obligations
upon which the present action is brought11 in that they falsely represented
themselves to be in a financial position to pay their obligation upon maturity
thereof."12 Its supporting affidavit stated, inter alia, that the "[d]efendants have
removed or disposed of their properties, or [are] ABOUT to do so, with intent to
defraud their creditors."13
On August 26, 1981, after an ex-parte hearing, the trial court issued an Order
denying the ABC’s application for a writ of preliminary attachment. The trial court
decreed that the grounds alleged in the application and that of its supporting
affidavit "are all conclusions of fact and of law" which do not warrant the issuance
of the writ prayed for.14On motion for reconsideration, however, the trial court, in
an Order dated September 14, 1981, reconsidered its previous order and granted the
ABC’s application for a writ of preliminary attachment on a bond of ₱12,700,000.
The order, in relevant part, stated:
With respect to the second ground relied upon for the grant of the writ of
preliminary attachment ex-parte, which is the alleged disposal of properties by the
defendants with intent to defraud creditors as provided in Sec. 1(e) of Rule 57 of
the Rules of Court, the affidavits can only barely justify the issuance of said writ as
against the defendant Alfredo Ching who has allegedly bound himself jointly and
severally to pay plaintiff the defendant corporation’s obligation to the plaintiff as a
surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as against the defendant
Alfredo Ching requiring the sheriff of this Court to attach all the properties of said
Alfredo Ching not exceeding ₱12,612,972.82 in value, which are within the
jurisdiction of this Court and not exempt from execution upon, the filing by
plaintiff of a bond duly approved by this Court in the sum of Twelve Million Seven
Hundred Thousand Pesos (₱12,700,000.00) executed in favor of the defendant
Alfredo Ching to secure the payment by plaintiff to him of all the costs which may
be adjudged in his favor and all damages he may sustain by reason of the
attachment if the court shall finally adjudge that the plaintiff was not entitled
thereto.
SO ORDERED.15
Upon the ABC’s posting of the requisite bond, the trial court issued a writ of
preliminary attachment. Subsequently, summonses were served on the
defendants,16 save Chung Kiat Hua who could not be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly filed a petition
for suspension of payments with the Securities and Exchange Commission (SEC),
docketed as SEC Case No. 2250, at the same time seeking the PBMCI’s
rehabilitation.17
On July 9, 1982, the SEC issued an Order placing the PBMCI’s business, including
its assets and liabilities, under rehabilitation receivership, and ordered that "all
actions for claims listed in Schedule "A" of the petition pending before any court or
tribunal are hereby suspended in whatever stage the same may be until further
orders from the Commission."18 The ABC was among the PBMCI’s creditors
named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching jointly filed a
Motion to Dismiss and/or motion to suspend the proceedings in Civil Case No.
142729 invoking the PBMCI’s pending application for suspension of payments
(which Ching co-signed) and over which the SEC had already assumed
jurisdiction.19 On February 4, 1983, the ABC filed its Opposition thereto.20
In the meantime, on July 26, 1983, the deputy sheriff of the trial court levied on
attachment the 100,000 common shares of Citycorp stocks in the name of Alfredo
Ching.21
Thereafter, in an Order dated September 16, 1983, the trial court partially granted
the aforementioned motion by suspending the proceedings only with respect to the
PBMCI. It denied Ching’s motion to dismiss the complaint/or suspend the
proceedings and pointed out that P.D. No. 1758 only concerns the activities of
corporations, partnerships and associations and was never intended to regulate
and/or control activities of individuals. Thus, it directed the individual defendants
to file their answers.22
Instead of filing an answer, Ching filed on January 14, 1984 a Motion to Suspend
Proceedings on the same ground of the pendency of SEC Case No. 2250. This
motion met the opposition from the ABC.23
On January 20, 1984, Tañedo filed his Answer with counterclaim and cross-
claim.24 Ching eventually filed his Answer on July 12, 1984.25
On October 25, 1984, long after submitting their answers, Ching filed an Omnibus
Motion,26 again praying for the dismissal of the complaint or suspension of the
proceedings on the ground of the July 9, 1982 Injunctive Order issued in SEC Case
No. 2250. He averred that as a surety of the PBMCI, he must also necessarily
benefit from the defenses of his principal. The ABC opposed Ching’s omnibus
motion.
Emilio Y. Tañedo, thereafter, filed his own Omnibus Motion27 praying for the
dismissal of the complaint, arguing that the ABC had "abandoned and waived" its
right to proceed against the continuing guaranty by its act of resorting to
preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the amount of his
preliminary attachment bond from ₱12,700,000 to ₱6,350,000.28 Alfredo Ching
opposed the motion,29 but on April 2, 1987, the court issued an Order setting the
incident for further hearing on May 28, 1987 at 8:30 a.m. for the parties to adduce
evidence on the actual value of the properties of Alfredo Ching levied on by the
sheriff.30
On March 2, 1988, the trial court issued an Order granting the motion of the ABC
and rendered the attachment bond of ₱6,350,000.31
On November 16, 1993, Encarnacion T. Ching, assisted by her husband Alfredo
Ching, filed a Motion to Set Aside the levy on attachment. She alleged inter alia
that the 100,000 shares of stocks levied on by the sheriff were acquired by her and
her husband during their marriage out of conjugal funds after the Citycorp
Investment Philippines was established in 1974. Furthermore, the indebtedness
covered by the continuing guaranty/comprehensive suretyship contract executed by
petitioner Alfredo Ching for the account of PBMCI did not redound to the benefit
of the conjugal partnership. She, likewise, alleged that being the wife of Alfredo
Ching, she was a third-party claimant entitled to file a motion for the release of the
properties.32 She attached therewith a copy of her marriage contract with Alfredo
Ching.33
The ABC filed a comment on the motion to quash preliminary attachment and/or
motion to expunge records, contending that:
2.1 The supposed movant, Encarnacion T. Ching, is not a party to this
present case; thus, she has no personality to file any motion before this
Honorable Court;
2.2 Said supposed movant did not file any Motion for Intervention
pursuant to Section 2, Rule 12 of the Rules of Court;
2.3 Said Motion cannot even be construed to be in the nature of a Third-
Party Claim conformably with Sec. 14, Rule 57 of the Rules of Court.
3. Furthermore, assuming in gracia argumenti that the supposed movant has the
required personality, her Motion cannot be acted upon by this Honorable Court as
the above-entitled case is still in the archives and the proceedings thereon still
remains suspended. And there is no previous Motion to revive the same.34
The ABC also alleged that the motion was barred by prescription or by laches
because the shares of stocks were in custodia legis.
During the hearing of the motion, Encarnacion T. Ching adduced in evidence her
marriage contract to Alfredo Ching to prove that they were married on January 8,
1960;35 the articles of incorporation of Citycorp Investment Philippines dated May
14, 1979;36 and, the General Information Sheet of the corporation showing that
petitioner Alfredo Ching was a member of the Board of Directors of the said
corporation and was one of its top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their Reply/Opposition to the
motion to expunge records.
Acting on the aforementioned motion, the trial court issued on December 15, 1993
an Order37 lifting the writ of preliminary attachment on the shares of stocks and
ordering the sheriff to return the said stocks to the petitioners. The dispositive
portion reads:
WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated
November 9, 1993, is hereby granted. Let the writ of preliminary attachment
subject matter of said motion, be quashed and lifted with respect to the attached
100,000 common shares of stock of Citycorp Investment Philippines in the name of
the defendant Alfredo Ching, the said shares of stock to be returned to him and his
movant-spouse by Deputy Sheriff Apolonio A. Golfo who effected the levy thereon
on July 26, 1983, or by whoever may be presently in possession thereof.
SO ORDERED.38
The plaintiff Allied Banking Corporation filed a motion for the reconsideration of
the order but denied the same on February 17, 1994. The petitioner bank forthwith
filed a petition for certiorari with the CA, docketed as CA-G.R. SP No. 33585, for
the nullification of the said order of the court, contending that:
1. The respondent Judge exceeded his authority thereby acted without
jurisdiction in taking cognizance of, and granting a "Motion" filed by a
complete stranger to the case.
2. The respondent Judge committed a grave abuse of discretion in lifting
the writ of preliminary attachment without any basis in fact and in law,
and contrary to established jurisprudence on the matter.39
On November 27, 1995, the CA rendered judgment granting the petition and setting
aside the assailed orders of the trial court, thus:
WHEREFORE, premises considered, the petition is GRANTED, hereby setting
aside the questioned orders (dated December 15, 1993 and February 17, 1994) for
being null and void.
SO ORDERED.40
The CA sustained the contention of the private respondent and set aside the assailed
orders. According to the CA, the RTC deprived the private respondent of its right to
file a bond under Section 14, Rule 57 of the Rules of Court. The petitioner
Encarnacion T. Ching was not a party in the trial court; hence, she had no right of
action to have the levy annulled with a motion for that purpose. Her remedy in such
case was to file a separate action against the private respondent to nullify the levy
on the 100,000 Citycorp shares of stocks. The court stated that even assuming that
Encarnacion T. Ching had the right to file the said motion, the same was barred by
laches.
Citing Wong v. Intermediate Appellate Court,41 the CA ruled that the presumption
in Article 160 of the New Civil Code shall not apply where, as in this case, the
petitioner-spouses failed to prove the source of the money used to acquire the
shares of stock. It held that the levied shares of stocks belonged to Alfredo Ching,
as evidenced by the fact that the said shares were registered in the corporate books
of Citycorp solely under his name. Thus, according to the appellate court, the RTC
committed a grave abuse of its discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders. The petitioners’ motion for
reconsideration was denied by the CA in a Resolution dated April 2, 1996.
The petitioner-spouses filed the instant petition for review on certiorari, asserting
that the RTC did not commit any grave abuse of discretion amounting to excess or
lack of jurisdiction in issuing the assailed orders in their favor; hence, the CA erred
in reversing the same. They aver that the source of funds in the acquisition of the
levied shares of stocks is not the controlling factor when invoking the presumption
of the conjugal nature of stocks under Art. 160,42 and that such presumption
subsists even if the property is registered only in the name of one of the spouses, in
this case, petitioner Alfredo Ching.43 According to the petitioners, the suretyship
obligation was not contracted in the pursuit of the petitioner-husband’s profession
or business.44 And, contrary to the ruling of the CA, where conjugal assets are
attached in a collection suit on an obligation contracted by the husband, the wife
should exhaust her motion to quash in the main case and not file a separate
suit.45 Furthermore, the petitioners contend that under Art. 125 of the Family Code,
the petitioner-husband’s gratuitous suretyship is null and void ab initio,46 and that
the share of one of the spouses in the conjugal partnership remains inchoate until
the dissolution and liquidation of the partnership.47
In its comment on the petition, the private respondent asserts that the CA correctly
granted its petition for certiorari nullifying the assailed order. It contends that the
CA correctly relied on the ruling of this Court in Wong v. Intermediate Appellate
Court. Citing Cobb-Perez v. Lantin and G-Tractors, Inc. v. Court of Appeals, the
private respondent alleges that the continuing guaranty and suretyship executed by
petitioner Alfredo Ching in pursuit of his profession or business. Furthermore,
according to the private respondent, the right of the petitioner-wife to a share in the
conjugal partnership property is merely inchoate before the dissolution of the
partnership; as such, she had no right to file the said motion to quash the levy on
attachment of the shares of stocks.
The issues for resolution are as follows: (a) whether the petitioner-wife has the
right to file the motion to quash the levy on attachment on the 100,000 shares of
stocks in the Citycorp Investment Philippines; (b) whether or not the RTC
committed a grave abuse of its discretion amounting to excess or lack of
jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the petitioner-wife had the right
to file the said motion, although she was not a party in Civil Case No. 142729.48
In Ong v. Tating,49 we held that the sheriff may attach only those properties of the
defendant against whom a writ of attachment has been issued by the court. When
the sheriff erroneously levies on attachment and seizes the property of a third
person in which the said defendant holds no right or interest, the superior authority
of the court which has authorized the execution may be invoked by the aggrieved
third person in the same case. Upon application of the third person, the court shall
order a summary hearing for the purpose of determining whether the sheriff has
acted rightly or wrongly in the performance of his duties in the execution of the
writ of attachment, more specifically if he has indeed levied on attachment and
taken hold of property not belonging to the plaintiff. If so, the court may then order
the sheriff to release the property from the erroneous levy and to return the same to
the third person. In resolving the motion of the third party, the court does not and
cannot pass upon the question of the title to the property with any character of
finality. It can treat the matter only insofar as may be necessary to decide if the
sheriff has acted correctly or not. If the claimant’s proof does not persuade the court
of the validity of the title, or right of possession thereto, the claim will be denied by
the court. The aggrieved third party may also avail himself of the remedy of
"terceria" by executing an affidavit of his title or right of possession over the
property levied on attachment and serving the same to the office making the levy
and the adverse party. Such party may also file an action to nullify the levy with
damages resulting from the unlawful levy and seizure, which should be a totally
separate and distinct action from the former case. The above-mentioned remedies
are cumulative and any one of them may be resorted to by one third-party claimant
without availing of the other remedies.50
In this case, the petitioner-wife filed her motion to set aside the levy on attachment
of the 100,000 shares of stocks in the name of petitioner-husband claiming that the
said shares of stocks were conjugal in nature; hence, not liable for the account of
her husband under his continuing guaranty and suretyship agreement with the
PBMCI. The petitioner-wife had the right to file the motion for said relief.
On the second issue, we find and so hold that the CA erred in setting aside and
reversing the orders of the RTC. The private respondent, the petitioner in the CA,
was burdened to prove that the RTC committed a grave abuse of its discretion
amounting to excess or lack of jurisdiction. The tribunal acts without jurisdiction if
it does not have the legal purpose to determine the case; there is excess of
jurisdiction where the tribunal, being clothed with the power to determine the case,
oversteps its authority as determined by law. There is grave abuse of discretion
where the tribunal acts in a capricious, whimsical, arbitrary or despotic manner in
the exercise of its judgment and is equivalent to lack of jurisdiction.51
It was incumbent upon the private respondent to adduce a sufficiently strong
demonstration that the RTC acted whimsically in total disregard of evidence
material to, and even decide of, the controversy before certiorari will lie. A special
civil action for certiorari is a remedy designed for the correction of errors of
jurisdiction and not errors of judgment. When a court exercises its jurisdiction, an
error committed while so engaged does not deprive it of its jurisdiction being
exercised when the error is committed.52
After a comprehensive review of the records of the RTC and of the CA, we find
and so hold that the RTC did not commit any grave abuse of its discretion
amounting to excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties acquired during
the marriage are presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband, or to the wife. In Tan v. Court of
Appeals,53 we held that it is not even necessary to prove that the properties were
acquired with funds of the partnership. As long as the properties were acquired by
the parties during the marriage, they are presumed to be conjugal in nature. In fact,
even when the manner in which the properties were acquired does not appear, the
presumption will still apply, and the properties will still be considered conjugal.
The presumption of the conjugal nature of the properties acquired during the
marriage subsists in the absence of clear, satisfactory and convincing evidence to
overcome the same.54
In this case, the evidence adduced by the petitioners in the RTC is that the 100,000
shares of stocks in the Citycorp Investment Philippines were issued to and
registered in its corporate books in the name of the petitioner-husband when the
said corporation was incorporated on May 14, 1979. This was done during the
subsistence of the marriage of the petitioner-spouses. The shares of stocks are, thus,
presumed to be the conjugal partnership property of the petitioners. The private
respondent failed to adduce evidence that the petitioner-husband acquired the
stocks with his exclusive money.55 The barefaced fact that the shares of stocks were
registered in the corporate books of Citycorp Investment Philippines solely in the
name of the petitioner-husband does not constitute proof that the petitioner-
husband, not the conjugal partnership, owned the same.56 The private respondent’s
reliance on the rulings of this Court in Maramba v. Lozano57 and Associated
Insurance & Surety Co., Inc. v. Banzon58 is misplaced. In the Maramba case, we
held that where there is no showing as to when the property was acquired, the fact
that the title is in the wife’s name alone is determinative of the ownership of the
property. The principle was reiterated in the Associated Insurance case where the
uncontroverted evidence showed that the shares of stocks were acquired during the
marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling of this Court in
Wong v. Intermediate Appellate Court59 buttresses the case for the petitioners. In
that case, we ruled that he who claims that property acquired by the spouses during
their marriage is not conjugal partnership property but belongs to one of them as
his personal property is burdened to prove the source of the money utilized to
purchase the same. In this case, the private respondent claimed that the petitioner-
husband acquired the shares of stocks from the Citycorp Investment Philippines in
his own name as the owner thereof. It was, thus, the burden of the private
respondent to prove that the source of the money utilized in the acquisition of the
shares of stocks was that of the petitioner-husband alone. As held by the trial court,
the private respondent failed to adduce evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing guaranty and
suretyship agreement with the private respondent for the payment of the PBMCI
loans, the petitioner-husband was in the exercise of his profession, pursuing a
legitimate business. The appellate court erred in concluding that the conjugal
partnership is liable for the said account of PBMCI under Article 161(1) of the New
Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and 3]60 of the Family
Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the
conjugal partnership, and those contracted by the wife, also for the same purpose,
in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and suretyship agreement as
security for the payment of the loan obtained by the PBMCI from the private
respondent in the amount of ₱38,000,000. In Ayala Investment and Development
Corp. v. Court of Appeals,61 this Court ruled "that the signing as surety is certainly
not an exercise of an industry or profession. It is not embarking in a business. No
matter how often an executive acted on or was persuaded to act as surety for his
own employer, this should not be taken to mean that he thereby embarked in the
business of suretyship or guaranty."
For the conjugal partnership to be liable for a liability that should appertain to the
husband alone, there must be a showing that some advantages accrued to the
spouses. Certainly, to make a conjugal partnership responsible for a liability that
should appertain alone to one of the spouses is to frustrate the objective of the New
Civil Code to show the utmost concern for the solidarity and well being of the
family as a unit. The husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the conjugal
partnership.62
In this case, the private respondent failed to prove that the conjugal partnership of
the petitioners was benefited by the petitioner-husband’s act of executing a
continuing guaranty and suretyship agreement with the private respondent for and
in behalf of PBMCI. The contract of loan was between the private respondent and
the PBMCI, solely for the benefit of the latter. No presumption can be inferred
from the fact that when the petitioner-husband entered into an accommodation
agreement or a contract of surety, the conjugal partnership would thereby be
benefited. The private respondent was burdened to establish that such benefit
redounded to the conjugal partnership.63
It could be argued that the petitioner-husband was a member of the Board of
Directors of PBMCI and was one of its top twenty stockholders, and that the shares
of stocks of the petitioner-husband and his family would appreciate if the PBMCI
could be rehabilitated through the loans obtained; that the petitioner-husband’s
career would be enhanced should PBMCI survive because of the infusion of fresh
capital. However, these are not the benefits contemplated by Article 161 of the New
Civil Code. The benefits must be those directly resulting from the loan. They
cannot merely be a by-product or a spin-off of the loan itself.64
This is different from the situation where the husband borrows money or receives
services to be used for his own business or profession. In the Ayala case, we ruled
that it is such a contract that is one within the term "obligation for the benefit of the
conjugal partnership." Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly
received the money and services to be used in or for his own business or his own
profession, that contract falls within the term "… obligations for the benefit of the
conjugal partnership." Here, no actual benefit may be proved. It is enough that the
benefit to the family is apparent at the time of the signing of the contract. From the
very nature of the contract of loan or services, the family stands to benefit from the
loan facility or services to be rendered to the business or profession of the husband.
It is immaterial, if in the end, his business or profession fails or does not succeed.
Simply stated, where the husband contracts obligations on behalf of the family
business, the law presumes, and rightly so, that such obligation will redound to the
benefit of the conjugal partnership.65
The Court held in the same case that the rulings of the Court in Cobb-Perez and G-
Tractors, Inc. are not controlling because the husband, in those cases, contracted the
obligation for his own business. In this case, the petitioner-husband acted merely as
a surety for the loan contracted by the PBMCI from the private respondent.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision
and Resolution of the Court of Appeals are SET ASIDE AND REVERSED. The
assailed orders of the RTC are AFFIRMED.
SO ORDERED.

EN BANC
[G.R. Nos. 137297 & 138547-48. December 11, 2001]
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. RICARDO
AGRAVANTE y ZANTUA, accused-appellant.
DECISION
MENDOZA, J.:
These cases are here on automatic appeal from the decision, [1] dated October
16, 1998, of the Regional Trial Court, Branch 40, Daet, Camarines Sur, finding
accused-appellant Ricardo Agravante guilty of three counts of rape committed
against his daughter Maria and sentencing him in each case to death and to pay the
victim the sum of P50,000.00 as moral damages.
The facts are as follows:
On November 26, 1994, the Provincial Prosecutor of Camarines Norte filed
three informations for rape against accused-appellant in the RTC, Branch 40 of
Daet, Camarines Norte. Except for the allegations of the dates and times of the
rapes, the informations in the three cases, docketed as Criminal Case Nos. 8430-32,
were similarly worded. They alleged
That on or about ___________________[2] at the Resettlement Area, Barangay
Matacong, San Lorenzo Ruiz, Camarines Norte, and within the jurisdiction of this
Honorable Court, the above-named accused, with lewd design and by means of
force and intimidation, did, then and there willfully, unlawfully, and feloniously
commit sexual intercourse with one Maria Agravante y Vargas, a minor fourteen
years of age, against the latters will, to her damage and prejudice.
That the crime was committed with the aggravating circumstance of relationship,
the accused being the father of the offended party.
CONTRARY TO LAW.[3]
Thereafter, the cases were jointly tried. The prosecution presented as its
witnesses the complainant, Maria Agravante; Dr. Marcelito Abas, the medico-legal
officer of the Camarines Norte Provincial Hospital; and Adelina Racho.
Maria testified that she was born on August 27, 1980, the child of accused-
appellant by his wife, Evelyn Vargas. [4] In 1994, she was a freshman at the
Matacong (San Lorenzo Ruiz National) High School located seven kilometers from
their house in Matacong, San Lorenzo Ruiz, Camarines Norte. Because of the
distance of their house to the high school, Maria stayed in a boarding house owned
by Adelina Racho, going home only on Saturday mornings.
Maria testified that on the night of November 5, 1994, she was home with her
father, herein accused-appellant, and the latters ward, Gary Fraga. Accused-
appellant and Gary Fraga slept in the living room, while Maria slept in her room.
Accused-appellants common-law wife, Virginia Bangayciso, had gone to a dance
party. At around 7 oclock in the evening, Maria woke up to find accused-appellant
on top of her. She tried to push him, but accused-appellant proved too strong for
her. She was slapped and then forced to have sexual intercourse with accused-
appellant. After he was through, accused-appellant left. Maria lighted a lamp and
went to the kitchen, where she washed off blood and a whitish substance from her
private parts. She then returned to her bedroom and went to sleep. At around
midnight, however, accused-appellant was back and raped her again. She tried to
resist him, but he punched her on the thighs. The following day, Maria returned to
her boarding house. She saw the owner, Adelina Racho, but did not tell her what
had happened for fear of her father.
On November 19, 1994, Maria came home for the weekend. Because she did
not arrive until noon, she was scolded and given some lashes by accused-appellant.
After lunch, her fathers common-law wife left to attend a birthday party in a place
about a kilometer away from their house. On the pretext that he wanted her to pick
lice from his hair, accused-appellant assaulted her when she came to him. Maria
pleaded with him, reminding him, I am your daughter, why are you doing this to
me?, but her pleas fell on deaf ears. Accused-appellant just the same raped
her. After he was through, accused-appellant left and went to fetch his common-law
wife, leaving his daughter sobbing. He returned with his common-law wife at 4
oclock in the afternoon.
Maria did not tell anyone about her misfortune until November 26, 1994,
when she told Susan Racho, the daughter of the owner of the boarding house, that
she was not going home that weekend because of what had happened to her. Susan
told Marias story to her mother, Adelina Racho, who took Maria to Danny
Manabat, a minister of the Iglesia ni Kristo (INK). Manabat and Enrico Amor, a
police captain, in turn took them to the Philippine National Police headquarters at
Camp Wenceslao Q. Vinzons in Dogongan, Daet, Camarines, where she gave a
sworn statement (Exh. A).[5] Maria was examined at the Camarines Provincial
Hospital.[6] The results of her examination (Exh. C) showed the following:
GENITAL EXAMINATION:
= Hymenal laceration[s] (old) 3:00, 6:00, 9:00 oclock
LABORATORY RESULT: Negative for sperm cells.[7]
According to the examining physician, Dr. Marcelito Abas, the three hymenal
lacerations could have been caused by the forcible penetration of a turgid or erected
penis. He explained that the old lacerations were at least five to seven days old
since lacerations heal after three days. As for the absence of sperm, Dr. Abas
opined that the same might have been washed away during urination.[8]
Adelina Racho was the last prosecution witness to testify. She was a day care
worker at the Department of Social Work and Development (DSWD) and Maria
was a boarder in their house located near the high school where Maria was
studying. According to Adelina Racho, she was told that Maria did not want to go
home on November 26, 1994, and that when she inquired about the reason, she was
told it was because Maria had been raped by her father. Adelina Racho said she
took Maria to the PNP at Camp Wenceslao Q. Vinzons, where they gave their
statements. She said it was Marias decision to have a medical examination at the
Provincial Hospital. Afterwards, Maria went to live with INK elder Danny Manabat
until the DSWD in Sorsogon, Sorsogon took custody of her.[9]
The defense presented as witnesses Marias high school adviser, Rosalia
Merca; the barangay captain of Guinobatan, Bacud, Camarines Norte, Noel Gadil;
accused-appellant; and the latters neighbor, Lilia Fraga Medollar.
Rosalia Merca affirmed her certification (Exh. 1),[10] dated November 28,
1994, that in 1994, Maria was absent from class six times in September, i.e.,
September 7, 8, 12, 13, 24, and 26, four times in October, i.e., October 4, 5, 6, and
17, and eight times in November, i.e., November 2, 3, 4, 11, 16, 18, 25, and 28.[11]
Barangay Captain Noel Gadil affirmed the certification (Exh. 2)[12] he issued
on January 8, 1997 to the effect that there was no dance party held in his barangay
on November 5, 1994.[13]
Testifying in his behalf, accused-appellant Ricardo Agravante stated that after
he and Marias mother, Evelyn Vargas, had separated in 1985, Maria remained in his
custody. From February to November 20, 1994, he worked as a laborer of the
Philippine National Oil Company (PNOC) assigned to a job site in the municipality
of San Lorenzo Ruiz. He and his common-law wife, Virginia Bangayciso, and
Maria lived in a resettlement area 50 kilometers away. Accused-appellant claimed
that he stayed at the job site from Monday to Saturday and went home only when
shuttle service was available. For this reason, he seldom saw Maria, who came
home from the boarding house only on weekends. Accused-appellant estimated the
boarding house to be eight kilometers from his house at barangay Matacong.
Accused-appellant denied having raped his daughter. He claimed that she filed
rape charges against him because she was given lashes by him on November 19,
1994. He said he did this only because she did not attend school and joined the
Iglesia ni Kristo and seldom came home. Accused-appellant claimed that after he
had punished Maria, a friend fetched him and his common-law wife to attend a
neighbors party. Accused-appellant admitted that in the evening of November 5 and
19, 1994, he slept in their house. He claimed, however, that Maria slept in a
separate room which had a lock. He said he only came to know about the charges
against him in the evening of November 26, 1994 when the police took him for
questioning.[14]
Lilia Fraga Medollar was a neighbor of the Agravantes. She corroborated
accused-appellants claim that in the afternoon of November 19, 1994, she fetched
accused-appellant and the latters common-law wife and the three of them went to a
birthday party of the child of a neighbor, Pacita Catayon, staying there until 8
oclock in the evening. Lilia Fraga Medollar belied Marias testimony that her
(Lilias) son Gary Fraga[15] slept in the house of the Agravantes the night of
November 5, 1994, because, according to her, she took her son from them on
October 25, 1994, after he had run away from home.[16]
On October 16, 1998, the trial court rendered its decision, the dispositive
portion of which reads:
IN THE CIRCUMSTANCES, the Court finds the accused Ricardo Agravante y
Zantua guilty of the crime[s] charged beyond reasonable doubt and is hereby
sentenced to suffer the penalty of death in each of the criminal cases No. 8430,
8431 and 8432 [sic].
Accordingly, said accused is hereby condemned to pay Maria Agravante the sum
of P50,000.00 in each of the three cases or a total sum of P150,000.00 as moral
damages.
IT IS SO ORDERED.[17]
On December 13, 1999, accused-appellant filed a motion for new trial on the
ground of newly discovered evidence based on an affidavit executed by his niece,
Criselda Agravante, on November 27, 1999. In her affidavit, Criselda stated that,
like Maria, she was recruited into the INK and persuaded by Adelina Racho to
work as a househelp because she might just become the victim of incestuous rape
which was the trend of the times; that she stayed in Adelina Rachos house until her
father Roberto came to take her; that in several conversations, Maria told her how
much she enjoyed her membership in the INK and how she hated her stepmother,
who beat her, and her father, who did not protect her from being abused; and that
she knew that Maria had been sleeping with her boyfriend Nio.
 In its resolution of January 25, 2000, this Court denied accused-appellants
motion for new trial on the ground that the affidavit did not constitute newly
discovered evidence. It was explained:
Rule 121, 2 of the 1988 Rules on Criminal Procedure allows a new trial to be held
on the ground of newly discovered evidence on the following conditions: (a) the
evidence was discovered after the trial, (b) it could not have been discovered and
produced at the trial despite reasonable diligence, and (c) it is of such weight that, if
admitted, would probably change the judgment.
In this case, the evidence supporting accused-appellants motion cannot be
considered newly discovered. It had been in existence even before the trial, only
that the witness, Criselda Agravante, who knew about the matter was not presented
during the trial. In effect, it amounts to no more than forgotten proof which would
not justify an order to conduct new trial. (People v. Penesa, 81 Phil. 398
(1948)) Even if Criselda told accused-appellant what she knew only after he had
been convicted, still it has not been shown that her testimony constitutes evidence
that could not have been unearthed without the exercise of reasonable
diligence. After all, Criselda is a niece of accused-appellant. Although she had
moved to Pampanga, it appears that she and accused-appellant had maintained
contact. By her own admission, she was aware of the filing of the rape charges
against accused-appellant. Yet it took her five years from learning of the charges
against accused-appellant to signify her willingness to give evidence in his favor.
Finally, the Court does not think that her testimony is of such weight that it would
probably cause the acquittal of herein accused-appellant because the affidavit is
merely of corroborative value and does not really concern facts constituting the
crimes subject of these cases. (People v. Samaniego and Ong Inc., 95 Phil. 218
(1954)) It does not incontrovertibly show that accused-appellant did not commit the
crimes with which he was charged.[18]
Accused-appellant then filed his brief in which he alleged that
1) The trial court grossly failed to consider facts and circumstances of
the case indicating that private complainants charge of Rape and
testimony are tainted by a semblance of being a malicious
concoction.
2) The trial court erred in giving undue weight and credence to the
testimony of private complainant despite the fact that her testimony
indicates inconsistency, lies, and improbabilities.
3) The trial court erred when it engages in giving undue weight to the
evidence presented by the prosecution despite the existence of clear,
positive and credible evidence effectively controverting the evidence
presented by the prosecution.
4) The trial court erred when it engages in wild conjectures and harped
on alleged weakness of appellants evidence to demolish the cause
and the strong and credible defense raised by the Accused.
5) The trial court erred in not acquitting the accused-appellant on ground
of reasonable doubt and for failing to appreciate facts indicating that
the instant case is merely a malicious concoction perpetrated by the
private complainant and her cohorts.[19]
I. The sole issue presented by accused-appellant concerns the credibility of
complainant Maria Agravante.
A. Accused-appellant contends that Maria Agravante simply concocted the
rape charges against him. He says that his daughter was bitter towards him because
he gave her lashes when he learned that she had been skipping classes in order to
attend INK activities. Proof of this, he claims, is the fact that it was an INK
member, Adelina Racho, who helped his daughter lodge a complaint in the PNP.
We find the contention to be without merit. First of all, as pointed out by the
Solicitor General, the members of the INK who helped Maria file charges against
accused-appellant are responsible members of the community: Adelina Racho is a
day care worker of the DSWD, Danilo Manabat is an INK minister, while Enrico
Amor is a police captain. If they helped Maria, it was because, as she said, she did
not have any relative to help her.[20] Indeed, the claim that Maria had been
brainwashed into filing the charges is belied by her steadfastness in seeking the
prosecution of her father even after she was no longer living in the house of INK
minister Danny Manabat and her refusal to give in to pressure from her relatives to
desist.[21] Second, when Maria was asked by the public prosecutor:
Now, you were repeatedly asked by the counsel for the accused that if ever
your father is found guilty by this Honorable Court in these three (3) cases, he
might be meted out the death penalty and you said you are aware of that. And you
also said when asked by the counsel for the accused that you also love your
father. So, may I ask you, what is your motive in filing these cases against your
father?,
she answered: Because he raped me, sir.[22]
No woman, much less one who is of tender age, would concoct a charge of sexual
abuse and endure the degradation and humiliation of a public trial, where she
would be forced to reveal the lurid details of her misfortune, if she had not really
been raped. This is particularly so where, as in these cases, the accused is
complainants own father for whom, it may be assumed, every child has the deepest
reverence and respect in our culture.[23]
 B. Accused-appellant points out alleged improbabilities and inconsistencies in
the testimony of Maria, to wit:
1. It is contended that the fact that Maria went back to sleep after she had been
raped on November 5, 1994 as if nothing happened to her cannot be the reaction of
one who had just gone through a harrowing experience.
What accused-appellant perceives to be a cavalier reaction (going back to
sleep as if nothing happened to her) appears more to be a desperate attempt on her
part to deny what had happened. This reaction is consistent with her other actions
after the first rape, i.e., the washing of her private parts and changing her
underwear. Indeed, there is no standard reaction of a victim to the crime of
rape. Rape is both a physical and emotional assault causing tremendous stress on
the victim.[24] After her harrowing experience, Maria found solace in sleep.
2. It is contended that Marias claim that accused-appellant whipped her on
November 19, 1994 because she came home late is improbable because accused-
appellant was aware of the distance which Maria had to travel to reach
home. According to accused-appellant, what is more probable is that he gave her
some lashings because she had been absent from class many times attending INK
activities.
But accused-appellant knew even before this incident of Marias absences
because, as Marias adviser testified, Marias stepmother saw her twice about Marias
school attendance.[25] As for accused-appellants claimed opposition to Marias
joining the INK, Maria testified that in fact she had obtained his permission.[26]
Thus, it appears that accused-appellant chastised his daughter because the
latter did not come home the previous weekend (November 12-13, 1994).
[27]
Accused-appellant himself admitted this when he testified that one of the
reasons he whipped Maria is that she seldom came home.[28]
3. It is contended that Marias claim that she did not miss any class before the
rape incidents[29] is belied by the certification (Exh. 1) issued by her adviser
showing that Maria indeed incurred absences in September and October, 1994.
This inconsistency concerns only a minor collateral matter and does not
detract from Marias testimony that she had been raped by accused-appellant in
November. For the same reason, accused-appellants claim that the certification
(Exh. 2) of Barangay Captain Noel Gadil that there was no dance held on
November 5, 1994 contradicts Marias testimony that accused-appellants common-
law wife attended the said affair has little relevance to the rape charges. In any
case, Gadil himself admitted that he issued the certification only on January 8,
1997, three years after the supposed event, not on the basis of any record kept by
him or his office but only from memory.[30]
4. According to accused-appellant, Marias testimony that Gary Fraga slept in
their house on November 5, 1994 is contradicted by the testimony of Lilia Fraga
Medollar that earlier, on October 25, 1994, she took her son Gary from the
Agravantes.
However, Lilia Fraga Medollar herself testified that it took six months from
the time her son Gary ran away sometime in October 1994 before she came to
know his whereabouts and subsequently took him from the Agravantes. [31]
Thus, accused-appellant has not shown any compelling reason for this Court
to depart from the trial courts finding that Maria was telling the truth when she
accused accused-appellant of raping her. The inconsistencies and improbabilities in
her testimony relate to minor, trivial, and inconsequential matters which do not
alter the essential fact in the crime of rape, which is carnal knowledge through
force or intimidation.[32] In fact, they may even be considered a badge of
truthfulness which erases any suspicion that Maria is a rehearsed witness. [33] On the
other hand, Marias claim that she had been raped is corroborated by the medical
finding that she suffered hymenal lacerations at the 3, 6, and 9 o clock positions.[34]
II. Art. 335 of the Revised Penal Code, as amended by R.A. No. 7659,
provides for the imposition of the death penalty on the offender in rape cases if the
victim is under eighteen (18) years of age and the offender is, among others, a
parent of the victim. As a qualifying circumstance which increases the range of the
penalty, the concurrence of the minority of the victim and her relationship to the
offender must be both alleged and proven.[35]
In these cases, while the informations allege that complainant was a minor
fourteen years of age at the time of the commission of the rapes and that accused-
appellant is the father of the offended party, only the relationship of accused-
appellant to the complainant has been sufficiently established. [36] To be sure, the
minority of complainant (14 years of age at the time of the commission of the
rapes) was the subject of the parties stipulation of facts. [37] However, the stipulation
of facts was not signed by accused-appellant as required by Rule 118, 2 of the
Revised Rules of Criminal Procedure which provides that No agreement or
admission made or entered during the pre-trial conference shall be used in evidence
against the accused unless reduced to writing and signed by him and his counsel.
This requirement is mandatory. As held in Fule v. Court of Appeals: [38]
The conclusion is inevitable, therefore, that the omission of the signature of
the accused and his counsel, as mandatorily required by the Rules, renders the
Stipulation of Facts inadmissible in evidence.The fact that the lawyer of the
accused, in his memorandum, confirmed the Stipulation of Facts does not cure the
defect because Rule 118 requires both the accused and his counsel to sign the
Stipulation of Facts. What the prosecution should have done, upon discovering that
the accused did not sign the Stipulation of Facts, as required by Rule 118, was to
submit evidence to establish the elements of the crime, instead of relying solely on
the supposed admission of the accused in the Stipulation of Facts.
 The stipulation of facts, therefore, cannot be used as evidence of complainants
age at the time of the rapes in question.
Nor is there sufficient evidence of complainants age. The testimonies of
complainant concerning her age and that of her father, herein accused-appellant,
concerning this matter are insufficient. In People v. Tundag,[39] in which the
complaints alleged that the victim was 13 years old at the time of the rapes, it was
held that it was error for the trial court to take judicial notice of the victims age
even if the defense admitted the victims minority. The Court emphasized that there
must be independent proof, such as a birth certificate, of the age of the
victim. In People v. San Agustin,[40] this Court held that the latters minority had not
been sufficiently established notwithstanding the appellants admission that the
victim was 13 years of age. Judicial notice of the victims age may be taken if the
victim is 10 years old or below, [41] but not where, as in this case, the victim is
alleged to be 14 years old when she was raped.
As no independent evidence was presented by the prosecution to prove the
minority of complainant, it was error for the trial court to find accused-appellant
guilty of qualified rape and to sentence him to death.
However, the award of moral damages in the amount of P50,000.00 in each
case must be sustained. There is no need to prove during trial that the victim
suffered mental, physical, and psychological trauma as these are presumed. In
addition, an award of P50,000.00 in civil indemnity must also be made in each case
in accordance with case law. [42] Because of the aggravating circumstance of
relationship, an award of exemplary damages in the amount of P25,000.00 should
also be given.[43]
WHEREFORE, the decision of the Regional Trial Court, Branch 49, Daet,
Camarines Sur is MODIFIED by finding accused-appellant Ricardo Agravante y
Zantua guilty of three counts of simple rape and accordingly sentencing him in
each case to suffer the penalty of reclusion perpetua and to pay complainant Maria
Agravante P50,000.00 as civil indemnity and P25,000.00 as exemplary damages in
addition to the amount of P50,000.00 awarded by the trial court as moral damages.
SO ORDERED.

EN BANC
[G.R. No. 131516. March 5, 2003]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. RONNIE RULLEPA
y GUINTO, accused-appellant.
DECISION
CARPIO-MORALES, J.:
On complaint of Cyra May Francisco Buenafe, accused-appellant Ronnie
Rullepa y Guinto was charged with Rape before the Regional Trial Court (RTC) of
Quezon City allegedly committed as follows:
That on or about the 17th day of November, 1995, in Quezon City, Philippines, the
said accused, by means of force and intimidation, to wit: by then and there
willfully, unlawfully and feloniously removing her panty, kissing her lips and
vagina and thereafter rubbing his penis and inserting the same to the inner portion
of the vagina of the undersigned complainant, 3 years of age, a minor, against her
will and without her consent.[1]
Arraigned on January 15, 1996, accused-appellant pleaded not guilty.[2]
From the testimonies of its witnesses, namely Cyra May, [3] her mother Gloria
Francisco Buenafe, Dr. Cristina V. Preyra, and SPO4 Catherine Borda, the
prosecution established the following facts:
On November 20, 1995, as Gloria was about to set the table for dinner at her
house in Quezon City, Cyra May, then only three and a half years old, told her,
Mama, si kuya Ronnie lagay niya titi niya at sinaksak sa puwit at sa bibig ko.
Kuya Ronnie is accused-appellant Ronnie Rullepa, the Buenafes house boy,
who was sometimes left with Cyra May at home.
Gloria asked Cyra May how many times accused-appellant did those things to
her, to which she answered many times. Pursuing, Gloria asked Cyra May what
else he did to her, and Cyra May indicated the room where accused-appellant slept
and pointed at his pillow.
As on the night of November 20, 1995 accused-appellant was out with
Glorias husband Col. Buenafe, [4] she waited until their arrival at past 11:00
p.m. Gloria then sent accused-appellant out on an errand and informed her husband
about their daughters plaint. Buenafe thereupon talked to Cyra May who repeated
what she had earlier told her mother Gloria.
When accused-appellant returned, Buenafe and Gloria verified from him
whether what Cyra May had told them was true. Ronnie readily admitted doing
those things but only once, at 4:00 p.m. of November 17, 1995 or three days
earlier. Unable to contain her anger, Gloria slapped accused-appellant several
times.
Since it was already midnight, the spouses waited until the following morning
to bring accused-appellant to Camp Karingal where he admitted the imputations
against him, on account of which he was detained. Glorias sworn statement[5] was
then taken.[6]
Recalling what accused-appellant did to her, Cyra May declared at the witness
stand: Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga, thus causing
her pain and drawing her to cry. She added that accused-appellant did these to her
twice in his bedroom.
Dr. Ma. Cristina V. Preyra, the Medico-Legal Officer and Chief of the
Biological Science Branch of the Philippine National Police Crime Laboratory who
examined Crya May, came up with her report dated November 21, 1995,
[7]
containing the following findings and conclusions:
FINDINGS:
GENERAL AND EXTRA GENITAL:
Fairly developed, fairly nourished and coherent female child subject. Breasts are
undeveloped. Abdomen is flat and soft.
GENITAL:
There is absence of pubic hair. Labia majora are full, convex and coaptated
with congested and abraded labia minora presenting in between. On separating
the same is disclosed an abraded posterior fourchette and an elastic, fleshy type
intact hymen. External vaginal orifice does not admit the tip of the examining index
finger.
xxx
CONCLUSION:
Subject is in virgin state physically.
There are no external signs of recent application of any form of trauma at the
time of examination. (Emphasis supplied.)
By Dr. Preyras explanation, the abrasions on the labia minora could have
been caused by friction with an object, perhaps an erect penis. She doubted if riding
on a bicycle had caused the injuries.[8]
The defenses sole witness was accused-appellant, who was 28 and single at
the time he took the witness stand on June 9, 1997. He denied having anything to
do with the abrasions found in Cyra Mays genitalia, and claimed that prior to the
alleged incident, he used to be ordered to buy medicine for Cyra May who had
difficulty urinating. He further alleged that after he refused to answer Glorias
queries if her husband Buenafe, whom he usually accompanied whenever he went
out of the house, was womanizing, Gloria would always find fault in him. He
suggested that Gloria was behind the filing of the complaint. Thus:
q- According to them you caused the abrasions found in her genital?
a- That is not true, sir.
q- If that is not true, what is the truth?
a- As I have mentioned earlier that before I started working with the
family I was sent to Crame to buy medicine for the daughter
because she had difficulty in urinating.
q- Did you know why the child has difficulty in urinating?
a- No, I do not know, sir.
q- And how about the present complaint filed against you, the complaint
filed by the mother of the victim?
a- I did not do it, sir.
q- What is the truth, what can you say about this present complaint filed
against you?
a- As I said Mrs. Buenafe got mad at me because after I explained to her
that I was going with her gusband (sic) to the children of the
husband with a former marriage.[9]
Finding for the prosecution, Branch 96 of the Quezon City RTC rendered
judgment, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered finding accused RONNIE
RULLEPA y GUINTO guilty beyond reasonable doubt of rape, and he is
accordingly sentenced to death.
The accused is ordered to pay CYRA MAE BUENAFE the amount of P40,000.00
as civil indemnity.
Costs to be paid by the accused.[10] (Italics in the original.)
Hence, this automatic review, accused-appellant assigning the following
errors to the trial court:
I
THE COURT A QUO ERRED IN CONSIDERING AS ADMISSIBLE IN
EVIDENCE THE ACCUSED-APPELLANTS ADMISSION.
II
THE COURT A QUO ERRED ON (sic) RULING THAT THE ACCUSED-
APPELLANTS SILENCE DURING TRIAL AMOUNTED TO AN IMPLIED
ADMISSION OF GUILT.
III
THE COURT A QUO ERRED IN FINDING THAT THE GUILT OF THE
ACCUSED-APPELLANT FOR THE CRIME CHARGED HAS BEEN PROVEN
BEYOND REASONABLE DOUBT.
IV
THE COURT A QUO GRAVELY ERRED IN IMPOSING THE SUPREME
PENALTY OF DEATH UPON THE ACCUSED-APPELLANT.[11] (Emphasis
supplied.)
 Accused-appellant assails the crediting by the trial court, as the following a- Opo.
portion of its decision shows, of his admission to Gloria of having sexually
assaulted Cyra May: q- When was that?
a- When my mother was asleep, he put he removed my panty and
In addition, the mother asserted that Rullepa had admitted Cyra Ma[y]s complaint inserted his penis inside my vagina, my anus and my mouth, sir.
during the confrontation in the house. Indeed, according to the mother, the
admission was even expressly qualified by Rullepas insistence that he had xxx
committed the sexual assault only once, specifying the time thereof as 4:00 pm of q- After your Kuya Ronnie did those things to you what did you feel?
November 17, 1995. That qualification proved that the admission was voluntary
and true. An uncoerced and truthful admission like this should be absolutely a- Sabi nya ganito (Witness putting her finger in her lips) Nasaktan po
admissible and competent. ako at umiyak po ako.
q- Did you cry because of hurt?
xxx
a- Yes.
Remarkably, the admission was not denied by the accused during trial despite his q- What part of your body hurt?
freedom to deny it if untrue. Hence, the admission became conclusive upon him.
[12]
(Emphasis supplied.) a- Pepe ko po. When I went to the bathroom to urinate, I felt pain in my
organ, sir.[13]
To accused-appellant, the statements attributed to him are inadmissible since Cyra May reiterated her testimony during cross-examination, providing more
they were made out of fear, having been elicited only after Cyra Mays parents revolting details of her ordeal:
bullied and questioned him.He thus submits that it was error for the trial court to
take his failure to deny the statements during the trial as an admission of guilt. q- So, you said that Kuya Ronnie did something to you what did he do to
you on November 17, 1995?
Accused-appellants submission does not persuade. The trial court considered
his admission merely as an additional ground to convince itself of his a- Sinaksak nga yong titi nya. He inserted his penis to my organ and to
culpability. Even if such admission, as well as the implication of his failure to deny my mouth, sir.
the same, were disregarded, the evidence suffices to establish his guilt beyond
reasonable doubt. xxx

The plain, matter-of-fact manner by which Cyra May described her abuse in q- When you said that your kuya Ronnie inserted his penis into your
the hands of her Kuya Ronnie is an eloquent testament to the truth of her organ, into your mouth, and into your anus, would you describe
accusations. Thus she testified on direct examination: what his penis?

q- Do you recall if Ronnie Rullepa did anything to you? a- It is a round object, sir.

a- Yes, sir. C o u r t:

q- What did he do to you? Is this titi of your kuya Ronnie a part of his body?

a- Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga a- Opo.

q- How many times did he do that to you? q- Was that in the head of kuya Ronnie?

a- Twice, sir. a- No, sir.

xxx q- Which part of his body that titi located?

q- Do you remember when he did these things to you? (Witness pointing to her groin area)
 C o u r t: q- Is it not a fact that you said a while ago that when your father leaves
the house, he [was] usually accompanied by your kuya Ronnie?
Continue
a- Opo.
xxx
q- Why is it that Kuya Ronnie was in the house when you father left the
q- Why were you in that room? house at that time, on November 17?
a- Gusto nya po matulog ako sa kuwarto niya. a- He was with Kuya Ronnie, sir.
q- When you were in that room, what did Kuya Ronnie do to you? q- So, it is not correct that kuya Ronnie did something to you because
a- Hinubo po niya ang panty ko. your kuya Ronnie [was] always with your Papa?

q- And after he remove your panty, what did Kuya Ronnie do, what did
he do to you?
a- He inserted his penis to my organ, sir.
q- Why did kuya Ronnie, was kuya Ronnie already naked or he was
already wearing any clothing?
a- Still had his clothing on, sir.
q- So, where did his penis, saan lumabas ang penis ni Kuya Ronnie?
a- Dito po, (Witness referring or pointing to her groin area)
xxx
q- So, thats the and at the time, you did not cry and you did not shout for
help?
a- Sabi nya po, not to make any noise because my mother might be
roused from sleep.
q- How long was kuya Ronnie did that to you?
a- Matagal po.
q- After kuya Ronnie scrub his penis to your vagina, what other things
did he do?
a- After that he inserted his penis to my mouth, and to my anus, sir.
q- You did not complain and you did not shout?
a- I cried, sir.[14]
Accused-appellant draws attention to the statement of Cyra May that he was
not in the house on November 17 (1995), as reflected in the following transcript of
her testimony:
a- Yes, sir.[15]
The above-quoted testimony of Cyra May does not indicate the time when her
father Col. Buenafe left their house on November 17, 1995 with accused-appellant
and, thus, does not preclude accused-appellants commission of rape on the same
date. In any event, a young child is vulnerable to suggestion, hence, her affirmative
response to the defense counsels above-quoted leading questions.
As for the variance in the claim regarding when Gloria was informed of the
rape, Gloria having testified that she learned of it on November 20, 1995 [16] while
Cyra May said that immediately after the incident, she awakened her mother who
was in the adjacent room and reported it: [17] This is a minor matter that does not
detract from Cyra Mays categorical, material testimony that accused-appellant
inserted his penis into her vagina.
Accused-appellant goes on to contend that Cyra May was coached, citing the
following portion of her testimony:
q- Yong sinabi mong sinira nya ang buhay mo, where did you get that
phrase?
a- It was the word of my Mama, sir.[18]
On the contrary, the foregoing testimony indicates that Cyra May was really
narrating the truth, that of hearing her mother utter sinira niya ang buhay mo.
Accused-appellants suggestion that Cyra May merely imagined the things of
which he is accused, perhaps getting the idea from television programs, is
preposterous. It is true that the ordinary child is a great weaver of romances, and
her imagination may induce (her) to relate something she has heard or read in a
story as personal experience. [19] But Cyra Mays account is hardly the stuff of
romance or fairy tales. Neither is it normal TV fare, if at all.
This Court cannot believe that a victim of Cyra Mays age could concoct a tale
of defloration, allow the examination of her private parts, and undergo the expense,
trouble, inconvenience, not to mention the trauma of public trial.[20]
 Besides, her testimony is corroborated by the findings of Dr. Preyra that there
were abrasions in her labia minora, which she opined, could have been caused by
friction with an erect penis.
This Court thus accords great weight to the following assessment of the trial
court regarding the competency and credibility of Cyra May as a witness:
Her very tender age notwithstanding, Cyra Ma(y) nonetheless appeared to possess
the necessary intelligence and perceptiveness sufficient to invest her with the
competence to testify about her experience. She might have been an impressionable
child as all others of her age are but her narration of Kuya Ronnies placing
his titi in her pepe was certainly one which could not be considered as a common
childs tale. Her responses during the examination of counsel and of the Court
established her consciousness of the distinction between good and bad, which
rendered inconceivable for her to describe a bad act of the accused unless it really
happened to her. Needless to state, she described the act of the accused as bad. Her
demeanor as a witness manifested during trial by her unhesitant, spontaneous, and
plain responses to questions further enhanced her claim to credit and
trustworthiness.[21] (Italics in the original.)
In a futile attempt at exculpation, accused-appellant claims that even before
the alleged incident Cyra May was already suffering from pain in urinating. He
surmises that she could have scratched herself which caused the abrasions. Dr.
Preyra, however, was quick to rule out this possibility. She stated categorically that
that part of the female organ is very sensitive and rubbing or scratching it is
painful.[22] The abrasions could not, therefore, have been self-inflicted.
That the Medical-Legal Officer found no external signs of recent application
of any form of trauma at the time of the examination does not preclude accused-
appellants conviction since the infliction of force is immaterial in statutory rape. [23]
More. That Cyra May suffered pain in her vagina but not in her anus despite
her testimony that accused-appellant inserted his penis in both orifices does not
diminish her credibility. It is possible that accused-appellants penis failed to
penetrate her anus as deeply as it did her vagina, the former being more resistant to
extreme forces than the latter.
Accused-appellants imputation of ill motive on the part of Gloria is
puerile. No mother in her right mind would subject her child to the humiliation,
disgrace and trauma attendant to a prosecution for rape if she were not motivated
solely by the desire to incarcerate the person responsible for the childs defilement.
[24]
Courts are seldom, if at all, convinced that a mother would stoop so low as to
subject her daughter to physical hardship and shame concomitant to a rape
prosecution just to assuage her own hurt feelings.[25]
Alternatively, accused-appellant prays that he be held liable for acts of
lasciviousness instead of rape, apparently on the basis of the following testimony of
Cyra May, quoted verbatim, that he merely scrubbed his penis against her vagina:
q- Is it not a fact that kuya Ronnie just made some scrubbed his penis
into your vagina?
a- Yes, sir.
q- And when he did not actually penetrated your vagina?
a- Yes, sir.[26]
Dr. Preya, however, found abrasions in the labia minora, which is directly beneath
the labia majora,[27] proving that there was indeed penetration of the vagina, not
just a mere rubbing or scrubbing of the penis against its surface.
In fine, the crime committed by accused-appellant is not merely acts of
lasciviousness but statutory rape.
The two elements of statutory rape are (1) that the accused had carnal
knowledge of a woman, and (2) that the woman is below twelve years of age. [28] As
shown in the previous discussion, the first element, carnal knowledge, had been
established beyond reasonable doubt. The same is true with respect to the second
element.
The victims age is relevant in rape cases since it may constitute an element of
the offense. Article 335 of the Revised Penal Code, as amended by Republic Act
No. 7659,[29] provides:
Art. 335. When and how rape is committed. Rape is committed by having carnal
knowledge of a woman under any of the following circumstances:
x x x.
3. When the woman is under twelve years of age x x x.
x x x.
The crime of rape shall be punished by reclusion perpetua.
x x x.
Furthermore, the victims age may constitute a qualifying circumstance,
warranting the imposition of the death sentence. The same Article states:
The death penalty shall also be imposed if the crime of rape is committed with any
of the following attendant circumstances:
1. when the victim is under eighteen (18) years of age and the offender is a
parent, ascendant, step-parent, guardian, relative by consanguinity or affinity with
the third civil degree, or the common-law spouse of the parent of the victim.
x x x.
4. when the victim is x x x a child below seven (7) years old.
x x x.
Because of the seemingly conflicting decisions regarding the sufficiency of
evidence of the victims age in rape cases, this Court, in the recently decided case
of People v. Pruna,[30]established a set of guidelines in appreciating age as an
element of the crime or as a qualifying circumstance, to wit:
1. The best evidence to prove the age of the offended party is an original or
certified true copy of the certificate of live birth of such party.
2. In the absence of a certificate of live birth, similar authentic documents such as
baptismal certificate and school records which show the date of birth of the victim
would suffice to prove age.
3. If the certificate of live birth or authentic document is shown to have been lost or
destroyed or otherwise unavailable, the testimony, if clear and credible, of the
victims mother or a member of the family either by affinity or consanguinity who is
qualified to testify on matters respecting pedigree such as the exact age or date of
birth of the offended party pursuant to Section 40, Rule 130 of the Rules on
Evidence shall be sufficient under the following circumstances:
a. If the victim is alleged to be below 3 years of age and what is sought to be
proved is that she is less than 7 years old;
b. If the victim is alleged to be below 7 years of age and what is sought to be
proved is that she is less than 12 years old;
c. If the victim is alleged to be below 12 years of age and what is sought to be
proved is that she is less than 18 years old.
4. In the absence of a certificate of live birth, authentic document, or the testimony
of the victims mother or relatives concerning the victims age, the complainants
testimony will suffice provided that it is expressly and clearly admitted by the
accused.
5. It is the prosecution that has the burden of proving the age of the offended
party. The failure of the accused to object to the testimonial evidence regarding age
shall not be taken against him.
6. The trial court should always make a categorical finding as to the age of the
victim.
Applying the foregoing guidelines, this Court in the Pruna case held that the
therein accused-appellant could only be sentenced to suffer the penalty of reclusion
perpetua since:
x x x no birth certificate or any similar authentic document, such as a baptismal
certificate of LIZETTE, was presented to prove her age. x x x.
x x x.
However, the Medico-Legal Report relied upon by the trial court does not in any
way prove the age of LIZETTE, for there is nothing therein which even mentions
her age. Only testimonial evidence was presented to establish LIZETTEs age. Her
mother, Jacqueline, testified (that the victim was three years old at the time of the
commission of the crime).
xxx
Likewise, LIZETTE testified on 20 November 1996, or almost two years after the
incident, that she was 5 years old. However, when the defense counsel asked her
how old she was on 3 January 1995, or at the time of the rape, she replied that she
was 5 years old. Upon further question as to the date she was born, she could not
answer.
For PRUNA to be convicted of rape in its qualified form and meted the supreme
penalty of death, it must be established with certainty that LIZETTE was below 7
years old at the time of the commission of the crime. It must be stressed that the
severity of the death penalty, especially its irreversible and final nature once carried
out, makes the decision-making process in capital offenses aptly subject to the most
exacting rules of procedure and evidence.
In view of the uncertainty of LIZETTEs exact age, corroborative evidence such as
her birth certificate, baptismal certificate or any other authentic document should
be introduced in evidence in order that the qualifying circumstance of below seven
(7) years old is appreciated against the appellant. The lack of objection on the part
of the defense as to her age did not excuse the prosecution from discharging its
burden. That the defense invoked LIZETTEs tender age for purposes of
questioning her competency to testify is not necessarily an admission that she was
below 7 years of age when PRUNA raped her on 3 January 1995. Such being the
case, PRUNA cannot be convicted of qualified rape, and hence the death penalty
cannot be imposed on him.
However, conformably with no. 3 (b) of the foregoing guidelines, the testimony of
LIZETTEs mother that she was 3 years old at the time of the commission of the
crime is sufficient for purposes of holding PRUNA liable for statutory rape, or rape
of a girl below 12 years of age. Under the second paragraph of Article 335, as
amended by R.A. No. 7659, in relation to no. 3 of the first paragraph thereof,
having carnal knowledge of a woman under 12 years of age is punishable
by reclusion perpetua. Thus, the penalty to be imposed on PRUNA should
be reclusion perpetua, and not death penalty. (Italics in the original.)
Several cases[31] suggest that courts may take judicial notice of the appearance
of the victim in determining her age. For example, the Court, in People v. Tipay,
[32]
qualified the ruling in People v. Javier,[33] which required the presentation of the
birth certificate to prove the rape victims age, with the following pronouncement:
This does not mean, however, that the presentation of the certificate of birth is at all
times necessary to prove minority. The minority of a victim of tender age who may
be below the age of ten is quite manifest and the court can take judicial notice
thereof. The crucial years pertain to the ages of fifteen to seventeen where minority
may seem to be dubitable due to ones physical appearance. In this situation, the
prosecution has the burden of proving with certainty the fact that the victim was
under 18 years of age when the rape was committed in order to justify the
imposition of the death penalty under the above-cited provision. (Emphasis
supplied.)
On the other hand, a handful of cases[34] holds that courts, without the
requisite hearing prescribed by Section 3, Rule 129 of the Rules of Court, [35] cannot
take judicial notice of the victims age.
Judicial notice signifies that there are certain facta probanda, or propositions
in a partys case, as to which he will not be required to offer evidence; these will be
taken for true by the tribunal without the need of evidence. [36] Judicial notice,
however, is a phrase sometimes used in a loose way to cover some other judicial
action. Certain rules of Evidence, usually known under other names, are frequently
referred to in terms of judicial notice.[37]
The process by which the trier of facts judges a persons age from his or her
appearance cannot be categorized as judicial notice. Judicial notice is based upon
convenience and expediency for it would certainly be superfluous, inconvenient,
and expensive both to parties and the court to require proof, in the ordinary way, of
facts which are already known to courts.[38] As Tundag puts it, it is the cognizance
of certain facts which judges may properly take and act on without proof because
they already know them. Rule 129 of the Rules of Court, where the provisions
governing judicial notice are found, is entitled What Need Not Be Proved. When
the trier of facts observes the appearance of a person to ascertain his or her age, he
is not taking judicial notice of such fact; rather, he is conducting an examination of
the evidence, the evidence being the appearance of the person. Such a process
militates against the very concept of judicial notice, the object of which is to do
away with the presentation of evidence.
This is not to say that the process is not sanctioned by the Rules of Court; on
the contrary, it does. A persons appearance, where relevant, is admissible as object
evidence, the same being addressed to the senses of the court. Section 1, Rule 130
provides:
SECTION 1. Object as evidence. Objects as evidence are those addressed to the
senses of the court. When an object is relevant to the fact in issue, it may be
exhibited to, examined or viewed by the court.
To be sure, one author writes, this practice of inspection by the court of
objects, things or persons relevant to the fact in dispute, has its roots in ancient
judicial procedure.[39] The author proceeds to quote from another authority:
Nothing is older or commoner in the administration of law in all countries than the
submission to the senses of the tribunal itself, whether judge or jury, of objects
which furnish evidence. The view of the land by the jury, in real actions, of a
wound by the judge where mayhem was alleged, and of the person of one alleged
to be an infant, in order to fix his age, the inspection and comparison of seals, the
examination of writings, to determine whether they are ()blemished,() the
implements with which a crime was committed or of a person alleged, in a bastardy
proceeding, to be the child of another, are few illustrations of what may be found
abundantly in our own legal records and textbooks for seven centuries past.
[40]
(Emphasis supplied.)
A persons appearance, as evidence of age (for example, of infancy, or of
being under the age of consent to intercourse), is usually regarded as relevant;
and, if so, the tribunal may properly observe the person brought before it.
[41]
Experience teaches that corporal appearances are approximately an index of
the age of their bearer, particularly for the marked extremes of old age and
youth. In every case such evidence should be accepted and weighed for what it may
be in each case worth. In particular, the outward physical appearance of an alleged
minor may be considered in judging his age; a contrary rule would for such an
inference be pedantically over-cautious.[42] Consequently, the jury or the court
trying an issue of fact may be allowed to judge the age of persons in court by
observation of such persons.[43] The formal offer of the person as evidence is not
necessary. The examination and cross-examination of a party before the jury are
equivalent to exhibiting him before the jury and an offer of such person as an
exhibit is properly refused. [44]
This Court itself has sanctioned the determination of an aliens age from his
appearance. In Braca v. Collector of Customs,[45] this Court ruled that:
The customs authorities may also determine from the personal appearance of the
immigrant what his age is. The person of a Chinese alien seeking admission into
the Philippine Islands is evidence in an investigation by the board of special inquiry
to determine his right to enter; and such body may take into consideration his
appearance to determine or assist in determining his age and a finding that the
applicant is not a minor based upon such appearance is not without evidence to
support it.
This Court has also implicitly recognized the same process in a criminal
case. Thus, in United States v. Agadas,[46] this Court held:
Rosario Sabacahan testified that he was 17 years of age; that he had never
purchased a cedula; and that he was going to purchase a cedula the following
january. Thereupon the court asked this defendant these questions: You are a pretty
big boy for seventeen. Answer: I cannot tell exactly because I do not remember
when I was born, but 17 years is my guess. Court: If you are going to take
advantage of that excuse, you had better get some positive evidence to that
effect. Answer: I do not remember, as I already stated on what date and in what
year I was born. The court, in determining the question of the age of the defendant,
Rosario Sabacahan, said:
The defendant, Rosario Sabacahan, testified that he thought that he was about 17
years of age, but judging by his appearance he is a youth 18 or 19 years old. He
has shown that he has no positive information on the subject and no effort was
made by the defense to prove the fact that he is entitled to the mitigating
circumstance of article 9, paragraph 2, of the Penal code, which fact it is held to be
incumbent upon the defense to establish by satisfactory evidence in order to enable
the court to give an accused person the benefit of the mitigating circumstance.
In United States vs. Estavillo and Perez (10 Off. Gaz., 1984) Estavillo testified,
when the case was tried in the court below, that he then was only 16 years of
age. There was no other testimony in the record with reference to his age. But the
trial judge said: The accused Estavillo, notwithstanding his testimony giving his
age as 16 years, is, as a matter of fact, not less than 20. This court, in passing upon
the age of Estavillo, held:
We presume that the trial court reached this conclusion with reference to the age of
Estavillo from the latters personal appearance. There is no proof in the record, as
we have said, which even tends to establish the assertion that this appellant
understated his age. * * * It is true that the trial court had an opportunity to note the
personal appearance of Estavillo for the purpose of determining his age, and by so
doing reached the conclusion that he was at least 20, just two years over 18. This
appellant testified that he was only 16, and this testimony stands
uncontradicted. Taking into consideration the marked difference in the penalties to
be imposed upon that age, we must, therefore, conclude (resolving all doubts in
favor of the appellants) that the appellants ages were 16 and 14 respectively.
While it is true that in the instant case Rosario testified that he was 17 years of age,
yet the trial court reached the conclusion, judging from the personal appearance of
Rosario, that he is a youth 18 or 19 years old. Applying the rule enunciated in the
case just cited, we must conclude that there exists a reasonable doubt, at least, with
reference to the question whether Rosario was, in fact 18 years of age at the time
the robbery was committed. This doubt must be resolved in favor of the defendant,
and he is, therefore, sentenced to six months of arresto mayor in lieu of six years
ten months and one day of presidio mayor.x x x.
There can be no question, therefore, as to the admissibility of a persons
appearance in determining his or her age. As to the weight to accord such
appearance, especially in rape cases, Pruna laid down guideline no. 3, which is
again reproduced hereunder:
3. If the certificate of live birth or authentic document is shown to have been lost or
destroyed or otherwise unavailable, the testimony, if clear and credible, of the
victims mother or a member of the family either by affinity or consanguinity who is
qualified to testify on matters respecting pedigree such as the exact age or date of
birth of the offended party pursuant to Section 40, Rule 130 of the Rules on
Evidence shall be sufficient under the following circumstances:
a. If the victim is alleged to be below 3 years of age and what is sought to be
proved is that she is less than 7 years old;
b. If the victim is alleged to be below 7 years of age and what is sought to be
proved is that she is less than 12 years old;
c. If the victim is alleged to be below 12 years of age and what is sought to be
proved is that she is less than 18 years old.
Under the above guideline, the testimony of a relative with respect to the age
of the victim is sufficient to constitute proof beyond reasonable doubt in cases (a),
(b) and (c) above. In such cases, the disparity between the allegation and the proof
of age is so great that the court can easily determine from the appearance of the as object evidence, cannot be accorded much weight and, following Pruna, the
victim the veracity of the testimony. The appearance corroborates the relatives testimony of the mother is, by itself, insufficient.
testimony.
As it has not been established with moral certainty that Cyra May was below
As the alleged age approaches the age sought to be proved, the persons seven years old at the time of the commission of the offense, accused-appellant
appearance, as object evidence of her age, loses probative value. Doubt as to her cannot be sentenced to suffer the death penalty. Only the penalty of reclusion
true age becomes greater and, following Agadas, supra, such doubt must be perpetua can be imposed upon him.
resolved in favor of the accused.
In line with settled jurisprudence, the civil indemnity awarded by the trial
court is increased to P50,000.00. In addition, Cyra May is entitled to an award of
This is because in the era of modernism and rapid growth, the victims mere moral damages in the amount of P50,000.00.[50]
physical appearance is not enough to gauge her exact age. For the extreme penalty
of death to be upheld, nothing but proof beyond reasonable doubt of every fact WHEREFORE, the Decision of the Regional Trial Court of Quezon City,
necessary to constitute the crime must be substantiated. Verily, the minority of the Branch 96, is AFFIRMED with MODIFICATION. Accused-appellant Ronnie
victim should be not only alleged but likewise proved with equal certainty and Rullepa y Guinto is found GUILTY of Statutory Rape, defined and punished by
clearness as the crime itself. Be it remembered that the proof of the victims age in Article 335 (3) of the Revised Penal Code, as amended, and is sentenced to suffer
the present case spells the difference between life and death.[47] the penalty of reclusion perpetua. He is ordered to pay private complainant, Cyra
May Buenafe y Francisco, the amount of P50,000.00 as civil indemnity
In the present case, the prosecution did not offer the victims certificate of live and P50,000.00 as moral damages.
birth or similar authentic documents in evidence. The victim and her mother,
SO ORDERED.
however, testified that she was only three years old at the time of the rape. Cyra
Mays testimony goes:
q- Your name is Cyra Mae is that correct?
a- Yes, sir.
q- And you are 3 years old?
a- Yes, sir.[48]
That of her mother goes:
Q How old was your daughter when there things happened?
A 3 and years old.
Q When was she born?
A In Manila, May 10, 1992.[49]
Because of the vast disparity between the alleged age (three years old) and the
age sought to be proved (below twelve years), the trial court would have had no
difficulty ascertaining the victims age from her appearance. No reasonable doubt,
therefore, exists that the second element of statutory rape, i.e., that the victim was
below twelve years of age at the time of the commission of the offense, is present.
Whether the victim was below seven years old, however, is another
matter. Here, reasonable doubt exists. A mature three and a half-year old can easily
be mistaken for an underdeveloped seven-year old. The appearance of the victim,

SECOND DIVISION
[G.R. No. L-36638. June 28, 1974.]
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. ALEXANDER
SACABIN @ "ROMEO", Defendant-Appellant.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Jaime M.
Lantin and Solicitor Renato S. Puno for Plaintiff-Appellee.
Pio A. Sepulveda, for Defendant-Appellant.
DECISION
FERNANDEZ, J.:
Convicted of rape and sentenced to suffer the penalty of reclusion perpetua 1 and
to pay the offended party, Erlinda Montibon, P3,000.00 for moral damages and
P3,000.00 for exemplary damages, appellant Alexander Sacabin has appealed to
this Court and now pleads for acquittal on the ground, which the lower court
overruled, that although he really had sexual intercourse with the offended party,
she voluntarily and willingly acceded to it because they were sweethearts.
This is a classic case of rape where, on the issue of whether or not the woman was
raped, the only eye-witnesses testifying are the offended party for the prosecution
and the accused in his defense. Thus, the judicial observation has been made long
ago, that rape is hard to be proved, but still harder to be defended. And in the case
at bar, We cannot be aided by the general rule that the findings of fact of the trial
judge must be sustained on appeal because he has had the opportunity to hear and
see the witnesses when they testified before him, for all the witnesses for the
prosecution testified before one trial Judge 2 , while the appellant presented his
evidence consisting of his lone testimony before another Judge 3 , and the latter
was the one that rendered the decision appealed from. We, therefore, reviewed and
evaluated all the evidence on record with extra care.
On the date of the commission of the offense, November 23, 1968, Erlinda
Montibon was barely over 15 years old. She finished sixth grade. She was then
living in the house of the spouses Patrolman and Mrs. Constancio Villondo as a
helper. She knew the appellant, then single and 22 years old. He was a laborer in
the Laya Building in Iligan City, then under construction, and was a usual buyer of
native bread and cakes which Erlinda used to sell at the supermarket nearby.
Erlinda testified that around 8:00 o’clock in the evening of November 23, 1968, she
was enticed by one Teodelita Dagondon to go to the supermarket. Teodelita said
she was going to buy for her birthday the following day all of Erlinda’s bread and
cakes. They went upstairs to one of the rooms of the Laya Building where they
would agree on the price of the bread and cakes. The appellant was then there
inside. The door was closed and appellant was able to have sexual intercourse with
her two times.
This is the version of Erlinda on how the rape was consummated: 4
x x x
"A Sacabin went near me and wrestled me.
Q What did you do when Romeo Sacabin wrestled you?
A I wanted to get away from his hold.
Q Did you shout for help?
Q When he succeeded in introducing his penis into your vagina, what did he do if
A Yes, I shouted for help. any?

x x x A He also pushed and pull his organ.

Q For how long was the push and pull motion made by this Romeo Sacabin?
Q Did you submit to the urgings of the accused in this case?
A Quite a few minutes . . .
A No, sir.
Q Please inform this Honorable Court if after the introduction of the penis and the
Q What did you do? push and pull motion if you felt some liquid getting inside your vagina.

A We were wrestling for sometime. In fact he smell(ed) wine. A There was, sir.

Q Could you inform this Court more how long did you wrestle with Sacabin? Q After that, what happened? Please inform this Honorable Court.

A Quite a long time before he got me. A After that Romeo Sacabin left the room but be was in the other room.

Q During all the time that you were wrestling with him, did you not cry out for help Q What did you do after he left?
outside?
A I was still crying . . .
A I shouted for help but nobody hear me because all the windows were closed.
Q Was that the only sexual intercourse that was done on you by the accused
Q What about the door? Alexander Sacabin?

A It was also closed. A Two times.

Q Please inform this Honorable Court if after all the wrestling by Sacabin and your COURT:chanrob1es virtual 1aw library
feminine resistance if Sacabin was able to have a sexual intercourse with you.
When was the second time?
A Yes, he trapped one of my legs and I fell on the ground and then he sat on me.
A Nearing dawn.
Q What did you feel when Romeo Sacabin was able to introduce his sexual organ
into your vagina? Q In the same place?

A Pain. A In the same place.

Q After he made the insertion, what did he do if any? Q The second time when the accused tried to make sexual intercourse with you
your already yielded your body to him.
A He also kissed me and squeezed my mammary gland.
A No, sir.
COURT:chanrob1es virtual 1aw library
Q What did you do?
Make it on record that the witness is crying.
A I also wrestled with him because I felt the pain.
Q When you wrestled with him, did you not occur to your mind to renew your call
for help from outside?
A I also shouted for help . . .
Q Was Sacabin able to introduce his sexual organ into your vagina for the second
time?
A Yes, because he rode on me for the second time and I was already weak and I
don’t want it because it was painful.
Q Did it not occur to your mind to appeal to this Alexander Sacabin to please pity
you because you were feeling pain in your body?
A I asked Romeo not to because it was painful and then Romeo said never mind
just allow me because anyway I will marry you.
Appellant Alexander Sacabin declared that he was 22 years old, single and a mason
by occupation. He saw Erlinda in the evening of that date. The two of them ate and
drank at Eliza’s restaurant, which was at the Iligan Supermarket, in front of which
was the Laya Building. From the restaurant, they went to her house owned by her
master, Patrolman Villondo. While in the house, Erlinda told him that she wanted to
go with him. He left and Erlinda followed him to the Laya Building where he used
to sleep. He was working there as a laborer and the building was still under
construction. When they arrived at the Laya Building, he told Erlinda that he would
go to Cagayan upon the termination of his work. Erlinda told him that she would go
with him to Cagayan. 5
"q What was your answer, if any, when she told you that she is going to Cagayan
with you?
a I answered, ‘yes, really you love me?
q What was her answer, if any?
a ‘Yes, I love you.’
q By the way, you have stated before this Court that you are sweethearts with
Erlinda, when did you become sweethearts?
a While I was working at Laya building this Erlinda was selling refreshments.
q Where was she selling refreshments?
a Sometime she bring refreshments at Laya building.
q More or less, can you tell the Court what time when was that when your love was
accepted by Erlinda?
a August 2, 1968.
q Did you consider that you were sweethearts, did you receive anything from her,
some sort of letters or tokens?
a I did not ask anything because we used to see each other and I did not ask any
remembrance from her because she is poor like myself."cralaw virtua1aw library
Erlinda then told appellant that she loved him. They slept together in a room
upstairs in the Laya Building. In the room where they slept, there were no tenants
for that particular unit of the apartment. But there were already electric lights inside
that room. They slept on a bed made of plywood. They had two sexual intercourse,
the first time from 8:00 to 9:00 o’clock p.m., and the second in the early morning.
They had already one sexual intercourse about one week prior to November 23,
1968, also at the Laya Building. At that time, she was getting water. 6
After a very careful review of the evidence, We affirm the lower court’s finding that
the version of the offended party is the one that should be believed over that of
the Appellant.
The offended party, Erlinda, was a young provinciana, barely over 15 years of age,
uncouth and almost unlettered, was a mere household helper but at the same time
engaged in the selling of native bread and cakes. She belonged to the poor and was
one of them, and was still possessed of the traditional and proverbial modesty of
the Filipina, especially the provinciana. She would not have filed a complaint for
rape and suffered the torment if not the ignominy of having to testify in a court of
justice about the wrong done to her, if in truth she was not really raped.
Early in the morning of November 24, 1968, she was brought by the appellant to
his father’s house in Rosario Heights. She went with him because she was
threatened with death if she would not do so. Patrolman Villondo was already there
because he was previously informed that Erlinda failed to return to their house and
that appellant was the one that brought her. And according to Erlinda, she did not
tell Patrolman Villondo that she was raped as she was "ashamed to tell him because
he is a man." And at that time, Villondo’s wife was in Cebu. But when she arrived
about six days later, she was at once informed by Erlinda that appellant raped her.
And immediately thereafter, he was brought to the medico legal officer of Iligan
City, Dr. Manuel Simon, who testified that on December 2, 1968, he examined the
offended party, found lacerations in her hymen, in positions 10 and 8 o’clock, First National City Bank) and
which had just recently healed (a laceration heals in 7 days). The lacerations could INVESTORS FINANCE Present:
not have been more than one month old "because at the edge of the lacerations, the CORPORATION, doing business
color was reddish and therefore they have healed recently."cralaw virtua1aw library under the name and style of FNCB PANGANIBAN, C.J.
Finance, Chairperson,
Physical evidence is evidence of the highest order. It speaks more eloquently than a Petitioners, YNARES-SANTIAGO,
hundred witnesses. And the physical evidence in this case strongly corroborates the AUSTRIA-MARTINEZ,
testimony of the offended party that she was raped. They consist of the green color CALLEJO, SR., and
dress and the panty that Erlinda was wearing at the time she was raped and which - versus- CHICO-NAZARIO, JJ.
show a torn portion of the left side of the dress and a torn portion of the panty.
According to Erlinda, they were torn when appellant forcibly pulled her dress up Promulgated:
and removed her panty shortly before she was raped. Surprisingly. appellant did not MODESTA R. SABENIANO,
at all rebut the testimony of Erlinda on this point. Respondent. October 16, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
Francisco Bagohin, who was then also residing in the house of Patrolman and Mrs.
Constancio Villondo, he being the drive of the rig owned by the latter, corroborated
the testimony of the offended party, Erlinda, that Teodelita Dagondon was the one DECISION
who fetched Erlinda "because the puto and bread that she is selling will all be
bought by Teodelita for the next day would be her birthday."cralaw virtua1aw
library CHICO-NAZARIO, J.:
The testimony of the appellant that he and Erlinda were sweethearts is unworthy of
belief. Erlinda denied vehemently this testimony of the appellant and even stated
that he never courted her. And if they were really sweethearts, Erlinda would not
have filed this serious charge of rape against him. Before this Court is a Petition for Review on Certiorari,[1] under Rule 45

IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby of the Revised Rules of Court, of the Decision [2] of the Court of Appeals in CA-
affirmed in its entirety with costs against Appellant.
G.R. CV No. 51930, dated 26 March 2002, and the Resolution, [3] dated 20

November 2002, of the same court which, although modifying its earlier Decision,

still denied for the most part the Motion for Reconsideration of herein petitioners.

Petitioner Citibank, N.A. (formerly known as the First National City Bank) is a

banking corporation duly authorized and existing under the laws of the United
FIRST DIVISION States of America and licensed to do commercial banking activities and perform

CITIBANK, N.A. (Formerly G.R. No. 156132 trust functions in the Philippines.
 Petitioner Investors Finance Corporation, which did business under the In their joint Answer[7] and Answer to Amended Complaint,[8] filed on 12

name and style of FNCB Finance, was an affiliate company of petitioner Citibank, September 1985 and 6 November 1985, respectively, petitioners admitted that

specifically handling money market placements for its clients. It is now, by virtue respondent had deposits and money market placements with them, including dollar

of a merger, doing business as part of its successor-in-interest, BPI Card Finance accounts in the Citibank branch in Geneva, Switzerland (Citibank-

Corporation. However, so as to consistently establish its identity in the Petition at Geneva). Petitioners further alleged that the respondent later obtained several loans

bar, the said petitioner shall still be referred to herein as FNCB Finance. [4] from petitioner Citibank, for which she executed Promissory Notes (PNs), and

secured by (a) a Declaration of Pledge of her dollar accounts in Citibank-Geneva,

Respondent Modesta R. Sabeniano was a client of both petitioners and (b) Deeds of Assignment of her money market placements with petitioner

Citibank and FNCB Finance. Regrettably, the business relations among the parties FNCB Finance. When respondent failed to pay her loans despite repeated demands

subsequently went awry. by petitioner Citibank, the latter exercised its right to off-set or compensate

respondents outstanding loans with her deposits and money market placements,

On 8 August 1985, respondent filed a Complaint [5] against petitioners, pursuant to the Declaration of Pledge and the Deeds of Assignment executed by

docketed as Civil Case No. 11336, before the Regional Trial Court (RTC) of respondent in its favor. Petitioner Citibank supposedly informed respondent

Makati City.Respondent claimed to have substantial deposits and money market Sabeniano of the foregoing compensation through letters, dated 28 September 1979

placements with the petitioners, as well as money market placements with the and 31 October 1979. Petitioners were therefore surprised when six years later, in

Ayala Investment and Development Corporation (AIDC), the proceeds of which 1985, respondent and her counsel made repeated requests for the withdrawal of

were supposedly deposited automatically and directly to respondents accounts with respondents deposits and money market placements with petitioner Citibank,

petitioner Citibank. Respondent alleged that petitioners refused to return her including her dollar accounts with Citibank-Geneva and her money market

deposits and the proceeds of her money market placements despite her repeated placements with petitioner FNCB Finance. Thus, petitioners prayed for the

demands, thus, compelling respondent to file Civil Case No. 11336 against dismissal of the Complaint and for the award of actual, moral, and exemplary

petitioners for Accounting, Sum of Money and Damages. Respondent eventually damages, and attorneys fees.

filed an Amended Complaint[6] on 9 October 1985 to include additional claims to

deposits and money market placements inadvertently left out from her original When the parties failed to reach a compromise during the pre-trial hearing,
[9]
Complaint. trial proper ensued and the parties proceeded with the presentation of their
respective evidence. Ten years after the filing of the Complaint on 8 August 1985, a
declaring respondent liable for damages and interest.
Decision[10] was finally rendered in Civil Case No. 11336 on 24 August 1995 by the
fourth Judge[11]who handled the said case, Judge Manuel D. Victorio, the
On 26 March 2002, the Court of Appeals rendered its Decision [12] affirming with
dispositive portion of which reads
modification the RTC Decision in Civil Case No. 11336, dated 24 August 1995,
and ruling entirely in favor of respondent in this wise
WHEREFORE, in view of all the foregoing, decision is
hereby rendered as follows:
(1) Declaring as illegal, null and void the setoff effected
by the defendant Bank [petitioner Citibank] of plaintiffs
[respondent Sabeniano] dollar deposit with Citibank,
Switzerland, in the amount of US$149,632.99, and ordering the
said defendant [petitioner Citibank] to refund the said amount to
the plaintiff with legal interest at the rate of twelve percent (12%)
per annum, compounded yearly, from 31 October 1979 until fully
paid, or its peso equivalent at the time of payment;
(2) Declaring the plaintiff [respondent Sabeniano]
indebted to the defendant Bank [petitioner Citibank] in the
amount of P1,069,847.40 as of 5 September 1979 and ordering
the plaintiff [respondent Sabeniano] to pay said amount, however,
there shall be no interest and penalty charges from the time the
illegal setoff was effected on 31 October 1979;
(3) Dismissing all other claims and counterclaims
interposed by the parties against each other.
Costs against the defendant Bank.
All the parties appealed the foregoing Decision of the RTC to the Court of Appeals,
docketed as CA-G.R. CV No. 51930. Respondent questioned the findings of the
RTC that she was still indebted to petitioner Citibank, as well as the failure of the
RTC to order petitioners to render an accounting of respondents deposits and
money market placements with them. On the other hand, petitioners argued that
petitioner Citibank validly compensated respondents outstanding loans with her
dollar accounts with Citibank-Geneva, in accordance with the Declaration of
Pledge she executed in its favor. Petitioners also alleged that the RTC erred in not
Wherefore, premises considered, the assailed 24 August
1995 Decision of the court a quo is hereby AFFIRMED with
MODIFICATION, as follows:
1. Declaring as illegal, null and void the set-off effected
by the defendant-appellant Bank of the plaintiff-appellants dollar
deposit with Citibank, Switzerland, in the amount of
US$149,632.99, and ordering defendant-appellant Citibank to
refund the said amount to the plaintiff-appellant with legal
interest at the rate of twelve percent (12%) per annum,
compounded yearly, from 31 October 1979 until fully paid, or its
peso equivalent at the time of payment;
2. As defendant-appellant Citibank failed to establish by
competent evidence the alleged indebtedness of plaintiff-
appellant, the set-off of P1,069,847.40 in the account of Ms.
Sabeniano is hereby declared as without legal and factual basis;
3. As defendants-appellants failed to account the
following plaintiff-appellants money market placements, savings
account and current accounts, the former is hereby ordered to
return the same, in accordance with the terms and conditions
agreed upon by the contending parties as evidenced by the
certificates of investments, to wit:
(i) Citibank NNPN Serial No. 023356
(Cancels and Supersedes NNPN No. 22526)
issued on 17 March 1977, P318,897.34 with
14.50% interest p.a.;
(ii) Citibank NNPN Serial No. 23357
(Cancels and Supersedes NNPN No. 22528)
issued on 17 March 1977, P203,150.00 with
14.50 interest p.a.;
 (iii) FNCB NNPN Serial No. 05757
(Cancels and Supersedes NNPN No. 04952),
issued on 02 June 1977, P500,000.00 with 17%
interest p.a.;
(iv) FNCB NNPN Serial No. 05758
(Cancels and Supersedes NNPN No. 04962),
issued on 02 June 1977, P500,000.00 with 17%
interest per annum;
(v) The Two Million (P2,000,000.00)
money market placements of Ms. Sabeniano
with the Ayala Investment & Development
Corporation (AIDC) with legal interest at the
rate of twelve percent (12%) per annum
compounded yearly, from 30 September 1976
until fully paid;
4. Ordering defendants-appellants to jointly and
severally pay the plaintiff-appellant the sum of FIVE HUNDRED
THOUSAND PESOS (P500,000.00) by way of moral damages,
FIVE HUNDRED THOUSAND PESOS (P500,000.00) as
exemplary damages, and ONE HUNDRED THOUSAND PESOS
(P100,000.00) as attorneys fees.
Apparently, the parties to the case, namely, the respondent, on one hand, and the
petitioners, on the other, made separate attempts to bring the aforementioned
Decision of the Court of Appeals, dated 26 March 2002, before this Court for
review.
G.R. No. 152985
Respondent no longer sought a reconsideration of the Decision of the Court of
Appeals in CA-G.R. CV No. 51930, dated 26 March 2002, and instead, filed
immediately with this Court on 3 May 2002 a Motion for Extension of Time to File
a Petition for Review,[13] which, after payment of the docket and other lawful fees,
was assigned the docket number G.R. No. 152985. In the said Motion, respondent
alleged that she received a copy of the assailed Court of Appeals Decision on 18
April 2002 and, thus, had 15 days therefrom or until 3 May 2002 within which to
file her Petition for Review. Since she informed her counsel of her desire to pursue
an appeal of the Court of Appeals Decision only on 29 April 2002, her counsel
neither had enough time to file a motion for reconsideration of the said Decision
with the Court of Appeals, nor a Petition for Certiorari with this Court. Yet, the
Motion failed to state the exact extension period respondent was requesting for.
Since this Court did not act upon respondents Motion for Extension of
Time to file her Petition for Review, then the period for appeal continued to run and
still expired on 3 May 2002.[14] Respondent failed to file any Petition for Review
within the prescribed period for appeal and, hence, this Court issued a Resolution,
[15]
dated 13 November 2002, in which it pronounced that
G.R. No. 152985 (Modesta R. Sabeniano vs. Court of
Appeals, et al.). It appearing that petitioner failed to file the
intended petition for review on certiorari within the period which
expired on May 3, 2002, the Court Resolves to DECLARE THIS
CASE TERMINATED and DIRECT the Division Clerk of Court
to INFORM the parties that the judgment sought to be reviewed
has become final and executory.
The said Resolution was duly recorded in the Book of Entries of Judgments on 3
January 2003.
G.R. No. 156132
 The Resolution of this
Meanwhile, petitioners filed with the Court of Appeals a Motion for Court, dated 13 November
2002, in G.R. No. 152985,
Reconsideration of its Decision in CA-G.R. CV No. 51930, dated 26 March declaring the Decision of
the Court of Appeals, dated
2002. Acting upon the said Motion, the Court of Appeals issued the Resolution,
26 March 2002, final and
[16]
dated 20 November 2002, modifying its Decision of 26 March 2002, as follows executory, pertains to
respondent Sabeniano
alone.
WHEREFORE, premises considered, the
instant Motion for Reconsideration is PARTIALLY
GRANTED as Sub-paragraph (V) paragraph 3 of the
assailed Decisionsdispositive portion is hereby Before proceeding to a discussion of the merits of the instant Petition, this
ordered DELETED.
Court wishes to address first the argument, persistently advanced by respondent in
The challenged 26 March 2002 Decision of the Court her pleadings on record, as well as her numerous personal and unofficial letters to
is AFFIRMED with MODIFICATION.
this Court which were no longer made part of the record, that the Decision of the

Court of Appeals in CA-G.R. CV No. 51930, dated 26 March 2002, had already
Assailing the Decision and Resolution of the Court of Appeals in CA-G.R.
become final and executory by virtue of the Resolution of this Court in G.R. No.
CV No. 51930, dated 26 March 2002 and 20 November 2002, respectively,
152985, dated 13 November 2002.
petitioners filed the present Petition, docketed as G.R. No. 156132. The Petition
G.R. No. 152985 was the docket number assigned by this Court to
was initially denied[17] by this Court for failure of the petitioners to attach thereto a
respondents Motion for Extension of Time to File a Petition for
Certification against Forum Shopping. However, upon petitioners Motion and
Review. Respondent, though, did not file her supposed Petition. Thus, after the
compliance with the requirements, this Court resolved[18] to reinstate the Petition.
lapse of the prescribed period for the filing of the Petition, this Court issued the

Resolution, dated 13 November 2002, declaring the Decision of the Court of

The Petition presented fourteen (14) assignments of errors allegedly
Appeals, dated 26 March 2002, final and executory. It should be pointed out,
committed by the Court of Appeals in its Decision, dated 26 March 2002, involving
however, that the Resolution, dated 13 November 2002, referred only to G.R. No.
both questions of fact and questions of law which this Court, for the sake of
152985, respondents appeal, which she failed to perfect through the filing of a
expediency, discusses jointly, whenever possible, in the succeeding paragraphs.
Petition for Review within the prescribed period. The declaration of this Court in

the same Resolution would bind respondent solely, and not petitioners which filed
I
their own separate appeal before this Court, docketed as G.R. No. 156132, the
Petition at bar. This would mean that respondent, on her part, should be bound by Petition for Review, ahead of the opposing party, then not actually filing the

the findings of fact and law of the Court of Appeals, including the monetary intended Petition.[21] The party who fails to file its intended Petition within the

amounts consequently awarded to her by the appellate court in its Decision, dated reglementary or extended period should solely bear the consequences of such

26 March 2002; and she can no longer refute or assail any part thereof. [19] failure.

Respondent Sabeniano did

This Court already explained the matter to respondent when it issued a not commit forum shopping.
Resolution[20] in G.R. No. 156132, dated 2 February 2004, which addressed her

Urgent Motion for the Release of the Decision with the Implementation of the Another issue that does not directly involve the merits of the present Petition, but
Entry of Judgment in the following manner raised by petitioners, is whether respondent should be held liable for forum
[A]cting on Citibanks and FNCB Finances Motion for
Reconsideration, we resolved to grant the motion, reinstate the shopping.
petition and require Sabeniano to file a comment thereto in
our Resolution of June 23, 2003. Sabeniano filed
a Comment dated July 17, 2003 to which Citibank and FNCB
Finance filed a Reply dated August 20, 2003. Petitioners contend that respondent committed forum shopping on the basis of the

From the foregoing, it is clear that Sabeniano had knowledge of, following facts:
and in fact participated in, the proceedings in G.R. No.
156132. She cannot feign ignorance of the proceedings therein
and claim that the Decision of the Court of Appeals has become While petitioners Motion for Reconsideration of the Decision in CA-G.R.
final and executory. More precisely, the Decision became final
and executory only with regard to Sabeniano in view of her CV No. 51930, dated 26 March 2002, was still pending before the Court of
failure to file a petition for review within the extended period
granted by the Court, and not to Citibank and FNCB Finance Appeals, respondent already filed with this Court on 3 May 2002 her Motion for
whose Petition for Reviewwas duly reinstated and is now
submitted for decision. Extension of Time to File a Petition for Review of the same Court of Appeals

Decision, docketed as G.R. No. 152985.Thereafter, respondent continued to

Accordingly, the instant Urgent Motion is hereby DENIED.
(Emphasis supplied.) participate in the proceedings before the Court of Appeals in CA-G.R. CV No.

51930 by filing her Comment, dated 17 July 2002, to petitioners Motion for
To sustain the argument of respondent would result in an unjust and incongruous Reconsideration; and a Rejoinder, dated 23 September 2002, to petitioners Reply.
situation wherein one party may frustrate the efforts of the opposing party to appeal Thus, petitioners argue that by seeking relief concurrently from this Court and the
the case by merely filing with this Court a Motion for Extension of Time to File a

Court of Appeals, respondent is undeniably guilty of forum shopping, if not indirect
contempt.
This Court, however, finds no sufficient basis to hold respondent liable for forum
indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of
the party or his counsel clearly constitute willful and deliberate
forum shopping, the same shall be ground for summary dismissal
with prejudice and shall constitute direct contempt, as well as
cause for administrative sanctions.

shopping.
Although it may seem at first glance that respondent was simultaneously seeking
Forum shopping has been defined as the filing of two or more suits involving the
recourse from the Court of Appeals and this Court, a careful and closer scrutiny of
same parties for the same cause of action, either simultaneously or successively, for
the details of the case at bar would reveal otherwise.
[22]
the purpose of obtaining a favorable judgment. The test for determining forum

shopping is whether in the two (or more) cases pending, there is an identity of
It should be recalled that respondent did nothing more in G.R. No. 152985
parties, rights or causes of action, and relief sought. [23] To guard against this
than to file with this Court a Motion for Extension of Time within which to file her
deplorable practice, Rule 7, Section 5 of the revised Rules of Court imposes the
Petition for Review. For unexplained reasons, respondent failed to submit to this
following requirement
Court her intended Petition within the reglementary period. Consequently, this

SEC. 5. Certification against forum shopping. The Court was prompted to issue a Resolution, dated 13 November 2002, declaring
plaintiff or principal party shall certify under oath in the
G.R. No. 152985 terminated, and the therein assailed Court of Appeals Decision
complaint or other initiatory pleading asserting a claim for relief,
or in a sworn certification annexed thereto and simultaneously final and executory. G.R. No. 152985, therefore, did not progress and respondents
filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court, appeal was unperfected.
tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b)
if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should The Petition for Review would constitute the initiatory pleading before
thereafter learn that the same or similar action or claim has been
filed or is pending, he shall report that fact within five (5) days this Court, upon the timely filing of which, the case before this Court commences;
therefrom to the court wherein his aforesaid complaint or
much in the same way a case is initiated by the filing of a Complaint before the
initiatory pleading has been filed.
trial court. The Petition for Review establishes the identity of parties, rights or
Failure to comply with the foregoing requirements shall
not be curable by mere amendment of the complaint or other causes of action, and relief sought from this Court, and without such a Petition,
initiatory pleading but shall be cause for the dismissal of the case
without prejudice, unless otherwise provided, upon motion and there is technically no case before this Court. The Motion filed by respondent
after hearing. The submission of a false certification or non-
compliance with any of the undertakings therein shall constitute seeking extension of time within which to file her Petition for Review does not
serve the same purpose as the Petition for Review itself. Such a Motion merely her from appealing the same. Granted that such a move is ostensibly irrational,

presents the important dates and the justification for the additional time requested nonetheless, it does not amount to malice, bad faith or abuse of the court processes

for, but it does not go into the details of the appealed case. in the absence of further proof. Again, it should be noted that the respondent did

not file her intended Petition for Review. The Petition for Review would have

Without any particular idea as to the assignments of error or the relief presented before this Court the grounds for respondents appeal and her arguments

respondent intended to seek from this Court, in light of her failure to file her in support thereof. Without said Petition, any reason attributed to the respondent for

Petition for Review, there is actually no second case involving the same parties, appealing the 26 March 2002 Decision would be grounded on mere speculations, to

rights or causes of action, and relief sought, as that in CA-G.R. CV No. 51930. which this Court cannot give credence.

It should also be noted that the Certification against Forum Shopping is

required to be attached to the initiatory pleading, which, in G.R. No. 152985, II

should have been respondents Petition for Review. It is in that Certification wherein As an exception to the
general rule, this Court
respondent certifies, under oath, that: (a) she has not commenced any action or filed takes cognizance of
questions of fact raised in
any claim involving the same issues in any court, tribunal or quasi-judicial agency
the Petition at bar.
and, to the best of her knowledge, no such other action or claim is pending therein;
It is already a well-settled rule that the jurisdiction of this Court in cases
(b) if there is such other pending action or claim, that she is presenting a complete
brought before it from the Court of Appeals by virtue of Rule 45 of the Revised
statement of the present status thereof; and (c) if she should thereafter learn that the
Rules of Court is limited to reviewing errors of law. Findings of fact of the Court of
same or similar action or claim has been filed or is pending, she shall report that
Appeals are conclusive upon this Court. There are, however, recognized exceptions
fact within five days therefrom to this Court. Without her Petition for Review,
to the foregoing rule, namely: (1) when the findings are grounded entirely on
respondent had no obligation to execute and submit the foregoing Certification
speculation, surmises, or conjectures; (2) when the interference made is manifestly
against Forum Shopping. Thus, respondent did not violate Rule 7, Section 5 of the
mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4)
Revised Rules of Court; neither did she mislead this Court as to the pendency of
when the judgment is based on a misapprehension of facts; (5) when the findings of
another similar case.
fact are conflicting; (6) when in making its findings, the Court of Appeals went

beyond the issues of the case, or its findings are contrary to the admissions of both
Lastly, the fact alone that the Decision of the Court of Appeals, dated 26
the appellant and the appellee; (7) when the findings are contrary to those of the
March 2002, essentially ruled in favor of respondent, does not necessarily preclude
trial court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as
well as in the petitioners main and reply briefs are not disputed by the respondent;
and (10) when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record.[24]
Several of the enumerated exceptions pertain to the Petition at bar.
It is indubitable that the Court of Appeals made factual findings that are
contrary to those of the RTC,[25] thus, resulting in its substantial modification of the
trial courts Decision, and a ruling entirely in favor of the respondent. In addition,
petitioners invoked in the instant Petition for Review several exceptions that would
justify this Courts review of the factual findings of the Court of Appeals, i.e., the
Court of Appeals made conflicting findings of fact; findings of fact which went
beyond the issues raised on appeal before it; as well as findings of fact premised on
the supposed absence of evidence and contradicted by the evidence on record.
On the basis of the foregoing, this Court shall proceed to reviewing and
re-evaluating the evidence on record in order to settle questions of fact raised in the
Petition at bar.
The fact that the trial judge
who rendered the RTC
Decision in Civil Case No.
11336, dated 24 August
1995, was not the same
judge who heard and tried
the case, does not, by itself,
render the said Decision
erroneous.
The Decision in Civil Case No. 11336 was rendered more than 10 years from the
institution of the said case. In the course of its trial, the case was presided over by
four (4) different RTC judges.[26] It was Judge Victorio, the fourth judge assigned to
the case, who wrote the RTC Decision, dated 24 August 1995. In his Decision,
[27]
Judge Victorio made the following findings
After carefully evaluating the mass of evidence adduced
by the parties, this Court is not inclined to believe the plaintiffs
assertion that the promissory notes as well as the deeds of
assignments of her FNCB Finance money market placements
were simulated. The evidence is overwhelming that the plaintiff
received the proceeds of the loans evidenced by the various
promissory notes she had signed. What is more, there was not an
iota of proof save the plaintiffs bare testimony that she had
indeed applied for loan with the Development Bank of the
Philippines.
More importantly, the two deeds of assignment were
notarized, hence they partake the nature of a public document. It
makes more than preponderant proof to overturn the effect of a
notarial attestation. Copies of the deeds of assignments were
actually filed with the Records Management and Archives Office.
Finally, there were sufficient evidence wherein the
plaintiff had admitted the existence of her loans with the
defendant Bank in the total amount of P1,920,000.00 exclusive of
interests and penalty charges (Exhibits 28, 31, 32, and 33).
In fine, this Court hereby finds that the defendants had
established the genuineness and due execution of the various
promissory notes heretofore identified as well as the two deeds of
assignments of the plaintiffs money market placements with
defendant FNCB Finance, on the strength of which the said
money market placements were applied to partially pay the
plaintiffs past due obligation with the defendant Bank. Thus, the
total sum of P1,053,995.80 of the plaintiffs past due obligation
was partially offset by the said money market placement leaving
a balance of P1,069,847.40 as of 5 September 1979 (Exhibit 34).

Disagreeing in the foregoing findings, the Court of Appeals stressed, in its Decision
in CA-G.R. CV No. 51930, dated 26 March 2002, that the ponente of the herein
assailed Decision is not the Presiding Judge who heard and tried the case. [28] This
brings us to the question of whether the fact alone that the RTC Decision was
rendered by a judge other than the judge who actually heard and tried the case is
sufficient justification for the appellate court to disregard or set aside the findings
in the Decision of the court a quo?
This Court rules in the negative.
What deserves stressing is that, in this jurisdiction, there exists a disputable
presumption that the RTC Decision was rendered by the judge in the regular
performance of his official duties. While the said presumption is only disputable, it
is satisfactory unless contradicted or overcame by other evidence. [29] Encompassed
in this presumption of regularity is the presumption that the RTC judge, in
resolving the case and drafting his Decision, reviewed, evaluated, and weighed all
the evidence on record. That the said RTC judge is not the same judge who heard
the case and received the evidence is of little consequence when the records and
transcripts of stenographic notes (TSNs) are complete and available for
consideration by the former.
In People v. Gazmen,[30] this Court already elucidated its position on such an issue
Accused-appellant makes an issue of the fact that the
judge who penned the decision was not the judge who heard and
tried the case and concludes therefrom that the findings of the
former are erroneous. Accused-appellants argument does not
merit a lengthy discussion. It is well-settled that the decision of a
judge who did not try the case is not by that reason alone
erroneous.
It is true that the judge who ultimately decided the case
had not heard the controversy at all, the trial having been
conducted by then Judge Emilio L. Polig, who was indefinitely
suspended by this Court. Nonetheless, the transcripts of
stenographic notes taken during the trial were complete and were
presumably examined and studied by Judge Baguilat before he
rendered his decision. It is not unusual for a judge who did not
try a case to decide it on the basis of the record. The fact that he
did not have the opportunity to observe the demeanor of the
witnesses during the trial but merely relied on the transcript of
their testimonies does not for that reason alone render the
judgment erroneous.
(People vs. Jaymalin, 214 SCRA 685, 692 [1992])
Although it is true that the judge who heard the
witnesses testify is in a better position to observe the witnesses
on the stand and determine by their demeanor whether they are
telling the truth or mouthing falsehood, it does not necessarily
follow that a judge who was not present during the trial cannot
render a valid decision since he can rely on the transcript of
stenographic notes taken during the trial as basis of his decision.
Accused-appellants contention that the trial judge did
not have the opportunity to observe the conduct and demeanor of
the witnesses since he was not the same judge who conducted the
hearing is also untenable. While it is true that the trial judge who
conducted the hearing would be in a better position to ascertain
the truth and falsity of the testimonies of the witnesses, it does
not necessarily follow that a judge who was not present during
the trial cannot render a valid and just decision since the latter
can also rely on the transcribed stenographic notes taken during
the trial as the basis of his decision.
(People vs. De Paz, 212 SCRA 56, 63 [1992])
At any rate, the test to determine the value of the
testimony of the witness is whether or not such is in conformity
with knowledge and consistent with the experience of mankind
(People vs. Morre, 217 SCRA 219 [1993]). Further, the
 credibility of witnesses can also be assessed on the basis of the
substance of their testimony and the surrounding circumstances
(People v. Gonzales, 210 SCRA 44 [1992]). A critical evaluation
of the testimony of the prosecution witnesses reveals that their
testimony accords with the aforementioned tests, and carries with
it the ring of truth end perforce, must be given full weight and
credit.
Irrefragably, by reason alone that the judge who penned the RTC Decision was not
the same judge who heard the case and received the evidence therein would not
render the findings in the said Decision erroneous and unreliable. While the
conduct and demeanor of witnesses may sway a trial court judge in deciding a case,
it is not, and should not be, his only consideration. Even more vital for the trial
court judges decision are the contents and substance of the witnesses testimonies,
as borne out by the TSNs, as well as the object and documentary evidence
submitted and made part of the records of the case.
This Court proceeds to
making its own findings of
fact.
Since the Decision of the Court of Appeals in CA-G.R. CV No. 51930,
dated 26 March 2002, has become final and executory as to the respondent, due to
her failure to interpose an appeal therefrom within the reglementary period, she is
already bound by the factual findings in the said Decision. Likewise, respondents
failure to file, within the reglementary period, a Motion for Reconsideration or an
appeal of the Resolution of the Court of Appeals in the same case, dated 20
November 2002, which modified its earlier Decision by deleting paragraph 3(v) of
its dispositive portion, ordering petitioners to return to respondent the proceeds of
her money market placement with AIDC, shall already bar her from questioning
such modification before this Court. Thus, what is for review before this Court is
the Decision of the Court of Appeals, dated 26 March 2002, as modified by the
Resolution of the same court, dated 20 November 2002.
Respondent alleged that she had several deposits and money market
placements with petitioners. These deposits and money market placements, as
determined by the Court of Appeals in its Decision, dated 26 March 2002, and as
modified by its Resolution, dated 20 November 2002, are as follows
Deposit/Placement Amount
Dollar deposit with Citibank-Geneva $ 149,632.99
Money market placement with Citibank, evidenced
by Promissory Note (PN) No. 23356 (which cancels
and supersedes PN No. 22526), earning 14.5%
interest per annum (p.a.) P 318,897.34
Money market placement with Citibank, evidenced
by PN No. 23357 (which cancels and supersedes PN
No. 22528), earning 14.5% interest p.a. P 203,150.00
Money market placement with FNCB Finance,
evidenced by PN No. 5757 (which cancels and
supersedes PN No. 4952), earning 17% interest p.a. P 500,000.00
Money market placement with FNCB Finance,
evidenced by PN No. 5758 (which cancels and
supersedes PN No. 2962), earning 17% interest p.a. P 500,000.00
This Court is tasked to determine whether petitioners are indeed liable to return the
foregoing amounts, together with the appropriate interests and penalties, to
respondent. It shall trace respondents transactions with petitioners, from her money
market placements with petitioner Citibank and petitioner FNCB Finance, to her
savings and current accounts with petitioner Citibank, and to her dollar accounts
with Citibank-Geneva.
Money market placements with petitioner Citibank Petitioner Citibank did not deny the existence nor questioned the

authenticity of PNs No. 23356 and 23357 it issued in favor of respondent for her

The history of respondents money market placements with petitioner money market placements. In fact, it admitted the genuineness and due execution

Citibank began on 6 December 1976, when she made a placement of P500,000.00 of the said PNs, but qualified that they were no longer outstanding. [31] In Hibberd v.

as principal amount, which was supposed to earn an interest of 16% p.a. and for Rohde and McMillian,[32] this Court delineated the consequences of such an

which PN No. 20773 was issued. Respondent did not yet claim the proceeds of her admission

placement and, instead, rolled-over or re-invested the principal and proceeds By the admission of the genuineness and due execution
of an instrument, as provided in this section, is meant that the
several times in the succeeding years for which new PNs were issued by petitioner party whose signature it bears admits that he signed it or that it
was signed by another for him with his authority; that at the time
Citibank to replace the ones which matured. Petitioner Citibank accounted for
it was signed it was in words and figures exactly as set out in the
respondents original placement and the subsequent roll-overs thereof, as follows pleading of the party relying upon it; that the document was
delivered; and that any formal requisites required by law, such as
a seal, an acknowledgment, or revenue stamp, which it lacks, are
Maturity Date waived by him. Hence, such defenses as that the signature is a
Date PN No. Cancels (mm/dd/yyyy) Amount Interest forgery (Puritan Mfg. Co. vs. Toti & Gradi, 14 N. M., 425;
PN No. (P) (p.a.) Cox vs. Northwestern Stage Co., 1 Idaho, 376;
(mm/dd/yyyy)
Woollen vs. Whitacre, 73 Ind., 198; Smith vs. Ehnert, 47 Wis.,
12/06/1976 20773 None 01/13/1977 500,000.00 16%
479; Faelnar vs. Escao, 11 Phil. Rep., 92); or that it was
01/14/1977 21686 20773 02/08/1977 508,444.44 15% unauthorized, as in the case of an agent signing for his principal,
02/09/1977 22526 21686 03/16/1977 313,952.59 15-3/4% or one signing in behalf of a partnership (Country
22528 21686 03/16/1977 200,000.00 15-3/4% Bank vs. Greenberg, 127 Cal., 26; Henshaw vs. Root, 60 Inc.,
03/17/1977 23356 22526 04/20/1977 318,897.34 14-1/2% 220; Naftzker vs. Lantz, 137 Mich., 441) or of a corporation
23357 22528 04/20/1977 203,150.00 14-1/2% (Merchant vs. International Banking Corporation, 6 Phil Rep.,
314; Wanita vs. Rollins, 75 Miss., 253; Barnes vs.Spencer &
Barnes Co., 162 Mich., 509); or that, in the case of the latter, that
the corporation was authorized under its charter to sign the
Petitioner Citibank alleged that it had already paid to respondent the instrument (Merchant vs. International Banking
Corporation, supra); or that the party charged signed the
principal amounts and proceeds of PNs No. 23356 and 23357, upon their
instrument in some other capacity than that alleged in the
maturity. Petitioner Citibank further averred that respondent used the P500,000.00 pleading setting it out (Payne vs. National Bank, 16 Kan., 147);
or that it was never delivered (Hunt vs. Weir, 29 Ill., 83;
from the payment of PNs No. 23356 and 23357, plus P600,000.00 sourced from Elbring vs. Mullen, 4 Idaho, 199; Thorp vs. Keokuk Coal Co., 48
N.Y., 253; Fire Association of Philadelphia vs. Ruby, 60 Neb.,
her other funds, to open two time deposit (TD) accounts with petitioner Citibank, 216) are cut off by the admission of its genuineness and due
execution.
namely, TD Accounts No. 17783 and 17784.
 The effect of the admission is such that in the case of a
promissory note a prima facie case is made for the plaintiff which Reviewing the evidence on record, this Court finds that petitioner Citibank
dispenses with the necessity of evidence on his part and entitles
him to a judgment on the pleadings unless a special defense of failed to satisfactorily prove that PNs No. 23356 and 23357 had already been paid,
new matter, such as payment, is interposed by the defendant
and that the amount so paid was actually used to open one of respondents TD
(Papa vs. Martinez, 12 Phil. Rep., 613; Chinese Chamber of
Commerce vs. Pua To Ching, 14 Phil. Rep., 222; Banco Espaol- accounts with petitioner Citibank.
Filipino vs. McKay & Zoeller, 27 Phil. Rep., 183). x x x

Petitioner Citibank presented the testimonies of two witnesses to support

Since the genuineness and due execution of PNs No. 23356 and 23357 are
its contention of payment: (1) That of Mr. Herminio Pujeda, [35] the officer-in-charge
uncontested, respondent was able to establish prima facie that petitioner Citibank is
of loans and placements at the time when the questioned transactions took place;
liable to her for the amounts stated therein. The assertion of petitioner Citibank of
and (2) that of Mr. Francisco Tan, [36] the former Assistant Vice-President of
payment of the said PNs is an affirmative allegation of a new matter, the burden of
Citibank, who directly dealt with respondent with regard to her deposits and loans.
proof as to such resting on petitioner Citibank. Respondent having proved the

existence of the obligation, the burden of proof was upon petitioner Citibank to
The relevant portion[37] of Mr. Pujedas testimony as to PNs No. 23356 and
show that it had been discharged. [33] It has already been established by this Court
23357 (referred to therein as Exhibits No. 47 and 48, respectively) is reproduced
that
below

As a general rule, one who pleads payment has the

burden of proving it. Even where the plaintiff must allege non-
payment, the general rule is that the burden rests on the defendant
to prove payment, rather than on the plaintiff to prove non-
payment. The debtor has the burden of showing with legal
certainty that the obligation has been discharged by payment.
When the existence of a debt is fully established by the
evidence contained in the record, the burden of proving that it has
been extinguished by payment devolves upon the debtor who
offers such defense to the claim of the creditor. Where the debtor
introduces some evidence of payment, the burden of going
forward with the evidence as distinct from the general burden of
proof shifts to the creditor, who is then under the duty of
producing some evidence of non-payment.[34]
Atty. Mabasa:
Okey [sic]. Now Mr. Witness, you were asked to testify in this
case and this case is [sic] consist [sic] of several
documents involving transactions between the plaintiff
and the defendant. Now, were you able to make your
own memorandum regarding all these transactions?
A Yes, based on my recollection of these facts, I did come up of
[sic] the outline of the chronological sequence of events.
Court:
Are you trying to say that you have personal knowledge or
participation to these transactions?
A Yes, your Honor, I was the officer-in charge of the unit that
was processing these transactions. Some of the
documents bear my signature.
Court:
And this resume or summary that you have prepared is based on
purely your recollection or documents?
A Based on documents, your Honor.
Court:
Are these documents still available now?
A Yes, your honor.
Court:
Better present the documents.
Atty. Mabasa:
Yes, your Honor, that is why your Honor.
Atty. Mabasa:
Q Now, basing on the notes that you prepared, Mr. Witness, and
according to you basing also on your personal
recollection about all the transactions involved between
Modesta Sabeniano and defendant City Bank [sic] in
this case. Now, would you tell us what happened to the
money market placements of Modesta Sabeniano that
you have earlier identified in Exhs. 47 and 48?
A The transactions which I said earlier were terminated and
booked to time deposits.
Q And you are saying time deposits with what bank?
A With First National Citibank.
Q Is it the same bank as Citibank, N.A.?
A Yes, sir.
Q And how much was the amount booked as time deposit with
defendant Citibank?
A In the amount of P500,000.00.
Q And outside this P500,000.00 which you said was booked out
of the proceeds of Exhs. 47 and 48, were there other
time deposits opened by Mrs. Modesta Sabeniano at that
time.
A Yes, she also opened another time deposit for P600,000.00.
Q So all in all Mr. Witness, sometime in April of 1978 Mrs.
Modesta Sabeneano [sic] had time deposit placements
with Citibank in the amount of P500,000.00 which is the
proceeds of Exh. 47 and 48 and another P600,000.00, is
it not?
A Yes, sir.
Q And would you know where did the other P600,000 placed by
Mrs. Sabeneano [sic] in a time deposit with Citibank,
N.A. came [sic] from?
A She funded it directly.
Q What are you saying Mr. Witness is that the P600,000 is a [sic]
fresh money coming from Mrs. Modesta Sabeneano
[sic]?
A That is right.
In his deposition in Hong Kong, Mr. Tan recounted what happened to PNs
No. 23356 and 23357 (referred to therein as Exhibits E and F, respectively), as
follows
Atty. Mabasa : Now from the Exhibits that you have identified
Mr. Tan from Exhibits A to F, which are
Exhibits of the plaintiff. Now, do I
understand from you that the original
 amount is Five Hundred Thousand and
thereafter renewed in the succeeding details on the circumstances surrounding the payment of the two PNs and the
exhibits?
opening of the time deposit accounts by respondent, such as the date of payment of
Mr. Tan : Yes, Sir.
the two PNs, mode of payment, and the manner and context by which respondent
Atty. Mabasa : Alright, after these Exhibits E and F matured, relayed her instructions to the officers of petitioner Citibank to use the proceeds of
what happened thereafter?
her two PNs in opening the TD accounts.
Mr. Tan : Split into two time deposits.

Atty. Mabasa : Exhibits E and F?

Moreover, while there are documentary evidences to support and trace

respondents money market placements with petitioner Citibank, from the original
Before anything else, it should be noted that when Mr. Pujedas testimony
PN No. 20773, rolled-over several times to, finally, PNs No. 23356 and 23357,
before the RTC was made on 12 March 1990 and Mr. Tans deposition in Hong
there is an evident absence of any documentary evidence on the payment of these
Kong was conducted on 3 September 1990, more than a decade had passed from
last two PNs and the use of the proceeds thereof by respondent for opening TD
the time the transactions they were testifying on took place. This Court had
accounts. The paper trail seems to have ended with the copies of PNs No. 23356
previously recognized the frailty and unreliability of human memory with regards
and 23357. Although both Mr. Pujeda and Mr. Tan said that they based their
[38]
to figures after the lapse of five years. Taking into consideration the substantial
testimonies, not just on their memories but also on the documents on file, the
length of time between the transactions and the witnesses testimonies, as well as
supposed documents on which they based those portions of their testimony on the
the undeniable fact that bank officers deal with multiple clients and process
payment of PNs No. 23356 and 23357 and the opening of the TD accounts from the
numerous transactions during their tenure, this Court is reluctant to give much
proceeds thereof, were never presented before the courts nor made part of the
weight to the testimonies of Mr. Pujeda and Mr. Tan regarding the payment of PNs
records of the case. Respondents money market placements were of substantial
No. 23356 and 23357 and the use by respondent of the proceeds thereof for
amounts consisting of the principal amount of P500,000.00, plus the interest it
opening TD accounts. This Court finds it implausible that they should remember,
should have earned during the years of placement and it is difficult for this Court to
after all these years, this particular transaction with respondent involving her PNs
believe that petitioner Citibank would not have had documented the payment
No. 23356 and 23357 and TD accounts. Both witnesses did not give any reason as
thereof.
to why, from among all the clients they had dealt with and all the transactions they
When Mr. Pujeda testified before the RTC on 6 February 1990,
had processed as officers of petitioner Citibank, they specially remembered [39]
petitioners counsel attempted to present in evidence a document that would
respondent and her PNs No. 23356 and 23357. Their testimonies likewise lacked
supposedly support the claim of petitioner Citibank that the proceeds of PNs No.
23356 and 23357 were used by respondent to open one of her two TD accounts in represent an obligation of petitioner Citibank separate and distinct from the

the amount of P500,000.00.Respondents counsel objected to the presentation of the obligation of petitioner FNCB Finance arising from respondents money market

document since it was a mere xerox" copy, and was blurred and hardly placements with the latter.

readable. Petitioners counsel then asked for a continuance of the hearing so that

they can have time to produce a better document, which was granted by the Money market placements with petitioner FNCB Finance

court. However, during the next hearing and continuance of Mr. Pujedas testimony

on 12 March 1990, petitioners counsel no longer referred to the said document. According to petitioners, respondents TD Accounts No. 17783 and 17784, in the

As respondent had established a prima facie case that petitioner Citibank total amount of P1,100,000.00, were supposed to mature on 15 March

is obligated to her for the amounts stated in PNs No. 23356 and 23357, and as 1978. However, respondent, through a letter dated 28 April 1977, [40] pre-terminated

petitioner Citibank failed to present sufficient proof of payment of the said PNs and the said TD accounts and transferred all the proceeds thereof to petitioner FNCB

the use by the respondent of the proceeds thereof to open her TD accounts, this Finance for money market placement. Pursuant to her instructions, TD Accounts

Court finds that PNs No. 23356 and 23357 are still outstanding and petitioner No. 17783 and 17784 were pre-terminated and petitioner Citibank (then still named

Citibank is still liable to respondent for the amounts stated therein. First National City Bank) issued Managers Checks (MC) No. 199253 [41] and

199251[42] for the amounts of P500,000.00 and P600,00.00, respectively. Both MCs

The significance of this Courts declaration that PNs No. 23356 and 23357 are still were payable to Citifinance (which, according to Mr. Pujeda, [43] was one with and

outstanding becomes apparent in the light of petitioners next contentions that the same as petitioner FNCB Finance), with the additional notation that A/C

respondent used the proceeds of PNs No. 23356 and 23357, together with MODESTA R. SABENIANO. Typewritten on MC No. 199253 is the phrase Ref.

additional money, to open TD Accounts No. 17783 and 17784 with petitioner Proceeds of TD 17783, and on MC No. 199251 is a similar phrase, Ref. Proceeds

Citibank; and, subsequently, respondent pre-terminated these TD accounts and of TD 17784. These phrases purportedly established that the MCs were paid from

transferred the proceeds thereof, amounting to P1,100,000.00, to petitioner FNCB the proceeds of respondents pre-terminated TD accounts with petitioner

Finance for money market placements. While respondents money market Citibank. Upon receipt of the MCs, petitioner FNCB Finance deposited the same to

placements with petitioner FNCB Finance may be traced back with definiteness to its account with Feati Bank and Trust Co., as evidenced by the rubber stamp mark

TD Accounts No. 17783 and 17784, there is only flimsy and unsubstantiated of the latter found at the back of both MCs. In exchange, petitioner FNCB Finance

connection between the said TD accounts and the supposed proceeds paid from booked the amounts received as money market placements, and accordingly issued

PNs No. 23356 and 23357. With PNs No. 23356 and 23357 still unpaid, then they PNs No. 4952 and 4962, for the amounts of P500,000.00 and P600,000.00,
respectively, payable to respondents savings account with petitioner Citibank, S/A amounts and interests covered by PNs No. 5757 and 5758 when these were already

No. 25-13703-4, upon their maturity on 1 June 1977. Once again, respondent canceled and superseded. It is now incumbent upon this Court to determine what

rolled-over several times the principal amounts of her money market placements subsequently happened to PNs No. 8167 and 8169.

with petitioner FNCB Finance, as follows

Petitioner FNCB Finance presented four checks as proof of payment of the

Maturity Date
Date PN No. Cancels (mm/dd/yyyy) Amount Interest principal amounts and interests of PNs No. 8167 and 8169 upon their maturity. All
(mm/dd/yyyy) PN No. (P) (p.a.)
the checks were payable to respondents savings account with petitioner Citibank,
04/29/1977 4952 None 06/01/1977 500,000.00 17%
4962 None 06/01/1977 600,000.00 17% with the following details
06/02/1977 5757 4952 08/31/1977 500,000.00 17%
5758 4962 08/31/1977 500,000.00 17%
Date of Issuance Amount
08/31/1977 8167 5757 08/25/1978 500,000.00 14%
(mm/dd/yyyy) Check No. (P) Notation
8169 5752 08/25/1978 500,000.00 14%
09/01/1978 76962 12,833.34Interest payment on PN#08167

09/01/1978 76961 12,833.34Interest payment on PN#08169

As presented by the petitioner FNCB Finance, respondent rolled-over only the
09/05/1978 77035 500,000.00Full payment of principal on
principal amounts of her money market placements as she chose to receive the PN#08167 which is hereby
cancelled
interest income therefrom. Petitioner FNCB Finance also pointed out that when PN
09/05/ 1978 77034 500,000.00Full payment of principal on
No. 4962, with principal amount of P600,000.00, matured on 1 June 1977, PN#08169 which is hereby
cancelled
respondent received a partial payment of the principal which, together with the

interest, amounted to P102,633.33;[44] thus, only the amount of P500,000.00 from

Then again, Checks No. 77035 and 77034 were later returned to petitioner FNCB
PN No. 4962 was rolled-over to PN No. 5758.
Finance together with a memo,[47] dated 6 September 1978, from Mr. Tan of

petitioner Citibank, to a Mr. Bobby Mendoza of petitioner FNCB

Based on the foregoing records, the principal amounts of PNs No. 5757 and 5758,
Finance. According to the memo, the two checks, in the total amount
upon their maturity, were rolled over to PNs No. 8167 and 8169, respectively. PN
of P1,000,000.00, were to be returned to respondents account with instructions to
No. 8167[45]expressly canceled and superseded PN No. 5757, while PN No.
book the said amount in money market placements for one more year. Pursuant to
8169[46] also explicitly canceled and superseded PN No. 5758. Thus, it is patently
the said memo, Checks No. 77035 and 77034 were invested by petitioner FNCB
erroneous for the Court of Appeals to still award to respondent the principal
Finance, on behalf of respondent, in money market placements for which it issued
PNs No. 20138 and 20139. The PNs each covered P500,000.00, to earn 11% have amounted to a total of P3,812,712.32, had there been no withdrawals or debits

interest per annum, and to mature on 3 September 1979. from the said accounts from the time the said deposits were made.

On 3 September 1979, petitioner FNCB Finance issued Check No. 100168, pay to Although the RTC and the Court of Appeals did not make any definitive findings as

the order of Citibank N.A. A/C Modesta Sabeniano, in the amount to the status of respondents savings and current accounts with petitioner Citibank,

of P1,022,916.66, as full payment of the principal amounts and interests of both the Decisions of both the trial and appellate courts effectively recognized only

PNs No. 20138 and 20139 and, resultantly, canceling the said PNs. [48] Respondent the P31,079.14 coming from respondents savings account which was used to off-set

actually admitted the issuance and existence of Check No. 100168, but with the her alleged outstanding loans with petitioner Citibank.[50]

qualification that the proceeds thereof were turned over to petitioner Citibank.
[49]
Respondent did not clarify the circumstances attending the supposed turn over, Since both the RTC and the Court of Appeals had consistently recognized only

but on the basis of the allegations of petitioner Citibank itself, the proceeds of PNs the P31,079.14 of respondents savings account with petitioner Citibank, and that

No. 20138 and 20139, amounting to P1,022,916.66, was used by it to liquidate respondent failed to move for reconsideration or to appeal this particular finding of

respondents outstanding loans. Therefore, the determination of whether or not fact by the trial and appellate courts, it is already binding upon this

respondent is still entitled to the return of the proceeds of PNs No. 20138 and Court. Respondent is already precluded from claiming any greater amount in her

20139 shall be dependent on the resolution of the issues raised as to the existence savings and current accounts with petitioner Citibank. Thus, this Court shall limit

of the loans and the authority of petitioner Citibank to use the proceeds of the said itself to determining whether or not respondent is entitled to the return of the

PNs, together with respondents other deposits and money market placements, to amount of P31,079.14 should the off-set thereof by petitioner Citibank against her

pay for the same. supposed loans be found invalid.

Savings and current accounts with petitioner Citibank

Dollar accounts with Citibank-Geneva

Respondent presented and submitted before the RTC deposit slips and

bank statements to prove deposits made to several of her accounts with petitioner Respondent made an effort of preparing and presenting before the RTC her own

Citibank, particularly, Accounts No. 00484202, 59091, and 472-751, which would computations of her money market placements and dollar accounts with Citibank-

Geneva, purportedly amounting to a total of United States (US) $343,220.98, as of

23 June 1985.[51] In her Memorandum filed with the RTC, she claimed a much
bigger amount of deposits and money market placements with Citibank-Geneva,
[52]
totaling US$1,336,638.65. However, respondent herself also submitted as part of
her formal offer of evidence the computation of her money market placements and
dollar accounts with Citibank-Geneva as determined by the latter. [53] Citibank-
Geneva accounted for respondents money market placements and dollar accounts
as follows
US$ 310.87 various charges including closing charges
According to the foregoing computation, by 25 October 1979, respondent had a
total of US$156,942.70, from which, US$149,632.99 was transferred by Citibank-
Geneva to petitioner Citibank in Manila, and was used by the latter to off-set
respondents outstanding loans. The balance of respondents accounts with Citibank-
Geneva, after the remittance to petitioner Citibank in Manila, amounted to
US$7,309.71, which was subsequently expended by a transfer to another account

with Citibank-Zuerich, in the amount of US$6,998.84, and by payment of various

MODESTA SABENIANO &/OR
================== bank charges, including closing charges, in the amount of US$310.87. Rightly so,

US$ 30000.-- Principal Fid. Placement both the RTC and the Court of Appeals gave more credence to the computation of
+ US$ 339.06 Interest at 3,875% p.a. from 12.07. 25.10.79
- US$ 95.-- Commission (minimum) Citibank-Geneva as to the status of respondents accounts with the said bank, rather

than the one prepared by respondent herself, which was evidently self-
US$ 30244.06 Total proceeds on 25.10.1979
serving. Once again, this Court shall limit itself to determining whether or not

US$ 114000.-- Principal Fid. Placement respondent is entitled to the return of the amount of US$149,632.99 should the off-
+ US$ 1358.50 Interest at 4,125% p.a. from 12.07. 25.10.79
- US$ 41.17 Commission set thereof by petitioner Citibank against her alleged outstanding loans be found

invalid. Respondent cannot claim any greater amount since she did not perfect an
US$ 115317.33 Total proceeds on 25.10.1979
appeal of the Decision of the Court of Appeals, dated 26 March 2002, which found
US$ 145561.39 Total proceeds of both placements on 25.10.1979 that she is entitled only to the return of the said amount, as far as her accounts with
+ US$ 11381.31 total of both current accounts
Citibank-Geneva is concerned.
US$ 156942.70 Total funds available

- US$ 149632.99 Transfer to Citibank Manila on 26.10.1979

III
(counter value of Pesos 1102944.78)

US$ 7309.71 Balance in current accounts Petitioner Citibank was able

to establish by
- US$ 6998.84 Transfer to Citibank Zuerich ac no. 121359 on preponderance of evidence
March the existence of respondents
13, 1980 loans.
 PN No. (mm/dd/yyyy) (mm/dd/yyyy) Principal (mm/dd/yyyy)
Amount
32935 07/20/1978 09/18/1978 P 400,000.00 07/20/1978
Petitioners version of events 33751 10/13/1978 12/12/1978 100,000.00 Unrecove
33798 10/19/1978 11/03/1978 100,000.00 10/19/1978
34025 11/15/1978 01/15/1979 150,000.00 11/16/1978
34079 11/21/1978 01/19/1979 250,000.00 11/21/1978
In sum, the following amounts were used by petitioner Citibank to liquidate 34192 12/04/1978 01/18/1979 100,000.00 12/05/1978
respondents purported outstanding loans 34402 12/26/1978 02/23/1979 300,000.00 12/26/1978
34534 01/09/1979 03/09/1979 150,000.00 01/09/1979
34609 01/17/1979 03/19/1979 150,000.00 01/17/1979
Description Amount 34740 01/30/1979 03/30/1979 220,000.00 01/30/1979
Principal and interests of PNs No. 20138 and 20139
(money market placements with petitioner FNCB P 1,022,916.66 Total P1,920,000.00
Finance)
Savings account with petitioner Citibank 31,079.14
Dollar remittance from Citibank-Geneva (peso When respondent was unable to pay the first set of PNs upon their maturity, these
equivalent
Of US$149,632.99) 1,102,944.78 were rolled-over or renewed several times, necessitating the execution by

Total P 2,156,940.58 respondent of new PNs in favor of petitioner Citibank. As of 5 April 1979,

respondent had the following outstanding PNs (second set), [56] the principal amount

According to petitioner Citibank, respondent incurred her loans under the of which remained at P1,920,000.00

circumstances narrated below.

Date of Issuance Date of Maturity
As early as 9 February 1978, respondent obtained her first loan from PN No. (mm/dd/yyyy) (mm/dd/yyyy) Principal Amount
34510 01/01/1979 03/02/1979 P 400,000.00
petitioner Citibank in the principal amount of P200,000.00, for which she executed 34509 01/02/1979 03/02/1979 100,000.00
PN No. 31504.[54]Petitioner Citibank extended to her several other loans in the 34534 01/09/1979 03/09/1979 150,000.00
34612 01/19/1979 03/16/1979 150,000.00
succeeding months. Some of these loans were paid, while others were rolled-over 34741 01/26/1979 03/12/1979 100,000.00
35689 02/23/1979 05/29/1979 300,000.00
or renewed. Significant to the Petition at bar are the loans which respondent 35694 03/19/1979 05/29/1979 150,000.00
obtained from July 1978 to January 1979, appropriately covered by PNs (first set). 35695 03/19/1979 05/29/1979 100,000.00
356946 03/20/1979 05/29/1979 250,000.00
[55]
The aggregate principal amount of these loans was P1,920,000.00, which could 35697 03/30/1979 05/29/1979 220,000.00

be broken down as follows Total P 1,920,000.00

Date of Issuance Date of Maturity Date of Release

All the PNs stated that the purpose of the loans covered thereby is To liquidate
existing obligation, except for PN No. 34534, which stated for its purpose personal
investment.
Respondent secured her foregoing loans with petitioner Citibank by
executing Deeds of Assignment of her money market placements with petitioner
FNCB Finance. On 2 March 1978, respondent executed in favor of petitioner
Citibank a Deed of Assignment [57] of PN No. 8169, which was issued by petitioner
FNCB Finance, to secure payment of the credit and banking facilities extended to
her by petitioner Citibank, in the aggregate principal amount of P500,000.00. On 9
March 1978, respondent executed in favor of petitioner Citibank another Deed of
Assignment,[58] this time, of PN No. 8167, also issued by petitioner FNCB Finance,
to secure payment of the credit and banking facilities extended to her by petitioner
Citibank, in the aggregate amount of P500,000.00. When PNs No. 8167 and 8169,
representing respondents money market placements with petitioner FNCB Finance,
matured and were rolled-over to PNs No. 20138 and 20139, respondent executed
new Deeds of Assignment,[59] in favor of petitioner Citibank, on 25 August
1978. According to the more recent Deeds, respondent assigned PNs No. 20138
and 20139, representing her rolled-over money market placements with petitioner
FNCB Finance, to petitioner Citibank as security for the banking and credit
facilities it extended to her, in the aggregate principal amount of P500,000.00 per
Deed.
In addition to the Deeds of Assignment of her money market placements with
petitioner FNCB Finance, respondent also executed a Declaration of Pledge, [60] in
which she supposedly pledged [a]ll present and future fiduciary placements held in
my personal and/or joint name with Citibank, Switzerland, to secure all claims the
petitioner Citibank may have or, in the future, acquire against respondent. The
petitioners copy of the Declaration of Pledge is undated, while that of the
respondent, a copy certified by a Citibank-Geneva officer, bore the date 24
September 1979.[61]
When respondent failed to pay the second set of PNs upon their maturity, an
exchange of letters ensued between respondent and/or her representatives, on one
hand, and the representatives of petitioners, on the other.
The first letter[62] was dated 5 April 1979, addressed to respondent and signed by
Mr. Tan, as the manager of petitioner Citibank, which stated, in part, that
Despite our repeated requests and follow-up, we regret you have
not granted us with any response or payment.
We, therefore, have no alternative but to call your loan
of P1,920,000.00 plus interests and other charges due and
demandable. If you still fail to settle this obligation by 4/27/79,
we shall have no other alternative but to refer your account to our
lawyers for legal action to protect the interest of the bank.
Respondent sent a reply letter[63] dated 26 April 1979, printed on paper bearing the
letterhead of respondents company, MC Adore International Palace, the body of
which reads
This is in reply to your letter dated April 5, 1979 inviting my
attention to my loan which has become due. Pursuant to our
representation with you over the telephone through Mr. F. A. Tan,
you allow us to pay the interests due for the meantime.
Please accept our Comtrust Check in the amount of P62,683.33.
 Please bear with us for a little while, at most ninety days. As you
know, we have a pending loan with the Development Bank of the
Philippines in the amount of P11-M. This loan has already been
recommended for approval and would be submitted to the Board
of Governors. In fact, to further facilitate the early release of this
loan, we have presented and furnished Gov. J. Tengco a xerox
copy of your letter.
You will be doing our corporation a very viable service, should
you grant us our request for a little more time.
A week later or on 3 May 1979, a certain C. N. Pugeda, designated as
Executive Secretary, sent a letter[64] to petitioner Citibank, on behalf of
respondent. The letter was again printed on paper bearing the letterhead of MC
Adore International Palace. The pertinent paragraphs of the said letter are
reproduced below
Per instructions of Mrs. Modesta R. Sabeniano, we would like to
request for a re-computation of the interest and penalty charges
on her loan in the aggregate amount of P1,920,000.00 with
maturity date of all promissory notes at June 30, 1979. As she has
personally discussed with you yesterday, this date will more or
less assure you of early settlement.
In this regard, please entrust to bearer, our Comtrust check
for P62,683.33 to be replaced by another check with amount
resulting from the new computation. Also, to facilitate the
processing of the same, may we request for another set of
promissory notes for the signature of Mrs. Sabeniano and to
cancel the previous ones she has signed and forwarded to you.
This was followed by a telegram, [65] dated 5 June 1979, and received by petitioner
Citibank the following day. The telegram was sent by a Dewey G. Soriano, Legal
Counsel.The telegram acknowledged receipt of the telegram sent by petitioner
Citibank regarding the re-past due obligation of McAdore International
Palace. However, it reported that respondent, the President and Chairman of MC
Adore International Palace, was presently abroad negotiating for a big loan. Thus,
he was requesting for an extension of the due date of the obligation until
respondents arrival on or before 31 July 1979.
The next letter,[66] dated 21 June 1979, was signed by respondent herself
and addressed to Mr. Bobby Mendoza, a Manager of petitioner FNCB
Finance. Respondent wrote therein
Re: PN No. 20138 for P500,000.00 &
PN No. 20139
for P500,000.00 totalling P1
Million, both PNs will
mature on 9/3/1979.
This is to authorize you to release the accrued quarterly
interests payment from my captioned placements and forward
directly to Citibank, Manila Attention: Mr. F. A. Tan, Manager, to
apply to my interest payable on my outstanding loan with
Citibank.
Please note that the captioned two placements are
continuously pledged/hypothecated to Citibank, Manila to
support my personal outstanding loan. Therefore, please do not
release the captioned placements upon maturity until you have
received the instruction from Citibank, Manila.
On even date, respondent sent another letter[67] to Mr. Tan of petitioner
Citibank, stating that
Re: S/A No. 25-225928
and C/A No. 484-946
This letter serves as an authority to debit whatever the
outstanding balance from my captioned accounts and
credit the amount to my loan outstanding account with
you.
 unpaid amount with respondents other collateral, particularly, a money market
Unlike respondents earlier letters, both letters, dated 21 June 1979, are printed on
placement in Citibank-Hongkong.
plain paper, without the letterhead of her company, MC Adore International Palace.

On 5 October 1979, respondent wrote Mr. Tan of petitioner Citibank, on paper

By 5 September 1979, respondents outstanding and past due obligations to
bearing the letterhead of MC Adore International Palace, as regards
petitioner Citibank totaled P2,123,843.20, representing the principal amounts plus
the P1,920,000.00 loan account supposedly of MC Adore Finance & Investment,
interests. Relying on respondents Deeds of Assignment, petitioner Citibank applied
Inc., and requested for a statement of account covering the principal and interest of
the proceeds of respondents money market placements with petitioner FNCB
the loan as of 31 October 1979. She stated therein that the loan obligation shall be
Finance, as well as her deposit account with petitioner Citibank, to partly liquidate
paid within 60 days from receipt of the statement of account.
respondents outstanding loan balance,[68] as follows

Respondents outstanding obligation (principal and interest) P 2,123,843.20 Almost three weeks later, or on 25 October 1979, a certain Atty. Moises Tolentino
Less: Proceeds from respondents money market
placements dropped by the office of petitioner Citibank, with a letter, dated 9 October 1979,
with petitioner FNCB Finance (principal and (1,022,916.66)
and printed on paper with the letterhead of MC Adore International Palace, which
interest)
Deposits in respondents bank accounts with authorized the bearer thereof to represent the respondent in settling the overdue
petitioner
Citibank (31,079.14) account, this time, purportedly, of MC Adore International Palace Hotel. The letter

Balance of respondents obligation P 1,069,847.40 was signed by respondent as the President and Chairman of the Board.

Mr. Tan of petitioner Citibank subsequently sent a letter, [69] dated 28 September Eventually, Atty. Antonio Agcaoili of Agcaoili & Associates, as counsel of

1979, notifying respondent of the status of her loans and the foregoing petitioner Citibank, sent a letter to respondent, dated 31 October 1979, informing

compensation which petitioner Citibank effected. In the letter, Mr. Tan informed her that petitioner Citibank had effected an off-set using her account with Citibank-

respondent that she still had a remaining past-due obligation in the amount Geneva, in the amount of US$149,632.99, against her outstanding, overdue,

of P1,069,847.40, as of 5 September 1979, and should respondent fail to pay the demandable and unpaid obligation to petitioner Citibank. Atty. Agcaoili claimed

amount by 15 October 1979, then petitioner Citibank shall proceed to off-set the therein that the compensation or off-set was made pursuant to and in accordance

with the provisions of Articles 1278 through 1290 of the Civil Code. He further
declared that respondents obligation to petitioner Citibank was now fully paid and petitioner Citibank, these only amounted to P1,150,000.00, and she had already

liquidated. paid them. She secured from petitioner Citibank two loans of P500,000.00

each. She executed in favor of petitioner Citibank the corresponding PNs for the

Unfortunately, on 7 October 1987, a fire gutted the 7 th floor of petitioner Citibanks loans and the Deeds of Assignment of her money market placements with petitioner

building at Paseo de Roxas St., Makati, Metro Manila. Petitioners submitted a FNCB Finance as security.[72] To prove payment of these loans, respondent

Certification[70] to this effect, dated 17 January 1991, issued by the Chief of the presented two provisional receipts of petitioner Citibank No. 19471, [73] dated 11

Arson Investigation Section, Fire District III, Makati Fire Station, Metropolitan August 1978, and No. 12723,[74] dated 10 November 1978 both signed by Mr. Tan,

Police Force.The 7th floor of petitioner Citibanks building housed its Control and acknowledging receipt from respondent of several checks in the total amount

Division, which was in charge of keeping the necessary documents for cases in of P500,744.00 and P500,000.00, respectively, for liquidation of loan.

which it was involved. After compiling the documentary evidence for the present

case, Atty. Renato J. Fernandez, internal legal counsel of petitioner Citibank, She borrowed another P150,000.00 from petitioner Citibank for personal

forwarded them to the Control Division. The original copies of the MCs, which investment, and for which she executed PN No. 34534, on 9 January 1979. Thus,

supposedly represent the proceeds of the first set of PNs, as well as that of other she admitted to receiving the proceeds of this loan via MC No. 228270. She

documentary evidence related to the case, were among those burned in the said fire. invested the loan amount in another money market placement with petitioner
[71]
FNCB Finance. In turn, she used the very same money market placement with

petitioner FNCB Finance as security for her P150,000.00 loan from petitioner

Respondents version of events Citibank. When she failed to pay the loan when it became due, petitioner Citibank

allegedly forfeited her money market placement with petitioner FNCB Finance

Respondent disputed petitioners narration of the circumstances surrounding her and, thus, the loan was already paid.[75]

loans with petitioner Citibank and the alleged authority she gave for the off-set or

compensation of her money market placements and deposit accounts with Respondent likewise questioned the MCs presented by petitioners, except for one

petitioners against her loan obligation. (MC No. 228270 in particular), as proof that she received the proceeds of the loans

covered by the first set of PNs. As recounted in the preceding paragraph,

Respondent denied outright executing the first set of PNs, except for one (PN No. respondent admitted to obtaining a loan of P150,000.00, covered by PN No. 34534,

34534 in particular). Although she admitted that she obtained several loans from and receiving MC No. 228270 representing the proceeds thereof, but claimed that
she already paid the same. She denied ever receiving MCs No. 220701 (for the loan Tan., (sic) per agreement to be shown to DBP representative. itwill (sic) be returned

of P400,000.00, covered by PN No. 33935) and No. 226467 (for the loan to me if the P11=M (sic) loan for MC Adore Palace Hotel is approved by DBP.[77]

of P250,000.00, covered by PN No. 34079), and pointed out that the checks did not
Findings of this Court as to the existence of the loans
bear her indorsements. She did not deny receiving all other checks but she

interposed that she received these checks, not as proceeds of loans, but as payment
After going through the testimonial and documentary evidence presented by both
of the principal amounts and/or interests from her money market placements with
sides to this case, it is this Courts assessment that respondent did indeed have
petitioner Citibank. She also raised doubts as to the notation on each of the checks
outstanding loans with petitioner Citibank at the time it effected the off-set or
that reads RE: Proceeds of PN#[corresponding PN No.], saying that such notation
compensation on 25 July 1979 (using respondents savings deposit with petitioner
did not appear on the MCs when she originally received them and that the notation
Citibank), 5 September 1979 (using the proceeds of respondents money market
appears to have been written by a typewriter different from that used in writing all
placements with petitioner FNCB Finance) and 26 October 1979 (using
other information on the checks (i.e., date, payee, and amount).[76] She even
respondents dollar accounts remitted from Citibank-Geneva).The totality of
testified that MCs were not supposed to bear notations indicating the purpose for
petitioners evidence as to the existence of the said loans preponderates over
which they were issued.
respondents. Preponderant evidence means that, as a whole, the evidence adduced
As to the second set of PNs, respondent acknowledged having signed them
by one side outweighs that of the adverse party.[78]
all. However, she asserted that she only executed these PNs as part of the simulated

loans she and Mr. Tan of petitioner Citibank concocted. Respondent explained that
Respondents outstanding obligation for P1,920,000.00 had been sufficiently
she had a pending loan application for a big amount with the Development Bank of
documented by petitioner Citibank.
the Philippines (DBP), and when Mr. Tan found out about this, he suggested that

they could make it appear that the respondent had outstanding loans with petitioner
The second set of PNs is a mere renewal of the prior loans originally covered by
Citibank and the latter was already demanding payment thereof; this might
the first set of PNs, except for PN No. 34534. The first set of PNs is supported, in
persuade DBP to approve respondents loan application. Mr. Tan made the
turn, by the existence of the MCs that represent the proceeds thereof received by
respondent sign the second set of PNs, so that he may have something to show the
the respondent.
DBP investigator who might inquire with petitioner Citibank as to respondents

loans with the latter. On her own copies of the said PNs, respondent wrote by hand

the notation, This isa (sic) simulated non-negotiable note, signed copy given to Mr.
It bears to emphasize that the proceeds of the loans were paid to respondent in used in commercial transactions for it also serves as a receipt or evidence for the

MCs, with the respondent specifically named as payee. MCs checks are drawn by drawee bank of the cancellation of the said check due to payment, [82] then, the

the banks manager upon the bank itself and regarded to be as good as the money it possession by petitioner Citibank of the said MCs, duly stamped Paid gives rise to

represents.[79] Moreover, the MCs were crossed checks, with the words Payees the presumption that the said MCs were already paid out to the intended payee,

Account Only. who was in this case, the respondent.

In general, a crossed check cannot be presented to the drawee bank for payment in This Court finds applicable herein the presumptions that private transactions have

cash. Instead, the check can only be deposited with the payees bank which, in turn, been fair and regular,[83] and that the ordinary course of business has been followed.
[84]
must present it for payment against the drawee bank in the course of normal There is no question that the loan transaction between petitioner Citibank and

banking hours. The crossed check cannot be presented for payment, but it can only the respondent is a private transaction. The transactions revolving around the

be deposited and the drawee bank may only pay to another bank in the payees or crossed MCs from their issuance by petitioner Citibank to respondent as payment

indorsers account.[80] The effect of crossing a check was described by this Court of the proceeds of her loans; to its deposit in respondents accounts with several

in Philippine Commercial International Bank v. Court of Appeals[81] different banks; to the clearing of the MCs by an independent clearing house; and

[T]he crossing of a check with the phrase Payees Account Only is finally, to the payment of the MCs by petitioner Citibank as the drawee bank of the
a warning that the check should be deposited in the account of
the payee. Thus, it is the duty of the collecting bank PCI Bank to said checks are all private transactions which shall be presumed to have been fair
ascertain that the check be deposited in payees account only. It is
and regular to all the parties concerned. In addition, the banks involved in the
bound to scrutinize the check and to know its depositors before it
can make the clearing indorsement all prior indorsements and/or foregoing transactions are also presumed to have followed the ordinary course of
lack of indorsement guaranteed.
business in the acceptance of the crossed MCs for deposit in respondents accounts,

submitting them for clearing, and their eventual payment and cancellation.
The crossed MCs presented by petitioner Bank were indeed deposited in several
The afore-stated presumptions are disputable, meaning, they are satisfactory if
different bank accounts and cleared by the Clearing Office of the Central Bank of
uncontradicted, but may be contradicted and overcome by other evidence.
the Philippines, as evidenced by the stamp marks and notations on the said
[85]
Respondent, however, was unable to present sufficient and credible evidence to
checks. The crossed MCs are already in the possession of petitioner Citibank, the
dispute these presumptions.
drawee bank, which was ultimately responsible for the payment of the amount

stated in the checks. Given that a check is more than just an instrument of credit
It should be recalled that out of the nine MCs presented by petitioner Citibank, the issuance of the said checks, to their deposit, clearance, and payment, and which

respondent admitted to receiving one as proceeds of a loan (MC No. 228270), would have involved not only petitioner Citibank, but also BPI, which accepted the

denied receiving two (MCs No. 220701 and 226467), and admitted to receiving all checks for deposit, and the Central Bank of the Philippines, which cleared the

the rest, but not as proceeds of her loans, but as return on the principal amounts and checks. It falls upon the respondent to overcome or dispute the presumption that the

interests from her money market placements. crossed checks were issued, accepted for deposit, cleared, and paid for by the banks

involved following the ordinary course of their business.

Respondent admitted receiving MC No. 228270 representing the proceeds of her

loan covered by PN No. 34534. Although the principal amount of the loan The mere fact that MCs No. 220701 and 226467 do not bear respondents signature

is P150,000.00, respondent only received P146,312.50, because the interest and at the back does not negate deposit thereof in her account. The liability for the lack

handling fee on the loan transaction were already deducted therefrom. [86] Stamps of indorsement on the MCs no longer fall on petitioner Citibank, but on the bank

and notations at the back of MC No. 228270 reveal that it was deposited at the who received the same for deposit, in this case, BPI Cubao Branch. Once again, it

Bank of the Philippine Islands (BPI), Cubao Branch, in Account No. 0123-0572-28. must be noted that the MCs were crossed, for payees account only, and the payee
[87]
The check also bore the signature of respondent at the back. [88] And, although named in both checks was none other than respondent. The crossing of the MCs

respondent would later admit that she did sign PN No. 34534 and received MC No. was already a warning to BPI to receive said checks for deposit only in respondents

228270 as proceeds of the loan extended to her by petitioner Citibank, she account. It was up to BPI to verify whether it was receiving the crossed MCs in

contradicted herself when, in an earlier testimony, she claimed that PN No. 34534 accordance with the instructions on the face thereof. If, indeed, the MCs were

was among the PNs she executed as simulated loans with petitioner Citibank. [89] deposited in accounts other than respondents, then the respondent would have a

cause of action against BPI.[90]

Respondent denied ever receiving MCs No. 220701 and 226467. However,

considering that the said checks were crossed for payees account only, and that they BPI further stamped its guarantee on the back of the checks to the effect that, All

were actually deposited, cleared, and paid, then the presumption would be that the prior endorsement and/or Lack of endorsement guaranteed. Thus, BPI became the

said checks were properly deposited to the account of respondent, who was clearly indorser of the MCs, and assumed all the warranties of an indorser, [91] specifically,

named the payee in the checks. Respondents bare allegations that she did not that the checks were genuine and in all respects what they purported to be; that it

receive the two checks fail to convince this Court, for to sustain her, would be for had a good title to the checks; that all prior parties had capacity to contract; and that

this Court to conclude that an irregularity had occurred somewhere from the time of the checks were, at the time of their indorsement, valid and subsisting. [92] So even if
the MCs deposited by BPI's client, whether it be by respondent herself or some HHH, respondent effectively admitted receipt of MC No. 226467, although for

other person, lacked the necessary indorsement, BPI, as the collecting bank, is reasons other than as proceeds of a loan.

bound by its warranties as an indorser and cannot set up the defense of lack of

indorsement as against petitioner Citibank, the drawee bank.[93] Neither can this Court give credence to respondents contention that the notations on

the MCs, stating that they were the proceeds of particular PNs, were not there when

Furthermore, respondents bare and unsubstantiated denial of receipt of the MCs in she received the checks and that the notations appeared to be written by a

question and their deposit in her account is rendered suspect when MC No. 220701 typewriter different from that used to write the other information on the

was actually deposited in Account No. 0123-0572-28 of BPI Cubao Branch, the checks. Once more, respondents allegations were uncorroborated by any other

very same account in which MC No. 228270 (which respondent admitted to evidence. Her and her counsels observation that the notations on the MCs appear to

receiving as proceeds of her loan from petitioner Citibank), and MCs No. 228203, be written by a typewriter different from that used to write the other information on

228357, and 228400 (which respondent admitted to receiving as proceeds from her the checks hardly convinces this Court considering that it constitutes a mere

money market placements) were deposited. Likewise, MC No. 226467 was opinion on the appearance of the notation by a witness who does not possess the

deposited in Account No. 0121-002-43 of BPI Cubao Branch, to which MCs No. necessary expertise on the matter. In addition, the notations on the MCs were

226285 and 226439 (which respondent admitted to receiving as proceeds from her written using both capital and small letters, while the other information on the

money market placements) were deposited. It is an apparent contradiction for checks were written using capital letters only, such difference could easily confuse

respondent to claim having received the proceeds of checks deposited in an an untrained eye and lead to a hasty conclusion that they were written by different

account, and then deny receiving the proceeds of another check deposited in the typewriters.

very same account.

Respondents testimony, that based on her experience transacting with banks, the

Another inconsistency in respondents denial of receipt of MC No. 226467 and her MCs were not supposed to include notations on the purpose for which the checks

deposit of the same in her account, is her presentation of Exhibit HHH, a were issued, also deserves scant consideration. While respondent may have

provisional receipt which was supposed to prove that respondent turned extensive experience dealing with banks, it still does not qualify her as a competent

over P500,000.00 to Mr. Tan of petitioner Citibank, that the said amount was split witness on banking procedures and practices. Her testimony on this matter is even

into three money market placements, and that MC No. 226467 represented the belied by the fact that the other MCs issued by petitioner Citibank (when it was still

return on her investment from one of these placements. [94] Because of her Exhibit named First National City Bank) and by petitioner FNCB Finance, the existence
and validity of which were not disputed by respondent, also bear similar notations respondents BPI Check No. 120989 for P500,000.00; but the initials on the

that state the reason for which they were issued. handwritten note appeared to be that of Mr. Bobby Mendoza of petitioner FNCB

Finance.[97]Second, according to Provisional Receipt No. 12724, BPI Check No.

Respondent presented several more pieces of evidence to substantiate her claim that 120989 for P500,000.00 was supposed to be invested in three money market

she received MCs No. 226285, 226439, 226467, 226057, 228357, and 228400, not placements with petitioner Citibank for the period of 60 days. Since all these

as proceeds of her loans from petitioner Citibank, but as the return of the principal money market placements were made through one check deposited on the same

amounts and payment of interests from her money market placements with day, 10 November 1978, it made no sense that the handwritten note at the back of

petitioners. Part of respondents exhibits were personal checks[95] drawn by Provisional Receipt No. 12724 provided for different dates of maturity for each of

respondent on her account with Feati Bank & Trust Co., which she allegedly the money market placements (i.e., 16 November 1978, 17 January 1979, and 21

invested in separate money market placements with both petitioners, the returns November 1978), and such dates did not correspond to the 60 day placement period

from which were paid to her via MCs No. 226285 and 228400. Yet, to this Court, stated on the face of the provisional receipt. And third, the principal amounts of the

the personal checks only managed to establish respondents issuance thereof, but money market placements as stated in the handwritten

there was nothing on the face of the checks that would reveal the purpose for which note P145,000.00, P145,000.00 and P242,000.00 totaled P532,000.00, and was

they were issued and that they were actually invested in money market placements obviously in excess of the P500,000.00 acknowledged on the face of Provisional

as respondent claimed. Receipt No. 12724.

Respondent further submitted handwritten notes that purportedly Exhibits III and III-1, the front and bank pages of a handwritten note of

computed and presented the returns on her money market placements, Mr. Bobby Mendoza of petitioner FNCB Finance, [98] also did not deserve much

corresponding to the amount stated in the MCs she received from petitioner evidentiary weight, and this Court cannot rely on the truth and accuracy of the

Citibank. Exhibit HHH-1[96] was a handwritten note, which respondent attributed to computations presented therein. Mr. Mendoza was not presented as a witness

Mr. Tan of petitioner Citibank, showing the breakdown of her BPI Check during the trial before the RTC, so that the document was not properly

for P500,000.00 into three different money market placements with petitioner authenticated nor its contents sufficiently explained. No one was able to

Citibank. This Court, however, noticed several factors which render the note highly competently identify whether the initials as appearing on the note were actually Mr.

suspect. One, it was written on the reversed side of Provisional Receipt No. 12724 Mendozas.

of petitioner Citibank which bore the initials of Mr. Tan acknowledging receipt of
 Also, going by the information on the front page of the note, this Court

observes that payment of respondents alleged money market placements with In support of respondents assertion that she had already paid whatever

petitioner FNCB Finance were made using Citytrust Checks; the MCs in question, loans she may have had with petitioner Citibank, she presented as evidence

including MC No. 228057, were issued by petitioner Citibank. Although Citytrust Provisional Receipts No. 19471, dated 11 August 1978, and No. 12723, dated 10

(formerly Feati Bank & Trust Co.), petitioner FNCB Finance, and petitioner November 1978, both of petitioner Citibank and signed by Mr. Tan, for the

Citibank may be affiliates of one another, they each remained separate and distinct amounts of P500,744.00 and P500,000.00, respectively. While these provisional

corporations, each having its own financial system and records. Thus, this Court receipts did state that Mr. Tan, on behalf of petitioner Citibank, received

cannot simply assume that one corporation, such as petitioner Citibank or Citytrust, respondents checks as payment for her loans, they failed to specifically identify

can issue a check to discharge an obligation of petitioner FNCB Finance. It should which loans were actually paid. Petitioner Citibank was able to present evidence

be recalled that when petitioner FNCB Finance paid for respondents money market that respondent had executed several PNs in the years 1978 and 1979 to cover the

placements, covered by its PNs No. 8167 and 8169, as well as PNs No. 20138 and loans she secured from the said bank. Petitioner Citibank did admit that respondent

20139, petitioner FNCB Finance issued its own checks. was able to pay for some of these PNs, and what it identified as the first and second

sets of PNs were only those which remained unpaid. It thus became incumbent

As a last point on this matter, if respondent truly had money market upon respondent to prove that the checks received by Mr. Tan were actually applied

placements with petitioners, then these would have been evidenced by PNs issued to the PNs in either the first or second set; a fact that, unfortunately, cannot be

by either petitioner Citibank or petitioner FNCB Finance, acknowledging the determined from the provisional receipts submitted by respondent since they only

principal amounts of the investments, and stating the applicable interest rates, as generally stated that the checks received by Mr. Tan were payment for respondents

well as the dates of their of issuance and maturity. After respondent had so loans.

meticulously reconstructed her other money market placements with petitioners and

consolidated the documentary evidence thereon, she came surprisingly short of Mr. Tan, in his deposition, further explained that provisional receipts were

offering similar details and substantiation for these particular money market issued when payment to the bank was made using checks, since the checks would

placements. still be subject to clearing. The purpose for the provisional receipts was merely to

acknowledge the delivery of the checks to the possession of the bank, but not yet of

Since this Court is satisfied that respondent indeed received the proceeds of the first payment.[99] This bank practice finds legitimacy in the pronouncement of this Court

set of PNs, then it proceeds to analyze her evidence of payment thereof. that a check, whether an MC or an ordinary check, is not legal tender and,
therefore, cannot constitute valid tender of payment. In Philippine Airlines, Inc. v.
Court of Appeals, [100] this Court elucidated that:
Since a negotiable instrument is only a substitute for
money and not money, the delivery of such an instrument does
not, by itself, operate as payment (Sec. 189, Act 2031 on Negs.
Insts.; Art. 1249, Civil Code; Bryan Landon Co. v. American
Bank, 7 Phil. 255; Tan Sunco, v. Santos, 9 Phil. 44; 21 R.C.L. 60,
61). A check, whether a manager's check or ordinary check, is not
legal tender, and an offer of a check in payment of a debt is not a
valid tender of payment and may be refused receipt by the
obligee or creditor. Mere delivery of checks does not discharge
the obligation under a judgment. The obligation is not
extinguished and remains suspended until the payment by
commercial document is actually realized (Art. 1249, Civil Code,
par. 3).
In the case at bar, the issuance of an official receipt by petitioner Citibank would
have been dependent on whether the checks delivered by respondent were actually
cleared and paid for by the drawee banks.
As for PN No. 34534, respondent asserted payment thereof at two separate
instances by two different means. In her formal offer of exhibits, respondent
submitted a deposit slip of petitioner Citibank, dated 11 August 1978, evidencing
[101]
the deposit of BPI Check No. 5785 for P150,000.00. In her Formal Offer of
Documentary Exhibits, dated 7 July 1989, respondent stated that the purpose for
the presentation of the said deposit slip was to prove that she already paid her loan
[102]
covered by PN No. 34534. In her testimony before the RTC three years later, on
28 November 1991, she changed her story. This time she narrated that the loan
covered by PN No. 34534 was secured by her money market placement with
petitioner FNCB Finance, and when she failed to pay the said PN when it became
due, the security was applied to the loan, therefore, the loan was considered paid.
[103]
Given the foregoing, respondents assertion of payment of PN No. 34534 is
extremely dubious.
According to petitioner Citibank, the PNs in the second set, except for PN
No. 34534, were mere renewals of the unpaid PNs in the first set, which was why
the PNs stated that they were for the purpose of liquidating existing obligations. PN
No. 34534, however, which was part of the first set, was still valid and subsisting
and so it was included in the second set without need for its renewal, and it still
being the original PN for that particular loan, its stated purpose was for personal
investment.[104] Respondent essentially admitted executing the second set of PNs,
but they were only meant to cover simulated loans. Mr. Tan supposedly convinced
her that her pending loan application with DBP would have a greater chance of
being approved if they made it appear that respondent urgently needed the money
because petitioner Citibank was already demanding payment for her simulated
loans.
Respondents defense of simulated loans to escape liability for the second set of
PNs is truly a novel one. It is regrettable, however, that she was unable to
substantiate the same.Yet again, respondents version of events is totally based on
her own uncorroborated testimony. The notations on the second set of PNs, that
they were non-negotiable simulated notes, were admittedly made by respondent
herself and were, thus, self-serving. Equally self-serving was respondents letter,
written on 7 October 1985, or more than six years after the execution of the second
set of PNs, in which she demanded return of the simulated or fictitious PNs,
together with the letters relating thereto, which Mr. Tan purportedly asked her to recording it in the General Ledger. She explained the procedure for booking loans,

execute. Respondent further failed to present any proof of her alleged loan as follows: The account officer, in the Marketing Department, deals directly with

application with the DBP, and of any circumstance or correspondence wherein the the clients who wish to borrow money from petitioner Citibank. The Marketing

simulated or fictitious PNs were indeed used for their supposed purpose. Department will forward a loan booking checklist, together with the borrowing

clients PNs and other supporting documents, to the loan pre-processor, who will

In contrast, petitioner Citibank, as supported by the testimonies of its officers and check whether the details in the loan booking checklist are the same as those in the

available documentation, consistently treated the said PNs as regular loans PNs. The documents are then sent to Signature Control for verification of the

accepted, approved, and paid in the ordinary course of its business. clients signature in the PNs, after which, they are returned to the loan pre-

processor, to be forwarded finally to the loan processor. The loan processor shall

The PNs executed by the respondent in favor of petitioner Citibank to cover her book the loan in the General Ledger, indicating therein the client name, loan

loans were duly-filled out and signed, including the disclosure statement found at amount, interest rate, maturity date, and the corresponding PN number. Since she

the back of the said PNs, in adherence to the Central Bank requirement to disclose booked respondents loans personally, Ms. Dondoyano testified that she saw the

the full finance charges to a loan granted to borrowers. original PNs. In 1986, Atty. Fernandez of petitioner Citibank requested her to

prepare an accounting of respondents loans, which she did, and which was

Mr. Tan, then an account officer with the Marketing Department of presented as Exhibit 120 for the petitioners. The figures from the said exhibit were

petitioner Citibank, testified that he dealt directly with respondent; he facilitated the culled from the bookings in the General Ledger, a fact which respondents counsel

loans; and the PNs, at least in the second set, were signed by respondent in his was even willing to stipulate.[107]

presence.[105]

Ms. Teresita Glorioso was an Investigation and Reconcilement Clerk at the Control

Mr. Pujeda, the officer who was previously in charge of loans and Department of petitioner Citibank. She was presented by petitioner Citibank to

placements, confirmed that the signatures on the PNs were verified against expound on the microfilming procedure at the bank, since most of the copies of the

respondents specimen signature with the bank.[106] PNs were retrieved from microfilm. Microfilming of the documents are actually

done by people at the Operations Department. At the end of the day or during the

Ms. Cristina Dondoyano, who worked at petitioner Citibank as a loan day, the original copies of all bank documents, not just those pertaining to loans,

processor, was responsible for booking respondents loans. Booking the loans means are microfilmed. She refuted the possibility that insertions could be made in the
microfilm because the microfilm is inserted in a cassette; the cassette is placed in officer has the power to approve the loan application. When the loan is approved,

the microfilm machine for use; at the end of the day, the cassette is taken out of the the account officer in charge will obtain the corresponding PNs from the client. The

microfilm machine and put in a safe vault; and the cassette is returned to the PNs are sent to the signature verifier who would validate the signatures therein

machine only the following day for use, until the spool is full.This is the against those appearing in the signature cards previously submitted by the client to

microfilming procedure followed everyday. When the microfilm spool is already the bank. The Operations Unit will check and review the documents, including the

full, the microfilm is developed, then sent to the Control Department, which double PNs, if it is a clean loan, and securities and deposits, if it is collateralized. The loan

checks the contents of the microfilms against the entries in the General Ledger. The is then recorded in the General Ledger. The Loans and Placements Department will

Control Department also conducts a random comparison of the contents of the not book the loans without the PNs.When the PNs are liquidated, whether they are

microfilms with the original documents; a random review of the contents is done on paid or rolled-over, they are returned to the client. [109] Ms. Rubio further explained

every role of microfilm.[108] that she was familiar with respondents accounts since, while she was still the Head

of the Loan and Placements Unit, she was asked by Mr. Tan to prepare a list of

Ms. Renee Rubio worked for petitioner Citibank for 20 years. She rose from the respondents outstanding obligations.[110] She thus calculated respondents

ranks, initially working as a secretary in the Personnel Group; then as a secretary to outstanding loans, which was sent as an attachment to Mr. Tans letter to

the Personnel Group Head; a Service Assistant with the Marketing Group, in 1972 respondent, dated 28 September 1979, and presented before the RTC as Exhibits

to 1974, dealing directly with corporate and individual clients who, among other 34-B and 34-C.[111]

things, secured loans from petitioner Citibank; the Head of the Collection Group of Lastly, the exchange of letters between petitioner Citibank and respondent, as well

the Foreign Department in 1974 to 1976; the Head of the Money Transfer Unit in as the letters sent by other people working for respondent, had consistently

1976 to 1978; the Head of the Loans and Placements Unit up to the early 1980s; recognized that respondent owed petitioner Citibank money.

and, thereafter, she established operations training for petitioner Citibank in the

Asia-Pacific Region responsible for the training of the officers of the bank. She In consideration of the foregoing discussion, this Court finds that the

testified on the standard loan application process at petitioner Citibank. According preponderance of evidence supports the existence of the respondents loans, in the

to Ms. Rubio, the account officer or marketing person submits a proposal to grant a principal sum ofP1,920,000.00, as of 5 September 1979. While it is well-settled

loan to an individual or corporation. Petitioner Citibank has a worldwide policy that that the term preponderance of evidence should not be wholly dependent on the

requires a credit committee, composed of a minimum of three people, which would number of witnesses, there are certain instances when the number of witnesses

approve the loan and amount thereof. There can be no instance when only one become the determining factor

The preponderance of evidence may be determined,
under certain conditions, by the number of witnesses testifying to
a particular fact or state of facts. For instance, one or two
witnesses may testify to a given state of facts, and six or seven
witnesses of equal candor, fairness, intelligence, and truthfulness,
and equally well corroborated by all the remaining evidence, who
have no greater interest in the result of the suit, testify against
such state of facts. Then the preponderance of evidence is
determined by the number of witnesses. (Wilcox vs. Hines, 100
Tenn. 524, 66 Am. St. Rep., 761.)[112]
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
Best evidence rule
extensively explained thus
This Court disagrees in the pronouncement made by the Court of Appeals
summarily dismissing the documentary evidence submitted by petitioners based on
its broad and indiscriminate application of the best evidence rule.
In general, the best evidence rule requires that the highest available degree
of proof must be produced. Accordingly, for documentary evidence, the contents of
a document are best proved by the production of the document itself, [113] to the
exclusion of any secondary or substitutionary evidence.[114]
The best evidence rule has been made part of the revised Rules of Court,
Rule 130, Section 3, which reads
In Estrada v. Desierto,[116] this Court had occasion to rule that
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.
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.,
91 Phil 565). x x x [115]
It is true that the Court relied not upon the original but
only 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 courts 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.24
xxxx
In several Canadian provinces, the principle of
unavailability has been abandoned, for certain documents in
which ordinarily no real dispute arised. 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.(Emphasis supplied.)
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 respondents
loans. The terms or contents of these documents were never the point of contention
in the Petition at bar. It was respondents 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 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 respondents
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
SEC. 5. When the 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.
The execution or existence of the original copies of the documents was
established through the testimonies of witnesses, such as Mr. Tan, before whom
most of the documents were personally executed by respondent. The original PNs
also went through the whole loan booking system of petitioner Citibank from the
account officer in its Marketing Department, to the pre-processor, to the signature
verifier, back to the pre-processor, then to the processor for booking. [117] The
original PNs were seen by Ms. Dondoyano, the processor, who recorded them in
the General Ledger. Mr. Pujeda personally saw the original MCs, proving
respondents receipt of the proceeds of her loans from petitioner Citibank, when he
helped Attys. Cleofe and Fernandez, the banks legal counsels, to reconstruct the
records of respondents loans. The original MCs were presented to Atty. Cleofe who
used the same during the preliminary investigation of the case, sometime in years
1986-1987. The original MCs were subsequently turned over to the Control and
Investigation Division of petitioner Citibank.[118]

It was only petitioner FNCB Finance who claimed that they lost the
original copies of the PNs when it moved to a new office. Citibank did not make a
similar contention; instead, it explained that the original copies of the PNs were
returned to the borrower upon liquidation of the loan, either through payment or
roll-over. Petitioner Citibank proffered the excuse that they were still looking for
the documents in their storage or warehouse to explain the delay and difficulty in
the retrieval thereof, but not their absence or loss. The original documents in this
case, such as the MCs and letters, were destroyed and, thus, unavailable for
presentation before the RTC only on 7 October 1987, when a fire broke out on the
7th floor of the office building of petitioner Citibank. There is no showing that the
fire was intentionally set. The fire destroyed relevant documents, not just of the
present case, but also of other cases, since the 7 th floor housed the Control and
Investigation Division, in charge of keeping the necessary documents for cases in
which petitioner Citibank was involved.
The foregoing would have been sufficient to allow the presentation of
photocopies or microfilm copies of the PNs, MCs, and letters by the petitioners as
secondary evidence to establish the existence of respondents loans, as an exception
to the best evidence rule.
The impact of the Decision of the Court of Appeals in the Dy case
In its assailed Decision, the Court of Appeals made the following pronouncement
Besides, We find the declaration and conclusions of this
Court in CA-G.R. CV No. 15934 entitled Sps. Dr. Ricardo L. Dy
and Rosalind O. Dy vs. City Bank, N.A., et al, promulgated on 15
January 1990, as disturbing taking into consideration the
similarities of the fraud, machinations, and deceits employed by
the defendant-appellant Citibank and its Account Manager
Francisco Tan.
Worthy of note is the fact that Our declarations and
conclusions against Citibank and the person of Francisco Tan
in CA-G.R. CV No. 15934 were affirmed in toto by the Highest
Magistrate in a Minute Resolution dated 22 August 1990
entitled Citibank, N.A., vs. Court of Appeals, G.R. 93350.
As the factual milieu of the present appeal created
reasonable doubts as to whether the nine (9) Promissory Notes
were indeed executed with considerations, the doubts, coupled by
the findings and conclusions of this Court in CA-G.R. CV No.
15934 and the Supreme Court in G.R. No. 93350. should be
construed against herein defendants-appellants Citibank and
FNCB Finance.
What this Court truly finds disturbing is the significance given by the Court of
Appeals in its assailed Decision to the Decision [119] of its Third Division in CA-
G.R. CV No. 15934 (or the Dy case), when there is an absolute lack of legal basis
for doing such.
Although petitioner Citibank and its officer, Mr. Tan, were also involved in the Dy
case, that is about the only connection between the Dy case and the one at bar. Not
only did the Dy case tackle transactions between parties other than the parties
presently before this Court, but the transactions are absolutely independent and
unrelated to those in the instant Petition.
In the Dy case, Severino Chua Caedo managed to obtain loans from herein
petitioner Citibank amounting to P7,000,000.00, secured to the extent
of P5,000,000.00 by a Third Party Real Estate Mortgage of the properties of
Caedos aunt, Rosalind Dy. It turned out that Rosalind Dy and her husband were
unaware of the said loans and the mortgage of their properties. The transactions
were carried out exclusively between Caedo and Mr. Tan of petitioner
Citibank. The RTC found Mr. Tan guilty of fraud for his participation in the
questionable transactions, essentially because he allowed Caedo to take out the
signature cards, when these should have been signed by the Dy spouses personally
before him.Although the Dy spouses signatures in the PNs and Third Party Real
Estate Mortgage were forged, they were approved by the signature verifier since
the signature cards against which they were compared to were also forged. Neither
the RTC nor the Court of Appeals, however, categorically declared Mr. Tan
personally responsible for the forgeries, which, in the narration of the facts, were
more likely committed by Caedo.
In the Petition at bar, respondent dealt with Mr. Tan directly, there was no third
party involved who could have perpetrated any fraud or forgery in her loan
transactions. Although respondent attempted to raise suspicion as to the
authenticity of her signatures on certain documents, these were nothing more than
naked allegations with no corroborating evidence; worse, even her own allegations
were replete with inconsistencies. She could not even establish in what manner or
under what circumstances the fraud or forgery was committed, or how Mr. Tan
could have been directly responsible for the same.
While the Court of Appeals can take judicial notice of the Decision of its Third
Division in the Dy case, it should not have given the said case much weight when it
rendered the assailed Decision, since the former does not constitute a
precedent. The Court of Appeals, in the challenged Decision, did not apply any
legal argument or principle established in the Dy case but, rather, adopted the
findings therein of wrongdoing or misconduct on the part of herein petitioner
Citibank and Mr. Tan. Any finding of wrongdoing or misconduct as against herein
petitioners should be made based on the factual background and pieces of evidence
submitted in this case, not those in another case.
It is apparent that the Court of Appeals took judicial notice of the Dy case not as a
legal precedent for the present case, but rather as evidence of similar acts
committed by petitioner Citibank and Mr. Tan. A basic rule of evidence, however,
states that, Evidence that one did or did not do a certain thing at one time is not
admissible to prove that he did or did not do the same or similar thing at another
time; but it may be received to prove a specific intent or knowledge, identity, plan,
system, scheme, habit, custom or usage, and the like. [120] The rationale for the rule
is explained thus
The rule is founded upon reason, public policy, justice
and judicial convenience. The fact that a person has committed
the same or similar acts at some prior time affords, as a general
rule, no logical guaranty that he committed the act in
question. This is so because, subjectively, a mans mind and even
his modes of life may change; and, objectively, the conditions
under which he may find himself at a given time may likewise
change and thus induce him to act in a different way. Besides, if
evidence of similar acts are to be invariably admitted, they will
give rise to a multiplicity of collateral issues and will subject the
defendant to surprise as well as confuse the court and prolong the
trial.[121]

The factual backgrounds of the two cases are so different and unrelated that the Dy
case cannot be used to prove specific intent, knowledge, identity, plan, system,
scheme, habit, custom or usage on the part of petitioner Citibank or its officer, Mr.
Tan, to defraud respondent in the present case.
(2) That both debts consist in a sum of money, or if the
things due are consumable, they be of the same kind, and also of
the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or
controversy, commenced by third persons and communicated in
due time to the debtor.

IV
There is little controversy when it comes to the right of petitioner Citibank
The liquidation of
respondents outstanding to compensate respondents outstanding loans with her deposit account. As already
loans were valid in so far as
found by this Court, petitioner Citibank was the creditor of respondent for her
petitioner Citibank used
respondents savings account outstanding loans. At the same time, respondent was the creditor of petitioner
with the bank and her
money market placements Citibank, as far as her deposit account was concerned, since bank deposits, whether
with petitioner FNCB
Finance; but illegal and fixed, savings, or current, should be considered as simple loan or mutuum by the
void in so far as petitioner
Citibank used respondents depositor to the banking institution.[122]Both debts consist in sums of money. By
dollar accounts with
Citibank-Geneva. June 1979, all of respondents PNs in the second set had matured and became

demandable, while respondents savings account was demandable anytime. Neither

Savings Account with petitioner Citibank was there any retention or controversy over the PNs and the deposit account

commenced by a third person and communicated in due time to the debtor

Compensation is a recognized mode of extinguishing obligations. Relevant concerned. Compensation takes place by operation of law, [123] therefore, even in the
provisions of the Civil Code provides absence of an expressed authority from respondent, petitioner Citibank had the

right to effect, on 25 June 1979, the partial compensation or off-set of respondents

Art. 1278. Compensation shall take place when two
persons, in their own right, are creditors and debtors of each outstanding loans with her deposit account, amounting to P31,079.14.
other.

Art. 1279. In order that compensation may be proper, it

is necessary; Money market placements with FNCB Finance
(1) That each one of the obligors be bound principally,
and that he be at the same time a principal creditor of the other;
 Things though are not as simple and as straightforward as regards to the
money market placements and bank account used by petitioner Citibank to
complete the compensation or off-set of respondents outstanding loans, which came
from persons other than petitioner Citibank.
Respondents money market placements were with petitioner FNCB
Finance, and after several roll-overs, they were ultimately covered by PNs No.
20138 and 20139, which, by 3 September 1979, the date the check for the proceeds
of the said PNs were issued, amounted to P1,022,916.66, inclusive of the principal
amounts and interests. As to these money market placements, respondent was the
creditor and petitioner FNCB Finance the debtor; while, as to the outstanding loans,
petitioner Citibank was the creditor and respondent the debtor. Consequently, legal
compensation, under Article 1278 of the Civil Code, would not apply since the first
requirement for a valid compensation, that each one of the obligors be bound
principally, and that he be at the same time a principal creditor of the other, was not
met.
What petitioner Citibank actually did was to exercise its rights to the
proceeds of respondents money market placements with petitioner FNCB Finance
by virtue of the Deeds of Assignment executed by respondent in its favor.
The Court of Appeals did not consider these Deeds of Assignment because
of petitioners failure to produce the original copies thereof in violation of the best
evidence rule.This Court again finds itself in disagreement in the application of the
best evidence rule by the appellate court.
To recall, the best evidence rule, in so far as documentary evidence is
concerned, requires the presentation of the original copy of the document only
when the context thereof is the subject of inquiry in the case. Respondent does not
question the contents of the Deeds of Assignment. While she admitted the existence
and execution of the Deeds of Assignment, dated 2 March 1978 and 9 March 1978,
covering PNs No. 8169 and 8167 issued by petitioner FNCB Finance, she claimed,
as defense, that the loans for which the said Deeds were executed as security, were
already paid. She denied ever executing both Deeds of Assignment, dated 25
August 1978, covering PNs No. 20138 and 20139. These are again issues collateral
to the contents of the documents involved, which could be proven by evidence
other than the original copies of the said documents.
Moreover, the Deeds of Assignment of the money market placements with
petitioner FNCB Finance were notarized documents, thus, admissible in
evidence. Rule 132, Section 30 of the Rules of Court provides that
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 acknowledgement being prima facie evidence of the
execution of the instrument or document involved.
Significant herein is this Courts elucidation in De Jesus v. Court of
Appeals,[124] which reads
On the evidentiary value of these documents, it should
be recalled that the notarization of a private document converts it
into a public one and renders it admissible in court without
further proof of its authenticity (Joson vs. Baltazar, 194 SCRA
 114 [1991]). This is so because a public document duly executed
and entered in the proper registry is presumed to be valid and notary publics concerned, which were already in the possession of the National
genuine until the contrary is shown by clear and convincing proof
(Asido vs. Guzman, 57 Phil. 652 [1918]; U.S. vs. Enriquez, 1 Phil Archives. He also explained that he could not bring to the RTC the Notarial
241 [1902]; Favor vs. Court of Appeals, 194 SCRA 308 [1991]).
Registries containing the original copies of the Deeds of Assignment, because the
As such, the party challenging the recital of the document must
prove his claim with clear and convincing evidence (Diaz vs. Department of Justice (DOJ) Circular No. 97, dated 8 November 1968, prohibits
Court of Appeals, 145 SCRA 346 [1986]).
the bringing of original documents to the courts to prevent the loss of irreplaceable

and priceless documents.[128]

The rule on the evidentiary weight that must be accorded a notarized

document is clear and unambiguous. The certificate of acknowledgement in the

Accordingly, this Court gives the Deeds of Assignment grave importance in
notarized Deeds of Assignment constituted prima facie evidence of the execution
establishing the authority given by the respondent to petitioner Citibank to use as
thereof. Thus, the burden of refuting this presumption fell on respondent. She could
security for her loans her money her market placements with petitioner FNCB
have presented evidence of any defect or irregularity in the execution of the said
Finance, represented by PNs No. 8167 and 8169, later to be rolled-over as PNs No.
documents[125] or raised questions as to the verity of the notary publics
20138 and 20139. These Deeds of Assignment constitute the law between the
acknowledgment and certificate in the Deeds. [126] But again, respondent admitted
parties, and the obligations arising therefrom shall have the force of law between
executing the Deeds of Assignment, dated 2 March 1978 and 9 March 1978,
the parties and should be complied with in good faith. [129] Standard clauses in all of
although claiming that the loans for which they were executed as security were
the Deeds provide that
already paid. And, she assailed the Deeds of Assignment, dated 25 August 1978,
The ASSIGNOR and the ASSIGNEE hereby further
with nothing more than her bare denial of execution thereof, hardly the clear and agree as follows:
convincing evidence required to trounce the presumption of due execution of a
xxxx
notarized document.
2. In the event the OBLIGATIONS are not paid at
maturity or upon demand, as the case may be, the ASSIGNEE is
fully authorized and empowered to collect and receive the
Petitioners not only presented the notarized Deeds of Assignment, but even secured PLACEMENT (or so much thereof as may be necessary) and
apply the same in payment of the OBLIGATIONS. Furthermore,
certified literal copies thereof from the National Archives. [127] Mr. Renato Medua, the ASSIGNOR agrees that at any time, and from time to time,
upon request by the ASSIGNEE, the ASSIGNOR will promptly
an archivist, working at the Records Management and Archives Office of the execute and deliver any and all such further instruments and
documents as may be necessary to effectuate this Assignment.
National Library, testified that the copies of the Deeds presented before the RTC

were certified literal copies of those contained in the Notarial Registries of the xxxx
 5. This Assignment shall be considered as sufficient
authority to FNCB Finance to pay and deliver the PLACEMENT
or so much thereof as may be necessary to liquidate the
OBLIGATIONS, to the ASSIGNEE in accordance with terms and
provisions hereof.[130]
Petitioner Citibank was only acting upon the authority granted to it under the
foregoing Deeds when it finally used the proceeds of PNs No. 20138 and 20139,
paid by petitioner FNCB Finance, to partly pay for respondents outstanding loans.
Strictly speaking, it did not effect a legal compensation or off-set under Article
1278 of the Civil Code, but rather, it partly extinguished respondents obligations
through the application of the security given by the respondent for her
loans. Although the pertinent documents were entitled Deeds of Assignment, they
were, in reality, more of a pledge by respondent to petitioner Citibank of her credit
due from petitioner FNCB Finance by virtue of her money market placements with
the latter. According to Article 2118 of the Civil Code
ART. 2118. If a credit has been pledged becomes due
before it is redeemed, the pledgee may collect and receive the
amount due. He shall apply the same to the payment of his claim,
and deliver the surplus, should there be any, to the pledgor.
PNs No. 20138 and 20139 matured on 3 September 1979, without them being
redeemed by respondent, so that petitioner Citibank collected from petitioner
FNCB Finance the proceeds thereof, which included the principal amounts and
interests earned by the money market placements, amounting to P1,022,916.66, and
applied the same against respondents outstanding loans, leaving no surplus to be
delivered to respondent.
Dollar accounts with Citibank-Geneva
Despite the legal compensation of respondents savings account and the total
application of the proceeds of PNs No. 20138 and 20139 to respondents
outstanding loans, there still remained a balance of P1,069,847.40. Petitioner
Citibank then proceeded to applying respondents dollar accounts with Citibank-
Geneva against her remaining loan balance, pursuant to a Declaration of Pledge
supposedly executed by respondent in its favor.
Certain principles of private international law should be considered herein because
the property pledged was in the possession of an entity in a foreign country,
namely, Citibank-Geneva. In the absence of any allegation and evidence presented
by petitioners of the specific rules and laws governing the constitution of a pledge
in Geneva, Switzerland, they will be presumed to be the same as Philippine local or
domestic laws; this is known as processual presumption.[131]
Upon closer scrutiny of the Declaration of Pledge, this Court finds the same
exceedingly suspicious and irregular.
First of all, it escapes this Court why petitioner Citibank took care to have the
Deeds of Assignment of the PNs notarized, yet left the Declaration of Pledge
unnotarized. This Court would think that petitioner Citibank would take greater
cautionary measures with the preparation and execution of the Declaration of
Pledge because it involved respondents all present and future fiduciary placements
with a Citibank branch in another country, specifically, in Geneva,
Switzerland. While there is no express legal requirement that the Declaration of
Pledge had to be notarized to be effective, even so, it could not enjoy the
same prima facie presumption of due execution that is extended to notarized
documents, and petitioner Citibank must discharge the burden of proving due
execution and authenticity of the Declaration of Pledge.
Second, petitioner Citibank was unable to establish the date when the Declaration
of Pledge was actually executed. The photocopy of the Declaration of Pledge
submitted by petitioner Citibank before the RTC was undated. [132] It presented only
a photocopy of the pledge because it already forwarded the original copy thereof to
Citibank-Geneva when it requested for the remittance of respondents dollar
accounts pursuant thereto. Respondent, on the other hand, was able to secure a
copy of the Declaration of Pledge, certified by an officer of Citibank-Geneva,
which bore the date 24 September 1979.[133] Respondent, however, presented her
passport and plane tickets to prove that she was out of the country on the said date
and could not have signed the pledge. Petitioner Citibank insisted that the pledge
was signed before 24 September 1979, but could not provide an explanation as to
how and why the said date was written on the pledge. Although Mr. Tan testified
that the Declaration of Pledge was signed by respondent personally before him, he
could not give the exact date when the said signing took place. It is important to
note that the copy of the Declaration of Pledge submitted by the respondent to the
RTC was certified by an officer of Citibank-Geneva, which had possession of the
original copy of the pledge. It is dated 24 September 1979, and this Court shall
abide by the presumption that the written document is truly dated. [134] Since it is
undeniable that respondent was out of the country on 24 September 1979, then she
could not have executed the pledge on the said date.
Third, the Declaration of Pledge was irregularly filled-out. The pledge was in a
standard printed form. It was constituted in favor of Citibank, N.A., otherwise
referred to therein as the Bank. It should be noted, however, that in the space which
should have named the pledgor, the name of petitioner Citibank was typewritten, to
wit
The pledge right herewith constituted shall secure all claims
which the Bank now has or in the future acquires
against Citibank, N.A., Manila (full name and address of the
Debtor), regardless of the legal cause or the transaction (for
example current account, securities transactions, collections,
credits, payments, documentary credits and collections) which
gives rise thereto, and including principal, all contractual and
penalty interest, commissions, charges, and costs.
The pledge, therefore, made no sense, the pledgor and pledgee being the same
entity. Was a mistake made by whoever filled-out the form? Yes, it could be a
possibility.Nonetheless, considering the value of such a document, the mistake as to
a significant detail in the pledge could only be committed with gross carelessness
on the part of petitioner Citibank, and raised serious doubts as to the authenticity
and due execution of the same. The Declaration of Pledge had passed through the
hands of several bank officers in the country and abroad, yet, surprisingly and
implausibly, no one noticed such a glaring mistake.
Lastly, respondent denied that it was her signature on the Declaration of temporarily, the original Declaration of Pledge. Petitioner Citibank did not present

Pledge. She claimed that the signature was a forgery. When a document is assailed any evidence to convince this Court that it had exerted diligent efforts to secure the

on the basis of forgery, the best evidence rule applies original copy of the pledge, nor did it proffer the reason why Citibank-Geneva

Basic is the rule of evidence that when the subject of obstinately refused to give it back, when such document would have been very vital
inquiry is the contents of a document, no evidence is admissible
other than the original document itself except in the instances to the case of petitioner Citibank. There is thus no justification to allow the
mentioned in Section 3, Rule 130 of the Revised Rules of Court.
presentation of a mere photocopy of the Declaration of Pledge in lieu of the
Mere photocopies of documents are inadmissible pursuant to the
best evidence rule. This is especially true when the issue is that original, and the photocopy of the pledge presented by petitioner Citibank has nil
of forgery.
probative value.[137] In addition, even if this Court cannot make a categorical
As a rule, forgery cannot be presumed and must be
proved by clear, positive and convincing evidence and the burden finding that respondents signature on the original copy of the pledge was forged, it
of proof lies on the party alleging forgery. The best evidence of a
forged signature in an instrument is the instrument itself is persuaded that petitioner Citibank willfully suppressed the presentation of the
reflecting the alleged forged signature. The fact of forgery can
original document, and takes into consideration the presumption that the evidence
only be established by a comparison between the alleged forged
signature and the authentic and genuine signature of the person willfully suppressed would be adverse to petitioner Citibank if produced. [138]
whose signature is theorized upon to have been forged. Without
the original document containing the alleged forged signature,
one cannot make a definitive comparison which would establish
forgery. A comparison based on a mere xerox copy or Without the Declaration of Pledge, petitioner Citibank had no authority to
reproduction of the document under controversy cannot produce
reliable results.[135] demand the remittance of respondents dollar accounts with Citibank-Geneva and to

apply them to her outstanding loans. It cannot effect legal compensation under

Respondent made several attempts to have the original copy of the pledge Article 1278 of the Civil Code since, petitioner Citibank itself admitted that

produced before the RTC so as to have it examined by experts. Yet, despite several Citibank-Geneva is a distinct and separate entity. As for the dollar accounts,

Orders by the RTC,[136] petitioner Citibank failed to comply with the production of respondent was the creditor and Citibank-Geneva is the debtor; and as for the

the original Declaration of Pledge. It is admitted that Citibank-Geneva had outstanding loans, petitioner Citibank was the creditor and respondent was the

possession of the original copy of the pledge. While petitioner Citibank in Manila debtor. The parties in these transactions were evidently not the principal creditor of

and its branch in Geneva may be separate and distinct entities, they are still each other.

incontestably related, and between petitioner Citibank and respondent, the former

had more influence and resources to convince Citibank-Geneva to return, albeit Therefore, this Court declares that the remittance of respondents dollar accounts

from Citibank-Geneva and the application thereof to her outstanding loans with
petitioner Citibank was illegal, and null and void. Resultantly, petitioner Citibank is

obligated to return to respondent the amount of US$149,632,99 from her Citibank- As for respondent, she is ordered to pay petitioner Citibank the balance of

Geneva accounts, or its present equivalent value in Philippine currency; and, at the her outstanding loans, which amounted to P1,069,847.40 as of 5 September

same time, respondent continues to be obligated to petitioner Citibank for the 1979. These loans continue to earn interest, as stipulated in the corresponding PNs,

balance of her outstanding loans which, as of 5 September 1979, amounted from the time of their respective maturity dates, since the supposed payment

to P1,069,847.40. thereof using respondents dollar accounts from Citibank-Geneva is deemed illegal,
V
null and void, and, thus, ineffective.

The parties shall be liable

for interests on their
monetary obligations to VI
each other, as determined
herein. Petitioner Citibank shall be
liable for damages to
respondent.

In summary, petitioner Citibank is ordered by this Court to pay respondent

Petitioners protest the award by the Court of Appeals of moral damages, exemplary
the proceeds of her money market placements, represented by PNs No. 23356 and
damages, and attorneys fees in favor of respondent. They argued that the RTC did
23357, amounting to P318,897.34 and P203,150.00, respectively, earning an
not award any damages, and respondent, in her appeal before the Court of Appeals,
[139]
interest of 14.5% per annum as stipulated in the PNs, beginning 17 March 1977,
did not raise in issue the absence of such.
the date of the placements.

While it is true that the general rule is that only errors which have been stated in the
Petitioner Citibank is also ordered to refund to respondent the amount of
assignment of errors and properly argued in the brief shall be considered, this Court
US$149,632.99, or its equivalent in Philippine currency, which had been remitted
has also recognized exceptions to the general rule, wherein it authorized the review
from her Citibank-Geneva accounts. These dollar accounts, consisting of two
of matters, even those not assigned as errors in the appeal, if the consideration
fiduciary placements and current accounts with Citibank-Geneva shall continue
thereof is necessary in arriving at a just decision of the case, and there is a close
earning their respective stipulated interests from 26 October 1979, the date of their
inter-relation between the omitted assignment of error and those actually assigned
remittance by Citibank-Geneva to petitioner Citibank in Manila and applied against
and discussed by the appellant. [140]Thus, the Court of Appeals did not err in
respondents outstanding loans.
 Q By the way Mrs. Witness will you kindly tell us again, you said
awarding the damages when it already made findings that would justify and support before that you are a businesswoman, will you tell us
again what are the businesses you are engaged into
the said award. [sic]?
Although this Court appreciates the right of petitioner Citibank to effect legal
A I am engaged in real estate. I am the owner of the Modesta
compensation of respondents local deposits, as well as its right to the proceeds of Village 1 and 2 in San Mateo, Rizal. I am also the
President and Chairman of the Board of Macador [sic]
PNs No. 20138 and 20139 by virtue of the notarized Deeds of Assignment, to Co. and Business Inc. which operates the Macador [sic]
International Palace Hotel. I am also the President of the
partly extinguish respondents outstanding loans, it finds that petitioner Citibank did Macador [sic] International Palace Hotel, and also the
Treasures Home Industries, Inc. which I am the
commit wrong when it failed to pay and properly account for the proceeds of Chairman and president of the Board and also operating
affiliated company in the name of Treasures Motor Sales
respondents money market placements, evidenced by PNs No. 23356 and 23357,
engaged in car dealers [sic] like Delta Motors, we are
and when it sought the remittance of respondents dollar accounts from Citibank- the dealers of the whole Northern Luzon and I am the
president of the Disto Company, Ltd., based in
Geneva by virtue of a highly-suspect Declaration of Pledge to be applied to the Hongkong licensed in Honkong [sic] and now operating
in Los Angeles, California.
remaining balance of respondents outstanding loans. It bears to emphasize that
Q What is the business of that Disto Company Ltd.?
banking is impressed with public interest and its fiduciary character requires high
A Disto Company, Ltd., is engaged in real estate and
standards of integrity and performance. [141] A bank is under the obligation to treat construction.
the accounts of its depositors with meticulous care whether such accounts consist
Q Aside from those businesses are you a member of any national
only of a few hundred pesos or of millions of pesos. [142] The bank must record every or community organization for social and civil
activities?
single transaction accurately, down to the last centavo, and as promptly as possible.
A Yes sir.
[143]
Petitioner Citibank evidently failed to exercise the required degree of care and
Q What are those?
transparency in its transactions with respondent, thus, resulting in the wrongful
A I am the Vice-President of thes [sic] Subdivision Association of
deprivation of her property.
the Philippines in 1976, I am also an officer of the
Chamber of Real Estate Business Association; I am also
an officer of the Chatholic [sic] Womens League and I
Respondent had been deprived of substantial amounts of her investments am also a member of the CMLI, I forgot the definition.

and deposits for more than two decades. During this span of years, respondent had Q How about any political affiliation or government position held
if any?
found herself in desperate need of the amounts wrongfully withheld from her. In
A I was also a candidate for Mayo last January 30, 1980.
her testimony[144] before the RTC, respondent narrated
Q Where?
A In Dagupan City, Pangasinan.

Q What else? For the mental anguish, serious anxiety, besmirched reputation, moral shock and

A I also ran as an Assemblywoman last May, 1984, Independent
party in Regional I, Pangasinan.
Q What happened to your businesses you mentioned as a result of
your failure to recover you [sic] investments and bank
deposits from the defendants?
social humiliation suffered by the respondent, the award of moral damages is but
proper.However, this Court reduces the amount thereof to P300,000.00, for the
award of moral damages is meant to compensate for the actual injury suffered by
the respondent, not to enrich her.[145]

A They are not all operating, in short, I was hampered to push

through the businesses that I have.
Having failed to exercise more care and prudence than a private individual
A [sic] Of all the businesses and enterprises that you mentioned
in its dealings with respondent, petitioner Citibank should be liable for exemplary
what are those that are paralyzed and what remain
inactive? damages, in the amount of P250,000.00, in accordance with Article 2229[146] and
A Of all the company [sic] that I have, only the Disto Company 2234[147] of the Civil Code.
that is now operating in California.

Q How about your candidacy as Mayor of Dagupan, [sic] City,

and later as Assemblywoman of Region I, what With the award of exemplary damages, then respondent shall also be entitled to an
happened to this?
award of attorneys fees.[148] Additionally, attorney's fees may be awarded when a
A I won by voting but when election comes on [sic] the counting
party is compelled to litigate or to incur expenses to protect his interest by reason
I lost and I protested this, it is still pending and because
I dont have financial resources I was not able to push of an unjustified act of the other party. [149] In this case, an award of P200,000.00
through the case.I just have it pending in the Comelec.
attorneys fees shall be satisfactory.
Q Now, do these things also affect your social and civic
activities?

A Yes sir, definitely. In contrast, this Court finds no sufficient basis to award damages to

petitioners. Respondent was compelled to institute the present case in the exercise
Q How?
of her rights and in the protection of her interests. In fact, although her Complaint
A I was embarrassed because being a businesswoman I would
like to inform the Honorable Court that I was awarded before the RTC was not sustained in its entirety, it did raise meritorious points and
as the most outstanding businesswoman of the year in
1976 but when this money was not given back to me I on which this Court rules in her favor. Any injury resulting from the exercise of
was not able to comply with the commitments that I
have promised to these associations that I am engaged ones rights is damnum absque injuria.[150]
into [sic], sir.
 in the amount of Two Hundred Fifty Thousand Pesos (P250,000.00); and attorneys

IN VIEW OF THE FOREGOING, the instant Petition is PARTLY fees in the amount of Two Hundred Thousand Pesos (P200,000.00); and

GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. No. 51930,

dated 26 March 2002, as already modified by its Resolution, dated 20 November 4. Respondent is ORDERED to pay petitioner Citibank the balance of her

2002, is hereby AFFIRMED WITH MODIFICATION, as follows outstanding loans, which, from the respective dates of their maturity to 5

September 1979, was computed to be in the sum of One Million Sixty-Nine

1. PNs No. 23356 and 23357 are DECLARED subsisting and Thousand Eight Hundred Forty-Seven Pesos and Forty Centavos (P1,069,847.40),

outstanding. Petitioner Citibank is ORDERED to return to respondent the principal inclusive of interest. These outstanding loans shall continue to earn interest, at the

amounts of the said PNs, amounting to Three Hundred Eighteen Thousand Eight rates stipulated in the corresponding PNs, from 5 September 1979 until payment

Hundred Ninety-Seven Pesos and Thirty-Four Centavos (P318,897.34) and Two thereof.
SO ORDERED.
Hundred Three Thousand One Hundred Fifty Pesos (P203,150.00), respectively,

plus the stipulated interest of Fourteen and a half percent (14.5%) per annum, Republic of the Philippines
Supreme Court
beginning 17 March 1977; Baguio City

2. The remittance of One Hundred Forty-Nine Thousand Six Hundred THIRD DIVISION
Thirty Two US Dollars and Ninety-Nine Cents (US$149,632.99) from respondents

Citibank-Geneva accounts to petitioner Citibank in Manila, and the application of

the same against respondents outstanding loans with the latter,

is DECLARED illegal, null and void. Petitioner Citibank is ORDERED to refund

to respondent the said amount, or its equivalent in Philippine currency using the

exchange rate at the time of payment, plus the stipulated interest for each of the

fiduciary placements and current accounts involved, beginning 26 October 1979;

3. Petitioner Citibank is ORDERED to pay respondent moral damages in

the amount of Three Hundred Thousand Pesos (P300,000.00); exemplary damages

CONCEPCION CHUA GAW,
Petitioner, G.R. No. 160855
Spouses Chua Chin and Chan Chi were the founders of three business

enterprises[3] namely: Hagonoy Lumber, Capitol Sawmill Corporation, and

Present:
- versus -
YNARES-SANTIAGO, J., Columbia Wood Industries. The couple had seven children, namely, Santos Chua;
Chairperson,
AUSTRIA-MARTINEZ, Concepcion Chua; Suy Ben Chua; Chua Suy Phen; Chua Sioc Huan; Chua Suy Lu;
CHICO-NAZARIO,
NACHURA, and and Julita Chua. On June 19, 1986, Chua Chin died, leaving his wife Chan Chi and
SUY BEN CHUA and
REYES, JJ.
FELISA CHUA, his seven children as his only surviving heirs. At the time of Chua Chins death, the
Respondents.
net worth of Hagonoy Lumber was P415,487.20.[4]
Promulgated:
April 16, 2008
On December 8, 1986, his surviving heirs executed a Deed of Extra-

Judicial Partition and Renunciation of Hereditary Rights in Favor of a Co-

Heir[5] (Deed of Partition, for brevity), wherein the heirs settled their interest in
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x Hagonoy Lumber as follows: one-half (1/2) thereof will pertain to the surviving

spouse, Chan Chi, as her share in the conjugal partnership; and the other half,

equivalent to P207,743.60, will be divided among Chan Chi and the seven children
DECISION
in equal pro indiviso shares equivalent to P25,967.00 each.[6] In said document,

Chan Chi and the six children likewise agreed to voluntarily renounce and waive
NACHURA, J.:
their shares over Hagonoy Lumber in favor of their co-heir, Chua Sioc Huan.

This is a Petition for Review on Certiorari from the Decision[1] of the

In May 1988, petitioner Concepcion Chua Gaw and her husband, Antonio
Court of Appeals (CA) in CA-G.R. CV No. 66790 and Resolution [2] denying the
Gaw, asked respondent, Suy Ben Chua, to lend them P200,000.00 which they will
motion for reconsideration. The assailed decision affirmed the ruling of the
use for the construction of their house in Marilao, Bulacan. The parties agreed that
Regional Trial Court (RTC) in a Complaint for Sum of Money in favor of the
the loan will be payable within six (6) months without interest. [7] On June 7, 1988,
plaintiff.
respondent issued in their favor China Banking Corporation Check No.
The antecedents are as follows:
240810[8] for P200,000.00 which he delivered to the couples house in Marilao, claimed that respondent persuaded petitioner to temporarily forego her demand as

Bulacan. Antonio later encashed the check. it would offend their mother who still wanted to remain in control of the family

businesses. To insure that she will defer her demand, respondent allegedly gave

On August 1, 1990, their sister, Chua Sioc Huan, executed a Deed of Sale her P200,000.00 as her share in the profits of Hagonoy Lumber.[12]

over all her rights and interests in Hagonoy Lumber for a consideration

of P255,000.00 in favor of respondent.[9] In his Reply, respondent averred that the spouses Gaw did not demand

from him an accounting of Capitol Sawmills Corporation, Columbia Wood

Meantime, the spouses Gaw failed to pay the amount they borrowed from Industries, and Hagonoy Lumber. He asserted that the spouses Gaw, in fact, have

respondent within the designated period. Respondent sent the couple a demand no right whatsoever in these businesses that would entitle them to an accounting

letter,[10] dated March 25, 1991, requesting them to settle their obligation with the thereof. Respondent insisted that the P200,000.00 was given to and accepted by

warning that he will be constrained to take the appropriate legal action if they fail them as a loan and not as their share in Hagonoy Lumber.[13]

to do so.

With leave of court, the spouses Gaw filed an Answer (with Amended

Failing to heed his demand, respondent filed a Complaint for Sum of Compulsory Counterclaim) wherein they insisted that petitioner, as one of the

Money against the spouses Gaw with the RTC. The complaint alleged that on June compulsory heirs, is entitled to one-sixth (1/6) of Hagonoy Lumber, which the

7, 1988, he extended a loan to the spouses Gaw for P200,000.00, payable within six respondent has arrogated to himself. They claimed that, despite repeated demands,

months without interest, but despite several demands, the couple failed to pay their respondent has failed and refused to account for the operations of Hagonoy Lumber

obligation.[11] and to deliver her share therein. They then prayed that respondent make an

accounting of the operations of Hagonoy Lumber and to deliver to petitioner her

In their Answer (with Compulsory Counterclaim), the spouses Gaw one-sixth (1/6) share thereof, which was estimated to be worth not less

contended that the P200,000.00 was not a loan but petitioners share in the profits of than P500,000.00.[14]

Hagonoy Lumber, one of her familys businesses. According to the spouses, when

they transferred residence to Marilao, Bulacan, petitioner asked respondent for an In his Answer to Amended Counterclaim, respondent explained that his

accounting, and payment of her share in the profits, of Capital Sawmills sister, Chua Sioc Huan, became the sole owner of Hagonoy Lumber when the heirs

Corporation, Columbia Wood Industries Corporation, and Hagonoy Lumber. They executed the Deed of Partition on December 8, 1986. In turn, he became the sole
owner of Hagonoy Lumber when he bought it from Chua Sioc Huan, as evidenced stockholders on January 1, 1991. He further testified that Chua Sioc Huan acquired

by the Deed of Sale dated August 1, 1990.[15] Hagonoy Lumber by virtue of a Deed of Partition, executed by the heirs of Chua

Chin. He, in turn, became the owner of Hagonoy Lumber when he bought the same

Defendants, in their reply, [16] countered that the documents on which from Chua Sioc Huan through a Deed of Sale dated August 1, 1990. [19]

plaintiff anchors his claim of ownership over Hagonoy Lumber were not true and

valid agreements and do not express the real intention of the parties. They claimed On re-direct examination, respondent stated that he sold his shares of

that these documents are mere paper arrangements which were prepared only upon stock in Capitol Sawmill for P254,000.00, which payment he received in cash. He

the advice of a counsel until all the heirs could reach and sign a final and binding also paid the purchase price of P255,000.00 for Hagonoy Lumber in cash, which

agreement, which, up to such time, has not been executed by the heirs.[17] payment was not covered by a separate receipt as he merely delivered the same to

Chua Sioc Huan at her house in Paso de Blas, Valenzuela. Although he maintains

During trial, the spouses Gaw called the respondent to testify as several accounts at Planters Bank, Paluwagan ng Bayan, and China Bank, the

adverse witness under Section 10, Rule 132. On direct examination, respondent amount he paid to Chua Sioc Huan was not taken from any of them. He kept the

testified that Hagonoy Lumber was the conjugal property of his parents Chua Chin amount in the house because he was engaged in rediscounting checks of people

and Chan Chi, who were both Chinese citizens. He narrated that, initially, his father from the public market. [20]

leased the lots where Hagonoy Lumber is presently located from his godfather, Lu

Pieng, and that his father constructed the two-storey concrete building standing On December 10, 1998, Antonio Gaw died due to cardio vascular and

thereon. According to respondent, when he was in high school, it was his father respiratory failure.[21]

who managed the business but he and his other siblings were helping him. Later,

his sister, Chua Sioc Huan, managed Hogonoy Lumber together with their other On February 11, 2000, the RTC rendered a Decision in favor of the

brothers and sisters. He stated that he also managed Hagonoy Lumber when he was respondent, thus:

in high school, but he stopped when he got married and found another job. He said
WHEREFORE, in the light of all the foregoing, the
that he now owns the lots where Hagonoy Lumber is operating.[18] Court hereby renders judgement ordering defendant Concepcion
Chua Gaw to pay the [respondent] the following:
1. P200,000.00 representing the
principal obligation with legal interest from
On cross-examination, respondent explained that he ceased to be a
judicial demand or the institution of the
stockholder of Capitol Sawmill when he sold his shares of stock to the other complaint on November 19, 1991;
 2. P50,000.00 as attorneys fees;
and demand an accounting of the operations of Hagonoy Lumber nor the delivery of
3. Costs of suit.
The defendants counterclaim is hereby dismissed for her 1/6 share therein.
being devoid of merit.

SO ORDERED.[22] As for petitioners claim that an accounting be done on Capitol Sawmill

Corporation and Columbia Wood Industries, the trial court held that respondent is

under no obligation to make such an accounting since he is not charged with

The RTC held that respondent is entitled to the payment of the amount
operating these enterprises.[23]
of P200,000.00 with interest. It noted that respondent personally issued Check No.

240810 to petitioner and her husband upon their request to lend them the aforesaid
Aggrieved, petitioner appealed to the CA, alleging that the trial court erred (1)
amount. The trial court concluded that the P200,000.00 was a loan advanced by the
when it considered the amount of P200,000.00 as a loan obligation and not
respondent from his own funds and not remunerations for services rendered to
Concepcions share in the profits of Hagonoy Lumber; (2) when it considered as
Hagonoy Lumber nor petitioners advance share in the profits of their parents
evidence for the defendant, plaintiffs testimony when he was called to testify as an
businesses.
adverse party under Section 10 (e), Rule 132 of the Rules of Court; and (3) when it

considered admissible mere copies of the Deed of Partition and Deed of Sale to
The trial court further held that the validity and due execution of the Deed
prove that respondent is now the owner of Hagonoy Lumber.[24]
of Partition and the Deed of Sale, evidencing transfer of ownership of Hagonoy

Lumber from Chua Sioc Huan to respondent, was never impugned. Although
On May 23, 2003, the CA affirmed the Decision of the RTC. [25] The
respondent failed to produce the originals of the documents, petitioner judicially
appellate court found baseless the petitioners argument that the RTC should not
admitted the due execution of the Deed of Partition, and even acknowledged her
have included respondents testimony as part of petitioners evidence. The CA noted
signature thereon, thus constitutes an exception to the best evidence rule. As for the
that the petitioner went on a fishing expedition, the taking of respondents testimony
Deed of Sale, since the contents thereof have not been put in issue, the non-
having taken up a total of eleven hearings, and upon failing to obtain favorable
presentation of the original document is not fatal so as to affect its authenticity as
information from the respondent, she now disclaims the same. Moreover, the CA
well as the truth of its contents. Also, the parties to the documents themselves do
held that the petitioner failed to show that the inclusion of respondents testimony in
not contest their validity. Ultimately, petitioner failed to establish her right to
the statement of facts in the assailed decision unduly prejudiced her defense and
 II. THAT ON THE IMPORTANT LEGAL ISSUE
counterclaims. In fact, the CA noted that the facts testified to by respondent were RELATIVE TO THE AFORESAID TWO OPPOSING
CLAIMS OF RESPONDENT AND PETITIONER,
deducible from the totality of the evidence presented. CLEAR AND PALPABLE LEGAL ERROR HAS
BEEN COMMITTED UNDER THE LOWER COURTS
DECISION ANNEX C AND THE QUESTIONED
The CA likewise found untenable petitioners claim that Exhibits H (Deed DECISION OF MAY 23, 2003 (ANNEX A) AND THE
RESOLUTION OF DECEMBER 2, 2003, (ANNEX B)
of Sale) and Exhibit I (Deed of Partition) were merely temporary paper IN DEVIATING FROM AND DISREGARDING
ESTABLISHED SUPREME COURT DECISIONS
arrangements. The CA agreed with the RTC that the testimony of petitioner ENJOINING COURTS NOT TO OVERLOOK OR
MISINTERPRET IMPORTANT FACTS AND
regarding the matter was uncorroborated she should have presented the other heirs CIRCUMSTANCES, SUPPORTED BY CLEAR AND
CONVINCING EVIDENCE ON RECORD, AND
to attest to the truth of her allegation. Instead, petitioner admitted the due execution
WHICH ARE OF GREAT WEIGHT AND VALUE,
of the said documents. Since petitioner did not dispute the due execution and WHICH WOULD CHANGE THE RESULT OF THE
CASE AND ARRIVE AT A JUST, FAIR AND
existence of Exhibits H and I, there was no need to produce the originals of the OBJECTIVE DECISION. (Citations omitted)

documents in accordance with the best evidence rule.[26] III. THAT FINALLY, AS TO THE OTHER LEGAL
IMPORTANT ISSUE RELATIVE TO CLAIM OR
OWNERSHIP OF THE HAGONOY
LUMBER FAMILY BUSINESS, CLEAR AND
On December 2, 2003, the CA denied the petitioners motion for reconsideration for PALPABLE LEGAL ERROR HAS BEEN
COMMITTED ON THE REQUIREMENTS AND
lack of merit.[27]
CORRECT APPLICATION OF THE BEST
EVIDENCE RULE UNDER SECTION 3, RULE 130
OF THE REVISED RULES OF COURT.[28]
Petitioner is before this Court in this petition for review on certiorari,

raising the following errors:

The petition is without merit.

I. THAT ON THE PRELIMINARY IMPORTANT

Petitioner contends that her case was unduly prejudiced by the RTCs
RELATED ISSUE, CLEAR AND PALPABLE LEGAL
ERROR HAS BEEN COMMITTED IN THE treatment of the respondents testimony as adverse witness during cross-
APPLICATION AND LEGAL SIGNIFICANCE OF
THE RULE ON EXAMINATION OF ADVERSE examination by his own counsel as part of her evidence. Petitioner argues that the
PARTY OR HOSTILE WITNESS UNDER SECTION
10 (d) AND (e) OF RULE 132, CAUSING SERIOUS adverse witness testimony elicited during cross-examination should not be
DOUBT ON THE LOWER COURTS APPEALED
DECISIONS OBJECTIVITY, ANNEX C. considered as evidence of the calling party. She contends that the examination of

respondent as adverse witness did not make him her witness and she is not bound
by his testimony, particularly during cross-examination by his own counsel. [29] In In the first place, the delineation of a piece of evidence as part of the

particular, the petitioner avers that the following testimony of the respondent as evidence of one party or the other is only significant in determining whether the

adverse witness should not be considered as her evidence: party on whose shoulders lies the burden of proof was able to meet the quantum of

evidence needed to discharge the burden. In civil cases, that burden devolves upon
(11.a) That RESPONDENT-Appellee became owner of the
HAGONOY LUMBER business when he bought the the plaintiff who must establish her case by preponderance of evidence. The rule is
same from Chua Sioc Huan through a Deed of Sale
that the plaintiff must rely on the strength of his own evidence and not upon the
dated August 1, 1990(EXH.H);
weakness of the defendants evidence. Thus, it barely matters who with a piece of
(11.b) That the HAGONOY LUMBER, on the other hand, was
acquired by the sister Chua Sioc Huan, by virtue of evidence is credited. In the end, the court will have to consider the entirety of the
Extrajudicial Partition and Renunciation of Hereditary
Rights in favor of a Co-Heir (EXH. I); evidence presented by both parties. Preponderance of evidence is then determined

(11.c) That the 3 lots on which the HAGONOY LUMBER by considering all the facts and circumstances of the case, culled from the
business is located were acquired by Lu Pieng from
evidence, regardless of who actually presented it.[31]
the Santos family under the Deed of Absolute Sale
(EXH. J); that Lu Pieng sold the Lots to Chua Suy Lu in
1976 (EXHS. K, L, & M.); that Chua Siok Huan
eventually became owner of the 3 Lots; and in 1989 That the witness is the adverse party does not necessarily mean that the
Chua Sioc Huan sold them to RESPONDENT-Appellee
(EXHS. Q and P); that after he acquired the 3 Lots, he calling party will not be bound by the formers testimony. The fact remains that it
has not sold them to anyone and he is the owner of the
lots.[30] was at his instance that his adversary was put on the witness stand. Unlike an

ordinary witness, the calling party may impeach an adverse witness in all respects

as if he had been called by the adverse party, [32] except by evidence of his bad
We do not agree that petitioners case was prejudiced by the RTCs
character.[33] Under a rule permitting the impeachment of an adverse witness,
treatment of the respondents testimony during cross-examination as her evidence.
although the calling party does not vouch for the witness veracity, he is nonetheless

bound by his testimony if it is not contradicted or remains unrebutted. [34]

If there was an error committed by the RTC in ascribing to the petitioner

the respondents testimony as adverse witness during cross-examination by his own

A party who calls his adversary as a witness is, therefore, not bound by the
counsel, it constitute a harmless error which would not, in any way, change the
latters testimony only in the sense that he may contradict him by introducing other
result of the case.
evidence to prove a state of facts contrary to what the witness testifies on. [35] A rule

that provides that the party calling an adverse witness shall not be bound by his
testimony does not mean that such testimony may not be given its proper weight,

but merely that the calling party shall not be precluded from rebutting his testimony Significantly, the RTCs finding that the P200,000.00 was given to the

or from impeaching him.[36] This, the petitioner failed to do. petitioner and her husband as a loan is supported by the evidence on record. Hence,

we do not agree with the petitioners contention that the RTC has overlooked certain

In the present case, the petitioner, by her own testimony, failed to discredit facts of great weight and value in arriving at its decision. The RTC merely took into

the respondents testimony on how Hagonoy Lumber became his sole property. The consideration evidence which it found to be more credible than the self-serving and

petitioner admitted having signed the Deed of Partition but she insisted that the uncorroborated testimony of the petitioner.

transfer of the property to Chua Siok Huan was only temporary. On cross- At this juncture, we reiterate the well-entrenched doctrine that the findings

examination, she confessed that no other document was executed to indicate that of fact of the CA affirming those of the trial court are accorded great respect, even

the transfer of the business to Chua Siok Huan was a temporary arrangement. She finality, by this Court. Only errors of law, not of fact, may be reviewed by this

declared that, after their mother died in 1993, she did not initiate any action Court in petitions for review on certiorari under Rule 45.[39] A departure from the

concerning Hagonoy Lumber, and it was only in her counterclaim in the instant general rule may be warranted where the findings of fact of the CA are contrary to

that, for the first time, she raised a claim over the business. the findings and conclusions of the trial court, or when the same is unsupported by

the evidence on record.[40]There is no reason to apply the exception in the instant

Due process requires that in reaching a decision, a tribunal must consider case because the findings and conclusions of the CA are in full accord with those of

the entire evidence presented.[37] All the parties to the case, therefore, are the trial court. These findings are buttressed by the evidence on record. Moreover,

considered bound by the favorable or unfavorable effects resulting from the the issues and errors alleged in this petition are substantially the very same

evidence.[38] As already mentioned, in arriving at a decision, the entirety of the questions of fact raised by petitioner in the appellate court.

evidence presented will be considered, regardless of the party who offered them in

evidence. In this light, the more vital consideration is not whether a piece of On the issue of whether the P200,000.00 was really a loan, it is well to

evidence was properly attributed to one party, but whether it was accorded the remember that a check may be evidence of indebtedness. [41] A check, the entries of

apposite probative weight by the court. The testimony of an adverse witness is which are in writing, could prove a loan transaction. [42] It is pure naivet to insist that

evidence in the case and should be given its proper weight, and such evidence an entrepreneur who has several sources of income and has access to considerable

becomes weightier if the other party fails to impeach the witness or contradict his bank credit, no longer has any reason to borrow any amount.

testimony.
 The petitioners allegation that the P200,000.00 was advance on her share and documents acknowledged before a notary public have in their favor the

in the profits of Hagonoy Lumber is implausible. It is true that Hagonoy Lumber presumption of regularity. Such a document must be given full force and effect

was originally owned by the parents of petitioner and respondent. However, on absent a strong, complete and conclusive proof of its falsity or nullity on account of

December 8, 1986, the heirs freely renounced and waived in favor of their sister some flaws or defects recognized by law. [45] A public document executed and

Chua Sioc Huan all their hereditary shares and interest therein, as shown by the attested through the intervention of a notary public is, generally, evidence of the

Deed of Partition which the petitioner herself signed. By virtue of this deed, Chua facts therein express in clear unequivocal manner.[46]

Sioc Huan became the sole owner and proprietor of Hagonoy Lumber. Thus, when

the respondent delivered the check for P200,000.00 to the petitioner on June 7, Petitioner, however, maintains that the RTC erred in admitting in evidence

1988, Chua Sioc Huan was already the sole owner of Hagonoy Lumber. At that a mere copy of the Deed of Partition and the Deed of Sale in violation of the best

time, both petitioner and respondent no longer had any interest in the business evidence rule.In addition, petitioner insists that the Deed of Sale was not the result

enterprise; neither had a right to demand a share in the profits of the business. of bona fide negotiations between a true seller and buyer.

Respondent became the sole owner of Hagonoy Lumber only after Chua Sioc Huan

sold it to him on August 1, 1990. So, when the respondent delivered to the The best evidence rule as encapsulated in Rule 130, Section 3,[47] of the

petitioner the P200,000.00 check on June 7, 1988, it could not have been given as Revised Rules of Civil Procedure applies only when the content of such document

an advance on petitioners share in the business, because at that moment in time is the subject of the inquiry. Where the issue is only as to whether such document

both of them had no participation, interest or share in Hagonoy Lumber. Even was actually executed, or exists, or on the circumstances relevant to or surrounding

assuming, arguendo, that the check was an advance on the petitioners share in the its execution, the best evidence rule does not apply and testimonial evidence is

profits of the business, it was highly unlikely that the respondent would deliver a admissible. Any other substitutionary evidence is likewise admissible without need

check drawn against his personal, and not against the business enterprises account. to account for the original.[48]Moreover, production of the original may be

dispensed with, in the trial courts discretion, whenever the opponent does not bona

It is also worthy to note that both the Deed of Partition and the Deed of fide dispute the contents of the document and no other useful purpose will be served

Sale were acknowledged before a Notary Public. The notarization of a private by requiring production.[49]

document converts it into a public document, and makes it admissible in court

without further proof of its authenticity. [43] It is entitled to full faith and credit upon Accordingly, we find that the best evidence rule is not applicable to the

its face.[44] A notarized document carries evidentiary weight as to its due execution, instant case. Here, there was no dispute as to the terms of either deed; hence, the
RTC correctly admitted in evidence mere copies of the two deeds. The petitioner
never even denied their due execution and admitted that she signed the Deed of
[50]
Partition. As for the Deed of Sale, petitioner had, in effect, admitted its
genuineness and due execution when she failed to specifically deny it in the manner
required by the rules.[51] The petitioner merely claimed that said documents do not
express the true agreement and intention of the parties since they were only
[52]
provisional paper arrangements made upon the advice of counsel. Apparently,
the petitioner does not contest the contents of these deeds but alleges that there was
a contemporaneous agreement that the transfer of Hagonoy Lumber to Chua Sioc
Huan was only temporary.
An agreement or the contract between the parties is the formal expression
of the parties rights, duties and obligations. It is the best evidence of the intention
of the parties.[53] The parties intention is to be deciphered from the language used in
the contract, not from the unilateral post facto assertions of one of the parties, or of
third parties who are strangers to the contract. [54] Thus, when the terms of an
agreement have been reduced to writing, it is deemed to contain all the terms
agreed upon and there can be, between the parties and their successors in interest,
no evidence of such terms other than the contents of the written agreement. [55]
WHEREFORE, premises considered, the petition is DENIED. The
Decision of the Court of Appeals in CA-G.R. CV No. 66790 dated May 23,
2003 and Resolution dated December 2, 2003 are AFFIRMED.
SO ORDERED.
FIRST DIVISION
[G.R. No. 80505 : December 4, 1990.]
192 SCRA 28
THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. MARIO
TANDOY y LIM, Defendant-Appellant.
DECISION
CRUZ, J.:
The decision of the Regional Trial Court of Makati, Branch 133 dated October 13,
1987, convicting Mario Tandoy of the crime of violation of Art. II, Sec. 4 of Rep.
Act No. 6425 known as the Dangerous Drugs Act of 1972, is before us on appeal.
The information against the accused-appellant read as follows:
That on or about the 27th day of May 1986, in the Municipality of Makati, Metro
Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused without being authorized by law, did then and there willfully,
unlawfully and feloniously sell eight (8) pieces of dried marijuana flowering tops,
two (2) pieces of dried marijuana flowering tops and crushed dried marijuana
flowering tops, which are prohibited drug, for and in consideration of P20.00.
Upon arraignment, Tandoy entered a plea of not guilty. After trial, Judge
Buenaventura J. Guerrero rendered a decision the dispositive portion of which
declared:
WHEREFORE, the Court finds Mario Tandoy y Lim guilty beyond
reasonable doubt of violation of Sec. 4, Art. II, Rep. Act No. 6425, as
amended, and is hereby sentenced to life imprisonment and to pay a fine
of P20,000.00 and cost.: nad
The marijuana confiscated in this case is declared confiscated and
forfeited and ordered turned over to the Dangerous Drugs Board for
proper disposal.
SO ORDERED.
The accused-appellant raises the following assignment of errors in this appeal:
1. The Court a quo erred in finding accused guilty beyond reasonable
doubt of the crime charged despite lack of evidence to prove that he sold
marijuana to the poseur-buyer.
 2. The Court a quo erred in admitting in evidence against the accused Exh. duties in a regular manner, it rejected Tandoy's uncorroborated allegation that he
"E-2-A" which is merely a xerox copy of the P10.00 bill allegedly used as had been manhandled and framed. Tandoy had not submitted sufficient evidence of
buy-bust money. his charges, let alone his admission that he had no quarrel with the peace officers
whom he had met only on the day of his arrest.
The evidence of the prosecution may be summarized as follows:
In People v. Patog, 4 this Court held:
On May 27, 1986, at about 3:30 p.m. Lt. Salido, Jr. of the Makati Police Station
dispatched Pfc. Herino de la Cruz, and Detectives Pablo R. Singayan, Nicanor When there is no evidence and nothing to indicate the principal witness for the
Candolesas, Luisito de la Cruz, Estanislao Dalumpines, Antonio Manalastas and prosecution was actuated by improper motives, the presumption is that he was not
Virgilio Padua to conduct a buy-bust operation at Solchuaga St., Barangay so actuated and his testimony is entitled to full faith and credit.
Singkamas, Makati.
Tandoy submits that "one will not sell this prohibited drug to another who is a total
The target area was a store along the said street, and Singayan was to pose as the stranger until the seller is certain of the identity of the buyer."
buyer. He stood alone near the store waiting for any pusher to approach. The other
The conjecture must be rejected.: nad
members of the team strategically positioned themselves. Soon, three men
approached Singayan. One of them was the accused-appellant, who said without In People v. Paco, 5 this Court observed:
preamble: "Pare, gusto mo bang umiskor?" Singayan said yes. The exchange was
Drug-pushing when done on a small level as in this case belongs to that class of
made then and there — two rolls/pieces of marijuana for one P10.00 and two P5.00
crimes that may be committed at anytime and at any place. After the offer to buy is
bills marked ANU (meaning Anti-Narcotics Unit).
accepted and the exchange is made, the illegal transaction is completed in a few
The team then moved in and arrested Tandoy. Manalastas and Candolesas made a minutes. The fact that the parties are in a public place and in the presence of other
body search of the accused-appellant and took from him the marked money, as well people may not always discourage them from pursuing their illegal trade as these
as eight more rolls/foils of marijuana and crushed leaves.: nad factors may even serve to camouflage the same. Hence, the Court has sustained the
conviction of drug pushers caught selling illegal drugs in a billiard hall (People v.
The arresting officers brought Tandoy to the Office of the Anti-Narcotics Unit,
Rubio, G.R. No. 66875, June 19, 1986, 142 SCRA 329; People v. Sarmiento, G.R.
Makati Police Station, for investigation by Detective Marvin Pajilan. The accused-
No. 72141, January 12, 1987, 147 SCRA 252), in front of a store (People vs. Khan,
appellant chose to remain silent after having been informed of his constitutional
supra) along a street at 1:45 p.m. (People v. Toledo, G.R. No. 67609, November 22,
rights.
1985, 140 SCRA 259), and in front of a house (People v. Policarpio, G.R. No.
These events were narrated under oath by De la Cruz, Singayan and Pajilan. 1 69844, February 23, 1988).
Microscopic, chemical and chromotographic examination was performed on the
As the Court has also held, "What matters is not an existing familiarity between the
confiscated marijuana by Raquel P. Angeles, forensic chemist of the National
buyer and the seller but their agreement and the acts constituting the sale and
Bureau of Investigation, who later testified that the findings were positive. The
delivery of the marijuana leaves." 6
marijuana was offered as an exhibit. 2
Under the second assigned error, the accused-appellant invokes the best evidence
As might be expected, the accused-appellant had a different story. His testimony
rule and questions the admission by the trial court of the xerox copy only of the
was that from 1:30 to 4:00 p.m. of the day in question, he was playing "cara y cruz"
marked P10.00 bill.
with 15 other persons along Solchuaga St. when somebody suddenly said that
policemen were making arrests. The players grabbed the bet money and scampered. The Solicitor General, in his Comment, correctly refuted that contention thus:
However, he and a certain Danny (another "cara y cruz" player) were caught and
This assigned error centers on the trial court's admission of the P10.00 bill marked
taken to the Narcotics Command headquarters in Makati. There they were mauled
money (Exh. E-2-A) which, according to the appellant, is excluded under the best
and warned that if they did not point to their fellow pushers, they would rot in jail.
evidence rule for being a mere xerox copy. Apparently, appellant erroneously thinks
The accused-appellant denied he had sold marijuana to Singayan and insisted the
that said marked money is an ordinary document falling under Sec. 2, Rule 130 of
bills taken from him were the bet money he had grabbed at the "cara y cruz"
the Revised Rules of Court which excludes the introduction of secondary evidence
game. 3
except in the five (5) instances mentioned therein.:-cralaw
The trial court, which had the opportunity to observe the demeanor of the witnesses
The best evidence rule applies only when the contents of the document are the
and to listen to their respective testimonies, gave more credence to the statements
subject of inquiry. Where the issue is only as to whether or not such document was
of the arresting officers. Applying the presumption that they had performed their
actually executed, or exists, or in the circumstances relevant to or surrounding its CORONA, J.:
execution, the best evidence rule does not apply and testimonial evidence is
admissible. (Cf. Moran, op. cit., pp. 76-77; 4 Martin, op. cit., p. 78.)
Since the aforesaid marked money was presented by the prosecution solely for the
purpose of establishing its existence and not its contents, other substitutionary This petition for review on certiorari assails the April 28, 1999 decision [1] and
evidence, like a xerox copy thereof, is therefore admissible without the need of
accounting for the original. March 27, 2000 resolution[2] of the Court of Appeals in CA-G.R. CR No. 19601

Moreover, the presentation at the trial of the "buy-bust money" was not affirming the trial courts judgment finding petitioner Pacifico B. Arceo, Jr. liable
indispensable to the conviction of the accused-appellant because the sale of the
marijuana had been adequately proved by the testimony of the police officers. So for violation of Batas Pambansa Blg. (BP) 22, otherwise known as the Bouncing
long as the marijuana actually sold by the accused-appellant had been submitted as
an exhibit, the failure to produce the marked money itself would not constitute a Checks Law.
fatal omission.
We are convinced from the evidence on record that the prosecution has overcome The facts of the case as found by the trial court and adopted by the Court of
the constitutional presumption of innocence in favor of the accused-appellant with
proof beyond reasonable doubt of his guilt. He must therefore suffer the penalty
prescribed by law for those who would visit the scourge of drug addiction upon our Appeals follow.
people.
On March 14, 1991, [petitioner], obtained a loan from
WHEREFORE, the appeal is DISMISSED and the challenged decision private complainant Josefino Cenizal [] in the amount
AFFIRMED in toto, with costs against the accused-appellant.: nad of P100,000.00. Several weeks thereafter, [petitioner] obtained
SO ORDERED an additional loan of P50,000.00 from [Cenizal]. [Petitioner]
then issued in favor of Cenizal, Bank of the Philippine Islands
[(BPI)] Check No. 163255, postdated August 4, 1991,
SECOND DIVISION for P150,000.00, at Cenizals house located at
70 Panay Avenue, Quezon City. When August 4, 1991 came,
PACIFICO B. ARCEO, JR., G.R. No. 142641 [Cenizal] did not deposit the check immediately because
Petitioner, [petitioner] promised [] that he would replace the check with
Present: cash. Such promise was made verbally seven (7) times. When
his patience ran out, [Cenizal] brought the check to the bank for
PUNO, J., Chairperson, encashment. The head office of the Bank of the Philippine
SANDOVAL-GUTIERREZ, Islands through a letter dated December 5, 1991, informed
- v e r s u s - CORONA, [Cenizal] that the check bounced because of insufficient funds.
AZCUNA and
GARCIA, JJ. Thereafter, [Cenizal] went to the house of [petitioner] to inform
him of the dishonor of the check but [Cenizal] found out that
PEOPLE OF THE PHILIPPINES, [petitioner] had left the place. So, [Cenizal] referred the matter
Respondent. Promulgated: to a lawyer who wrote a letter giving [petitioner] three days from
July 17, 2006 receipt thereof to pay the amount of the check. [Petitioner] still
failed to make good the amount of the check. As a consequence,
x------------------------------------------x [Cenizal] executed on January 20, 1992 before the office of the
City Prosecutor of Quezon City his affidavit and submitted
documents in support of his complaint for [e]stafa and
DECISION [v]iolation of [BP 22] against [petitioner]. After due
 investigation, this case for [v]iolation of [BP 22] was filed
against [petitioner] on March 27, 1992. The check in question Petitioner asserts that there was no violation of BP 22 because the check was
and the return slip were however lost by [Cenizal] as a result of
a fire that occurred near his residence on September 16, 1992. presented to the drawee bank only on December 5, 1991 or 120 days from the date
[Cenizal] executed an Affidavit of Loss regarding the loss of the
check in question and the return slip.[3] thereof (August 4, 1991). He argues that this was beyond the 90-day period

provided under the law in connection with the presentment of the check. We

After trial, petitioner was found guilty as charged. Aggrieved, he appealed to the disagree.

Court of Appeals. However, on April 28, 1999, the appellate court affirmed the trial
Section 1 of BP 22 provides:
courts decision in toto. Petitioner sought reconsideration but it was denied. Hence,
SECTION 1. Checks without sufficient funds. ― Any person who makes
this petition. or draws and issues any check to apply on account or for value,
knowing at the time of issue that he does not have sufficient
Petitioner claims that the trial and appellate courts erred in convicting him despite funds in or credit with the drawee bank for the payment of such
check in full upon its presentment, which check is subsequently
the failure of the prosecution to present the dishonored check during the trial. He dishonored by the draweebank for insufficiency of funds or
credit or would have been dishonored for the same reason had
also contends that he should not be held liable for the dishonor of the check not the drawer, without any valid reason, ordered the bank to
stop payment, shall be punished by imprisonment of not less
because it was presented beyond the 90-day period provided under the law. than thirty days but not more than one (1) year or by a fine of
not less than but not more than double the amount of the check
Petitioner further questions his conviction since the notice requirement was not which fine shall in no case exceed Two Hundred Thousand
Pesos, or both such fine and imprisonment at the discretion of
complied with and he was given only three days to pay, not five banking days as the court.

required by law. Finally, petitioner asserts that he had already paid his obligation The same penalty shall be imposed upon any person who, having
sufficient funds in or credit with the drawee bank when he
makes or draws and issues a check, shall fail to keep sufficient
to Cenizal.
funds or to maintain a credit to cover the full amount of the
check if presented within a period of ninety (90) days from the
Petitioners contentions have no merit.
date appearing thereon, for which reason it is dishonored by
the drawee bank.

Where the check is drawn by a corporation, company or entity, the person

SIGNIFICANCE OF THE 90-
or persons who actually signed the check in behalf of such
DAY PERIOD
drawer shall be liable under this Act.
FOR PRESENTMENT OF T
HE CHECK
In Wong v. Court of Appeals,[4] the Court ruled that the 90-day period provided in The gravamen of the offense is the act of drawing and issuing a worthless check.

[6]
the law is not an element of the offense. Neither does it discharge petitioner from Hence, the subject of the inquiry is the fact of issuance or execution of the check,

his duty to maintain sufficient funds in the account within a reasonable time from not its content.

the date indicated in the check. According to current banking practice, the
Here, the due execution and existence of the check were sufficiently
reasonable period within which to present a check to the drawee bank is six
established. Cenizal testified that he presented the originals of the check, the return
months. Thereafter, the check becomes stale and the drawer is discharged from
slip and other pertinent documents before the Office of the City Prosecutor
liability thereon to the extent of the loss caused by the delay.
of Quezon City when he executed his complaint-affidavit during the preliminary
Thus, Cenizals presentment of the check to the drawee bank 120 days (four
investigation. The City Prosecutor found a prima facie case against petitioner for
months) after its issue was still within the allowable period. Petitioner was freed
violation of BP 22 and filed the corresponding information based on the
neither from the obligation to keep sufficient funds in his account nor from liability
documents. Although the check and the return slip were among the documents lost
resulting from the dishonor of the check.
by Cenizal in a fire that occurred near his residence on September 16, 1992, he was

APPLICABILITY OF THE nevertheless able to adequately establish the due execution, existence and loss of
BEST EVIDENCE RULE
the check and the return slip in an affidavit of loss as well as in his testimony

during the trial of the case.

Petitioners insistence on the presentation of the check in evidence as a

condition sine qua non for conviction under BP 22 is wrong. Petitioner anchors his Moreover, petitioner himself admited that he issued the check. He never denied that

argument on Rule 130, Section 3, of the Rules of Court, otherwise known as the the check was presented for payment to the drawee bank and was dishonored for

best evidence rule. However, the rule applies only where the content of the having been drawn against insufficient funds.

document is the subject of the inquiry. Where the issue is the execution or existence
PRESENCE OF THE
of the document or the circumstances surrounding its execution, the best evidence ELEMENTS OF THE
OFFENSE
rule does not apply and testimonial evidence is admissible.[5]
Based on the allegations in the information, [7] petitioner was charged for violating

the first paragraph of BP 22. The elements of the offense are:

1. the making, drawing and issuance of any check to apply

to account or for value; NOTICE OF DISHONOR TO
PETITIONER
2. knowledge of the maker, drawer, or issuer that at the AND PAYMENT OF THE OBL
time of issue he does not have sufficient funds in or IGATION
credit with the draweebank for the payment of the check
in full upon its presentment; and
The trial court found that, contrary to petitioners claim, Cenizals counsel had

informed petitioner in writing of the checks dishonor and demanded payment of the

3. subsequent dishonor of the check by the drawee bank value of the check. Despite receipt of the notice of dishonor and demand for
for insufficiency of funds or credit, or dishonor of the
check for the same reason had not the drawer, without payment, petitioner still failed to pay the amount of the check.
any valid cause, ordered the bank to stop payment.[8]

Petitioner cannot claim that he was deprived of the period of five banking

All these elements are present in this case. days from receipt of notice of dishonor within which to pay the amount of the

Both the trial and appellate courts found that petitioner issued BPI check no. check.[9] While petitioner may have been given only three days to pay the value of

163255 postdated August 4, 1991 in the amount of P150,000 in consideration of a the check, the trial court found that the amount due thereon remained unpaid even

loan which he obtained from Cenizal. When the check was deposited, it was after five banking days from his receipt of the notice of dishonor. This negated his

dishonored by the drawee bank for having been drawn against insufficient claim that he had already paid Cenizal and should therefore be relieved of any

funds. There was sufficient evidence on record that petitioner knew of the liability.

insufficiency of his funds in the drawee bank at the time of the issuance of the
Moreover, petitioners claim of payment was nothing more than a mere
check. In fact, this was why, on maturity date, he requested the payee not
allegation. He presented no proof to support it. If indeed there was payment,
to encash it with the promise that he would replace it with cash. He made this
petitioner should have redeemed or taken the check back in the ordinary course of
request and assurance seven times but repeatedly failed to make good on his
business.[10] Instead, the check remained in the possession of the payee who
promises despite the repeated accommodation granted him by the payee, Cenizal.

demanded the satisfaction of petitioners obligation when the check became due as
well as when the check was dishonored by the drawee bank.
These findings (due notice to petitioner and nonpayment of the obligation)
were confirmed by the appellate court. This Court has no reason to rule otherwise.
Well-settled is the rule that the factual findings of the trial court, when affirmed by
the appellate court, are not to be disturbed.[11]
WHEREFORE, the petition is hereby DENIED. The April 28, 1999
decision and March 27, 2000 resolution of the Court of Appeals in CA-G.R. CR
No. 19601 are AFFIRMED.
Costs against petitioner.
SO ORDERED.
THIRD DIVISION
[G.R. No. 152807. August 12, 2003]
HEIRS OF LOURDES SAEZ SABANPAN: BERNARDO S. SABANPAN,
RENE S. SABANPAN, DANILO S. SABANPAN and THELMA S.
CHU; HEIRS OF ADOLFO SAEZ: MA. LUISA SAEZ TAPIZ, MA.
VICTORIA SAEZ LAPITAN, MA. BELEN SAEZ and EMMANUEL
SAEZ; and HEIRS OF CRISTINA SAEZ GUTIERREZ: ROY SAEZ
GUTIERREZ and LUIS SAEZ JR., petitioners, vs. ALBERTO C.
COMORPOSA, HERDIN C. COMORPOSA, OFELIA C. ARIEGO,
[1]
REMEDIOS COMORPOSA, VIRGILIO A. LARIEGO, 1-
a
BELINDA M. COMORPOSA and ISABELITA H.
COMORPOSA, respondents.
DECISION
PANGANIBAN, J.:
The admissibility of evidence should be distinguished from its probative
value. Just because a piece of evidence is admitted does not ipso facto mean that it
conclusively proves the fact in dispute.
The Case
Before us is a Petition for Review [2] under Rule 45 of the Rules of Court,
seeking to set aside the August 7, 2001 Decision and the February 27, 2002
Resolution of the Court of Appeals [3](CA) in CA-GR SP No. 60645. The dispositive
portion of the assailed Decision reads as follows:
WHEREFORE, in view of all the foregoing, the Court hereby AFFIRMS the
Decision dated 22 June 2000 rendered by Branch 18 of the Regional Trial Court of
Digos, Davao del Sur, REVERSING and SETTING ASIDE the Decision of the
Municipal Trial Court of Sta. Cruz, Davao del Su[r].[4]
The assailed Resolution[5] denied petitioners Motion for Reconsideration.
The Facts
The CA summarized the factual antecedents of the case as follows:
A [C]omplaint for unlawful detainer with damages was filed by [petitioners]
against [respondents] before the Santa Cruz, Davao del Sur Municipal Trial Court.
The [C]omplaint alleged that Marcos Saez was the lawful and actual possessor of
Lot No. 845, Land 275 located at Darong, Sta. Cruz, Davao del Sur with an area of
1.2 hectares. In 1960, he died leaving all his heirs, his children and grandchildren.
In 1965, Francisco Comorposa who was working in the land of Oboza was
terminated from his job. The termination of his employment caused a problem in
relocating his house. Being a close family friend of [Marcos] Saez, Francisco
Comorposa approached the late Marcos Saezs son, [Adolfo] Saez, the husband of
Gloria Leano Saez, about his problem. Out of pity and for humanitarian
consideration, Adolfo allowed Francisco Comorposa to occupy the land of Marcos
Saez. Hence, his nipa hut was carried by his neighbors and transferred to a portion
of the land subject matter of this case. Such transfer was witnessed by several
people, among them, Gloria Leano and Noel Oboza. Francisco Comorposa
occupied a portion of Marcos Saez property without paying any rental.
Francisco Comorposa left for Hawaii, U.S.A. He was succeeded in his possession
by the respondents who likewise did not pay any rental and are occupying the
premises through petitioners tolerance.
On 7 May 1998, a formal demand was made upon the respondents to vacate the
premises but the latter refused to vacate the same and claimed that they [were] the
legitimate claimants and the actual and lawful possessor[s] of the premises. A
[C]omplaint was filed with the barangay office of Sta. Cruz[,] Davao del Sur, but
the parties failed to arrive at an amicable settlement. Thus, the corresponding
Certificate to File Action was issued by the said barangay and an action for
unlawful detainer was filed by petitioners against respondents.
Respondents, in their Answer, denied the material allegations of the [C]omplaint
and alleged that they entered and occupied the premises in their own right as true,
valid and lawful claimants, possessors and owners of the said lot way back in 1960
and up to the present time; that they have acquired just and valid ownership and
possession of the premises by ordinary or extraordinary prescription, and that the
Regional Director of the DENR, Region XI has already upheld their possession
over the land in question when it ruled that they [were] the rightful claimants and
possessors and [were], therefore, entitled to the issuance of a title.
The Municipal Trial Court of Sta. Cruz, Davao del Sur rendered judgment in favor
of petitioners but the Regional Trial Court of Digos, Davao del Sur, on appeal,
reversed and set aside the said decision. x x x[6]
Ruling of the Court of Appeals
Affirming the Regional Trial Court (RTC), the CA upheld the right of
respondents as claimants and possessors. The appellate court held that -- although
not yet final -- the Order issued by the regional executive director of the
Department of Environment and Natural Resources (DENR) remained in full force
and effect, unless declared null and void. The CA added that the Certification
issued by the DENRs community environment and natural resources (CENR)
officer was proof that when the cadastral survey was conducted, the land was still
alienable and was not yet allocated to any person.
According to the CA, respondents had the better right to possess alienable and
disposable land of the public domain, because they have suffiently proven their
actual, physical, open, notorious, exclusive, continuous and uninterrupted
possession thereof since 1960. The appellate court deemed as self-serving, and
therefore incredible, the Affidavits executed by Gloria Leano Saez, Noel Oboza and
Paulina Paran.
Hence, this Petition.[7]
The Issue
In their Memorandum, petitioners raise the following issues for the Courts
consideration:
I
Did the Court of Appeals gravely abuse its discretion and [err] in sustaining the
ruling of the Regional Trial Court giving credence to the Order dated 2 April 1998
issued by the regional executive director?
II
Did the Court of Appeals gravely abuse its discretion and err in sustaining the
Regional Trial Courts ruling giving weight to the CENR Officers Certification,
which only bears the facsimile of the alleged signature of a certain Jose F. Tagorda
and, [worse], it is a new matter raised for the first time on appeal?
III
Did the Court of Appeals gravely abuse its discretion and err in holding that the
land subject matter of this case has been acquired by means of adverse possession
and prescription?
IV
Did the Court of Appeals gravely abuse its discretion, and err in declaring that,
neither is there error on the part of the Regional Trial Court, when it did not give
importance to the affidavits by Gloria Leano Saez, Noel [Oboza], and Paulina
Paran for allegedly being self serving?[8]
 To facilitate the discussion, the fourth and the third issues shall be discussed
in reverse sequence.
The Courts Ruling
The Petition has no merit.
First Issue:
The DENR Order of April 2, 1998
Petitioners claim that the reliance of the CA upon the April 2, 1998 Order
issued by the regional director of the DENR was erroneous. The reason was that the
Order, which had upheld the claim of respondents, was supposedly not yet final and
executory. Another Order dated August 23, 1999,[9] issued later by the DENR
regional director, allegedly held in abeyance the effectivity of the earlier one.
Under the Public Land Act,[10] the management and the disposition of public
land is under the primary control of the director of lands [11] (now the director of the
Lands Management Bureau or LMB),[12] subject to review by the DENR secretary.
[13]
As a rule, then, courts have no jurisdiction to intrude upon matters properly
falling within the powers of the LMB.
The powers given to the LMB and the DENR to alienate and dispose of public
land does not, however, divest regular courts of jurisdiction over possessory actions
instituted by occupants or applicants to protect their respective possessions and
occupations.[14] The power to determine who has actual physical possession or
occupation of public land and who has the better right of possession over it remains
with the courts.[15] But once the DENR has decided, particularly through the grant
of a homestead patent and the issuance of a certificate of title, its decision on these
points will normally prevail.[16]
Therefore, while the issue as to who among the parties are entitled to a piece
of public land remains pending with the DENR, the question of recovery of
possession of the disputed property is a matter that may be addressed to the courts.
Second Issue:
CENR Officers Certification
Petitioners contend that the CENR Certification dated July 22, 1997 is a sham
document, because the signature of the CENR officer is a mere facsimile. In
support of their argument, they cite Garvida v. Sales Jr.[17] and argue that the
Certification is a new matter being raised by respondents for the first time on
appeal.
We are not persuaded.
In Garvida, the Court held:
A facsimile or fax transmission is a process involving the transmission and
reproduction of printed and graphic matter by scanning an original copy, one
elemental area at a time, and representing the shade or tone of each area by a
specified amount of electric current. x x x[18]
Pleadings filed via fax machines are not considered originals and are at best
exact copies. As such, they are not admissible in evidence, as there is no way of
determining whether they are genuine or authentic.[19]
The Certification, on the other hand, is being contested for bearing a facsimile
of the signature of CENR Officer Jose F. Tagorda. The facsimile referred to is not
the same as that which is alluded to in Garvida. The one mentioned here refers to a
facsimile signature, which is defined as a signature produced by mechanical means
but recognized as valid in banking, financial, and business transactions.[20]
Note that the CENR officer has not disclaimed the Certification. In fact, the
DENR regional director has acknowledged and used it as reference in his Order
dated April 2, 1998:
x x x. CENR Officer Jose F. Tagorda, in a CERTIFICATION dated 22 July 1997, certified
among others, that: x x x per records available in his Office, x x x the controverted
lot x x x was not allocated to any person x x x.[21]
If the Certification were a sham as petitioner claims, then the regional director
would not have used it as reference in his Order. Instead, he would have either
verified it or directed the CENR officer to take the appropriate action, as the latter
was under the formers direct control and supervision.
Petitioners claim that the Certification was raised for the first time on appeal
is incorrect. As early as the pretrial conference at the Municipal Trial Court (MTC),
the CENR Certification had already been marked as evidence for respondents as
stated in the Pre-trial Order. [22] The Certification was not formally offered, however,
because respondents had not been able to file their position paper.
 Neither the rules of procedure[23] nor jurisprudence[24] would sanction the
admission of evidence that has not been formally offered during the trial. But this
evidentiary rule is applicable only to ordinary trials, not to cases covered by the
rule on summary procedure -- cases in which no full-blown trial is held.[25]
Third Issue:
Affidavit of Petitioners Witnesses
Petitioners assert that the CA erred in disregarding the Affidavits of their
witnesses, insisting that the Rule on Summary Procedure authorizes the use of
affidavits. They also claim that the failure of respondents to file their position paper
and counter-affidavits before the MTC amounts to an admission by silence.
The admissibility of evidence should not be confused with its probative
value. Admissibility refers to the question of whether certain pieces of evidence are
to be considered at all, while probative value refers to the question of whether the
admitted evidence proves an issue.[26] Thus, a particular item of evidence may be
admissible, but its evidentiary weight depends on judicial evaluation within the
guidelines provided by the rules of evidence.[27]
While in summary proceedings affidavits are admissible as the witnesses
respective testimonies, the failure of the adverse party to reply does not ipso
facto render the facts, set forth therein, duly proven. Petitioners still bear the burden
of proving their cause of action, because they are the ones asserting an affirmative
relief.[28]
Fourth Issue:
Defense of Prescription
Petitioners claim that the court a quo erred in upholding the defense of
prescription proffered by respondents. It is the formers contention that since the
latters possession of the land was merely being tolerated, there was no basis for the
claim of prescription. We disagree.
For the Court to uphold the contention of petitioners, they have first to prove
that the possession of respondents was by mere tolerance. The only pieces of
evidence submitted by the former to support their claim were a technical
description and a vicinity map drawn in accordance with the survey dated May 22,
1936.[29] Both of these were discredited by the CENR Certification, which indicated
that the contested lot had not yet been allocated to any person when the survey was
conducted.[30] The testimony of petitioners witnesses alone cannot prevail over
respondents continued and uninterrupted possession of the subject lot for a
considerable length of time.
Furthermore, this is an issue of fact that cannot, as a rule, be raised in a
petition for review under Rule 45.[31]
WHEREFORE, the Petition is DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
THIRD DIVISION
[G.R. No. 191696, April 10, 2013]
ROGELIO DANTIS, Petitioner, v. JULIO MAGHINANG, JR., Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the
January 25, 2010 Decision1and the March 23, 2010 Resolution2 of the Court of
Appeals (CA), in CA-G.R. CV No. 85258, reversing the March 2, 2005
Decision3 of the Regional Trial Court, Branch 18, Malolos, Bulacan (RTC), in an
action for quieting of title and recovery of possession with damages.
The Facts
The case draws its origin from a complaint4 for quieting of title and recovery of
possession with damages filed by petitioner Rogelio Dantis (Rogelio) against
respondent Julio Maghinang, Jr. (Julio, Jr.) before the RTC, docketed as Civil Case
No. 280-M-2002. Rogelio alleged that he was the registered owner of a parcel of
land covered by Transfer Certificate of Title (TCT) No. T-125918, with an area of
5,657 square meters, located in Sta. Rita, San Miguel, Bulacan; that he acquired
ownership of the property through a deed of extrajudicial partition of the estate of
his deceased father, Emilio Dantis (Emilio), dated December 22, 1993; that he had
been paying the realty taxes on the said property; that Julio, Jr. occupied and built a
house on a portion of his property without any right at all; that demands were made
upon Julio, Jr. that he vacate the premises but the same fell on deaf ears; and that
the acts of Julio, Jr. had created a cloud of doubt over his title and right of
possession of his property. He, thus, prayed that judgment be rendered declaring
him to be the true and real owner of the parcel of land covered by TCT No. T-
125918; ordering Julio, Jr. to deliver the possession of that portion of the land he
was occupying; and directing Julio, Jr. to pay rentals from October 2000 and
attorney’s fees of P100,000.00.
He added that he was constrained to institute an ejectment suit against Julio, Jr.
before the Municipal Trial Court of San Miguel, Bulacan (MTC), but the complaint
was dismissed for lack of jurisdiction and lack of cause of action.
In his Answer,5 Julio, Jr. denied the material allegations of the complaint. By way
of an affirmative defense, he claimed that he was the actual owner of the 352
square meters (subject lot) of the land covered by TCT No. T-125918 where he was
living; that he had been in open and continuous possession of the property for
almost thirty (30) years; the subject lot was once tenanted by his ancestral relatives
until it was sold by Rogelio’s father, Emilio, to his father, Julio Maghinang, Sr.
(Julio, Sr.); that later, he succeeded to the ownership of the subject lot after his
father died on March 10, 1968; and that he was entitled to a separate registration of
the subject lot on the basis of the documentary evidence of sale and his open and
uninterrupted possession of the property.
As synthesized by the RTC from the respective testimonies of the principal
witnesses, their diametrically opposed positions are as
follows:chanroblesvirtuallawlibrary
Plaintiff Rogelio Dantis testified that he inherited 5,657 square meters of land,
identified as Lot 6-D-1 of subdivision plan Psd-031421-054315, located at Sta.
Rita, San Miguel, Bulacan, through an Extrajudicial Partition of Estate of Emilio
Dantis, executed in December 1993 which land was titled later on under his name,
Rogelio Dantis, married to Victoria Payawal, as shown by copy of Transfer
Certificate of Title No. T-125918, issued by the Register of Deeds of Bulacan on
September 29, 1998, declared for taxation purposes as Tax Declaration with ARP
No. C20-22-043-07-046. According to him, defendant and his predecessor-in-
interest built the house located on said lot. When he first saw it, it was only a small
hut but when he was about 60 years old, he told defendant not to build a bigger
house thereon because he would need the land and defendant would have to vacate
the land. Plaintiff, however, has not been in physical possession of the premises.
Defendant Julio Maghinang, Jr., presented by plaintiff as adverse witness, testified
that he has no title over the property he is occupying. He has not paid realty taxes
thereon. He has not paid any rental to anybody. He is occupying about 352 square
meters of the lot. He presented an affidavit executed on September 3, 1953 by
Ignacio Dantis, grandfather of Rogelio Dantis and the father of Emilio Dantis. The
latter was, in turn, the father of Rogelio Dantis. The affidavit, according to affiant
Ignacio Dantis, alleged that Emilio Dantis agreed to sell 352 square meters of the
lot to Julio Maghinang on installment. Defendant was then 11 years old in 1952.
Defendant Julio Maghinang, Jr. likewise testified for the defendant’s case as
follows: He owns that house located at Sta. Rita, San Miguel, Bulacan, on a 352
square meter lot. He could not say that he is the owner because there is still
question about the lot. He claimed that his father, Julio Maghinang (Sr.), bought the
said lot from the parents of Rogelio Dantis. He admitted that the affidavit was not
signed by the alleged vendor, Emilio Dantis, the father of Rogelio Dantis. The
receipt he presented was admittedly a mere photocopy. He spent P50,000.00 as
attorney’s fees. Since 1953, he has not declared the property as his nor paid the
taxes thereon because there is a problem.6
On March 2, 2005, the RTC rendered its decision declaring Rogelio as the true
owner of the entire 5,657-square meter lot located in Sta. Rita, San Miguel,
Bulacan, as evidenced by his TCT over the same. The RTC did not lend any
probative value on the documentary evidence of sale adduced by Julio, Jr.
consisting of: 1) an affidavit allegedly executed by Ignacio Dantis (Ignacio),
Rogelio’s grandfather, whereby said affiant attested, among others, to the sale of
the subject lot made by his son, Emilio, to Julio, Sr. (Exhibit “3”)7; and 2) an
undated handwritten receipt of initial downpayment in the amount of P100.00
supposedly issued by Emilio to Julio, Sr. in connection with the sale of the subject
lot (Exhibit “4”).8 The RTC ruled that even if these documents were adjudged as
competent evidence, still, they would only serve as proofs that the purchase price
for the subject lot had not yet been completely paid and, hence, Rogelio was not
duty-bound to deliver the property to Julio, Jr. The RTC found Julio, Jr. to be a
mere possessor by tolerance. The dispositive portion of the RTC decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, Judgment is hereby rendered as follows:
1. quieting the title and removing whatever cloud over the title on the parcel
of land, with area of 5,647 sq. meters, more or less, located at Sta. Rita,
San Miguel, Bulacan, covered by Transfer Certificate of Title No. T-
125918 issued by the Register of Deeds of Bulacan in the name of
“Rogelio Dantis, married to Victoria Payawal”;cralawlibrary
2. declaring that Rogelio Dantis, married to Victoria Payawal, is the true and
lawful owner of the aforementioned real property; and
3. ordering defendant Julio Maghinang, Jr. and all persons claiming under
him to peacefully vacate the said real property and surrender the
possession thereof to plaintiff or latter’s successors-in-interest.
No pronouncement as to costs in this instance.
SO ORDERED.9
Julio, Jr. moved for a reconsideration of the March 2, 2005 Decision, but the
motion was denied by the RTC in its May 3, 2005 Order. 10 Feeling aggrieved, Julio,
Jr. appealed the decision to the CA.

On January 25, 2010, the CA rendered the assailed decision in CA-G.R. CV NO.
85258, finding the appeal to be impressed with merit. It held that Exhibit “4” was
an indubitable proof of the sale of the 352-square meter lot between Emilio and
Julio, Sr. It also ruled that the partial payment of the purchase price, coupled with
the delivery of the res, gave efficacy to the oral sale and brought it outside the
operation of the statute of frauds. Finally, the court a quo declared that Julio, Jr. and
his predecessors-in-interest had an equitable claim over the subject lot which
imposed on Rogelio and his predecessors-in-interest a personal duty to convey
what had been sold after full payment of the selling price. The decretal portion of
the CA decision reads:chanroblesvirtuallawlibrary
IN VIEW OF THE FOREGOING, the decision appealed from is reversed. The
heirs of Julio Maghinang Jr. are declared the owners of the 352-square meter
portion of the lot covered by TCT No. T-125968 where the residence of defendant
Julio Maghinang is located, and the plaintiff is ordered to reconvey the aforesaid
portion to the aforesaid heirs, subject to partition by agreement or action to
determine the exact metes and bounds and without prejudice to any legal remedy
that the plaintiff may take with respect to the unpaid balance of the price.
SO ORDERED.11
The motion for reconsideration12 filed by Rogelio was denied by the CA in its
March 23, 2010 Resolution. Unfazed, he filed this petition for review on certiorari
before this Court.
Issues:
The fundamental question for resolution is whether there is a perfected contract of
sale between Emilio and Julio, Sr. The determination of this issue will settle the
rightful ownership of the subject lot.
Rogelio submits that Exhibit “3” and Exhibit “4” are devoid of evidentiary value
and, hence, deserve scant consideration. He stresses that Exhibit “4” is inadmissible
in evidence being a mere photocopy, and the existence and due execution thereof
had not been established. He argues that even if Exhibit “4” would be considered as
competent and admissible evidence, still, it would not be an adequate proof of the
existence of the alleged oral contract of sale because it failed to provide a
description of the subject lot, including its metes and bounds, as well as its full
price or consideration.13cralawvllred
Rogelio argues that while reconveyance may be availed of by the owner of a real
property wrongfully included in the certificate of title of another, the remedy is not
obtainable herein since he is a transferee in good faith, having acquired the land
covered by TCT No. T-125918, through a Deed of Extrajudicial Partition of
Estate.14 He asserts that he could not be considered a trustee as he was not privy to
Exhibit “4.” In any event, he theorizes that the action for reconveyance on the
ground of implied trust had already prescribed since more than 10 years had lapsed
since the execution of Exhibit “4” in 1953. It is the petitioner’s stance that Julio, Jr.
did not acquire ownership over the subject lot by acquisitive prescription
contending that prescription does not lie against a real property covered by a
Torrens title. He opines that his certificate of title to the subject lot cannot be
collaterally attacked because a Torrens title is indefeasible and must be respected
unless challenged in a direct proceeding.15cralawvllred
The Court’s Ruling
In the case at bench, the CA and the RTC reached different conclusions on the
question of whether or not there was an oral contract of sale. The RTC ruled that
Rogelio Dantis was the sole and rightful owner of the parcel of land covered by
TCT No. T-125918 and that no oral contract of sale was entered into between
Emilio Dantis and Julio Maghinang, Sr. involving the 352-square meter portion of
the said property. The CA was of the opposite view. The determination of whether
there existed an oral contract of sale is essentially a question of fact.
In petitions for review under Rule 45, the Court, as a general rule, does not venture
to re-examine the evidence presented by the contending parties during the trial of
the case considering that it is not a trier of facts and the findings of fact of the CA
are conclusive and binding upon this Court. The rule, however, admits of several
exceptions. One of which is when the findings of the CA are contrary to those of
the trial court.16 Considering the incongruent factual conclusions of the CA and the
RTC, this Court is constrained to reassess the factual circumstances of the case and
reevaluate them in the interest of justice.
The petition is meritorious.
It is an age-old rule in civil cases that he who alleges a fact has the burden of
proving it and a mere allegation is not evidence.17 After carefully sifting through
the evidence on record, the Court finds that Rogelio was able to establish a prima
facie case in his favor tending to show his exclusive ownership of the parcel of land
under TCT No. T-125918 with an area of 5,657 square meters, which included the
352-square meter subject lot. From the records, it appears that TCT No. T-125918
is a derivative of TCT No. T-256228, which covered a bigger area of land
measuring 30,000 square meters registered in the name of Emilio Dantis; that
Emilio died intestate on November 13, 1952; that Emilio’s five heirs, including
Rogelio, executed an extra-judicial partition of estate on December 22, 1993 and
divided among themselves specific portions of the property covered by TCT No. T-
256228, which were already set apart by metes and bounds; that the land known as
Lot 6-D-1 of the subdivision plan Psd-031421-054315 with an area of 5,657 sq. m.
went to Rogelio, the property now covered by TCT No. T-125918; and that the
property was declared for realty tax purpose in the name of Rogelio for which a tax
declaration was issued in his name; and that the same had not been transferred to
anyone else since its issuance.
In light of Rogelio’s outright denial of the oral sale together with his insistence of
ownership over the subject lot, it behooved upon Julio, Jr. to contravene the
former’s claim and convince the court that he had a valid defense. The burden of
evidence shifted to Julio, Jr. to prove that his father bought the subject lot from
Emilio Dantis. In Jison v. Court of Appeals,18 the Court
held:chanroblesvirtuallawlibrary
Simply put, he who alleges the affirmative of the issue has the burden of proof, and
upon the plaintiff in a civil case, the burden of proof never parts. However, in the
course of trial in a civil case, once plaintiff makes out a prima facie case in his
favor, the duty or the burden of evidence shifts to defendant to controvert plaintiff’s
prima facie case, otherwise, a verdict must be returned in favor of plaintiff.
Moreover, in civil cases, the party having the burden of proof must produce a
preponderance of evidence thereon, with plaintiff having to rely on the strength of
his own evidence and not upon the weakness of the defendant’s. The concept of
“preponderance of evidence” refers to evidence which is of greater weight, or more
convincing, that which is offered in opposition to it; at bottom, it means probability
of truth.19
Julio, Jr. failed to discharge this burden. His pieces of evidence, Exhibit “3” and
Exhibit “4,” cannot prevail over the array of documentary and testimonial evidence
that were adduced by Rogelio. The totality of Julio, Jr.’s evidence leaves much to
be desired.
To begin with, Exhibit “3,” the affidavit of Ignacio, is hearsay evidence and, thus,
cannot be accorded any evidentiary weight. Evidence is hearsay when its probative
force depends on the competency and credibility of some persons other than the
witness by whom it is sought to be produced. The exclusion of hearsay evidence is
anchored on three reasons: 1) absence of cross-examination; 2) absence of
demeanor evidence; and 3) absence of oath.20cralawvllred
Jurisprudence dictates that an affidavit is merely hearsay evidence where its
affiant/maker did not take the witness stand.21 The sworn statement of Ignacio is of
this kind. The affidavit was not identified and its averments were not affirmed by
affiant Ignacio. Accordingly, Exhibit “3” must be excluded from the judicial
proceedings being an inadmissible hearsay evidence. It cannot be deemed a
declaration against interest for the matter to be considered as an exception to the
hearsay rule because the declarant was not the seller (Emilio), but his father
(Ignacio).
Exhibit “4,” on the other hand, is considered secondary evidence being a mere
photocopy which, in this case, cannot be admitted to prove the contents of the
purported undated handwritten receipt. The best evidence rule requires that the
highest available degree of proof must be produced. For documentary evidence, the
contents of a document are best proved by the production of the document itself to
the exclusion of secondary or substitutionary evidence, pursuant to Rule 130,
Section 322.
A secondary evidence is admissible only upon compliance with Rule 130, Section
5, which states that: when the original has been lost or destroyed, or cannot be
produced in court, the offeror, upon proof of its execution or existence and the
cause of its unavailability without bad faith on his part, may prove its contents by a
copy, or by a recital of its contents in some authentic document, or by the testimony
of witnesses in the order stated. Accordingly, the offeror of the secondary evidence
is burdened to satisfactorily prove the predicates thereof, namely: (1) the execution
or existence of the original; (2) the loss and destruction of the original or its non-
production in court; and (3) the unavailability of the original is not due to bad faith
on the part of the proponent/offeror. Proof of the due execution of the document
and its subsequent loss would constitute the basis for the introduction of secondary
evidence.23 In MCC Industrial Sales Corporation v. Ssangyong Corporation,24 it
was held that where the missing document is the foundation of the action, more
strictness in proof is required than where the document is only collaterally
involved.
Guided by these norms, the Court holds that Julio, Jr. failed to prove the due
execution of the original of Exhibit “4” as well as its subsequent loss. A nexus of
logically related circumstance rendered Julio, Jr.’s evidence highly suspect. Also,
his testimony was riddled with improbabilities and contradictions which tend to
erode his credibility and raise doubt on the veracity of his evidence.
First, the claim of Julio, Jr. that Emilio affixed his signature on the original of
Exhibit “4” in 1953 is highly improbable because record shows that Emilio died
even before that year, specifically, on November 13, 1952. Excerpts from Julio,
Jr.’s testimony relative to this matter are as follows:chanroblesvirtuallawlibrary
Atty. Vicente Millora
(On Cross-examination)
Q: You don’t remember how old you were when this according to you you
witnessed Emilio Dantis signed this?
A: Eleven years old, Sir.
Q: So that was 1953?
A: Yes, Sir.
Q: And you were then…?
A: I was born October 1942, Sir.
 Atty. Vicente Millora
Q: You were eleven (11) years old? (On Cross-examination)
A: Yes, Sir.
Q: So, who is your sister to whom you gave the original?
Q: And you mean to say that you witnessed the signing allegedly of the original of A: Benedicta Laya, Sir.
Exhibit “4” when you were eleven (11) years old?
A: Yes, Sir. Q: In other words now, you did not lost the document or the original of Exhibit “4”
but you gave it to your sister, am I correct?
Q: And you remember what was signed in this receipt. From your memory can you A: I just lent to her the original copy, Sir.
tell the title of this Exhibit “4”?
A: What I can say that it is a Sale, Sir. Q: So, you lent this original of Exhibit “4” to your sister and your sister never
returned the same to you?
Q: So, when you said that you witnessed an alleged sale you are referring to A: Yes, Sir, because it was lost, that was the only one left in her custody.
Exhibit “4”?
A: Yes, Sir.25 (Emphasis supplied) Interpreter:cralaw

Second, Julio, Jr.’s testimony pertinent to the alleged loss of the original of Exhibit Witness referring to the xerox copy.
“4” is laden with inconsistencies that detract from his credibility. His testimony
bears the earmarks of falsehood and, hence, not reliable. Julio, Jr. testified in this Atty. Vicente Millora
wise:chanroblesvirtuallawlibrary
Q: In other words, it was your sister who lost the original, is that correct?
Atty. Roldan Villacorta A: Yes, Sir, when I lent the original.28 (Emphasis supplied)
(On Direct examination)
The Court also notes the confused narration of Julio, Jr. regarding the last time he
Q: Mr. Witness, I noticed that this document marked as Exhibit “4” is only a saw the original of Exhibit “4.”
photocopy, where is the original of this document?
A: The original was with the safekeeping of my parents because of the lapse of Atty. Vicente Millora
time the original was misplaced, Sir.26 (On Cross-examination)

The above testimony of Julio, Jr. tends to give the impression that the original of Q: And when did you last see the original?
the document was lost while it was in the possession of his parents. During cross- A: When my mother died in 1993 that was the last time I tried to see the original of
examination, however, he testified that it was lost while it was in his possession. the document after her interment, Sir.

Atty. Vicente Millora Q: Where did you see this document?

(On Cross-examination) A: From the safekeeping of my mother, Sir.29cralawvllred

Q: x x x Where did you keep that document? xxxx

A: I was the one keeping that document because I live in different places, [the
said] it was lost or misplaced, Sir.
Q: In other words, it was lost while the same was in your possession??
A: Yes, Sir.27 (Emphasis supplied)
Still, later, Julio, Jr. claimed that his sister was the one responsible for the loss of
the original of Exhibit “4” after borrowing the same from him.
Q: When did you get this Exhibit “4” now, the photocopy from your sister?
A: When the interment of my mother in September 1993, Sir.
Q: Now, let us reform. Which one did you get after the interment of your mother,
this Exhibit “4” or the original?
A: I asked that xerox copy because I have lost the original and I could not find the
same, Sir.

Q: So, from the safe of your mother after her interment, what used you found and
got this Exhibit “4”?
A: Yes, Sir, from my sister.
Q: So, not from your mother safe?
A: The original was taken from the safe of my mother, Sir.
Q: So after your mother’s death you never saw the original?
A: I did not see it anymore because the original was lost before she died,
Sir.30(Underscoring supplied)
Third, it is quite strange that two receipts were prepared for the initial payment of
P100.00 in connection with the sale of the subject lot. The Court notes that the
contents of Exhibit “4” were similar to those of Annex “A”31 of Julio, Jr.’s Answer,
dated June 9, 2002. Annex “A,” however, was typewritten and the name of the
recipient indicated therein was a certain Cornelio A. Dantis, whose identity and
participation in the alleged sale was never explained.
Fourth, apart from the lone testimony of Julio, Jr., no other witness who knew or
read Exhibit “4,” much less saw it executed, was presented. In the absence of any
shred of corroborative evidence, the Court cannot help but entertain doubts on the
truthfulness of Julio, Jr.’s naked assertion.
Assuming, in gratia argumenti, that Exhibit “4” is admissible in evidence, there
will still be no valid and perfected oral contract for failure of Julio, Jr. to prove the
concurrence of the essential requisites of a contract of sale by adequate and
competent evidence.
By the contract of sale, one of the contracting parties obligates himself to transfer
the ownership of, and to deliver, a determinate thing, and the other to pay therefor a
price certain in money or its equivalent.32A contract of sale is a consensual contract
and, thus, is perfected by mere consent which is manifested by the meeting of the
offer and the acceptance upon the thing and the cause which are to constitute the
contract.33 Until the contract of sale is perfected, it cannot, as an independent source
of obligation, serve as a binding juridical relation between the parties.34 The
essential elements of a contract of sale are: a) consent or meeting of the minds, that
is, consent to transfer ownership in exchange for the price; b) determinate subject
matter; and c) price certain in money or its equivalent.35 The absence of any of the
essential elements shall negate the existence of a perfected contract of
sale.36cralawvllred
Seemingly, Julio, Jr. wanted to prove the sale by a receipt when it should be the
receipt that should further corroborate the existence of the sale. At best, his
testimony only alleges but does not prove the existence of the verbal agreement.
Julio, Jr. miserably failed to establish by preponderance of evidence that there was
a meeting of the minds of the parties as to the subject matter and the purchase
price.
The chief evidence of Julio, Jr. to substantiate the existence of the oral contract of
sale is Exhibit “4.” For a better understanding and resolution of the issue at hand,
Exhibit “4” is being reproduced here:chanroblesvirtuallawlibrary
Alamin ng sino mang
Makababasa
Akong si Emilio Dantis may sapat na Gulang may asawa naninirahan sa Sta Rita
San Miguel Bul. ay kusang nagsasasay ng sumosunod.
Na ako Tumanggap Kay Julio Maghinang ng P100.00 peso cuartang Pilipino,
bilang paunang bayad sa Lupa niyang nilote sa akin 400 apat na raan mahigit na
metro cudrado.
Testigo Tumangap,
Emilio a Dantis
A perusal of the above document would readily show that it does not specify a
determinate subject matter. Nowhere does it provide a description of the property
subject of the sale, including its metes and bounds, as well as its total area. The
Court notes that while Julio, Jr. testified that the land subject of the sale consisted
of 352 square meters, Exhibit “4,” however, states that it’s more than 400 square
meters. Moreover, Exhibit “4” does not categorically declare the price certain in
money. Neither does it state the mode of payment of the purchase price and the
period for its payment.
In Swedish Match, AB v. Court of Appeals,37 the Court ruled that the manner of
payment of the purchase price was an essential element before a valid and binding
contract of sale could exist. Albeit the Civil Code does not explicitly provide that
the minds of the contracting parties must also meet on the terms or manner of
payment of the price, the same is needed, otherwise, there is no sale.38 An
agreement anent the manner of payment goes into the price so much so that a
disagreement on the manner of payment is tantamount to a failure to agree on the
price.39 Further, in Velasco v. Court of Appeals,40 where the parties already agreed
on the object of sale and on the purchase price, but not on how and when the
downpayment and the installment payments were to be paid, this Court
ruled:chanroblesvirtuallawlibrary
Such being the situation, it cannot, therefore, be said that a definite and firm sales
agreement between the parties had been perfected over the lot in question. Indeed,
this Court has already ruled before that a definite agreement on the manner of
payment of the purchase price is an essential element in the formation of a binding
and enforceable contract of sale. The fact, therefore, that the petitioners delivered to
the respondent the sum of P10,000.00 as part of the down-payment that they had to
pay cannot be considered as sufficient proof of the perfection of any purchase and
sale agreement between the parties herein under Art. 1482 of the new Civil Code,
as the petitioners themselves admit that some essential matter – the terms of
payment – still had to be mutually covenanted.41
The CA held that partial performance of the contract of sale – giving of a
downpayment coupled with the delivery of the res - took the oral contract out of the
scope of the Statute of Frauds. This conclusion arose from its erroneous finding
that there was a perfected contract of sale. The above disquisition, however, shows
that there was none. There is, therefore, no basis for the application of the Statute
of Frauds. The application of the Statute of Frauds presupposes the existence of a
perfected contract.42 As to the delivery of the res, it does not appear to be a
voluntary one pursuant to the purported sale. If Julio, Jr. happened to be there, it
was because his ancestors tenanted the land. It must be noted that when Julio, Jr.
built his house, Rogelio protested.
WHEREFORE, the petition is GRANTED. The assailed January 25, 2010
Decision and the March 23, 2010 Resolution of the Court Appeals, in CA-G.R. CV
No. 85258, are REVERSED and SET ASIDE. The March 2, 2005 Decision of the
Regional Trial Court of Malolos, Bulacan, Branch 18, in Civil Case No. 280-M-
2002, is REINSTATED.
SO ORDERED.
THIRD DIVISION
[G.R. No. 191696, April 10, 2013]
ROGELIO DANTIS, Petitioner, v. JULIO MAGHINANG, JR., Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the
January 25, 2010 Decision1and the March 23, 2010 Resolution2 of the Court of
Appeals (CA), in CA-G.R. CV No. 85258, reversing the March 2, 2005
Decision3 of the Regional Trial Court, Branch 18, Malolos, Bulacan (RTC), in an
action for quieting of title and recovery of possession with damages.
The Facts
The case draws its origin from a complaint4 for quieting of title and recovery of
possession with damages filed by petitioner Rogelio Dantis (Rogelio) against
respondent Julio Maghinang, Jr. (Julio, Jr.) before the RTC, docketed as Civil Case
No. 280-M-2002. Rogelio alleged that he was the registered owner of a parcel of
land covered by Transfer Certificate of Title (TCT) No. T-125918, with an area of
5,657 square meters, located in Sta. Rita, San Miguel, Bulacan; that he acquired
ownership of the property through a deed of extrajudicial partition of the estate of
his deceased father, Emilio Dantis (Emilio), dated December 22, 1993; that he had
been paying the realty taxes on the said property; that Julio, Jr. occupied and built a
house on a portion of his property without any right at all; that demands were made
upon Julio, Jr. that he vacate the premises but the same fell on deaf ears; and that
the acts of Julio, Jr. had created a cloud of doubt over his title and right of
possession of his property. He, thus, prayed that judgment be rendered declaring
him to be the true and real owner of the parcel of land covered by TCT No. T-
125918; ordering Julio, Jr. to deliver the possession of that portion of the land he
was occupying; and directing Julio, Jr. to pay rentals from October 2000 and
attorney’s fees of P100,000.00.
He added that he was constrained to institute an ejectment suit against Julio, Jr.
before the Municipal Trial Court of San Miguel, Bulacan (MTC), but the complaint
was dismissed for lack of jurisdiction and lack of cause of action.
In his Answer,5 Julio, Jr. denied the material allegations of the complaint. By way
of an affirmative defense, he claimed that he was the actual owner of the 352
square meters (subject lot) of the land covered by TCT No. T-125918 where he was
living; that he had been in open and continuous possession of the property for
almost thirty (30) years; the subject lot was once tenanted by his ancestral relatives
until it was sold by Rogelio’s father, Emilio, to his father, Julio Maghinang, Sr.
(Julio, Sr.); that later, he succeeded to the ownership of the subject lot after his
father died on March 10, 1968; and that he was entitled to a separate registration of
the subject lot on the basis of the documentary evidence of sale and his open and
uninterrupted possession of the property.
As synthesized by the RTC from the respective testimonies of the principal
witnesses, their diametrically opposed positions are as
follows:chanroblesvirtuallawlibrary
Plaintiff Rogelio Dantis testified that he inherited 5,657 square meters of land,
identified as Lot 6-D-1 of subdivision plan Psd-031421-054315, located at Sta.
Rita, San Miguel, Bulacan, through an Extrajudicial Partition of Estate of Emilio
Dantis, executed in December 1993 which land was titled later on under his name,
Rogelio Dantis, married to Victoria Payawal, as shown by copy of Transfer
Certificate of Title No. T-125918, issued by the Register of Deeds of Bulacan on
September 29, 1998, declared for taxation purposes as Tax Declaration with ARP
No. C20-22-043-07-046. According to him, defendant and his predecessor-in-
interest built the house located on said lot. When he first saw it, it was only a small
hut but when he was about 60 years old, he told defendant not to build a bigger
house thereon because he would need the land and defendant would have to vacate
the land. Plaintiff, however, has not been in physical possession of the premises.
Defendant Julio Maghinang, Jr., presented by plaintiff as adverse witness, testified
that he has no title over the property he is occupying. He has not paid realty taxes
thereon. He has not paid any rental to anybody. He is occupying about 352 square
meters of the lot. He presented an affidavit executed on September 3, 1953 by
Ignacio Dantis, grandfather of Rogelio Dantis and the father of Emilio Dantis. The
latter was, in turn, the father of Rogelio Dantis. The affidavit, according to affiant
Ignacio Dantis, alleged that Emilio Dantis agreed to sell 352 square meters of the
lot to Julio Maghinang on installment. Defendant was then 11 years old in 1952.
Defendant Julio Maghinang, Jr. likewise testified for the defendant’s case as
follows: He owns that house located at Sta. Rita, San Miguel, Bulacan, on a 352
square meter lot. He could not say that he is the owner because there is still
question about the lot. He claimed that his father, Julio Maghinang (Sr.), bought the
said lot from the parents of Rogelio Dantis. He admitted that the affidavit was not
signed by the alleged vendor, Emilio Dantis, the father of Rogelio Dantis. The
receipt he presented was admittedly a mere photocopy. He spent P50,000.00 as
attorney’s fees. Since 1953, he has not declared the property as his nor paid the
taxes thereon because there is a problem.6
On March 2, 2005, the RTC rendered its decision declaring Rogelio as the true
owner of the entire 5,657-square meter lot located in Sta. Rita, San Miguel,
Bulacan, as evidenced by his TCT over the same. The RTC did not lend any
probative value on the documentary evidence of sale adduced by Julio, Jr.
consisting of: 1) an affidavit allegedly executed by Ignacio Dantis (Ignacio),
Rogelio’s grandfather, whereby said affiant attested, among others, to the sale of
the subject lot made by his son, Emilio, to Julio, Sr. (Exhibit “3”)7; and 2) an
undated handwritten receipt of initial downpayment in the amount of P100.00
supposedly issued by Emilio to Julio, Sr. in connection with the sale of the subject
lot (Exhibit “4”).8 The RTC ruled that even if these documents were adjudged as
competent evidence, still, they would only serve as proofs that the purchase price
for the subject lot had not yet been completely paid and, hence, Rogelio was not
duty-bound to deliver the property to Julio, Jr. The RTC found Julio, Jr. to be a
mere possessor by tolerance. The dispositive portion of the RTC decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, Judgment is hereby rendered as follows:
1. quieting the title and removing whatever cloud over the title on the parcel
of land, with area of 5,647 sq. meters, more or less, located at Sta. Rita,
San Miguel, Bulacan, covered by Transfer Certificate of Title No. T-
125918 issued by the Register of Deeds of Bulacan in the name of
“Rogelio Dantis, married to Victoria Payawal”;cralawlibrary
2. declaring that Rogelio Dantis, married to Victoria Payawal, is the true and
lawful owner of the aforementioned real property; and
3. ordering defendant Julio Maghinang, Jr. and all persons claiming under
him to peacefully vacate the said real property and surrender the
possession thereof to plaintiff or latter’s successors-in-interest.
No pronouncement as to costs in this instance.
SO ORDERED.9
Julio, Jr. moved for a reconsideration of the March 2, 2005 Decision, but the
motion was denied by the RTC in its May 3, 2005 Order. 10 Feeling aggrieved, Julio,
Jr. appealed the decision to the CA.
On January 25, 2010, the CA rendered the assailed decision in CA-G.R. CV NO.
85258, finding the appeal to be impressed with merit. It held that Exhibit “4” was
an indubitable proof of the sale of the 352-square meter lot between Emilio and
Julio, Sr. It also ruled that the partial payment of the purchase price, coupled with
the delivery of the res, gave efficacy to the oral sale and brought it outside the
operation of the statute of frauds. Finally, the court a quo declared that Julio, Jr. and
his predecessors-in-interest had an equitable claim over the subject lot which
imposed on Rogelio and his predecessors-in-interest a personal duty to convey
what had been sold after full payment of the selling price. The decretal portion of
the CA decision reads:chanroblesvirtuallawlibrary
IN VIEW OF THE FOREGOING, the decision appealed from is reversed. The
heirs of Julio Maghinang Jr. are declared the owners of the 352-square meter
portion of the lot covered by TCT No. T-125968 where the residence of defendant
Julio Maghinang is located, and the plaintiff is ordered to reconvey the aforesaid
portion to the aforesaid heirs, subject to partition by agreement or action to
determine the exact metes and bounds and without prejudice to any legal remedy
that the plaintiff may take with respect to the unpaid balance of the price.
SO ORDERED.11
The motion for reconsideration12 filed by Rogelio was denied by the CA in its
March 23, 2010 Resolution. Unfazed, he filed this petition for review on certiorari
before this Court.
Issues:

The fundamental question for resolution is whether there is a perfected contract of
sale between Emilio and Julio, Sr. The determination of this issue will settle the
rightful ownership of the subject lot.
Rogelio submits that Exhibit “3” and Exhibit “4” are devoid of evidentiary value
and, hence, deserve scant consideration. He stresses that Exhibit “4” is inadmissible
in evidence being a mere photocopy, and the existence and due execution thereof
had not been established. He argues that even if Exhibit “4” would be considered as
competent and admissible evidence, still, it would not be an adequate proof of the
existence of the alleged oral contract of sale because it failed to provide a
description of the subject lot, including its metes and bounds, as well as its full
price or consideration.13cralawvllred
Rogelio argues that while reconveyance may be availed of by the owner of a real
property wrongfully included in the certificate of title of another, the remedy is not
obtainable herein since he is a transferee in good faith, having acquired the land
covered by TCT No. T-125918, through a Deed of Extrajudicial Partition of
Estate.14 He asserts that he could not be considered a trustee as he was not privy to
Exhibit “4.” In any event, he theorizes that the action for reconveyance on the
ground of implied trust had already prescribed since more than 10 years had lapsed
since the execution of Exhibit “4” in 1953. It is the petitioner’s stance that Julio, Jr.
did not acquire ownership over the subject lot by acquisitive prescription
contending that prescription does not lie against a real property covered by a
Torrens title. He opines that his certificate of title to the subject lot cannot be
collaterally attacked because a Torrens title is indefeasible and must be respected
unless challenged in a direct proceeding.15cralawvllred
The Court’s Ruling
In the case at bench, the CA and the RTC reached different conclusions on the
question of whether or not there was an oral contract of sale. The RTC ruled that
Rogelio Dantis was the sole and rightful owner of the parcel of land covered by
TCT No. T-125918 and that no oral contract of sale was entered into between
Emilio Dantis and Julio Maghinang, Sr. involving the 352-square meter portion of
the said property. The CA was of the opposite view. The determination of whether
there existed an oral contract of sale is essentially a question of fact.
In petitions for review under Rule 45, the Court, as a general rule, does not venture
to re-examine the evidence presented by the contending parties during the trial of
the case considering that it is not a trier of facts and the findings of fact of the CA
are conclusive and binding upon this Court. The rule, however, admits of several
exceptions. One of which is when the findings of the CA are contrary to those of
the trial court.16 Considering the incongruent factual conclusions of the CA and the
RTC, this Court is constrained to reassess the factual circumstances of the case and
reevaluate them in the interest of justice.
The petition is meritorious.
It is an age-old rule in civil cases that he who alleges a fact has the burden of
proving it and a mere allegation is not evidence.17 After carefully sifting through
the evidence on record, the Court finds that Rogelio was able to establish a prima
facie case in his favor tending to show his exclusive ownership of the parcel of land
under TCT No. T-125918 with an area of 5,657 square meters, which included the
352-square meter subject lot. From the records, it appears that TCT No. T-125918
is a derivative of TCT No. T-256228, which covered a bigger area of land
measuring 30,000 square meters registered in the name of Emilio Dantis; that
Emilio died intestate on November 13, 1952; that Emilio’s five heirs, including
Rogelio, executed an extra-judicial partition of estate on December 22, 1993 and
divided among themselves specific portions of the property covered by TCT No. T-
256228, which were already set apart by metes and bounds; that the land known as
Lot 6-D-1 of the subdivision plan Psd-031421-054315 with an area of 5,657 sq. m.
went to Rogelio, the property now covered by TCT No. T-125918; and that the
property was declared for realty tax purpose in the name of Rogelio for which a tax
declaration was issued in his name; and that the same had not been transferred to
anyone else since its issuance.
In light of Rogelio’s outright denial of the oral sale together with his insistence of
ownership over the subject lot, it behooved upon Julio, Jr. to contravene the
former’s claim and convince the court that he had a valid defense. The burden of
evidence shifted to Julio, Jr. to prove that his father bought the subject lot from
Emilio Dantis. In Jison v. Court of Appeals,18 the Court
held:chanroblesvirtuallawlibrary
Simply put, he who alleges the affirmative of the issue has the burden of proof, and
upon the plaintiff in a civil case, the burden of proof never parts. However, in the
course of trial in a civil case, once plaintiff makes out a prima facie case in his
favor, the duty or the burden of evidence shifts to defendant to controvert plaintiff’s
prima facie case, otherwise, a verdict must be returned in favor of plaintiff.
Moreover, in civil cases, the party having the burden of proof must produce a
preponderance of evidence thereon, with plaintiff having to rely on the strength of
his own evidence and not upon the weakness of the defendant’s. The concept of
“preponderance of evidence” refers to evidence which is of greater weight, or more
convincing, that which is offered in opposition to it; at bottom, it means probability
of truth.19
Julio, Jr. failed to discharge this burden. His pieces of evidence, Exhibit “3” and
Exhibit “4,” cannot prevail over the array of documentary and testimonial evidence
that were adduced by Rogelio. The totality of Julio, Jr.’s evidence leaves much to
be desired.

To begin with, Exhibit “3,” the affidavit of Ignacio, is hearsay evidence and, thus,
cannot be accorded any evidentiary weight. Evidence is hearsay when its probative
force depends on the competency and credibility of some persons other than the
witness by whom it is sought to be produced. The exclusion of hearsay evidence is
anchored on three reasons: 1) absence of cross-examination; 2) absence of
demeanor evidence; and 3) absence of oath.20cralawvllred
Jurisprudence dictates that an affidavit is merely hearsay evidence where its
affiant/maker did not take the witness stand.21 The sworn statement of Ignacio is of
this kind. The affidavit was not identified and its averments were not affirmed by
affiant Ignacio. Accordingly, Exhibit “3” must be excluded from the judicial
proceedings being an inadmissible hearsay evidence. It cannot be deemed a
declaration against interest for the matter to be considered as an exception to the
hearsay rule because the declarant was not the seller (Emilio), but his father
(Ignacio).
erode his credibility and raise doubt on the veracity of his evidence.
First, the claim of Julio, Jr. that Emilio affixed his signature on the original of
Exhibit “4” in 1953 is highly improbable because record shows that Emilio died
even before that year, specifically, on November 13, 1952. Excerpts from Julio,
Jr.’s testimony relative to this matter are as follows:chanroblesvirtuallawlibrary
Atty. Vicente Millora
(On Cross-examination)
Q: You don’t remember how old you were when this according to you you
witnessed Emilio Dantis signed this?
A: Eleven years old, Sir.
Q: So that was 1953?
A: Yes, Sir.

Exhibit “4,” on the other hand, is considered secondary evidence being a mere Q: And you were then…?
photocopy which, in this case, cannot be admitted to prove the contents of the A: I was born October 1942, Sir.
purported undated handwritten receipt. The best evidence rule requires that the
highest available degree of proof must be produced. For documentary evidence, the Q: You were eleven (11) years old?
contents of a document are best proved by the production of the document itself to A: Yes, Sir.
the exclusion of secondary or substitutionary evidence, pursuant to Rule 130,
Section 322. Q: And you mean to say that you witnessed the signing allegedly of the original of
Exhibit “4” when you were eleven (11) years old?
A secondary evidence is admissible only upon compliance with Rule 130, Section A: Yes, Sir.
5, which states that: when the original has been lost or destroyed, or cannot be
produced in court, the offeror, upon proof of its execution or existence and the Q: And you remember what was signed in this receipt. From your memory can you
cause of its unavailability without bad faith on his part, may prove its contents by a tell the title of this Exhibit “4”?
copy, or by a recital of its contents in some authentic document, or by the testimony A: What I can say that it is a Sale, Sir.
of witnesses in the order stated. Accordingly, the offeror of the secondary evidence
is burdened to satisfactorily prove the predicates thereof, namely: (1) the execution Q: So, when you said that you witnessed an alleged sale you are referring to
or existence of the original; (2) the loss and destruction of the original or its non- Exhibit “4”?
production in court; and (3) the unavailability of the original is not due to bad faith A: Yes, Sir.25 (Emphasis supplied)
on the part of the proponent/offeror. Proof of the due execution of the document
and its subsequent loss would constitute the basis for the introduction of secondary Second, Julio, Jr.’s testimony pertinent to the alleged loss of the original of Exhibit
evidence.23 In MCC Industrial Sales Corporation v. Ssangyong Corporation,24 it “4” is laden with inconsistencies that detract from his credibility. His testimony
was held that where the missing document is the foundation of the action, more bears the earmarks of falsehood and, hence, not reliable. Julio, Jr. testified in this
strictness in proof is required than where the document is only collaterally wise:chanroblesvirtuallawlibrary
involved.
Atty. Roldan Villacorta
Guided by these norms, the Court holds that Julio, Jr. failed to prove the due (On Direct examination)
execution of the original of Exhibit “4” as well as its subsequent loss. A nexus of
logically related circumstance rendered Julio, Jr.’s evidence highly suspect. Also, Q: Mr. Witness, I noticed that this document marked as Exhibit “4” is only a
his testimony was riddled with improbabilities and contradictions which tend to photocopy, where is the original of this document?
A: The original was with the safekeeping of my parents because of the lapse of Atty. Vicente Millora
time the original was misplaced, Sir.26 (On Cross-examination)

The above testimony of Julio, Jr. tends to give the impression that the original of Q: And when did you last see the original?
the document was lost while it was in the possession of his parents. During cross- A: When my mother died in 1993 that was the last time I tried to see the original of
examination, however, he testified that it was lost while it was in his possession. the document after her interment, Sir.

Atty. Vicente Millora Q: Where did you see this document?

(On Cross-examination) A: From the safekeeping of my mother, Sir.29cralawvllred

Q: x x x Where did you keep that document? xxxx

A: I was the one keeping that document because I live in different places, [the
said] it was lost or misplaced, Sir.
Q: In other words, it was lost while the same was in your possession??
A: Yes, Sir.27 (Emphasis supplied)
Still, later, Julio, Jr. claimed that his sister was the one responsible for the loss of
the original of Exhibit “4” after borrowing the same from him.
Q: When did you get this Exhibit “4” now, the photocopy from your sister?
A: When the interment of my mother in September 1993, Sir.
Q: Now, let us reform. Which one did you get after the interment of your mother,
this Exhibit “4” or the original?
A: I asked that xerox copy because I have lost the original and I could not find the
same, Sir.

Atty. Vicente Millora Q: So, from the safe of your mother after her interment, what used you found and
(On Cross-examination) got this Exhibit “4”?
A: Yes, Sir, from my sister.
Q: So, who is your sister to whom you gave the original?
A: Benedicta Laya, Sir. Q: So, not from your mother safe?
A: The original was taken from the safe of my mother, Sir.
Q: In other words now, you did not lost the document or the original of Exhibit “4”
but you gave it to your sister, am I correct? Q: So after your mother’s death you never saw the original?
A: I just lent to her the original copy, Sir. A: I did not see it anymore because the original was lost before she died,
Sir.30(Underscoring supplied)
Q: So, you lent this original of Exhibit “4” to your sister and your sister never
returned the same to you? Third, it is quite strange that two receipts were prepared for the initial payment of
A: Yes, Sir, because it was lost, that was the only one left in her custody. P100.00 in connection with the sale of the subject lot. The Court notes that the
contents of Exhibit “4” were similar to those of Annex “A”31 of Julio, Jr.’s Answer,
Interpreter:cralaw dated June 9, 2002. Annex “A,” however, was typewritten and the name of the
recipient indicated therein was a certain Cornelio A. Dantis, whose identity and
Witness referring to the xerox copy. participation in the alleged sale was never explained.

Atty. Vicente Millora Fourth, apart from the lone testimony of Julio, Jr., no other witness who knew or
read Exhibit “4,” much less saw it executed, was presented. In the absence of any
Q: In other words, it was your sister who lost the original, is that correct? shred of corroborative evidence, the Court cannot help but entertain doubts on the
A: Yes, Sir, when I lent the original.28 (Emphasis supplied) truthfulness of Julio, Jr.’s naked assertion.

The Court also notes the confused narration of Julio, Jr. regarding the last time he Assuming, in gratia argumenti, that Exhibit “4” is admissible in evidence, there
saw the original of Exhibit “4.” will still be no valid and perfected oral contract for failure of Julio, Jr. to prove the
concurrence of the essential requisites of a contract of sale by adequate and
competent evidence.
By the contract of sale, one of the contracting parties obligates himself to transfer
the ownership of, and to deliver, a determinate thing, and the other to pay therefor a
price certain in money or its equivalent.32A contract of sale is a consensual contract
and, thus, is perfected by mere consent which is manifested by the meeting of the
offer and the acceptance upon the thing and the cause which are to constitute the
contract.33 Until the contract of sale is perfected, it cannot, as an independent source
of obligation, serve as a binding juridical relation between the parties.34 The
essential elements of a contract of sale are: a) consent or meeting of the minds, that
is, consent to transfer ownership in exchange for the price; b) determinate subject
matter; and c) price certain in money or its equivalent.35 The absence of any of the
essential elements shall negate the existence of a perfected contract of
sale.36cralawvllred
Seemingly, Julio, Jr. wanted to prove the sale by a receipt when it should be the
receipt that should further corroborate the existence of the sale. At best, his
testimony only alleges but does not prove the existence of the verbal agreement.
Julio, Jr. miserably failed to establish by preponderance of evidence that there was
a meeting of the minds of the parties as to the subject matter and the purchase price.
The chief evidence of Julio, Jr. to substantiate the existence of the oral contract of
sale is Exhibit “4.” For a better understanding and resolution of the issue at hand,
Exhibit “4” is being reproduced here:chanroblesvirtuallawlibrary
Alamin ng sino mang
Makababasa
Akong si Emilio Dantis may sapat na Gulang may asawa naninirahan sa Sta Rita
San Miguel Bul. ay kusang nagsasasay ng sumosunod.
Na ako Tumanggap Kay Julio Maghinang ng P100.00 peso cuartang Pilipino,
bilang paunang bayad sa Lupa niyang nilote sa akin 400 apat na raan mahigit na
metro cudrado.
Testigo Tumangap,
Emilio a Dantis
A perusal of the above document would readily show that it does not specify a
determinate subject matter. Nowhere does it provide a description of the property
subject of the sale, including its metes and bounds, as well as its total area. The
Court notes that while Julio, Jr. testified that the land subject of the sale consisted
of 352 square meters, Exhibit “4,” however, states that it’s more than 400 square
meters. Moreover, Exhibit “4” does not categorically declare the price certain in
money. Neither does it state the mode of payment of the purchase price and the
period for its payment.
In Swedish Match, AB v. Court of Appeals,37 the Court ruled that the manner of
payment of the purchase price was an essential element before a valid and binding
contract of sale could exist. Albeit the Civil Code does not explicitly provide that
the minds of the contracting parties must also meet on the terms or manner of
payment of the price, the same is needed, otherwise, there is no sale.38 An
agreement anent the manner of payment goes into the price so much so that a
disagreement on the manner of payment is tantamount to a failure to agree on the
price.39 Further, in Velasco v. Court of Appeals,40 where the parties already agreed
on the object of sale and on the purchase price, but not on how and when the
downpayment and the installment payments were to be paid, this Court
ruled:chanroblesvirtuallawlibrary
Such being the situation, it cannot, therefore, be said that a definite and firm sales
agreement between the parties had been perfected over the lot in question. Indeed,
this Court has already ruled before that a definite agreement on the manner of
payment of the purchase price is an essential element in the formation of a binding
and enforceable contract of sale. The fact, therefore, that the petitioners delivered to
the respondent the sum of P10,000.00 as part of the down-payment that they had to
pay cannot be considered as sufficient proof of the perfection of any purchase and
sale agreement between the parties herein under Art. 1482 of the new Civil Code,
as the petitioners themselves admit that some essential matter – the terms of
payment – still had to be mutually covenanted.41
The CA held that partial performance of the contract of sale – giving of a
downpayment coupled with the delivery of the res - took the oral contract out of the
scope of the Statute of Frauds. This conclusion arose from its erroneous finding
that there was a perfected contract of sale. The above disquisition, however, shows
that there was none. There is, therefore, no basis for the application of the Statute
of Frauds. The application of the Statute of Frauds presupposes the existence of a
perfected contract.42 As to the delivery of the res, it does not appear to be a
voluntary one pursuant to the purported sale. If Julio, Jr. happened to be there, it
was because his ancestors tenanted the land. It must be noted that when Julio, Jr.
built his house, Rogelio protested.
WHEREFORE, the petition is GRANTED. The assailed January 25, 2010
Decision and the March 23, 2010 Resolution of the Court Appeals, in CA-G.R. CV
No. 85258, are REVERSED and SET ASIDE. The March 2, 2005 Decision of the
Regional Trial Court of Malolos, Bulacan, Branch 18, in Civil Case No. 280-M-
2002, is REINSTATED.
SO ORDERED.
G.R. No. 108453 July 11, 1994
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
DONALD DISMUKE Y PAMARITO, accused-appellant.
The Solicitor General for plaintiff-appellee.
Public Attorney's Office for accused-appellant.
DAVIDE, JR., J.:
In an information1 filed with the Regional Trial Court of Valenzuela, Metro Manila,
and docketed therein as Criminal Case No. 994-V-92, accused Donald Dismuke y
Pamarito was charged with the violation of Section 4, Article II of R.A. No. 6425,
as amended, committed in this wise:
That on or about the 8th day of February 1992 in Valenzuela,
MM. and within the jurisdiction of this Honorable Court, the
above-named accused, without having been authorized by law,
did then and there wilfully, unlawfully and feloniously deliver,
sell and give away to one PO2 Nelson Labrador two tea bags of
marijuana flowering tops for one Twenty peso bill with SN
QB65721, knowing the same to be a prohibited drug under the
provision of the above-cited law.
CONTRARY TO LAW.
The accused pleaded not guilty at his arraignment on 24 February 1992.
After trial on the merits, the lower court promulgated on 28 August 1992 its
decision2 finding the accused guilty of the crime charged and sentencing him to
suffer the penalty of reclusion perpetua, to pay a fine of P20,000.00, and to pay the
costs.
In the main, the prosecution's case drew its support from the uncorroborated
testimony of PO3 Nelson Labrador of the Northern Police District Anti-Narcotics
Unit (NPD-ANU). He had joined the National Police Service on 5 November
1991.3 According to him, at about 3:00 p.m. of 8 February 1992 (barely three
months after he had joined the service), he was at the office of the NPD-ANU at
Sangandaan, Caloocan City, when an informer arrived and told him that a certain
"Donald" was selling marijuana.4 He then decided to conduct a buy-bust operation,
with himself acting as the buyer, and with PO3 Eliseo Gargaritano and PO3
Wilfredo Lumba as the other team members. Together with the informer, they
proceeded to Consuelo Street, Doña Ata Subdivision, Marulas, Valenzuela, Metro
Manila. They arrived at their destination at about 5:00 p.m. and while cruising
around, their informer pointed to a man near a sari-sari store as Donald, the accused
in this case. Labrador, who was in plainclothes, approached Donald and told the
latter of his "intention to buy P20.00 worth of marijuana." Since Donald "trusted"
him, he (Labrador) "gave him the buy/bust money" and Donald in turn gave the
former "two teabags of marijuana."5 Then, pursuant to the team's pre-arranged
signal, Labrador held Donald's right hand. Responding thereto, the other members
of the team came out from their strategic locations, identified themselves, and
assisted Labrador in arresting Donald. The team then brought Donald to the NPD-
ANU office in Sangandaan, Caloocan City, where he was turned over to the unit's
investigator, a certain Reynaldo Lichido, for proper disposition and investigation.
The latter prepared a referral-letter to the PC Laboratory for examination of the tea
bags.
Labrador, however, could only produce in court a photocopy of the alleged marked
money (Exhibit "E") because the bill itself was allegedly in the custody of PO3
Gargaritano. The bill had supposedly been marked by Gargaritano on the "Saligang
Batas" portion thereof.6 The latter, despite subpoenas sent to him, failed to appear,
thereby causing the postponement of the hearing and prompting the trial court to
issue orders requiring him to show cause why he should not be held in contempt of
court.7 Although he subsequently appeared, the prosecution did not present him as a
witness in the case.
Through Ms. Tita V. Advincula, a forensic chemist of the PNP Central Laboratory
Section, Central Police District, Manila, the prosecution also proved that the
contents of the two heat-sealed transparent plastic bags (Exhibits "B-1" and "B-2"),
which were transmitted to her office by PNP Inspector Asuncion S. Santos of the
District Dangerous Drug Enforcement Division of the Northern Police District
Command, were found positive "for marijuana, a prohibited drug."8
On the other hand, through the testimonies of the accused and Dennis Pinpin, the
defense presented a different version of the incident. According to the accused, in
the afternoon of 8 February 1992, he and his friends, namely, Dennis Pinpin, Ricky
Pinpin, and Erwin Soriano were at Consuelo Street, Marulas, Valenzuela, helping
their friend, Allan Olequino, transfer residence. 9 Suddenly, a tricycle stopped, and
PO3 Nelson Labrador and his two companions, Erning and Vicente, alighted from
the tricycle. Labrador asked who among them had quarreled with his brother.
Labrador's companions pointed to the accused and so Nelson told him to board the
tricycle and picked up a piece of wood of which he brandished at him. The three
forced him to board the tricycle. The accused protested that he had not done
anything, but he was told to do his explaining at the police headquarters. He was
not, however, brought to the headquarters but to a place near the barangay hall at F.
Bautista Street in Marulas where he was questioned about the identities of the
pushers in the area. When he failed to name or pinpoint any pusher, he was taken to
the Sangandaan police headquarters where PO3 Labrador took out two plastic
teabags of marijuana which Labrador threatened to use against him if he would still
refuse to name the pushers. Nonetheless, he insisted that he did not know any
pusher. He was detained at the said headquarters for about two days. Thereafter, he
was brought before a fiscal in Caloocan City after being warned not to say anything
against them.10
The accused further testified that during his school days at the Valenzuela
Municipal High School in 1990, he intervened in a fight between his neighbor and
Noel Labrador, a brother of PO3 Labrador. When he failed to pacify them, he
boxed Noel, hitting him on the chin. This incident came to the knowledge of the
school principal who then called them to a conference, which PO3 Labrador
attended. He had personally known PO3 Labrador for a long time because the
latter's residence is at F. Bautista Street, Marulas, Valenzuela, which is merely
within "walking distance" from where he, the accused, lived.11
Dennis Pinpin, a neighbor, friend, and former schoolmate of Donald, corroborated
the latter's testimony on the incident of 8 February 1992,12 He also testified that he
was the one who had a misunderstanding with Noel Labrador in 1990. He reported
the matter to Donald who tried to settle their differences but Donald ended up
fighting with Noel. He, Donald, and Noel were called to the principal's office and
were reprimanded by the principal. At the said conference, Noel's parents and PO3
Labrador were present. Thereafter, Noel threatened them by saying that the fight
was not yet over.13
The lower court found the testimony of PO3 Labrador to be credible and positive
and dismissed the accused's claim that he was framed and that the charge was ill-
motivated. It said:
The alleged quarrel happened in 1990 almost two years ago and
was allegedly patched up and settled by the school principal in
the presence of PO2 Nelson Labrador. If it is true that there was a
fight/quarrel, the Labradors will not wait that long a time to take
the alleged vindictive
move.14
In his Appellant's Brief, the accused asserts that the trial court erred:
I heal wounds of conflict, it does not necessarily extinguish the desire for vengeance,
. . . IN GIVING WEIGHT AND CREDENCE TO THE
IMPROBABLE AND INCREDIBLE TESTIMONY OF THE
PROSECUTION LONE EYEWITNESS.
II
. . . IN ADMITTING IN EVIDENCE THE TWO TEA BAGS OF
MARIJUANA WHICH WAS PLANTED BY POLICE OFFICER
NELSON LABRADOR IN BLATANT VIOLATION OF THE
ACCUSED ['S] CONSTITUTIONAL RIGHTS.
III
. . . IN NOT HOLDING THAT THE PROSECUTION
MISERABLY FAILED TO PROVE THE GUILT OF THE
ACCUSED BEYOND REASONABLE DOUBT.15
At the heart of these assigned errors is the issue of credibility of witnesses. It is
well-settled that this Court will not interfere with the judgment of the trial court in
passing on the credibility of the witnesses, unless there appears in the record some
fact or circumstance of weight and influence which has been overlooked or the
significance of which has been misapprehended or misinterpreted.16 The reason for
this is that the trial court is in a better position to decide the question, having heard
the witnesses themselves and observed their deportment and manner of testifying
during the trial.17
A careful review of the records of this case and a meticulous evaluation of the
evidence of the parties reveal vital facts and circumstances which the trial court
overlooked or misapprehended and which if taken into account would alter the
result of this case.
For one thing, the accused personally knew PO3 Labrador; they had met in 1990 in
the principal's office of the Valenzuela Municipal High School during a
confrontation between PO3 Labrador's brother, Nelson, on the one hand, and
Dennis Pinpin and the accused on the other, after the accused had intervened in the
fight between Nelson and Dennis and boxed Nelson on his chin. It is, therefore,
most unlikely that the accused would sell a prohibited drug to a brother of a former
foe who, after the confrontation, had warned that the fight was not yet over.18 This
incident could have provided PO3 Labrador with a motive against the accused. The
trial court is of the view that it could not have, because the incident happened two
years earlier, the dispute was settled by the principal, and if Labrador desired
revenge, he would not have waited for two years. We do not agree. While time may
which may just hibernate until the circumstances become favorable.
In the instant case, the favorable circumstances could have arisen when PO3
Labrador joined the PNP in November of 1991. Within three months thereafter, he
conducted the alleged buy-bust operation against the accused solely on the basis of
an alleged tip from an informer given two hours before he conducted the operation.
It may be noted that PO3 Labrador did not testify that he had obtained other
derogatory information against the accused or that he had known the accused to be
a drug dealer, pusher, or user. His conduct in this case tainted the presumption of
regularity in the performance of his duty.
For another, we have serious doubts on the existence of the alleged marked money.
There is no evidence as to who provided it and as to when and where it was
allegedly marked by PO3 Gargaritano. What Labrador produced was a mere
photocopy of the alleged marked money (Exhibit "E"). He claimed that the marked
money itself was in the possession of Gargaritano. If it was in Gargaritano's
possession, we cannot understand why he was not called anymore to the witness
stand to testify for the prosecution when he finally appeared in court in compliance
with its orders.
While the presentation in evidence of the marked money in drugs cases resulting
from buy-bust operations may not be indispensable,19 the peculiar circumstances of
this case, heightened by the attempt of the alleged poseur-buyer to present a
photocopy of what he claims to be the buy-bust money and the unexplained failure
of the prosecution to call to the witness stand the claimed custodian of the marked
money although the latter had already appeared in court, only taint further the
veracity of PO3 Labrador's story.
Exhibit "E" is not admissible in evidence under the best evidence rule.20 To be
admissible as secondary evidence, the prosecution should have shown that the
original marked money has been lost or destroyed or cannot be produced in court or
that it is in the custody of the adverse party.21 The prosecution did not.
Then too, the prosecution failed to prove that the specimens examined by the
forensic chemist were the ones purportedly sold by the accused to PO3 Labrador.
According to the latter, when they arrived at their headquarters after the buy-bust
operation, he turned over the accused to their investigator, a certain Reynaldo
Lichido, for proper disposition and investigation. Lichido also "immediately
prepared the referral to the PC Laboratory for examination in order to be sure if the
specimen is positive."22 What the forensic chemist examined were the contents of
"two transparent plastic bag [sic] containing flowering tops with rolling papers
suspected to be marijuana" transmitted by PNP Inspector Asuncion Santos, Officer-
in-Charge of the District Dangerous Drugs Enforcement Division of the Northern
Police District Command. 23 Both Lichido and Santos were not presented by the
prosecution to testify in this case. Thus, there is no evidence to prove that what
were allegedly sold by the accused to PO3 Labrador were actually the ones turned
over to Lichido, that what the latter received were turned over to Santos, and that
what Santos transmitted to the forensic chemist were those allegedly sold by the
accused. The failure to establish the evidence's chain of custody is damaging to the
prosecution's case.
On the whole then, the scanty evidence for the prosecution casts serious doubts as
to the guilt of the accused. It does not pass the test of moral certainty and is
insufficient to rebut the presumption of innocence which the Bill of Rights
guarantees the accused. It is apropos to repeat the doctrine that an accusation is not,
according to the fundamental law, synonymous with guilt; the prosecution must
overthrow the presumption of innocence with proof of guilt beyond reasonable
doubt.24
In the light of the above disquisition, it is apparent that the law enforcement agency
charged with the enforcement of the Dangerous Drugs Act is partly to be blamed
for the result of this case, assuming that it does have a case against the accused. In
People vs. Tantiado,25 we exhorted "the law enforcement agencies, especially those
assigned to enforce the Dangerous Drugs Act, to carefully prepare their plans for
buy-bust operations and to efficiently and effectively carry them out, ever mindful
of the possibility that their blunders may not only frustrate the efforts to eradicate
the drug menace but worse, embolden drug lords, pushers or users into defying the
authorities." Equally at fault is the prosecuting arm of the Government, whose
ineptitude in prosecuting the case warrants that its attention be likewise directed, as
in the Tantiado case and the recent case of People vs. Camba,26 to what was said
in People vs. Esquivel:27
In this connection it may not be out of place to bring to the
attention of prosecuting attorneys the absolute necessity of laying
before the court the pertinent facts at their disposal with
methodical and meticulous attention, clarifying contradictions
and filling up gaps and loopholes in their evidence, to the end
that the court's mind may not be tortured by doubts, that the
innocent may not suffer and the guilty not escape unpunished.
Obvious to all, this is the prosecution's prime duty to the court, to
the accused, and to the state.
Again, just like in People vs. Camba,28 we cannot help but notice that the trial court
imposed the penalty of reclusion perpetua which was not the penalty provided for
by law at the time the offense charged was allegedly committed. Although the
penalty imposable is now immaterial, we call the trial court's attention to the fact
that the penalty then imposable was life imprisonment, if only to underscore the
need to impose only the penalty which the law prescribes.
WHEREFORE, the appealed decision of Branch 171 of the Regional Trial Court of
Valenzuela, Metro Manila, in Criminal Case No. 994-V-92 is REVERSED and, on
the ground of reasonable doubt, accused-appellant DONALD DISMUKE y
PAMARITO is hereby ACQUITTED. His immediate release from detention is
hereby ordered, unless further detention for any lawful cause is warranted.
Costs de oficio.
SO ORDERED.
G.R. No. L-43955-56 July 30, 1979
RENATO LAZATIN alias RENATO STA. CLARA, petitioner,
vs.
HONORABLE JUDGE JOSE C. CAMPOS, JR., NORA L. DE LEON,
BERNARDO DE LEON, ARLENE DE LEON and IRMA L.
VELOSO, respondents.
Ernesto T. Zshornack, Jr. for petitioner.
Jose W. Diokno Law Office private respondents the Leons.
Arturo E. Balbastro for privates respondent Veloso.
TEEHANKEE, J.:1äwphï1.ñët
The Court dismisses the petition which seeks to overrule respondent judge's orders
declaring that petitioner has failed to establish by competent evidence his alleged
status as an adopted child of the deceased Lazatin spouses and prays for judgment
of this Court "declaring as established the fact of (his) adoption as a son of the
deceased spouses entitling him to succeed in their estates as such." Respondent
judge correctly ruled that he could not allow petitioner (who had filed a motion to
intervene in the proceedings to probate the will of the late Margarita de Asis Vda.
de Lazatin and to settle her estate as her adopted son, after having earlier filed a
motion to intervene in the intestate proceedings of her pre-deceased husband as his
admitted illegitimate [not natural] son), over the opposition of private respondents,
to introduce evidence that he had "enjoyed ... the status of an adopted child of the
without his first producing competent and documentary that there had been judicial
proceedings for his by the said spouses which resulted in the final judgment of a
competent court decreeing his adoption.
On January 13, 1974, Dr. Mariano M. Lazatin diamond intestate in Pasay City,
survived by his wife, Margarita de Asis, and his adopted twin daughters, respondent
Nora L. de Leon, married to respondent Bernardo de Leon, and respondent Irma
Lazatin, married to Francisco Veloso.
One month after Mariano's death, his widow, Margarita de Asis, commenced an
intestate proceeding before the Court of First Instance of Pasay, docketed as Sp.
Proc. No. 2326-P. Mariano, Oscar, Virgilio and Yvonne, claiming to be admitted
illegitimate (not natural) children of Dr. Lazatin with one Helen Munoz, intervened.
Subsequently, one Lily Lazatin also intervened, claiming to be another admitted
illegitimate (not natural) child.
Two months after or on April 11, 1974, the widow, Margarita de Asis, also died,
leaving a & holographic will executed on May 29, 1970, providing, among others,
for a legacy of cash, jewelry, and stocks to respondent Arlene de Leon, a
granddaughter; a legacy of support to Rodolfo Gallardo, a son of her late sister; and
a legacy of education to Ramon Sta. Clara, son of petitioner Renato Lazatin alias
Renato Sta. Clara.
During her lifetime, Margarita de Asis kept a safety deposit box at the People's
Bank and Trust Company, Roxas Boulevard branch, which either she or respondent
Nora L. de Leon could open. Five days after Margarita's death, respondent Nora L.
de Leon, accompanied by her husband, respondent Bernardo de Leon, opened the
safety deposit box and removed its contents: (a) shares of stock; (b) her adoption
papers and those of her sister, respondent Irma L. Veloso; and (c) jewelry belonging
to her and to her mother. Respondent Nora L. de Leon claims that she opened the
safety deposit box in good faith, believing that it was held jointly by her and her
deceased mother. Her sole reason for opening the box was to get her stock
certificates and other small items deposited therein. When she was to close the
deposit box, the bank personnel informed her that she needed an authority from the
court to do so, in view of her mother's death and so, she removed everything from
the box.
On June 3, 1974, private respondents filed a petition to probate the will of the late
Margarita de Asis, before docketed as Sp. Proc. No. 2341-P of respondent Court,
Days after having learned that respondent Nora L. de Leon had opened this safety
deposit box, petitioner's son, Ramon Sta. Clara, filed a motion in the probate court,
claiming that the deceased had executed a will subsequent to that submitted for
probate and demanding its production. He likewise prayed for the opening of the
safety deposit box. Respondent Nora L. de Leon admitted that she opened the box
but there was no will or any document resembling a will therein.
Upon the order of the probate court, presided over by Judge Arsenio B. Alcantara,
the safety deposit box was opened on November 6, 1974, at which time it was
found to be empty, because prior thereto respondent Nora L. de Leon had already
removed its contents.
On November 22, 1974, or seven months after, the death of Margarita de Asis,
petitioner intervened for the first time in the proceedings to settle the estate of the
late Dr. Mariano M. Lazatin (Sp. Proc. No. 2326- P), as an admitted illegitimate
(not natural) child.
Under the same date of November 22, 1974, petitioner's son, Ramon, filed a
petition in the estate proceedings of Margarita de Asis to examine private
respondents on the contents of the safety deposit box, Whereupon, on January 31,
1975, the probate court ordered respondent Nora L. de Leon to deliver the
properties taken from the safety deposit box to the Clerk of Court. Subsequently,
however, the two cases (Sp. Proc. No. 2326-P, Mariano Lazatin, and 2341-P,
Margarita de Asis) were transferred to the sala of respondent Judge Jose C.
Campos, Jr.
On May 29, 1975, Judge Campos issued an order requiring counsel for respondents
Nora L. de Leon and Bernardo de Leon to produce all those papers and items
removed from the safety deposit box and to deliver the same to the custody of the
court within one week. Within the period ordered, respondent Nora L. de Leon
deposited with the Clerk of Court, not the items themselves, but two keys to a new
safety deposit box which could only be opened upon order of the court.
On August 20, 1975, petitioner Renato to Lazatin alias Renato Sta. Clara filed a
motion to intervene in the estate of Margarita de Asis, Sp. Proc. No. 2341-P, as an
adopted child, on the basis of an affidavit executed by Benjamin Lazatin, brother of
the deceased Dr. Mariano M. Lazatin, the petitioner was an "illegitimate son" of Dr.
Lazatin and was later adopted by him. This affidavit was later modified on August
19, 1975 to state that petitioner was adopted by both Mariano M. Lazatin and his
wife Margarita de Asis.
On September 29, 1975, Judge Campos found respondent' Nora L. de Leon guilty
of contempt of court for not complying with the orders of January 31, 1975 and
May 29, 1975, requiring her to produce and deliver to the court an the papers and
items removed from the safety deposit box. Her former counsel was also found
guilty of contempt, sentenced to pay a fine of P00.00 and suspended from
appearing in the two cases (Sp. Proc. No. 2326-P, Mariano M. Lazatin, and Sp.
Proc. No. 2341-P, Margarita de Asis), on her testimony that she, Nora L. de Leon,
acted upon his advice.
Respondent court heard petitioner's motion to intervene as an adopted son in the
estate of Margarita de Asis, Sp. Proc. No. 2341-P, at which hearings petitioner
presented no decree of adoption in his, favor. Instead, petitioner attempted to prove,
over private respondents' objections, that he had recognized the deceased spouses
as his parents; he had been supported by them until their death; formerly he was
known as "Renato Lazatin" but was compelled to change his surname to "Sta.
Clara" when the deceased spouses refused to give consent to his marriage to his
present wife; that at first, he and his wife stayed at the residence of Engracio de
Asis, father of Margarita, but a few months later, they transferred to the Mercy
Hospital at Taft Avenue, Manila, owned by the deceased spouses, where they
continuously resided up to the present. Photographs were also intended to be
presented by petitioner, e.g., photograph of Irma Veloso where she addressed
herself as sister of petitioner; photograph of deceased Margarita de Asis and
petitioner when he was a boy; document showing that petitioners real name is
"Renato Lazatin." 1
Respondent court first reserved its ruling on private respondents' objections to the
admission of petitioner's evidence, but on November 14, 1975, when petitioner
could not present evidence on the issue of his alleged legal adoption, respondent
court discontinued the hearing and gave the parties time to file memoranda on the
question of the admissibility of the evidence sought to be introduced by petitioner.
On March 4, 1976, respondent court barred the introduction of petitioner's evidence
because: têñ.£îhqwâ£
All the evidence submitted by Renato and Ramon Sta. Clara
through their counsel do not prove or have no tendency to prove
the existence of any judicial proceeding where the adoption of
the parties above named were taken up by any court. Neither do
the evidence tend to establish the presence of any record of a
proceeding in court where the adoption of the above named
persons was held. The evidence, however, tends to prove a status
of a recognized natural child which, however, is not the legal
basis for which Renato and Ramon seek to intervene in this
proceedings. In view thereof, and taking into consideration the
evidence heretofore presented by the petitioners, any further
introduction of similar evidence, documentary or oral, would not
prove or tend to prove the fact of their adoption but rather of a
recognized natural child.
Petitioner then filed on March 16, 1976, in both cases, a motion to declare as
established the fact of adoption in view of respondent Nora L. de Leon's refusal to
comply with the orders of respondent court to deposit the items she had removed
from the safety deposit box of Margarita de Asis. As authority therefor, petitioner
invokes the sanction of Rule 29, Section 3 of the Rules of Court, since according to
him, the order of the court for the production of the items in the safety deposit box
can be considered as an order for production and inspection of documents under
Rule 27.
Private respondents opposed the motion, and on March 26, 1976, respondent court
denied petitioner's motion. On April 26, 1976, respondent Nora L. de Leon
deposited with respondent court the items she had removed from the safety deposit
box. An inventory was conducted by respondent court, with notice to the parties,
and the items surrendered consisted only of pieces of jewelry and stock certificates.
On June 3,1976, respondent court, ruling on petitioners motion for definite
resolution on his previous n declare as established the fact of adoption, issued the f
order: têñ.£îhqwâ£
As far as the case of Renato Sta. Clara is his Petition to establish
his status as an adopted child, The Court has ruled that he has
failed to establish such status. The any motion for reconsideration
unless based on some documentary proof.
Hence, the petition at bar.
We find the ruling of the respondent court to be in conformity with law and
jurisprudence.
1. Adoption is a juridical act, a proceeding in rem 2 which creates between two
persons a relationship similar to that which results from legitimate paternity and
filiation. 3 Only an adoption made through the court, or in pursuance with the
procedure laid down under Rule 99 of the Rules of Court is valid in this
jurisdiction. 4 It is not of natural law at all, but is wholly and entirely artificial. 5 To
establish the relation, the statutory requirements must be strictly carried out,
otherwise, the adoption is an absolute nullity. 6 The fact of adoption is never
presumed, but must be affirmatively proved by the person claiming its existence.
The destruction by fire of a public building in which the adoption papers would
have been filed if existent does not give rise to a presumption of adoption nor is the
destruction of the records of an adoption proceeding to be presumed. On the
contrary, the absence of a record of adoption has been said to evolve a presumption
of its non-existence. 7 Where, under the provisions of the statute, an adoption is
effected by a court order, the records of such court constitute the evidence by which
such adoption may be established. 8
2. Petitioner's flow of evidence in the case below does not lead us to any proof of
judicial adoption. We can not pluck from his chain of evidence any link to the real
existence of a court decree of adoption in his favor. Petitioner's proofs do not show
or tend to show that at one time or another a specific court of competent
jurisdiction rendered in an adoption proceeding initiated by the late spouses an
order approving his adoption as a child of the latter. No judicial records of such
adoption or copies thereof are presented or attempted to be presented. Petitioner
merely proceeds from a nebulous assumption that he was judicially adopted
between the years 1928 and 1932. By what particular court was the adoption
decreed or by whom was the petition heard, petitioner does not even manifest,
much less show. There are no witnesses cited to that adoption proceeding or to the
adoption decree. Apparently on the assumption that the adoption was commenced
in Manila, petitioner's counsel secured a certification from the Court of first
Instance of Manila which, however, negatively reported "(T)hat among the
salvaged records now available in this Office, there has not been found, after a
diligent search, any record regarding the adoption of Mr. Renato Lazatin alias
Renato Sta. Clara allegedly filed sometime in the years 1928 to 1931 by the
spouses Dr. Mariano M. Lazatin and Margarita de Asis Lazatin." The certification
of the Local Civil Registrar of Manila "(T)hat our pre-war records relative to
decisions of the Court of First Instance were either destroyed or burned during the
Liberation of the City of Manila," does not furnish any legal basis for a
presumption of adoption in favor of petitioner. This is because there was no proof
that petitioner was really adopted in Manila or that an adoption petition was filed in
the Court of first Instance of Manila by the deceased spouses, where, after hearing,
a judgment of approval was rendered by said court. Moreover, if there was really
such adoption, petitioner could have conveniently secured a copy of the newpaper
publication of the adoption as required under Section 4, Rule 99 of the Rules of
Court (formerly Section 4, Rule 100) or a certification of the publishing house to
that effect. Petitioner's failure on this point is anotherer strong indication of the
non-existence of the one who gave the written consent of the non-existence of the
adoption paper. We also observed to the adoption (Section 3, Rule 99, Rules of
Court), whether the parents or orphanage, does not appear on this point is not so
difficult and such proof must be presented if only to prove the real existence of the
adoption. And of course, if the war, the clear right and duty of petitioner was to
duly reconstitute the records as provided by law.
3. The absence of proof of such order of adoption by the court, as provided by the
statute, cannot be substituted by parol evidence that a child has lived with a person,
not his parent, and has been treated as a child to establish such adoption. 9 Even
evidence of declaration of the deceased, made in his lifetime, that he intended to
adopt a child as his heir, and that he had adopted him, and of the fact that the child
resided with the deceased, as a member of his family, from infancy until he attained
his majority, is not sufficient to establish the fact of adoption.10 Nor does the fact
that the deceased spouses fed, clothed, educated, recognized and referred to one
like petitioner as an adopted child, recognized and referred to one like petitioner as
an adopted child, necessarily establish adoption of the child. 11 Withal, the attempts
of petitioner to prove his adoption by acts and declarations of the deceased do not
discharge the mandatory presentation of the judicial decree of adoption. The thrust
of petitioner's evidence is rather to establish his status as an admitted illegitimate
child, not an adopted child which status of an admitted illegitimate child was — the
very basis of his petitioner for intervention in the estate proceedings of the late Dr.
Lazatin, as above stated. (Supra, at page 3 hereof)
We do not discount though that declarations in regard to pedigree, although
hearsay, are admitted on the principle that they are natural expressions of persons
who must know the truth. 12 Pedigree testimony is admitted because it is the best
that the nature of the case admits and because greater evil might arise from the
rejection of such proof than from its admission. 13 But, in proving an adoption,
there is a better proof available and it should be produced. The whereabouts of the
child's family and circulation of the jurisdiction in which they resided and
investigation in those courts where adoption are usually granted would surely
produce an adoption order, if indeed there was an order. 14 Besides, since the point
in favor of receiving hearsay evidence upon matters of family history or pedigree is
its reliability, it has been set forth as a condition upon which such evidence is
received that it emanate from a source within the family. Pursuant to this view,
before a declaration of a deceased person can be admitted to prove pedigree, or
ancestry, the relationship of the declarant, by either of blood or affinity to the
family in question, or a branch thereof, must ordinarily be established by competent
evidence. 15 Section 33 of Rule 130 states: "The act or declaration of a person
deceased, or outside of the Philippines, or unable to testify, in respect to the
pedigree of another person related to him by birth or marriage, may be received in
evidence where it occurred before the controversy, and the relationship between the
two persons is shown by evidence other than such actor declaration ..."
4. Secondary evidence is nonetheless admissible where the records of adoption
proceedings were actually lost or destroyed. But, prior to the introduction of such
secondary evidence, the proponent must establish the former existence of the
instrument. The correct order of proof is as follows: Existence; execution; loss;
contents; although this order may be changed if necessary in the discretion of the
court. 16 The sufficiency of the proof offered as a predicate for the admission of an
alleged lost deed lies within the judicial discretion of the trial court under all the
circumstances of the particular case.17 As earlier pointed out, petitioner failed to
establish the former existence of the adoption paper and its subsequent loss or
destruction. Secondary proof may only be introduced if it has first beer. established
that such adoption paper really existed and was lost. This is
indispensable. 18 Petitioner's supposed adoption was only testified to by him and is
allegedly to be testified to a brother of the deceased Mariano M. Lazatin or others
who have witnessed that the deceased spouses treated petitioner as their child. If
adoption was really made, the records thereof should have existed and the same
presented at the hearing or subsequent thereto or a reasonable explanation of loss or
destruction thereof, if that be the case, adduced. 19
Assuming the mere fact that the deceased spouses treated petitioner as their child
does not justify the conclusion that petitioner had been in fact judicially adopted by
the spouses nor does it constitute admissible proof of adoption.
We cannot entertain the plea of petitioner that the sanction of Rule 29 should be
applied to consider as established the fact of his adoption due to the refusal of
respondent Nora L. de Leon to produce the document of adoption, because first, the
fact or real existence of petitioner's adoption had not been
established; second, there is no proof that such document of adoption is in the
possession of respondent Nora L. de Leon; third, the motu proprio order of the
court for Nora de Leon to produce the items retrieved from the safety deposit box
cannot be treated as a mode of discovery of production and inspection of
documents under Rule 27; and fourth, the items deposited in the safety deposit box
have already been surrendered by respondent Nora L. de Leon on April 26; 1976
and no document of adoption in favor of petitioner was listed as found in the safety
deposit box.
5. As a necessary consequence, petitioner Renato Lazatin alias Renato Sta. Clara
cannot properly intervene in the settlement of the estate of Margarita de Asis, Sp.
Proc. No. 2341-P as an adopted child because of lack of proof thereof. For one to
intervene in an estate proceeding, it is a requisite that he has an interest in the
estate, either as one who would be benefited as an heir or one who has a claim
against the estate like a creditor. 20 A child by adoption cannot inherit from the
parent creditor. by adoption unless the act of adoption has been done in strict
accord with the statue. Until this is done, no rights are acquired by the child and
neither the supposed adopting parent or adopted child could be bound
thereby. 21 The burden of proof in establishing adoption is upon the person claiming
such relationship. He must prove compliance with the statutes relating to adoption
in the jurisdiction where the adoption occurred. 22 A fortiori if no hereditary interest
in the estate can be gained by a claimant who failed to submit proof thereof,
whether the will is probated or not, intervention should be denied as it would
merely result in unnecessary complication. 23 To succeed, a child must be
ligitimate, legitimated, adopted, acknowledged illegitimate natural child or natural
child by legal fiction or recognized spurious child. 24
In the face of the verified pleadings of record (constituting judicial admissions)
which show that petitioner sought to intervene on November 22, 1974 in the estate
proceedings of his alleged adoptive father Dr. Mariano M. Lazatin (Sp. Proc. No.
2326-P) as an admitted illegitimate (not natural) child, 25 while his intervention on
August 20, 1975 in the estate of Margarita de Asis, widow of the deceased Dr.
Lazatin (Sp. Proc. No. 2341-P) was as her adopted child on the basis of the
affidavit of a brother of the deceased Dr. Lazatin, Benjamin Lazatin, executed
August 19, 1975 (which affidavit modified a first affidavit executed on May 31,
1975, which failed to estate by "oversight" petitioner, but stated that affiant knew
petitioner to be "an illegitimate son" of Dr. Lazatin who later "legally adopted
(him) as a son before the Court of First Instance of Manila sometime between the
years 1928 and 1921") and prescinding from the question of whether a natural or
spurious child may be legally adopted by the putative father, we hold that no grave
abuse of discretion nor error of law as committed by respondent judge in issuing
the questioned orders of March 4, 1976, March 26, 1976 and June 3, 1976 denying
petitioner's petition "to declare as established in this proceeding the fact of
adoption" and denying "any motion for reconsideration unless based on some
documentary proof." The Court finds no basis to grant the affirmative relief sought
in this proceeding by petitioner for a rendition of judgment "declaring as
established the fact of your petitioner's adoption as a son of the deceased spouses
entitling him to succeed in their estates as such in accordance with the applicable
law on succession as to his inheritance."
Upon the filing of the petition, the Court issued on June 16, 1976 a temporary
restraining order; which as amended on July 21, 1976, restrained respondent judge
"from proceeding with the hearing scheduled on June 17, 1976 at 8:30 a.m.,
requiring the submission of evidence to establish heirship in Special Proceedings
No. 2326-P entitled 'Intestate Estate of the Late Mariano M. Lazatin' and Special
Proceedings No. 2341-P, entitled 'Testate Estate of the late Margarita de Asis Vda.
de Lazatin,' and from proceeding with the probate of the alleged holographic will of
the deceased Doñ;a Margarita de Asis Vda. de Lazatin scheduled on June 29, 1976,
August 10 and 12, 1976 and on any other dates." With the Court's determination of
the issues as herein set forth, there is no longer any need for restraining the
proceedings below and the said restraining order shall be immediately lifted.
On January 24, 1977, the Court upon petitioner's motion resolved to conditionally
allow respondent judge "to take the deposition of petitioner's witnesses to
perpetuate their testimonies pursuant to Rule 134, Section 7 of the Rules of Court,
subject to the Court's ruling in due course on the admissibility of such testimonies."
The Court thereby permitted in effect the advance testimonies of petitioner's
witnesses, principally among them Rafael Lazatin and Esteban L. Lazatin, both
brothers of the deceased Dr. Mariano L. Lazatin and as stated in petitioner's motion
of January 11, 1977: têñ.£îhqwâ£
Substantially, the testimony of the above-named witnesses will be
on the fact that they had been informed by the deceased spouses,
Mariano and Margarita Lazatin that your petitioner was their
[Mariano's and Margarita's] judicially adopted son and to elicit
further from them the fact that your petitioner enjoys the
reputation of being their judicially adopted son in the Lazatin
family.
The Court's resolution allowing the advance testimonies of petitioner's witnesses
was but in application of the Court's long standing admonition to trial courts is
reaffirmed in Lamagan vs. De la Cruz, 26, "to be liberal in accepting proferred
evidence since even if they were to refuse to accept the evidence, the affected party
will nevertheless be allowed to spread the excluded evidence on the record, for
review on appeal." The Court therein once again stressed the established rule that
"it is beyond question that rulings of the trial court on procedural questions and on
admissibility of evidence during the course of the trial are interlocutory in nature
and may not be the subject of separate appeal or review on certiorari, but are to be
assigned as errors and reviewed in the appeal properly taken from the decision
rendered by the trial court on the merits of the case," 27 and that a party's recourse
when proferred evidence is rejected by the trial court is to make a offer stating on
the record what a party or witness would have testified to were his testimony not
excluded, as well as to attach to the record any rejected exhibits.
At the continuation of the proceedings below for declaration of heirship and for
probate of the alleged holographic the deceased Margarita de Asis Vda. de Lazatin,
pet who has failed to establish his status as an alleged ;m child of Margarita de Asis
(unless, as reserved to him by the court below, he can show some documentary
proof),and whose intervention in the estate of the deceased Dr. Mariano Lazatin is
as an admitted illegitimate child, win have to decide whether he will pursue his first
theory of having the of such admitted illegitimate child of said deceased. Whatever
be his theory and his course of action and whether or not he may be duly snowed to
intervene in the proceedings below as such alleged admitted illegitimate child, his
recourse in the event of an adverse ruling against him is to make a formal offer of
proof and of his excluded evidence, oral and documentary, and seek a reversal on
an appeal in due course.
ACCORDINGLY, the petition is dismissed and the questioned orders denying
petitioner's petition below "to declare as established in this proceeding the fact of
[his] adoption" are hereby affirmed. The temporary restraining order issued on June
16, 1976 and amended on July 21, 1976 is ordered lifted, effective immediately.
Without costs.
SO ORDERED.
THIRD DIVISION
[G.R. No. 102858. July 28, 1997]
THE DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS and
TEODORO ABISTADO, substituted by MARGARITA, MARISSA,
MARIBEL, ARNOLD and MARY ANN, all surnamed
ABISTADO, respondents.
DECISION
PANGANIBAN, J.:
Is newspaper publication of the notice of initial hearing in an original land
registration case mandatory or directory?
Statement of the Case
The Court of Appeals ruled that it was merely procedural and that the failure
to cause such publication did not deprive the trial court of its authority to grant the
application. But the Solicitor General disagreed and thus filed this petition to set
aside the Decision[1] promulgated on July 3, 1991 and the subsequent
Resolution[2] promulgated on November 19, 1991 by Respondent Court of
Appeals[3] in CA-G.R. CV No. 23719. The dispositive portion of the challenged
Decision reads:[4]
"WHEREFORE, premises considered, the judgment of dismissal appealed from is
hereby set aside, and a new one entered confirming the registration and title of
applicant, Teodoro Abistado, Filipino, a resident of Barangay 7, Poblacion
Mamburao, Occidental Mindoro, now deceased and substituted by Margarita,
Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado, represented by
their aunt, Miss Josefa Abistado, Filipinos, residents of Poblacion Mamburao,
Occidental Mindoro, to the parcel of land covered under MSI (IV-A-8) 315-D
located in Poblacion Mamburao, Occidental Mindoro.
The oppositions filed by the Republic of the Philippines and private oppositor are
hereby dismissed for want of evidence.
Upon the finality of this decision and payment of the corresponding taxes due on
this land, let an order for the issuance of a decree be issued."
The Facts
On December 8, 1986, Private Respondent Teodoro Abistado filed a petition
for original registration of his title over 648 square meters of land under
Presidential Decree (PD) No. 1529.[5] The application was docketed as Land
Registration Case (LRC) No. 86 and assigned to Branch 44 of the Regional Trial
Court of Mamburao, Occidental Mindoro.[6] However, during the pendency of his
petition, applicant died. Hence, his heirs -- Margarita, Marissa, Maribel, Arnold and
Mary Ann, all surnamed Abistado -- represented by their aunt Josefa Abistado, who
was appointed their guardian ad litem, were substituted as applicants.
The land registration court in its decision dated June 13, 1989 dismissed the
petition for want of jurisdiction. However, it found that the applicants through their
predecessors-in-interest had been in open, continuous, exclusive and peaceful
possession of the subject land since 1938.
In dismissing the petition, the trial court reasoned: [7]
"x x x. However, the Court noted that applicants failed to comply with the
provisions of Section 23 (1) of PD 1529, requiring the Applicants to publish the
notice of Initial Hearing (Exh. `E') in a newspaper of general circulation in the
Philippines. Exhibit `E' was only published in the Official Gazette (Exhibits `F' and
`G'). Consequently, the Court is of the well considered view that it has not legally
acquired jurisdiction over the instant application for want of compliance with the
mandatory provision requiring publication of the notice of initial hearing in a
newspaper of general circulation."
The trial court also cited Ministry of Justice Opinion No. 48, Series of 1982,
which in its pertinent portion provides:[8]
It bears emphasis that the publication requirement under Section 23 [of PD 1529]
has a two-fold purpose; the first, which is mentioned in the provision of the
aforequoted provision refers to publication in the Official Gazette, and is
jurisdictional; while the second, which is mentioned in the opening clause of the
same paragraph, refers to publication not only in the Official Gazette but also in a
newspaper of general circulation, and is procedural. Neither one nor the other is
dispensable. As to the first, publication in the Official Gazette is indispensably
necessary because without it, the court would be powerless to assume jurisdiction
over a particular land registration case. As to the second, publication of the notice
of initial hearing also in a newspaper of general circulation is indispensably
necessary as a requirement of procedural due process; otherwise, any decision that
the court may promulgate in the case would be legally infirm.
Unsatisfied, private respondents appealed to Respondent Court of Appeals
which, as earlier explained, set aside the decision of the trial court and ordered the
registration of the title in the name of Teodoro Abistado.
 The subsequent motion for reconsideration was denied in the challenged CA
Resolution dated November 19, 1991.
The Director of Lands represented by the Solicitor General thus elevated this
recourse to us. This Court notes that the petitioners counsel anchored his petition
on Rule 65. This is an error. His remedy should be based on Rule 45 because he is
appealing a final disposition of the Court of Appeals. Hence, we shall treat his
petition as one for review under Rule 45, and not for certiorari under Rule 65.[9]
The Issue
Petitioner alleges that Respondent Court of Appeals committed grave abuse of
discretion[10] in holding
x x x that publication of the petition for registration of title in LRC Case No. 86
need not be published in a newspaper of general circulation, and in not dismissing
LRC Case No. 86 for want of such publication.
Petitioner points out that under Section 23 of PD 1529, the notice of initial
hearing shall be published both in the Official Gazette and in a newspaper of
general circulation. According to petitioner, publication in the Official Gazette is
necessary to confer jurisdiction upon the trial court, and xxx in xxx a newspaper of
general circulation to comply with the notice requirement of due process.[11]
Private respondents, on the other hand, contend that failure to comply with the
requirement of publication in a newspaper of general circulation is a mere
procedural defect. They add that publication in the Official Gazette is sufficient to
confer jurisdiction.[12]
In reversing the decision of the trial court, Respondent Court of Appeals
ruled:[13]
x x x although the requirement of publication in the Official Gazette and in a
newspaper of general circulation is couched in mandatory terms, it cannot be
gainsaid that the law also mandates with equal force that publication in the Official
Gazette shall be sufficient to confer jurisdiction upon the court.
Further, Respondent Court found that the oppositors were afforded the
opportunity to explain matters fully and present their side. Thus, it justified its
disposition in this wise:[14]
x x x We do not see how the lack of compliance with the required procedure
prejudiced them in any way. Moreover, the other requirements of: publication in the
Official Gazette, personal notice by mailing, and posting at the site and other
conspicuous places, were complied with and these are sufficient to notify any party
who is minded to make any objection of the application for registration.
The Courts Ruling
We find for petitioner.
Newspaper Publication Mandatory
The pertinent part of Section 23 of Presidential Decree No. 1529 requiring
publication of the notice of initial hearing reads as follows:
Sec. 23. Notice of initial hearing, publication, etc. -- The court shall, within five
days from filing of the application, issue an order setting the date and hour of the
initial hearing which shall not be earlier than forty-five days nor later than ninety
days from the date of the order.
The public shall be given notice of initial hearing of the application for land
registration by means of (1) publication; (2) mailing; and (3) posting.
1. By publication. --
Upon receipt of the order of the court setting the time for initial hearing, the
Commissioner of Land Registration shall cause a notice of initial hearing to be
published once in the Official Gazette and once in a newspaper of general
circulation in the Philippines: Provided, however, that the publication in the
Official Gazette shall be sufficient to confer jurisdiction upon the court. Said notice
shall be addressed to all persons appearing to have an interest in the land involved
including the adjoining owners so far as known, and `to all whom it may
concern.' Said notice shall also require all persons concerned to appear in court at a
certain date and time to show cause why the prayer of said application shall not be
granted.
xxx xxx xxx
Admittedly, the above provision provides in clear and categorical terms that
publication in the Official Gazette suffices to confer jurisdiction upon the land
registration court. However, the question boils down to whether, absent any
publication in a newspaper of general circulation, the land registration court can
validly confirm and register the title of private respondents.
We answer this query in the negative. This answer is impelled by the demands
of statutory construction and the due process rationale behind the publication
requirement.
The law used the term shall in prescribing the work to be done by the
Commissioner of Land Registration upon the latters receipt of the court order
setting the time for initial hearing.The said word denotes an imperative and thus
indicates the mandatory character of a statute.[15] While concededly such literal
mandate is not an absolute rule in statutory construction, as its import ultimately
depends upon its context in the entire provision, we hold that in the present case the
term must be understood in its normal mandatory meaning. In Republic vs.
Marasigan,[16] the Court through Mr. Justice Hilario G. Davide, Jr. held that Section
23 of PD 1529 requires notice of the initial hearing by means of (1) publication, (2)
mailing and (3) posting, all of which must be complied with. If the intention of the
law were otherwise, said section would not have stressed in detail the requirements
of mailing of notices to all persons named in the petition who, per Section 15 of the
Decree, include owners of adjoining properties, and occupants of the land. Indeed,
if mailing of notices is essential, then by parity of reasoning, publication in a
newspaper of general circulation is likewise imperative since the law included such
requirement in its detailed provision.
It should be noted further that land registration is a proceeding in rem.
[17]
Being in rem, such proceeding requires constructive seizure of the land as
against all persons, including the state, who have rights to or interests in the
property. An in rem proceeding is validated essentially through publication. This
being so, the process must strictly be complied with. Otherwise, persons who may
be interested or whose rights may be adversely affected would be barred from
contesting an application which they had no knowledge of. As has been ruled, a
party as an owner seeking the inscription of realty in the land registration court
must prove by satisfactory and conclusive evidence not only his ownership thereof
but the identity of the same, for he is in the same situation as one who institutes an
action for recovery of realty. [18] He must prove his title against the whole
world. This task, which rests upon the applicant, can best be achieved when all
persons concerned -- nay, the whole world -- who have rights to or interests in the
subject property are notified and effectively invited to come to court and show
cause why the application should not be granted. The elementary norms of due
process require that before the claimed property is taken from concerned parties
and registered in the name of the applicant, said parties must be given notice and
opportunity to oppose.
It may be asked why publication in a newspaper of general circulation should
be deemed mandatory when the law already requires notice by publication in the
Official Gazette as well as by mailing and posting, all of which have already been
complied with in the case at hand. The reason is due process and the reality that the
Official Gazette is not as widely read and circulated as newspapers and is
oftentimes delayed in its circulation, such that the notices published therein may
not reach the interested parties on time, if at all. Additionally, such parties may not
be owners of neighboring properties, and may in fact not own any other real
estate. In sum, the all-encompassing in rem nature of land registration cases, the
consequences of default orders issued against the whole world and the objective of
disseminating the notice in as wide a manner as possible demand a mandatory
construction of the requirements for publication, mailing and posting.
Admittedly, there was failure to comply with the explicit publication
requirement of the law. Private respondents did not proffer any excuse; even if they
had, it would not have mattered because the statute itself allows no
excuses. Ineludibly, this Court has no authority to dispense with such mandatory
requirement. The law is unambiguous and its rationale clear. Time and again, this
Court has declared that where the law speaks in clear and categorical language,
there is no room for interpretation, vacillation or equivocation; there is room only
for application.[19] There is no alternative. Thus, the application for land registration
filed by private respondents must be dismissed without prejudice to reapplication in
the future, after all the legal requisites shall have been duly complied with.
WHEREFORE, the petition is GRANTED and the assailed Decision and
Resolution are REVERSED and SET ASIDE. The application of private respondent
for land registration is DISMISSED without prejudice. No costs.
SO ORDERED.
THIRD DIVISION
G.R. No. L-45828 June 1, 1992
DIRECTOR OF LANDS, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SILVESTRE MANLAPAZ and
NATIVIDAD PIZARRO, respondents.
ROMERO, J.:
This is a petition for review on certiorari seeking the reversal of the
Decision 1 rendered by respondent Court of Appeals in CA-G.R. No. 56788-B,
dated March 7, 1977, affirming the Decision 2 of the then Court of First Instance of
Bataan, dated April 6, 1974, in Land Registration Case No. N-235, adjudicating in
favor of herein private respondents the subject two (2) parcels of land.
The undisputed facts of the case are as follows:
On January 29, 1973, spouses Silvestre Manlapaz and Natividad Pizarro (herein
private respondents) filed an application before the Court of First Instance of
Bataan, seeking the registration and confirmation of titles to two (2) parcels of land,
under Act 496 in relation to Sec. 48 (B) of C.A. No. 141, designated as Lot No.
2855 and Lot No. 2856. The parcels of land applied for are portions of Lot 2749 of
Orion Cadastre covered by plans Sgs-4600-D and Sgs-4601-D, situated at Barrio
Damulog, Municipality of Orion, Province of Bataan, containing an area of 49,954
sq. meters and 54,052 sq. meters, respectively.3
Prior to the initial hearing of the case, the trial court in its Order dated April 5,
1973, directed the Land Registration Commissioner to submit his report on whether
or not the parcels of land in question had been issued patents or whether the same
are subject of pending decrees. 4 In compliance with this directive, Acting Geodetic
Engineer (Chief Surveyor) Amado Masicampo, on behalf of the Commissioner of
Land Registration, filed a manifestation dated April 26, 1973 stating that the
subject parcels of land described on Plans Sgs-4600-D and Sgs-4601-D are
portions of Lot 2749, Cad. 241, Orion Cadastre and that the same have been the
subject of registration proceedings in Court Cadastral Case No. 15, LRC (GLRO)
Cadastral Record No. 1021 wherein a decision has been rendered although there is
no existing record of the same on file because it was among those records lost or
destroyed due to the ravages of the last global war. The record also disclosed that
Plans Sgs-4600-D and Sgs-4601-D, when plotted in the Municipal Index Map
through their respective lines conflict with Lot 1, Sgs-2806 which has been issued
Sales Patent No. 5819. 5
The Director of Lands seasonably filed an opposition on the ground that neither the
applicants nor their predecessor-in-interest possess sufficient title to acquire
ownership in fee simple of the parcels of land applied for; that they have not been
in open, continuous, exclusive and notorious possession and occupation of the land
in question for at least thirthy (30) years immediately preceding the filing of the
present application; and that these parcels of land are portions of the public domain
belonging to the Republic of the Philippines, and therefore, not subject to
appropriation. 6
At the hearing on August 21, 1973, the Court issued an order of special default with
the exception of the Director of Lands. 7 As prayed for by private respondents'
counsel, the parties were allowed to present evidence before the Clerk of Court
who was commissioned to receive the same and to submit his findings after the
termination of the reception of evidence. 8
In order to establish thirty (30) years of open and continuous possession over the
subject property, private respondents presented Crisanto Angeles and Monico
Balila, Crisanto Angeles claimed that he first took possession of these two (2)
parcels of land in the year 1931 while he was still twenty (20) years old. He cleared
the land and planted different kinds of fruit-bearing trees such as mango, star apple
and bananas, as well as seasonal crops thereon. He likewise converted 5,000 sq.
meters thereof into a ricefield which was enlarged to one hectare. 9 These parcels
of land were declared for taxation purposes only in 1966. 10 Meanwhile, in the
year 1938, he sold the parcel containing an area of about five (5) hectares to Pablito
Punay, who immediately took possession of the same, cultivated it and introduced
several improvements thereon. 11 In September 1972, after he had already cleared
the whole tract of the second parcel of land, he sold the same to private
respondents. 12 Pablito Punay also sold the first parcel of land he acquired from
Crisanto to them. 13Angeles further stated that he knew all the owners of the
adjoining parcels of land but, on cross-examination, was unable to remember their
names. 14 Witness Monico Balila testified that he is the owner of the parcel of land
adjoining private respondent's property. He had seen Angeles clear the same and
plant different fruit trees. On cross-examination, he said that he was twelve (12)
years old when he first lived at Bilolo, Orion, Bataan in 1938. His land holding was
five kilometers away from private respondents' land and it was his uncle who was
then in possession of the land he presently owns. 15
Private respondent Silvestre Manlapaz also testified that upon their acquisition of
the two (2) parcels of land designated as Lots 2855 and 2856, they immediately
took possession of the same, planted coconuts, camotes and other vegetables and
expanded the portion planted to palay. Some portions were converted into two (2)
residential lots, one with an area of 276 sq. meters and the other, 105 sq. meters.
They then declared those properties in their names and paid the corresponding land
taxes. 16
The Director of Lands, on the other hand, did not present any evidence to support
his opposition.
On April 6, 1974, the lower court rendered its decision, the dispositive part of
which reads as follows:
WHEREFORE, the title to two parcels of land Identified and
shown in plans Sgs-4600-D and 4601-D, situated at Barrio
Damulog, Municipality of Orion, Province of Bataan, containing
an area of 49,954 square meters and 54,052 square meters,
respectively, is ordered confirmed in the name of the spouses
Silvestre Manlapaz and Natividad Pizarro, both of legal age,
Filipino citizens and residents of Pilar, Bataan.
 After this decision shall have become final, let an order issue for
a decree of registration in favor of the applicants.
SO ORDERED. 17
From said judgment, the Director of Lands interposed an appeal to the Court of
Appeals which promulgated its decision 18 on May 7, 1977, affirming the decision
of the lower court. It found that the defense of res judicata was belatedly raised on
appeal. The omission to include the same in the answer as one of the affirmative
defenses constitutes a waiver of said defense. The manifestation of Mr. Masicampo
stating that the two (2) parcels of land have been the subject of registration
proceedings was not enough to support res judicata. It concluded that the 30-year
period of continuous possession of private respondents' predecessors-in-interest has
been satisfactorily proved, the Director of Lands not having presented any evidence
to contradict, impugn or impeach the facts established by private respondents.
Hence, this petition which assigns the following errors:
I L-15237, May 31, 1963, 8 SCRA 157, 162; Torrada v. Bonearos,
Respondent Court erred in ruling that petitioner failed to raise the
defense of res judicata in the trial court and, hence, waived the
same.
II
Respondent Court erred in ruling that petitioner failed to
prove res judicata by competent evidence.
III
Respondent Court erred in ruling that after the cadastral
proceedings and the declaration of the subject parcels of land as
public land therein, the same may be the subject of judicial
confirmation of imperfect title or claim based on adverse and
continuous possession of at least thirty (30) years, citing the case
of Mindanao v. Director of Lands, et al., G.R. No. L-19535, July
10, 1967. 19
The Court of Appeals committed no error in disregarding res judicata. In the case
of Director of Lands v. Court of Appeals, 20 this Court had addressed a similar
contention in this manner:
WE find no legal basis to uphold the foregoing contentions of
Petitioner. It is clear from the evidence on record that in the
proceedings had before the Court of First Instance of Batangas,
acting as a land registration court, the oppositor Director of
Lands. petitioner herein, did not interpose any objection nor set
up the defense of res judicata with respect to the lots in question.
Such failure on the part of oppositor Director of Lands. to OUR
mind, is a procedural infirmity which cannot be cured on
appeal.Section 2, Rule 9, Revised Rules of Court of 1964, in no
uncertain language, provides that:
SEC. 2. Defenses and obligations not pleaded
deemed waived. — Defenses and objections not
pleaded either in a motion to dismiss or in the
answer are deemed waived; . . .
All defenses therefore not interposed in a motion to dismiss or in
an answer are deemed waived. (Santiago, et al. v. Ramirez, et al.;
L-39832, January 30, 1976, 69 SCRA 247, 253).
Thus, the defense of res adjudicata when not set up either in a
motion to dismiss or in answer, is deemed waived. It cannot be
pleaded for the first time at the trial or on appeal. (Phil. Coal
Miners' Union v. CEPOC, et al., L-19007, April 30, 1964, 10
SCRA 784, 789). (Emphasis supplied)
Furthermore, petitioner advanced the view that it is the intendment of the law that a
person who fails to prove his title to a parcel of land which is the object of cadastral
proceedings or one who does not file his claim therein is forever barred from doing
so in a subsequent proceeding. Judgment in a cadastral proceeding which is a
proceeding in rem constitutes res judicata even against a person who did not take
part in the proceedings as claimant.
We disagree. The above-cited case likewise settled this contention. It said:
But granting for a moment, that the defenses of res
adjudicata was properly raised by petitioner herein, WE still hold
that, factually, there is no prior final judgment all to speak
of. The decision in Cadastral Case No. 41 does not constitute a
bar to the application of respondent Manuela Pastor; because a
decision in a cadastral proceeding declaring a lot public land is
not the final decree contemplated in Section 38 and 40 of the
Land Registration Act.
 A Judicial declaration that a parcel of land is public, does not
preclude even the same applicant from subsequently seeking a
judicial confirmation of his title to the same land, provided he
thereafter complies with the provisions. of Section 48 of
Commonwealth Act No. 141, as amended, and as long as said
public land remains alienable and disposable (now section 3 and
4, PD No. 1073,) 21 (Emphasis supplied)
As a rule, the Court respects the factual findings of the Court of Appeals, imparting
to them a certain measure of finality. However, the rule is not without clearly
defined exceptions, among which are: ". . . (2) the inference made is manifestly
mistaken; . . . (4) the judgment is based on misapprehension of facts; . . . and (9)
when the finding of fact of the Court of Appeals is premised on the absence of
evidence and is contradicted by evidence on record." 22
It must be emphasized that the burden is on applicant to prove his positive
averments and not for the government or the private oppositors to establish a
negative proposition insofar as the applicants' specific lots are
concerned. 23 Applying this rule to the instant case, the conclusions reached by the
court a quo and respondent Court of Appeals that the private respondents through
their predecessors-in-interest have been in open, continuous, exclusive and
notorious possession of the subject land under a bonafide claim of ownership are
not persuasive for the following reasons.
First, the testimony of Crisanto Angeles as to his possession and ownership of the
two (2) parcels of land fails to inspire belief. He claimed that he was in possession
of the land way back in 1930. Yet he declared the same for taxation purposes only
in 1966. Although tax receipts are not incontrovertible evidence of ownership, they
constitute at least proof that the holder had a claim of title over the property. 24 He
stated that he knew the owners of the adjoining properties, but during the cross-
examination, he was unable to give their names. Nor was he able to explain how he
came into possession of the parcel of land and there is no showing of any title,
perfect or imperfect, granted by the state to him or his predecessors.
Second, the attempt of Monico Balila to corroborate Angeles' length of possession
over the subject property is less than credible. Having been an adjoining owner
only in 1953 by his own admission, he could not have known how long Crisanto
Angeles owned and possessed the parcels of land.
Third, Pablito Punay, the second predecessor-in-interest of Lot No. 2855 of the
private respondents was not made to testify. No reason was disclosed for his failure
to appear before the court.
Lastly, the documents introduced by the applicants merely evidenced the fact that
the parcels of land applied for were alienable and disposable lands of the public
domain,25 but no document has been presented that would clearly establish the
length of time of the possession of their predecessors-in-interest. That the private
respondents have paid the corresponding taxes since 1972 26 when they possessed
the same is of no moment because what is vital to consider is their predecessors-in-
interest's compliance with the 30-year period.
Undoubtedly, the private respondents have failed to submit convincing proof of
their predecessors-in-interest's actual, peaceful and adverse possession in the
concept of owner of the lots in question during the period required, by law. This is
of utmost significance in view of the basic presumption that lands of whatever
classification belong to the State and evidence of a land grant must be "well-nigh
incontrovertible." 27
WHEREFORE, premises considered, the May 7, 1977 decision of the Court of
Appeals is hereby REVERSED and SET ASIDE, and judgment is rendered
DISMISSING the application for registration and confirmation of titles of Lots No.
2855 and 2656. No pronouncement as to costs.
SO ORDERED.
G.R. No. L-23893 October 29, 1968
VILLA REY TRANSIT, INC., plaintiff-appellant,
vs.
EUSEBIO E. FERRER, PANGASINAN TRANSPORTATION CO., INC. and
PUBLIC SERVICE COMMISSION,defendants.
EUSEBIO E. FERRER and PANGASINAN TRANSPORTATION CO.,
INC., defendants-appellants.
PANGASINAN TRANSPORTATION CO., INC., third-party plaintiff-appellant,
vs.
JOSE M. VILLARAMA, third-party defendant-appellee.
Chuidian Law Office for plaintiff-appellant.
Bengzon, Zarraga & Villegas for defendant-appellant / third-party plaintiff-
appellant.
Laurea & Pison for third-party defendant-appellee.
ANGELES, J.:
This is a tri-party appeal from the decision of the Court of First Instance of Manila,
Civil Case No. 41845, declaring null and void the sheriff's sale of two certificates
of public convenience in favor of defendant Eusebio E. Ferrer and the subsequent
sale thereof by the latter to defendant Pangasinan Transportation Co., Inc.;
declaring the plaintiff Villa Rey Transit, Inc., to be the lawful owner of the said
certificates of public convenience; and ordering the private defendants, jointly and
severally, to pay to the plaintiff, the sum of P5,000.00 as and for attorney's fees.
The case against the PSC was dismissed.
The rather ramified circumstances of the instant case can best be understood by a
chronological narration of the essential facts, to wit:
Prior to 1959, Jose M. Villarama was an operator of a bus transportation, under the
business name of Villa Rey Transit, pursuant to certificates of public convenience
granted him by the Public Service Commission (PSC, for short) in Cases Nos.
44213 and 104651, which authorized him to operate a total of thirty-two (32) units
on various routes or lines from Pangasinan to Manila, and vice-versa. On January
8, 1959, he sold the aforementioned two certificates of public convenience to the
Pangasinan Transportation Company, Inc. (otherwise known as Pantranco), for
P350,000.00 with the condition, among others, that the seller (Villarama) "shall not
for a period of 10 years from the date of this sale, apply for any TPU service
identical or competing with the buyer."
Barely three months thereafter, or on March 6, 1959: a corporation called Villa Rey
Transit, Inc. (which shall be referred to hereafter as the Corporation) was organized
with a capital stock of P500,000.00 divided into 5,000 shares of the par value of
P100.00 each; P200,000.00 was the subscribed stock; Natividad R. Villarama (wife
of Jose M. Villarama) was one of the incorporators, and she subscribed for
P1,000.00; the balance of P199,000.00 was subscribed by the brother and sister-in-
law of Jose M. Villarama; of the subscribed capital stock, P105,000.00 was paid to
the treasurer of the corporation, who was Natividad R. Villarama.
In less than a month after its registration with the Securities and Exchange
Commission (March 10, 1959), the Corporation, on April 7, 1959,
bought five certificates of public convenience, forty-nine buses, tools and
equipment from one Valentin Fernando, for the sum of P249,000.00, of which
P100,000.00 was paid upon the signing of the contract; P50,000.00 was payable
upon the final approval of the sale by the PSC; P49,500.00 one year after the final
approval of the sale; and the balance of P50,000.00 "shall be paid by the BUYER
to the different suppliers of the SELLER."
The very same day that the aforementioned contract of sale was executed, the
parties thereto immediately applied with the PSC for its approval, with a prayer for
the issuance of a provisional authority in favor of the vendee Corporation to operate
the service therein involved.1 On May 19, 1959, the PSC granted the provisional
permit prayed for, upon the condition that "it may be modified or revoked by the
Commission at any time, shall be subject to whatever action that may be taken on
the basic application and shall be valid only during the pendency of said
application." Before the PSC could take final action on said application for
approval of sale, however, the Sheriff of Manila, on July 7, 1959, levied on two of
the five certificates of public convenience involved therein, namely, those issued
under PSC cases Nos. 59494 and 63780, pursuant to a writ of execution issued by
the Court of First Instance of Pangasinan in Civil Case No. 13798, in favor of
Eusebio Ferrer, plaintiff, judgment creditor, against Valentin Fernando, defendant,
judgment debtor. The Sheriff made and entered the levy in the records of the PSC.
On July 16, 1959, a public sale was conducted by the Sheriff of the
said two certificates of public convenience. Ferrer was the highest bidder, and a
certificate of sale was issued in his name.
Thereafter, Ferrer sold the two certificates of public convenience to Pantranco, and
jointly submitted for approval their corresponding contract of sale to the
PSC.2 Pantranco therein prayed that it be authorized provisionally to operate the
service involved in the said two certificates.
The applications for approval of sale, filed before the PSC, by Fernando and the
Corporation, Case No. 124057, and that of Ferrer and Pantranco, Case No. 126278,
were scheduled for a joint hearing. In the meantime, to wit, on July 22, 1959, the
PSC issued an order disposing that during the pendency of the cases and before a
final resolution on the aforesaid applications, the Pantranco shall be the one to
operate provisionally the service under the twocertificates embraced in the contract
between Ferrer and Pantranco. The Corporation took issue with this particular
ruling of the PSC and elevated the matter to the Supreme Court,3 which decreed,
after deliberation, that until the issue on the ownership of the disputed certificates
shall have been finally settled by the proper court, the Corporation should be the
one to operate the lines provisionally.
On November 4, 1959, the Corporation filed in the Court of First Instance of
Manila, a complaint for the annulment of the sheriff's sale of the
aforesaid two certificates of public convenience (PSC Cases Nos. 59494 and
63780) in favor of the defendant Ferrer, and the subsequent sale thereof by the
latter to Pantranco, against Ferrer, Pantranco and the PSC. The plaintiff
Corporation prayed therein that all the orders of the PSC relative to the parties'
dispute over the said certificates be annulled.
In separate answers, the defendants Ferrer and Pantranco averred that the plaintiff
Corporation had no valid title to the certificates in question because the contract
pursuant to which it acquired them from Fernando was subject to a suspensive
condition — the approval of the PSC — which has not yet been fulfilled, and,
therefore, the Sheriff's levy and the consequent sale at public auction of the
certificates referred to, as well as the sale of the same by Ferrer to Pantranco, were
valid and regular, and vested unto Pantranco, a superior right thereto.
Pantranco, on its part, filed a third-party complaint against Jose M. Villarama,
alleging that Villarama and the Corporation, are one and the same; that Villarama
and/or the Corporation was disqualified from operating the two certificates in
question by virtue of the aforementioned agreement between said Villarama and
Pantranco, which stipulated that Villarama "shall not for a period of 10 years from
the date of this sale, apply for any TPU service identical or competing with the
buyer."
Upon the joinder of the issues in both the complaint and third-party complaint, the
case was tried, and thereafter decision was rendered in the terms, as above stated.
As stated at the beginning, all the parties involved have appealed from the decision.
They submitted a joint record on appeal.
Pantranco disputes the correctness of the decision insofar as it holds that Villa Rey
Transit, Inc. (Corporation) is a distinct and separate entity from Jose M. Villarama;
that the restriction clause in the contract of January 8, 1959 between Pantranco and
Villarama is null and void; that the Sheriff's sale of July 16, 1959, is likewise null
and void; and the failure to award damages in its favor and against Villarama.
Ferrer, for his part, challenges the decision insofar as it holds that the sheriff's sale
is null and void; and the sale of the two certificates in question by Valentin
Fernando to the Corporation, is valid. He also assails the award of P5,000.00 as
attorney's fees in favor of the Corporation, and the failure to award moral damages
to him as prayed for in his counterclaim.
The Corporation, on the other hand, prays for a review of that portion of the
decision awarding only P5,000.00 as attorney's fees, and insisting that it is entitled
to an award of P100,000.00 by way of exemplary damages.
After a careful study of the facts obtaining in the case, the vital issues to be
resolved are: (1) Does the stipulation between Villarama and Pantranco, as
contained in the deed of sale, that the former "SHALL NOT FOR A PERIOD OF
10 YEARS FROM THE DATE OF THIS SALE, APPLY FOR ANY TPU
SERVICE IDENTICAL OR COMPETING WITH THE BUYER," apply to new
lines only or does it include existing lines?; (2) Assuming that said stipulation
covers all kinds of lines, is such stipulation valid and enforceable?; (3) In the
affirmative, that said stipulation is valid, did it bind the Corporation?
For convenience, We propose to discuss the foregoing issues by starting with the
last proposition.
The evidence has disclosed that Villarama, albeit was not an incorporator or
stockholder of the Corporation, alleging that he did not become such, because he
did not have sufficient funds to invest, his wife, however, was an incorporator with
the least subscribed number of shares, and was elected treasurer of the Corporation.
The finances of the Corporation which, under all concepts in the law, are supposed
to be under the control and administration of the treasurer keeping them as trust
fund for the Corporation, were, nonetheless, manipulated and disbursed as if they
were the private funds of Villarama, in such a way and extent that Villarama
appeared to be the actual owner-treasurer of the business without regard to the
rights of the stockholders. The following testimony of Villarama, 4together with the
other evidence on record, attests to that effect:
Q. Doctor, I want to go back again to the incorporation of the Villa
Rey Transit, Inc. You heard the testimony presented here by the bank
regarding the initial opening deposit of ONE HUNDRED FIVE
THOUSAND PESOS, of which amount Eighty-Five Thousand Pesos was
a check drawn by yourself personally. In the direct examination you told
the Court that the reason you drew a check for Eighty-Five Thousand
Pesos was because you and your wife, or your wife, had spent the money
of the stockholders given to her for incorporation. Will you please tell the
Honorable Court if you knew at the time your wife was spending the
money to pay debts, you personally knew she was spending the money of
the incorporators?
A. You know my money and my wife's money are one. We never talk
about those things.
Q. Doctor, your answer then is that since your money and your wife's
money are one money and you did not know when your wife was paying
debts with the incorporator's money?
A. Because sometimes she uses my money, and sometimes the money
given to her she gives to me and I deposit the money.
Q. Actually, aside from your wife, you were also the custodian of some
of the incorporators here, in the beginning?
A. Not necessarily, they give to my wife and when my wife hands to
me I did not know it belonged to the incorporators.
 Q. It supposes then your wife gives you some of the money received
by her in her capacity as treasurer of the corporation?
A. Maybe.
Q. What did you do with the money, deposit in a regular account?
A. Deposit in my account.
Q. Of all the money given to your wife, she did not receive any check?
A. I do not remember.
Q. Is it usual for you, Doctor, to be given Fifty Thousand Pesos
without even asking what is this?
xxx xxx xxx
JUDGE: Reform the question.
Q. The subscription of your brother-in-law, Mr. Reyes, is Fifty-Two
Thousand Pesos, did your wife give you Fifty-two Thousand Pesos?
A. I have testified before that sometimes my wife gives me money and
I do not know exactly for what.
The evidence further shows that the initial cash capitalization of the corporation of
P105,000.00 was mostly financed by Villarama. Of the P105,000.00 deposited in
the First National City Bank of New York, representing the initial paid-up capital of
the Corporation, P85,000.00 was covered by Villarama's personal check. The
deposit slip for the said amount of P105,000.00 was admitted in evidence as Exh.
23, which shows on its face that P20,000.00 was paid in cash and P85,000.00
thereof was covered by Check No. F-50271 of the First National City Bank of New
York. The testimonies of Alfonso Sancho5 and Joaquin Amansec,6 both employees
of said bank, have proved that the drawer of the check was Jose Villarama himself.
Another witness, Celso Rivera, accountant of the Corporation, testified that while
in the books of the corporation there appears an entry that the treasurer received
P95,000.00 as second installment of the paid-in subscriptions, and, subsequently,
also P100,000.00 as the first installment of the offer for second subscriptions worth
P200,000.00 from the original subscribers, yet Villarama directed him (Rivera) to
make vouchers liquidating the sums.7 Thus, it was made to appear that the
P95,000.00 was delivered to Villarama in payment for equipment purchased from
him, and the P100,000.00 was loaned as advances to the stockholders. The said
accountant, however, testified that he was not aware of any amount of money that
had actually passed hands among the parties involved,8 and actually the only
money of the corporation was the P105,000.00 covered by the deposit slip Exh. 23,
of which as mentioned above, P85,000.00 was paid by Villarama's personal check.
Further, the evidence shows that when the Corporation was in its initial months of
operation, Villarama purchased and paid with his personal checks Ford trucks for
the Corporation. Exhibits 20 and 21 disclose that the said purchases were paid by
Philippine Bank of Commerce Checks Nos. 992618-B and 993621-B, respectively.
These checks have been sufficiently established by Fausto Abad, Assistant
Accountant of Manila Trading & Supply Co., from which the trucks were
purchased9 and Aristedes Solano, an employee of the Philippine Bank of
Commerce,10as having been drawn by Villarama.
Exhibits 6 to 19 and Exh. 22, which are photostatic copies of ledger entries and
vouchers showing that Villarama had co-mingled his personal funds and
transactions with those made in the name of the Corporation, are very illuminating
evidence. Villarama has assailed the admissibility of these exhibits, contending that
no evidentiary value whatsoever should be given to them since "they were merely
photostatic copies of the originals, the best evidence being the originals
themselves." According to him, at the time Pantranco offered the said exhibits, it
was the most likely possessor of the originals thereof because they were stolen
from the files of the Corporation and only Pantranco was able to produce the
alleged photostat copies thereof.
Section 5 of Rule 130 of the Rules of Court provides for the requisites for the
admissibility of secondary evidence when the original is in the custody of the
adverse party, thus: (1) opponent's possession of the original; (2) reasonable notice
to opponent to produce the original; (3) satisfactory proof of its existence; and (4)
failure or refusal of opponent to produce the original in court.11 Villarama has
practically admitted the second and fourth requisites.12As to the third, he admitted
their previous existence in the files of the Corporation and also that he had seen
some of them.13 Regarding the first element, Villarama's theory is that since even at
the time of the issuance of the subpoena duces tecum, the originals were already
missing, therefore, the Corporation was no longer in possession of the same.
However, it is not necessary for a party seeking to introduce secondary evidence to
show that the original is in the actual possession of his adversary. It is enough that
the circumstances are such as to indicate that the writing is in his possession or
under his control. Neither is it required that the party entitled to the custody of the
instrument should, on being notified to produce it, admit having it in his
possession.14 Hence, secondary evidence is admissible where he denies having it in
his possession. The party calling for such evidence may introduce a copy thereof as
in the case of loss. For, among the exceptions to the best evidence rule is "when the
original has been lost, destroyed, or cannot be produced in court."15 The originals of
the vouchers in question must be deemed to have been lost, as even the Corporation
admits such loss. Viewed upon this light, there can be no doubt as to the
admissibility in evidence of Exhibits 6 to 19 and 22.
Taking account of the foregoing evidence, together with Celso Rivera's
testimony,16 it would appear that: Villarama supplied the organization expenses and
the assets of the Corporation, such as trucks and equipment;17 there was no actual
payment by the original subscribers of the amounts of P95,000.00 and P100,000.00
as appearing in the books;18 Villarama made use of the money of the Corporation
and deposited them to his private accounts;19 and the Corporation paid his personal
accounts.20
Villarama himself admitted that he mingled the corporate funds with his own
money.21 He also admitted that gasoline purchases of the Corporation were made in
his name22 because "he had existing account with Stanvac which was properly
secured and he wanted the Corporation to benefit from the rebates that he
received."23
The foregoing circumstances are strong persuasive evidence showing that
Villarama has been too much involved in the affairs of the Corporation to
altogether negative the claim that he was only a part-time general manager. They
show beyond doubt that the Corporation is his alter ego.
It is significant that not a single one of the acts enumerated above as proof of
Villarama's oneness with the Corporation has been denied by him. On the contrary,
he has admitted them with offered excuses.
Villarama has admitted, for instance, having paid P85,000.00 of the initial capital
of the Corporation with the lame excuse that "his wife had requested him to
reimburse the amount entrusted to her by the incorporators and which she had used
to pay the obligations of Dr. Villarama (her husband) incurred while he was still the
owner of Villa Rey Transit, a single proprietorship." But with his admission that he
had received P350,000.00 from Pantranco for the sale of the two certificates and
one unit,24 it becomes difficult to accept Villarama's explanation that he and his
wife, after consultation,25 spent the money of their relatives (the stockholders) when
they were supposed to have their own money. Even if Pantranco paid the
P350,000.00 in check to him, as claimed, it could have been easy for Villarama to
have deposited said check in his account and issued his own check to pay his
obligations. And there is no evidence adduced that the said amount of P350,000.00
was all spent or was insufficient to settle his prior obligations in his business, and
in the light of the stipulation in the deed of sale between Villarama and Pantranco
that P50,000.00 of the selling price was earmarked for the payments of accounts
due to his creditors, the excuse appears unbelievable.
On his having paid for purchases by the Corporation of trucks from the Manila
Trading & Supply Co. with his personal checks, his reason was that he was only
sharing with the Corporation his credit with some companies. And his main reason
for mingling his funds with that of the Corporation and for the latter's paying his
private bills is that it would be more convenient that he kept the money to be used
in paying the registration fees on time, and since he had loaned money to the
Corporation, this would be set off by the latter's paying his bills. Villarama
admitted, however, that the corporate funds in his possession were not only for
registration fees but for other important obligations which were not specified. 26
Indeed, while Villarama was not the Treasurer of the Corporation but was,
allegedly, only a part-time manager, 27 he admitted not only having held the
corporate money but that he advanced and lent funds for the Corporation, and yet
there was no Board Resolution allowing it.28
Villarama's explanation on the matter of his involvement with the corporate affairs
of the Corporation only renders more credible Pantranco's claim that his control
over the corporation, especially in the management and disposition of its funds,
was so extensive and intimate that it is impossible to segregate and identify which
money belonged to whom. The interference of Villarama in the complex affairs of
the corporation, and particularly its finances, are much too inconsistent with the
ends and purposes of the Corporation law, which, precisely, seeks to separate
personal responsibilities from corporate undertakings. It is the very essence of
incorporation that the acts and conduct of the corporation be carried out in its own
corporate name because it has its own personality.
The doctrine that a corporation is a legal entity distinct and separate from the
members and stockholders who compose it is recognized and respected in all cases
which are within reason and the law.29 When the fiction is urged as a means of
perpetrating a fraud or an illegal act or as a vehicle for the evasion of an existing
obligation, the circumvention of statutes, the achievement or perfection of a
monopoly or generally the perpetration of knavery or crime,30 the veil with which
the law covers and isolates the corporation from the members or stockholders who
compose it will be lifted to allow for its consideration merely as an aggregation of
individuals.
Upon the foregoing considerations, We are of the opinion, and so hold, that the
preponderance of evidence have shown that the Villa Rey Transit, Inc. is an alter
ego of Jose M. Villarama, and that the restrictive clause in the contract entered into
by the latter and Pantranco is also enforceable and binding against the said
Corporation. For the rule is that a seller or promisor may not make use of a
corporate entity as a means of evading the obligation of his covenant.31 Where the
Corporation is substantially the alter ego of the covenantor to the restrictive
agreement, it can be enjoined from competing with the covenantee. 32
The Corporation contends that even on the supposition that Villa Rey Transit, Inc.
and Villarama are one and the same, the restrictive clause in the contract between
Villarama and Pantranco does not include the purchase of existing lines but it only
applies to application for the new lines. The clause in dispute reads thus:
(4) The SELLER shall not, for a period of ten (10) years from the date of
this sale apply for any TPU service identical or competing with the
BUYER. (Emphasis supplied)
As We read the disputed clause, it is evident from the context thereof that the
intention of the parties was to eliminate the seller as a competitor of the buyer for
ten years along the lines of operation covered by the certificates of public
convenience subject of their transaction. The word "apply" as broadly used has for
frame of reference, a service by the seller on lines or routes that would compete
with the buyer along the routes acquired by the latter. In this jurisdiction, prior
authorization is needed before anyone can operate a TPU service, 33whether the
service consists in a new line or an old one acquired from a previous operator. The
clear intention of the parties was to prevent the seller from conducting any
competitive line for 10 years since, anyway, he has bound himself not to apply for
authorization to operate along such lines for the duration of such period.34
If the prohibition is to be applied only to the acquisition of new certificates of
public convenience thru an application with the Public Service Commission, this
would, in effect, allow the seller just the same to compete with the buyer as long as
his authority to operate is only acquired thru transfer or sale from a previous
operator, thus defeating the intention of the parties. For what would prevent the
seller, under the circumstances, from having a representative or dummy apply in
the latter's name and then later on transferring the same by sale to the seller? Since
stipulations in a contract is the law between the contracting parties,
Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and
good faith. (Art. 19, New Civil Code.)
We are not impressed of Villarama's contention that the re-wording of the two
previous drafts of the contract of sale between Villarama and Pantranco is
significant in that as it now appears, the parties intended to effect the least
restriction. We are persuaded, after an examination of the supposed drafts, that the
scope of the final stipulation, while not as long and prolix as those in the drafts, is
just as broad and comprehensive. At most, it can be said that the re-wording was
done merely for brevity and simplicity.
The evident intention behind the restriction was to eliminate the sellers as a
competitor, and this must be, considering such factors as the good will35 that the
seller had already gained from the riding public and his adeptness and proficiency
in the trade. On this matter, Corbin, an authority on Contracts has this to say.36
When one buys the business of another as a going concern, he usually
wishes to keep it going; he wishes to get the location, the building, the
stock in trade, and the customers. He wishes to step into the seller's shoes
and to enjoy the same business relations with other men. He is willing to
pay much more if he can get the "good will" of the business, meaning by
this the good will of the customers, that they may continue to tread the old
footpath to his door and maintain with him the business relations enjoyed
by the seller.
... In order to be well assured of this, he obtains and pays for the seller's
promise not to reopen business in competition with the business sold.
As to whether or not such a stipulation in restraint of trade is valid, our
jurisprudence on the matter37says:
The law concerning contracts which tend to restrain business or trade has
gone through a long series of changes from time to time with the changing
condition of trade and commerce. With trifling exceptions, said changes
have been a continuous development of a general rule. The early cases
show plainly a disposition to avoid and annul all contract which prohibited
or restrained any one from using a lawful trade "at any time or at any
place," as being against the benefit of the state. Later, however, the rule
became well established that if the restraint was limited to "a certain
time" and within "a certain place," such contracts were valid and not
"against the benefit of the state." Later cases, and we think the rule is now
well established, have held that a contract in restraint of trade is valid
providing there is a limitation upon either time or place. A contract,
however, which restrains a man from entering into business or trade
without either a limitation as to time or place, will be held invalid.
The public welfare of course must always be considered and if it be not
involved and the restraint upon one party is not greater than protection to
the other requires, contracts like the one we are discussing will be
sustained. The general tendency, we believe, of modern authority, is to
make the test whether the restraint is reasonably necessary for the
protection of the contracting parties. If the contract is reasonably
necessary to protect the interest of the parties, it will be upheld. (Emphasis
supplied.)
Analyzing the characteristics of the questioned stipulation, We find that although it
is in the nature of an agreement suppressing competition, it is, however, merely
ancillary or incidental to the main agreement which is that of sale. The suppression
or restraint is only partial or limited: first, in scope, it refers only to application for
TPU by the seller in competition with the lines sold to the buyer; second, in
duration, it is only for ten (10) years; and third, with respect to situs or territory,
the restraint is only along the lines covered by the certificates sold. In view of these
limitations, coupled with the consideration of P350,000.00 for just two certificates
of public convenience, and considering, furthermore, that the disputed stipulation is
only incidental to a main agreement, the same is reasonable and it is not harmful
nor obnoxious to public service.38 It does not appear that the ultimate result of the
clause or stipulation would be to leave solely to Pantranco the right to operate
along the lines in question, thereby establishing monopoly or predominance
approximating thereto. We believe the main purpose of the restraint was to protect
for a limited time the business of the buyer.
Indeed, the evils of monopoly are farfetched here. There can be no danger of price
controls or deterioration of the service because of the close supervision of the
Public Service Commission.39 This Court had stated long ago,40that "when one
devotes his property to a use in which the public has an interest, he virtually grants
to the public an interest in that use and submits it to such public use under
reasonable rules and regulations to be fixed by the Public Utility Commission."
Regarding that aspect of the clause that it is merely ancillary or incidental to a
lawful agreement, the underlying reason sustaining its validity is well explained in
36 Am. Jur. 537-539, to wit:
... Numerous authorities hold that a covenant which is incidental to the
sale and transfer of a trade or business, and which purports to bind the
seller not to engage in the same business in competition with the
purchaser, is lawful and enforceable. While such covenants are designed
to prevent competition on the part of the seller, it is ordinarily neither their
purpose nor effect to stifle competition generally in the locality, nor to
prevent it at all in a way or to an extent injurious to the public. The
business in the hands of the purchaser is carried on just as it was in the
hands of the seller; the former merely takes the place of the latter; the
commodities of the trade are as open to the public as they were before; the
same competition exists as existed before; there is the same employment
furnished to others after as before; the profits of the business go as they
did before to swell the sum of public wealth; the public has the same
opportunities of purchasing, if it is a mercantile business; and production
is not lessened if it is a manufacturing plant.
The reliance by the lower court on tile case of Red Line Transportation Co. v.
Bachrach41 and finding that the stipulation is illegal and void seems misplaced. In
the said Red Line case, the agreement therein sought to be enforced was virtually a
division of territory between two operators, each company imposing upon itself an
obligation not to operate in any territory covered by the routes of the other.
Restraints of this type, among common carriers have always been covered by the
general rule invalidating agreements in restraint of trade. 42
Neither are the other cases relied upon by the plaintiff-appellee applicable to the
instant case. In Pampanga Bus Co., Inc. v. Enriquez,43the undertaking of the
applicant therein not to apply for the lifting of restrictions imposed on his
certificates of public convenience was not an ancillary or incidental agreement. The
restraint was the principal objective. On the other hand, in Red Line Transportation
Co., Inc. v. Gonzaga,44 the restraint there in question not to ask for extension of the
line, or trips, or increase of equipment — was not an agreement between the parties
but a condition imposed in the certificate of public convenience itself.
Upon the foregoing considerations, Our conclusion is that the stipulation
prohibiting Villarama for a period of 10 years to "apply" for TPU service along the
lines covered by the certificates of public convenience sold by him to Pantranco is
valid and reasonable. Having arrived at this conclusion, and considering that the
preponderance of the evidence have shown that Villa Rey Transit, Inc. is itself
the alter ego of Villarama, We hold, as prayed for in Pantranco's third party
complaint, that the said Corporation should, until the expiration of the 1-year
period abovementioned, be enjoined from operating the line subject of the
prohibition.
To avoid any misunderstanding, it is here to be emphasized that the 10-year
prohibition upon Villarama is not against his application for, or purchase of,
certificates of public convenience, but merely the operation of TPU along the lines
covered by the certificates sold by him to Pantranco. Consequently, the sale
between Fernando and the Corporation is valid, such that the rightful ownership of
the disputed certificates still belongs to the plaintiff being the prior purchaser in
good faith and for value thereof. In view of the ancient rule of caveat
emptor prevailing in this jurisdiction, what was acquired by Ferrer in the sheriff's
sale was only the right which Fernando, judgment debtor, had in the certificates of
public convenience on the day of the sale.45
Accordingly, by the "Notice of Levy Upon Personalty" the Commissioner of Public
Service was notified that "by virtue of an Order of Execution issued by the Court of
First Instance of Pangasinan, the rights, interests, or participation which the
defendant, VALENTIN A. FERNANDO — in the above entitled case may have in
the following realty/personalty is attached or levied upon, to wit: The rights,
interests and participation on the Certificates of Public Convenience issued to
Valentin A. Fernando, in Cases Nos. 59494, etc. ... Lines — Manila to Lingayen,
Dagupan, etc. vice versa." Such notice of levy only shows that Ferrer, the vendee at
auction of said certificates, merely stepped into the shoes of the judgment debtor.
Of the same principle is the provision of Article 1544 of the Civil Code, that "If the
same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith,
if it should be movable property."
There is no merit in Pantranco and Ferrer's theory that the sale of the certificates of
public convenience in question, between the Corporation and Fernando, was not
consummated, it being only a conditional sale subject to the suspensive condition
of its approval by the Public Service Commission. While section 20(g) of the
Public Service Act provides that "subject to established limitation and exceptions
and saving provisions to the contrary, it shall be unlawful for any public service or
for the owner, lessee or operator thereof, without the approval and authorization of
the Commission previously had ... to sell, alienate, mortgage, encumber or lease its
property, franchise, certificates, privileges, or rights or any part thereof, ...," the
same section also provides:
... Provided, however, That nothing herein contained shall be construed to
prevent the transaction from being negotiated or completed before its
approval or to prevent the sale, alienation, or lease by any public service
of any of its property in the ordinary course of its business.
It is clear, therefore, that the requisite approval of the PSC is not a condition
precedent for the validity and consummation of the sale.
Anent the question of damages allegedly suffered by the parties, each of the
appellants has its or his own version to allege.
Villa Rey Transit, Inc. claims that by virtue of the "tortious acts" of defendants
(Pantranco and Ferrer) in acquiring the certificates of public convenience in
question, despite constructive and actual knowledge on their part of a prior sale
executed by Fernando in favor of the said corporation, which necessitated the latter
to file the action to annul the sheriff's sale to Ferrer and the subsequent transfer to
Pantranco, it is entitled to collect actual and compensatory damages, and attorney's
fees in the amount of P25,000.00. The evidence on record, however, does not
clearly show that said defendants acted in bad faith in their acquisition of the
certificates in question. They believed that because the bill of sale has yet to be
approved by the Public Service Commission, the transaction was not a
consummated sale, and, therefore, the title to or ownership of the certificates was
still with the seller. The award by the lower court of attorney's fees of P5,000.00 in
favor of Villa Rey Transit, Inc. is, therefore, without basis and should be set aside.
Eusebio Ferrer's charge that by reason of the filing of the action to annul the
sheriff's sale, he had suffered and should be awarded moral, exemplary damages
and attorney's fees, cannot be entertained, in view of the conclusion herein reached
that the sale by Fernando to the Corporation was valid.
Pantranco, on the other hand, justifies its claim for damages with the allegation that
when it purchased ViIlarama's business for P350,000.00, it intended to build up the
traffic along the lines covered by the certificates but it was rot afforded an
opportunity to do so since barely three months had elapsed when the contract was
violated by Villarama operating along the same lines in the name of Villa Rey
Transit, Inc. It is further claimed by Pantranco that the underhanded manner in
which Villarama violated the contract is pertinent in establishing punitive or moral
damages. Its contention as to the proper measure of damages is that it should be the
purchase price of P350,000.00 that it paid to Villarama. While We are fully in
accord with Pantranco's claim of entitlement to damages it suffered as a result of
Villarama's breach of his contract with it, the record does not sufficiently supply the
necessary evidentiary materials upon which to base the award and there is need for
further proceedings in the lower court to ascertain the proper amount.
PREMISES CONSIDERED, the judgment appealed from is hereby modified as
follows:
1. The sale of the two certificates of public convenience in question by Valentin
Fernando to Villa Rey Transit, Inc. is declared preferred over that made by the
Sheriff at public auction of the aforesaid certificate of public convenience in favor
of Eusebio Ferrer;
2. Reversed, insofar as it dismisses the third-party complaint filed by Pangasinan
Transportation Co. against Jose M. Villarama, holding that Villa Rey Transit, Inc. is
an entity distinct and separate from the personality of Jose M. Villarama, and
insofar as it awards the sum of P5,000.00 as attorney's fees in favor of Villa Rey
Transit, Inc.;
3. The case is remanded to the trial court for the reception of evidence in
consonance with the above findings as regards the amount of damages suffered by
Pantranco; and
4. On equitable considerations, without costs. So ordered.
THIRD DIVISION
ALLIED BANKING G.R. No. 151040
CORPORATION,
Petitioner, Present:
 1. Decision dated 11 December 2001,[1] partially reversing
PANGANIBAN, J., Chairman and setting aside an earlier decision of the Regional
- versus - SANDOVAL-GUTIERREZ, Trial Court at Makati, Branch 145, in its Civil Case No.
CORONA, 10947; and
CARPIO-MORALES, and
GARCIA, JJ. 2. Resolution dated 01 July 2002,[2] denying Cheng Yong and
CHENG YONG and LILIA Lilia Gaws motion for reconsideration.
GAW,
Respondents. Promulgated:
The material facts:
October 6, 2005
x--------------------------------------
------x Sometime before 1981, Philippine Pacific Fishing Company, Inc.

CHENG YONG and LILIA G.R. No. 154109 (Philippine Pacific), through its then Vice-Chairman of the Board and concurrent
GAW, President Marilyn Javier, obtained from Allied Banking Corporation (Allied Bank),
Petitioners,
a packing credit accommodation amounting to One Million Seven Hundred Fifty
Two Thousand Pesos (P1,752,000.00).
- versus -

To secure the obligation, Marilyn Javier and the spouses Cheng Yong and
ALLIED BANKING
Lilia Gaw (spouses Cheng, for short), executed a Continuing
CORPORATION
and EX-OFFICIO SHERIFF Guaranty/Comprehensive Surety bearing date 27 March 1981.[3]
OF
MALABON, METRO Later, Philippine Pacific, due to business reverses and alleged misuse of corporate
MANILA, funds by its operating officers, defaulted in the payment of said obligation.
Respondents.
An intra-corporate dispute among its stockholders followed, prompting the filing
x---------------------------------------------------------------------------------x
against Philippine Pacific of a petition for receivership before the Securities and
DECISION Exchange Commission (SEC), which petition was docketed as SEC Case No. 2042.
Likewise, a criminal case for Estafa was filed against Marilyn Javier.
GARCIA, J.: Thereafter, the corporation was reorganized, following which the spouses Cheng
Yong and Lilia Gaw were elected as its president and treasurer, respectively. The
spouses Cheng also hold similar positions in another company, the Glee Chemicals
Before us are these two (2) petitions for review on certiorari under Rule
Phils., Inc. (GCPI), which, incidentally, also had a credit line with Allied Bank.
45 of the Rules of Court to nullify and set aside the following issuances of the
Court of Appeals (CA) in CA-G.R. CV 41280, to wit:
Meanwhile, on 27 July 1981, the parties in SEC Case No. 2042 agreed to create and
constitute a management committee, instead of placing Philippine Pacific under
receivership. Hence, in an order dated 14 August 1981, the SEC formally created a
management committee whose functions, include, among others, the following:
1. To take custody and possession of all assets, funds,
properties and records of the corporation and to prepare
an inventory thereof;
2. To administer, manage and preserve such assets, funds and
records;
xxx xxx xxx
7. To acquire, lease, sell, mortgage or otherwise encumber
such assets with the prior approval of the Commission.[4]
It appears, however, that two (2) days prior to the constitution of the management
committee, Allied Bank and Philippine Pacific agreed to restructure and convert the
packing credit accommodation into a simple loan. Accordingly, Philippine Pacific
[5]
executed in favor of Allied Bank a promissory note dated 12 August 1981 in the
same amount as the packing credit accommodation. Aside from affixing their
signatures on the same promissory note in their capacity as officers of Philippine
Pacific, the spouses Cheng also signed the note in their personal capacities and as
co-makers thereof.
As it turned out, Philippine Pacific failed to pay according to the schedule of
payments set out in the promissory note of 12 August 1981, prompting the spouses
Cheng to secure the note with substantial collateral by executing a deed of chattel
mortgage in favor of Allied Bank over a fishing vessel, Jean III, a Japanese-
manufactured vessel with refrigerated hatches and glass freezers, owned by the
spouses and registered in their names.
Philippine Pacific again defaulted payment. Hence, on 18 September 1984, Allied
Bank filed with the sheriff of Navotas an application for extra-judicial foreclosure
of the chattel mortgage constituted on Jean III.
Pursuant thereto, notices of extra-judicial sale dated 21 September 1981 were
served on the concerned parties by the Ex-Officio sheriff of Malabon while the
vessel was moored at the Navotas Fishing Port Complex and under a charter
contract with Lig Marine Products, Inc.
On 27 September 1984, the spouses Cheng, to prevent the auction sale of the
vessel, filed with the Regional Trial Court at Quezon City an action for declaratory
relief with prayer for injunctive remedies. Initially, that court issued a writ of
preliminary injunction restraining the sale but later lifted it upon dismissal of the
main case for declaratory relief on 29 March 1985.
In the meantime, the vessel sank at the port of Navotas on 22 June 1985, resulting
to its total loss. As per certification of the Harbor Master of the Philippine Fisheries
Development Authority, the vessel sank due to unnoticed defects caused by its
prolonged stay in the fish port and the abandonment thereof. Shortly before the
loss, charterer Lig Marine Products, Inc. offered to purchase the vessel for Four
Million Pesos (P4,000,000.00).
On 26 June 1985, the spouses Cheng filed with the Regional Trial Court at Makati
a complaint for Injunction, Annulment of Contracts and Damages with the
provisional remedy of Preliminary Injunction, against Allied Bank and the Ex-
Officio Sheriff of Malabon, therein praying, inter alia, that the promissory note
dated 12 August 1981 be declared void and unenforceable because it was executed
without the prior approval or ratification of the SEC-created management
committee in SEC Case No. 2042, and to declare invalid the deed of chattel
mortgage over the vessel Jean III for having been constituted to secure a void or
unenforceable obligation. The complaint was docketed as Civil Case No. 10947 and
raffled to Branch 145 of the court.
Meanwhile, on 02 August 1985, Allied Bank filed with the Ex-Officio Sheriff of
Pasig an application for extrajudicial foreclosure of the real estate
mortgage[6]constituted by the Cheng spouses over their parcel of land covered by
TCT No. (222143) 23843, located in San Juan, Metro Manila (hereinafter referred
to as the San Juan property), together with the improvement thereon, consisting of
a two-storey building belonging to GCPI. It appears that said property was
mortgaged by the spouses in favor of Allied Bank on 31 May 1983 to partially
secure the payment of the time loan granted by the Bank to GCPI. Despite GCPIs
full payment of said loan, Allied Bank refused to release the mortgage on the San
Juan property, theorizing that it also secured the obligation of the spouses Cheng as
Philippine Pacifics co-makers of the promissory note dated 12 August 1981, in
accordance with the stipulation in the deed of mortgage extending coverage of the
guaranty to any other obligation owing to the mortgagee.
On 22 August 1985, the spouses Cheng filed in Civil Case No. 10947 an amended
complaint praying, among others, that: (a) the promissory note of 12 August 1981
be declared void and unenforceable; (b) the vessel be declared a total loss; and (c)
Allied Bank be ordered to pay them the value of the loss. And, in order to prevent
Allied Bank and the Ex-Officio Sheriff of Pasig from foreclosing the real estate
mortgage over their San Juan property, the spouses Cheng filed a supplemental
complaint with an application for a writ of preliminary injunction. A writ of
preliminary injunction was, thereafter, issued by the trial court.
On 17 October 1985, Allied Bank filed a motion to dismiss the amended as well as
the supplemental complaints.
In its order of 12 March 1986, the trial court denied the motion with respect to the
amended complaint, for lack of merit, while deferring the resolution thereof as
regards the supplemental complaint until after trial because the ground alleged did
not appear to be indubitable.
Eventually, in a decision dated 08 February 1989, [7] the trial court declared both the
promissory note dated 12 August 1981 and the deed of chattel mortgage over the
vessel Jean III invalid and unenforceable. Dispositively, the decision reads:
WHEREFORE, premises considered, the Court renders judgment
declaring both the promissory Note (Exh. M) and the Deed of
Chattel Mortgage (Exh. 5) not valid and unenforceable;
permanently enjoining defendants Allied Banking Corporation
and the ex-officio sheriff of Malabon and his deputies, agents and
representatives from proceeding with the foreclosure and auction
sale of the fishing vessel JEAN III; permanently enjoining the
defendants-bank and ex-officio sheriff of Pasig from proceeding
with the foreclosure and auction sale of the plaintiffs real
property covered by TCT No. (222143) 23843 including the
building thereon owned by Glee Chemicals Philippines, Inc.;
ordering defendant bank to pay plaintiffs the sum of Four Million
Pesos (P4,000,000.00), Philippine Currency, for the loss of the
aforementioned vessel, the sum of Thirty Thousand Pesos
(P30,000.00), Philippine Currency as moral and exemplary
damages, the further sum of Thirty Thousand Pesos (P30,000.00),
Philippine Currency, as attorneys fees; and the costs of the suit.
The motion to dismiss the supplemental complaint filed by
defendant is denied for lack of merit.
Finally, within three (3) days from the finality of this decision,
defendant bank is hereby compelled to execute the necessary
release or cancellation of mortgage covering the aforesaid parcels
of land, and deliver the two torrens titles in its possession to
herein plaintiffs.
SO ORDERED.
 Therefrom, Allied Bank went to the Court of Appeals (CA) via ordinary in favor of the spouses Cheng; (c) ordering Allied Bank to deliver the two (2)

appeal under Rule 41 of the Rules of Court, which appellate recourse was docketed torrens titles in favor of the spouses; and (d) ordering Allied Bank to pay attorneys

as CA-G.R. CV No. 41280. fees and costs. In short, Allied Bank faults the Court of Appeals for not reversing

the trial courts decision in its entirety. More specifically, it submits:

As stated at the outset hereof, the Court of Appeals, in its Decision dated

11 December 2001, partially reversed and set aside the appealed decision of the
In General, THE HONORABLE COURT OF APPEALS
trial court insofar as it (a) declared the promissory note as not valid and
GRAVELY ERRED WHEN IT DID NOT REVERSE AND SET
unenforceable and (b) ordered Allied Bank to pay the spouses Cheng the amount of

Four Million Pesos (P4,000,000.00) for the loss of the fishing vessel and the sum of ASIDE THE DECISION OF THE REGIONAL TRIAL COURT

Thirty Thousand Pesos (P30,000.00) as moral and exemplary damages. In all other OF MAKATI CITY, BRANCH 145 IN ITS ENTIRETY.

respects, the appellate court affirmed the trial court, thus:

WHEREFORE, the foregoing considered, the appealed In Particular, THE HONORABLE COURT OF
decision is REVERSED and SET ASIDE insofar as it
(1) DECLARED the Promissory Note dated 12 August 1981 APPEALS PATENTLY ERRED WHEN IT UPHELD
as NOT VALID and unenforceable, and
(2) ORDERED appellant Bank to pay to appellee-spouses Cheng RESPONDENTS ASSERTION THAT THE REAL ESTATE
the amount of Four Million Pesos (P4,000,000.00) for the loss of
the fishing vessel JEAN III and the amount of Thirty Thousand MORTGAGE DATED MAY 31, 1983 CANNOT BE
Pesos (P30,000.00) for moral and exemplary damages. In all
other respects, the decision is AFFIRMED. FORECLOSED WITH RESPECT TO THE OBLIGATION OF

SO ORDERED. PHILIPPINE PACIFIC TO PETITIONER.

Dissatisfied, Allied Bank immediately filed with this Court its petition for
For their part, the spouses Cheng filed with the Court of Appeals a motion
review on certiorari in G.R. No. 151040, seeking to set aside and reverse only that
for reconsideration, disputing the appellate courts pronouncement that the August
portion of the appellate courts decision which affirmed certain aspects of the trial
12, 1981 promissory note and the deed of chattel mortgage over the fishing
courts decision, i.e., (a) enjoining Allied Bank and the Ex-Officio Sheriff of Pasig
vessel Jean III are valid and enforceable and that the loss of said vessel must be
from proceeding with the foreclosure of the Real Estate Mortgage over the San

Juan property; (b) ordering Allied Bank to execute a release of the same mortgage
borne by them. In its resolution of 1 July 2002, the appellate court denied the
motion.
Hence, the spouses Chengs own petition for review on certiorari in G.R.
No. 154109, seeking the reversal and setting aside of both the appellate courts
decision of 11 December 2001 and resolution of 01 July 2002, it being their
submission that said court committed a grave and serious reversible error in not
holding that:
1. the subject Promissory Note is not valid and
enforceable for non-fulfillment of a suspensive condition and
consequently, the Deed of Chattel Mortgage, being a mere
accessory agreement, is likewise not valid and enforceable in the
absence of a valid principal contract; and
2. the Loss of the mortgaged Fishing Vessel Jean III
must be borne by the respondent bank considering that the vessel
was in its possession and control at the time of the loss.
Per this Courts Resolution dated 20 November 2002,[8] the two (2)
separate petitions were ordered consolidated, involving, as they do, the same
decision of the appellate court.
As we see it, the common issues to be resolved are:
I. Whether or not the promissory note dated 12
August 1981 is valid;
II. Whether or not the chattel mortgage over the fishing
vessel Jean III can be foreclosed for Philippine Pacifics
failure to comply with its obligation under the
promissory note dated 12 August 1981; and
III. Whether or not the real estate mortgage constituted
over spouses Chengs parcel of land covered by TCT No.
(222143) 23843 [San Juan property] also secured the
spouses obligation as co-makers of the promissory note
dated 12 August 1981.
In justifying its reversal of the trial courts finding that the validity and
effectivity of the promissory note dated 12 August 1981 were conditioned upon the
ratification thereof by the SEC-created management committee in SEC Case No.
2042, the appellate court explained that the terms of the subject promissory note are
clear and leave no doubt upon the intention of the parties. On this score, it ruled
that the parole evidence introduced by the Cheng spouses to the effect that the
validity and enforceability of the note are conditioned upon its approval and
ratification by the management committee should have been discarded by the trial
court, consistent with the parole evidence rule embodied in Rule 130, Section 9 of
the Rules of Court.[9] Says the appellate court in its challenged decision:
Instead, We agree with [Allied Bank] that there is no
evidence to support the court a quos finding that the effectivity of
the promissory note was dependent upon the prior ratification or
confirmation of the management committee formed by the SEC
in SEC Case No. 2042.
 To begin with, there is nothing on the face of the
promissory note requiring said prior ratification for it to become where the management committee was ordered created; hence, it would not be
valid. Basic is the rule that if the terms of the contract are clear
and leave no doubt upon the intention of the parties, the literal correct to presume that it had notice of the existence of the management committee
meaning of its stipulations shall control (Article 1370, Civil
which, incidentally, was still to be created when the subject promissory note was
Code; Honrado, Jr. vs. CA, 198 SCRA 326).
This basic rule notwithstanding, the court a executed on 12 August 1981. Notably, while the parties in SEC Case No. 2042
quo admitted in evidence the alleged verbal stipulation made by
[the spouses Cheng] to the effect that the validity of the agreed to form the management committee on 27 July 1981, it was only on 14
promissory note was dependent upon its ratification by the
management committee. Such parole evidence should not have August 1981 when the committee was actually created and its members appointed.
been allowed as it had the effect of altering the provisions of the
promissory note which are in clear and unequivocal terms. Clearly then, the subject promissory note was outside the realm of authority of the

management committee. Corollarily, the chattel mortgage accessory to it is likewise

Under the parole evidence rule, the terms of a contract
are conclusive upon the parties and evidence which shall vary a valid.
complete and enforceable agreement embodied in a document is
inadmissible (Magellan Manufacturing Corporation vs. CA, 201
SCRA 106).[10] (Words in bracket ours). We thus declare and so hold that Allied Banks foreclosure of the chattel

mortgage constituted over the vessel Jean III was justified. On this score, we also
We agree. rule that the loss of the mortgaged chattel brought about by its sinking must be

borne not by Allied Bank but by the spouses Cheng. As owners of the fishing
The appellate court is correct in declaring that under the parole evidence
vessel, it was incumbent upon the spouses to insure it against loss. Thus, when the
rule, when the parties have reduced their agreement into writing, they are deemed
vessel sank before the chattel mortgage could be foreclosed, uninsured as it is, its
to have intended such written agreement to be the sole repository and memorial of
loss must be borne by the spouses Cheng.
everything that they have agreed upon. All their prior and contemporaneous

agreements are deemed to be merged in the written document so that, as between We proceed to the third issue. Both the trial court and the appellate court
them and their successors-in-interest, such writing becomes exclusive evidence of are unanimous in finding that the real estate mortgage executed by the spouses
the terms thereof and any verbal agreement which tends to vary, alter or modify the Cheng over their San Juan property to secure the loan of GCPI cannot be held to
same is not admissible.[11] secure the spouses obligation as co-makers of the promissory note dated 12 August

1981. We see no reason to depart from the findings of the two courts below.
Here, the terms of the subject promissory note and the deed of chattel

mortgage are clear and explicit and devoid of any conditionality upon which its Article 2126 of the Civil Code is explicit:
validity depends. To be sure, Allied Bank was not a party to SEC Case No. 2042
 ART. 2126. The mortgage directly and immediately ESPEJO, ODELEJO ESPEJO and
subjects the property upon which it is imposed, whoever the NEMI FERNANDEZ, Promulgated:
possessor may be, to the fulfillment of the obligation for whose Respondents. August 25, 2010
security it was constituted. x--------------------------------------------------------x

The agreement between the Cheng spouses and Allied Bank as evidenced DECISION

by the receipt signed by Allied Banks representative is that the San Juan
DEL CASTILLO, J.
property shall collateralize the approved loan of GCPI, thus indicating the specific

loan to be secured and nothing else. To be sure, the obligation of GCPI was already When the parties admit the contents of written documents but put in issue whether these
paid in full. Hence the real estate mortgage accessory to it was inevitably documents adequately and correctly express the true intention of the parties, the deciding

extinguished. body is authorized to look beyond these instruments and into the contemporaneous and
subsequent actions of the parties in order to determine such intent.
All told, we find no reversible error committed by the appellate court in

rendering the assailed 11 December 2001 Decision and subsequent 01 July Well-settled is the rule that in case of doubt, it is the intention of the contracting parties that
prevails, for the intention is the soul of a contract, not its wording which is prone to mistakes,
2002Resolution in CA-G.R. CV 41280.
inadequacies, or ambiguities. To hold otherwise would give life, validity, and precedence to

WHEREFORE, the consolidated petitions are DENIED and the mere typographical errors and defeat the very purpose of agreements.
This Petition for Review on Certiorari[1] assails the October 7, 2003 Decision,[2] as well as
challenged decision and resolution of the Court of Appeals AFFIRMED in toto.
the May 11, 2005 Resolution[3] of the Court of Appeals (CA) in CA G.R. SP No. 69981. The
dispositive portion of the appellate courts Decision reads:
SO ORDERED.
FIRST DIVISION WHEREFORE, finding reversible error committed by the Department
of Agrarian Reform Adjudication Board, the instant petition for review is
SALUN-AT MARQUEZ and NESTOR G.R. No. 168387 GRANTED. The assailed Decision, dated 17 January 2001, rendered by
DELA CRUZ, the Department of Agrarian Reform Adjudication Board is hereby
Petitioners, ANNULLED and SET ASIDE. The Decision of the Department of
Present: Agrarian Reform Adjudication Board of Bayombong[,] Nueva Vizcaya,
- versus - dated 17 March 1998, is REINSTATED. Costs against respondents.

CORONA, C. J., Chairperson, SO ORDERED.[4]

ELOISA ESPEJO, ELENITA ESPEJO, VELASCO, JR.,
EMERITA ESPEJO, OPHIRRO LEONARDO-DE CASTRO,
ESPEJO, OTHNIEL ESPEJO, DEL CASTILLO, and
ORLANDO ESPEJO, OSMUNDO PEREZ, J.
The reinstated Decision of the Department of Agrarian Reform Adjudication Board
(DARAB) of Bayombong, Nueva Vizcaya, in turn, contained the following dispositive
portion:
Accordingly, judgment is rendered:
1. Finding [respondents] to be the owner by re-purchase
from RBBI [of] the Murong property covered by TCT No.
[T-]62096 (formerly TCT No. 43258);
2. Ordering the cancellation of TCT with CLOA Nos. 395
and 396 in the name[s] of Salun-at Marquez and Nestor de la Cruz
respectively, as they are disqualified to become tenants of the
Lantap property;
3. Directing RBBI to sell through VOS the Lantap property
to its rightful beneficiary, herein tenant-farmer Nemi Fernandez
under reasonable terms and conditions;
4. Ordering RBBI to return the amount paid to it by Nestor
and Salun-at; and ordering the latter to pay 20 cavans of palay per
hectare at 46 kilos per cavan unto [respondents] plus such accrued
and unpaid rentals for the past years as may be duly accounted for
with the assistance of the Municipal Agrarian Reform Officer of
Bagabag, Nueva Vizcaya who is also hereby instructed to assist
the parties execute their leasehold contracts and;
5. The order to supervise harvest dated March 11, 1998 shall
be observed until otherwise modified or dissolved by the appellate
body.
SO ORDERED.[5]
Factual Antecedents
Respondents Espejos were the original registered owners of two parcels of agricultural land,
with an area of two hectares each. One is located at Barangay Lantap, Bagabag, Nueva
Vizcaya (the Lantap property) while the other is located in Barangay Murong, Bagabag,
Nueva Vizcaya (the Murong property). There is no dispute among the parties that the
Lantap property is tenanted by respondent Nemi Fernandez (Nemi) [6] (who is the
husband[7] of respondent Elenita Espejo (Elenita), while the Murong property is tenanted by
petitioners Salun-at Marquez (Marquez) and Nestor Dela Cruz (Dela Cruz).[8]
The respondents mortgaged both parcels of land to Rural Bank of Bayombong, Inc. (RBBI)
to secure certain loans. Upon their failure to pay the loans, the mortgaged properties were
foreclosed and sold to RBBI. RBBI eventually consolidated title to the properties and
transfer certificates of title (TCTs) were issued in the name of RBBI. TCT No. T-
62096 dated January 14, 1985 was issued for the Murong property. It contained the
following description:
Beginning at a point marked I on plan H-176292, S. 44034 W. 1656.31
m. more or less from B.L.L.M. No 1, Bagabag Townsite, K-27,
thence N. 28 deg. 20 E., 200.00 m. to point 2;
thence S. 61 deg. 40 E., 100.00 m. to point 3;
thence S. 28 deg. 20 W., 200.00 m. to point 4;
thence N. 61 deg. 40 W., 100.00 m. to point 1; point of beginning;
Containing an area of 2.000 hectares. Bounded on the northeast, by
Road; on the southeast, and southwest by public land; and on the
northwest by Public Land, properties claimed by Hilario Gaudia and
Santos Navarrete. Bearings true. Declination 0131 E. Points referred to
are marked on plan H-176292. Surveyed under authority of sections 12-
22 Act No. 2874 and in accordance with existing regulations of the
Bureau of Lands by H.O. Bauman Public Land Surveyor, [in]
December 1912-March 1913. Note: All corners are Conc. Mons.
15x15x60 cm. This is Lot No. 79-A=Lot No. 159 of Bagabag
Townsite, K-27.[9]
Subsequently, TCT No. T-62836 dated June 4, 1985 was issued for the Lantap property and
contained the following description:
Beginning at a point marked 1 on plan H-105520, N. 80 deg. 32 W.,
1150.21 m. from BLLM No. 122, Irrigation project,
thence N. 61 deg. 40E., 200.00 m. to point 2;
thence N. 28 deg. 20E, 100.00 m. to point 3;
 thence S. 61 deg. 40E, 200.00 m. to point 4;
thence S. 28 deg. 20W, 100.00 m. to point 1; point of beginning;
containing an area of 2.0000 hectares. Bounded on the northeast,
southeast, and southwest by Public land; and on the northwest by Road
and public land. Bearings true. Declination 0 deg. 31E., points referred
to are marked on plan H-105520. Surveyed under authority of Section
12-22, Act No. 2874 and in accordance with existing regulations of the
Bureau of Lands, by H.O. Bauman Public Land Surveyor, [in] Dec.
1912-Mar. 1913 and approved on January 6, 1932. Note: This is Lot
No. 119-A Lot No. 225 of Bagabag Townsite K-27. All corners are B.I.
Conc. Mons. 15x60 cm.[10]
title corresponds to the Murong property. There is no evidence, however, that respondents
took possession of the Murong property, or demanded lease rentals from the petitioners
(who continued to be the tenants of the Murong property), or otherwise exercised acts of
ownership over the Murong property. On the other hand, respondent Nemi (husband of
respondent Elenita and brother-in-law of the other respondents), continued working on the
other property -- the Lantap property -- without any evidence that he ever paid rentals to
RBBI or to any landowner. The Deed of Sale was annotated on TCT No. T-62096 almost a
decade later, on July 1, 1994.[12]

Both TCTs describe their respective subjects as located in Bagabag Townsite, K-27, without
Meanwhile, on June 20, 1990, RBBI, pursuant to Sections 20 [13] and 21[14] of Republic Act
any reference to either Barangay Lantap or Barangay Murong.
(RA) No. 6657,[15] executed separate Deeds of Voluntary Land Transfer (VLTs) in favor of
petitioners Marquez and Dela Cruz, the tenants of the Murong property. Both VLTs
On February 26, 1985, respondents Espejos bought back one of their lots from RBBI. The
described the subject thereof as an agricultural land located
Deed of Sale[11] described the property sold as follows:
in Barangay Murong and covered by TCT No. T-62836 (which, however, is the title
x x x do hereby SELL, TRANSFER, and CONVEY, absolutely and corresponding to the Lantap property).[16]
unconditionally x x x that certain parcel of land, situated in the
Municipality of Bagabag, Province of Nueva Vizcaya, and more
particularly bounded and described as follows, to wit: After the petitioners completed the payment of the purchase price of P90,000.00 to RBBI,

Beginning at a point marked 1 on plan x x x x
Containing an area of 2.000 hectares. Bounded on
the NE., by Road; on the SE., and SW by Public
Land; and on the NW., by Public Land, properties
claimed by Hilario Gaudia and Santos
Navarrete. Bearing true. Declination 013 B. Points
referred to are marked on plan H-176292.
of which the Rural Bank of Bayombong (NV) Inc., is the registered
owner in fee simple in accordance with the Land Registration Act, its
title thereto being evidenced by Transfer Certificate of Title No. T-
62096issued by the Registry of Deeds of Nueva Vizcaya.
As may be seen from the foregoing, the Deed of Sale did not mention the barangay where
the property was located but mentioned the title of the property (TCT No. T-62096), which
the DAR issued the corresponding Certificates of Land Ownership Award (CLOAs) to
petitioners Marquez[17] and Dela Cruz[18] on September 5, 1991. Both CLOAs stated that
their subjects were parcels of agricultural land situated in Barangay Murong.[19] The
CLOAs were registered in the Registry of Deeds of Nueva Vizcaya on September 5, 1991.
On February 10, 1997 (more than 10 years after the Deed of Sale in favor of the respondents
and almost seven years after the execution of VLTs in favor of the petitioners), respondents
filed a Complaint[20] before the Regional Agrarian Reform Adjudicator (RARAD) of
Bayombong, Nueva Vizcaya for the cancellation of petitioners CLOAs, the deposit of
leasehold rentals by petitioners in favor of respondents, and the execution of a deed of
voluntary land transfer by RBBI in favor of respondent Nemi. The complaint was based on
respondents theory that the Murong property, occupied by the petitioners, was owned by the
respondents by virtue of the 1985 buy-back, as documented in the Deed of Sale. They based
their claim on the fact that their Deed of Sale refers to TCT No. 62096, which pertains to the
Murong property.
[21]
Petitioners filed their Answer and insisted that they bought the Murong property as
farmer-beneficiaries thereof. They maintained that they have always displayed good faith,
paid lease rentals to RBBI when it became the owner of the Murong property, bought the
same from RBBI upon the honest belief that they were buying the Murong property, and
occupied and exercised acts of ownership over the Murong property. Petitioners also argued
that what respondents Espejos repurchased from RBBI in 1985 was actually the Lantap
property, as evidenced by their continued occupation and possession of the Lantap property
through respondent Nemi.
RBBI answered[22] that it was the Lantap property which was the subject of the buy-back
transaction with respondents Espejos. It denied committing a grave mistake in the
transaction and maintained its good faith in the disposition of its acquired assets in
conformity with the rural banking rules and regulations.
[23]
OIC-RARAD Decision
The OIC-RARAD gave precedence to the TCT numbers appearing on the Deed of Sale and
the VLTs. Since TCT No. T-62096 appeared on respondents Deed of Sale and the said title
refers to the Murong property, the OIC-RARAD concluded that the subject of sale was
indeed the Murong property. On the other hand, since the petitioners VLTs referred to TCT
No. T-62836, which corresponds to the Lantap property, the OIC-RARAD ruled that
petitioners CLOAs necessarily refer to the Lantap property. As for the particular description
contained in the VLTs that the subject thereof is the Murong property, the OIC-RARAD
ruled that it was a mere typographical error.
Further, since the VLTs covered the Lantap property and petitioners are not the actual tillers
thereof, the OIC-RARAD declared that they were disqualified to become tenants of the
Lantap property and ordered the cancellation of their CLOAs. It then ordered RBBI to
execute a leasehold contract with the real tenant of the Lantap property, Nemi.
The OIC-RARAD recognized that petitioners only right as the actual tillers of the Murong
property is to remain as the tenants thereof after the execution of leasehold contracts with
and payment of rentals in arrears to respondents.
DARAB Decision[24]
Upon appeal filed by petitioners, the DARAB reversed the OIC-RARAD Decision. It ruled
that in assailing the validity of the CLOAs issued to petitioners as bona fide tenant-farmers,
the burden of proof rests on the respondents. There being no evidence that the DAR field
personnel were remiss in the performance of their official duties when they issued the
corresponding CLOAs in favor of petitioners, the presumption of regular performance of
duty prevails. This conclusion is made more imperative by the respondents admission that
petitioners are the actual tillers of the Murong property, hence qualified beneficiaries thereof.
As for respondents allegation that they bought back the Murong property from RBBI, the
DARAB ruled that they failed to support their allegation with substantial evidence. It gave
more credence to RBBIs claim that respondents repurchased the Lantap property, not the
Murong property. Respondents, as owners of the Lantap property, were ordered to enter into
an agricultural leasehold contract with their brother-in-law Nemi, who is the actual tenant of
the Lantap property.
The DARAB ended its January 17, 2001 Decision in this wise:
 We find no basis or justification to question the authenticity and validity
of the CLOAs issued to appellants as they are by operation of law
qualified beneficiaries over the landholdings; there is nothing to quiet as
these titles were awarded in conformity with the CARP program
implementation; and finally, the Board declares that all controverted
claims to or against the subject landholding must be completely and
finally laid to rest.
WHEREFORE, premises considered and finding reversible errors[,] the
assailed decision is ANNULLED and a new judgment is hereby
rendered, declaring:
1. Appellants Salun-at Marquez and Nestor Dela
Cruz as the bona fide tenant-tillers over the Murong property and
therefore they are the qualified beneficiaries thereof;
2. Declaring Transfer Certificate of Title (TCT) Nos.
395 and 396 issued in the name of [farmer-beneficiaries] Salun-at
Marquez and Nestor Dela Cruz respectively, covered formerly by TCT
No. 62096 (TCT No. 43258) of the Murong property as valid and legal;
3. Ordering the co-[respondents] to firm-up an
agricultural leasehold contract with bona fide tenant-tiller Nemi
Fernandez over the Lantap property, [the latter] being the subject matter
of the buy back arrangement entered into between [respondents] and
Rural Bank of Bayombong, Incorporated, and other incidental matters
are deemed resolved.
SO ORDERED.[25]
Ruling of the Court of Appeals
In appealing to the CA, the respondents insisted that the DARAB erred in ruling that they
repurchased the Lantap property, while the petitioners were awarded the Murong
property. They were adamant that the title numbers indicated in their respective deeds of
conveyance should control in determining the subjects thereof. Since respondents Deed of
Sale expressed that its subject is the property with TCT No. T-62096, then what was sold to
them was the Murong property. On the other hand, petitioners VLTs and CLOAs say that
they cover the property with TCT No. T-62836; thus it should be understood that they were
awarded the Lantap property. Respondents added that since petitioners are not the actual
tillers of the Lantap property, their CLOAs should be cancelled due to their lack of
qualification.
The CA agreed with the respondents. Using the Best Evidence Rule embodied in Rule 130,
Section 3, the CA held that the Deed of Sale is the best evidence as to its contents,
particularly the description of the land which was the object of the sale. Since the Deed of
Sale expressed that its subject is the land covered by TCT No. T-62096 the Murong property
then that is the property that the respondents repurchased.
The CA further ruled that as for petitioners VLTs, the same refer to the property with TCT
No. T-62836; thus, the subject of their CLOAs is the Lantap property. The additional
description in the VLTs that the subject thereof is located in Barangay Murong was
considered to be a mere typographical error. The CA ruled that the technical description
contained in the TCT is more accurate in identifying the subject property since the same
particularly describes the properties metes and bounds.
Both the RBBI[26] and petitioners[27] filed their respective motions for reconsideration, which
were separately denied.[28]
On June 22, 2004, RBBI filed a separate Petition for Review on Certiorari, docketed as
G.R. No. 163320, with this Court.[29] RBBI raised the issue that the CA failed to appreciate
that respondents did not come to court with clean hands because they misled RBBI to
believe at the time of the sale that the two lots were not tenanted. RBBI also asked that they
be declared free from any liability to the parties as it did not enrich itself at anyones
expense. RBBIs petition was dismissed on July 26, 2004 for lack of merit. The said
Resolution reads:
Considering the allegations, issues[,] and arguments adduced in the
petition for review on certiorari, the Court Resolves to DENY the
petition for lack of sufficient showing that the Court of Appeals had
 committed any reversible error in the questioned judgment to warrant
Evidence Rule. The question involving the admissibility of evidence is a legal question that
the exercise by this Court of its discretionary appellate jurisdiction in this
case.[30] is within the Courts authority to review.[35]

Besides, even if it were a factual question, the Court is not precluded to review the
Their Motion for Reconsideration was likewise denied with finality.[31] Entry of judgment
same. The rule that a petition for review should raise only questions of law admits of
was made in that case on December 15, 2004.[32]
exceptions, among which are (1) when the findings are grounded entirely on speculations,
surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd or
On July 27, 2005,[33] petitioners filed the instant petition.
impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on
a misappreciation of facts; (5) when the findings of fact are conflicting; (6) when, in making
Issues
its findings, the same are contrary to the admissions of both appellant and appellee; (7) when
the findings are contrary to those of the trial court; (8) when the findings are conclusions
Rephrased and consolidated, the parties present the following issues for the Courts
without citation of specific evidence on which they are based; (9) when the facts set forth in
determination:
the petition as well as in the petitioner's main and reply briefs are not disputed by the

I respondent; and (10) when the findings of fact are premised on the supposed absence of
What is the effect of the final judgment dismissing RBBIs Petition for Review evidence and contradicted by the evidence on record.[36]
on Certiorari, which assailed the same CA Decision

II In the instant case, we find sufficient basis to apply the exceptions to the general rule because
Whether the CA erred in utilizing the Best Evidence Rule to determine the subject of the
contracts the appellate court misappreciated the facts of the case through its erroneous application of
the Best Evidence Rule, as will be discussed below. Moreover, the disparate rulings of the
III
What are the subject properties of the parties respective contracts with RBBI three reviewing bodies below are sufficient for the Court to exercise its jurisdiction under
Rule 45.
Our Ruling
First Issue
Dismissal of RBBIs appeal
Propriety of the Petition
Respondents maintain that the instant petition for review raises factual issues which are
beyond the province of Rule 45.[34] Respondents maintain that the Courts earlier dismissal of RBBIs petition
for review of the same CA Decision is eloquent proof that there is no reversible error in the

The issues involved herein are not entirely factual. Petitioners assail the appellate courts appellate courts decision in favor of the respondents.[37]

rejection of their evidence (as to the contractual intent) as inadmissible under the Best
We are not persuaded. This Court dismissed RBBIs earlier petition in G.R. No. 163320 (in this case RBBI) has already transferred his title to third persons (petitioners), the said
because it failed to convincingly demonstrate the alleged errors in the CA Decision. The transferees are not bound by any judgment which may be rendered against the vendor.[41]
bank did not point out the inadequacies and errors in the appellate courts decision but simply
Second Issue
placed the responsibility for the confusion on the respondents for allegedly misleading the
Is it correct to apply the Best Evidence Rule?
bank as to the identity of the properties and for misrepresenting that the two lots were not
tenanted. Thus, RBBI argued that respondents did not come to court with clean hands.
Citing the Best Evidence Rule in Rule 130, Section 3, the CA held that the Deed of Sale
between respondents and RBBI is the best evidence as to the property that was sold by
These arguments were ineffectual in convincing the Court to review the appellate courts
RBBI to the respondents. Since the Deed of Sale stated that its subject is the land covered by
Decision. It is the appellants responsibility to point out the perceived errors in the appealed
TCT No. T-62096 the title for the Murong property then the property repurchased by the
decision.When a party merely raises equitable considerations such as the clean hands
respondents was the Murong property. Likewise, the CA held that since the VLTs between
doctrine without a clear-cut legal basis and cogent arguments to support his claim, there
petitioners and RBBI refer to TCT No. T-62836 the title for the Lantap property then the
should be no surprise if the Court is not swayed to exercise its appellate jurisdiction and the
property transferred to petitioners was the Lantap property.
appeal is dismissed outright. The dismissal of an appeal does not always and necessarily
mean that the appealed decision is correct, for it could simply be the result of the appellants
Petitioners argue that the appellate court erred in using the best evidence rule to determine
inadequate discussion, ineffectual arguments, or even procedural lapses.
the subject of the Deed of Sale and the Deeds of Voluntary Land Transfer. They maintain
that the issue in the case is not the contents of the contracts but the intention of the parties
RBBIs failure to convince the Court of the merits of its appeal should not prejudice
that was not adequately expressed in their contracts. Petitioners then argue that it is the Parol
petitioners who were not parties to RBBIs appeal, especially because petitioners duly filed a
Evidence Rule that should be applied in order to adequately resolve the dispute.
separate appeal and were able to articulately and effectively present their arguments. A party
cannot be deprived of his right to appeal an adverse decision just because another party had
Indeed, the appellate court erred in its application of the Best Evidence Rule. The Best
already appealed ahead of him,[38] or just because the other partys separate appeal had
Evidence Rule states that when the subject of inquiry is the contents of a document, the best
already been dismissed.[39]
evidence is the original document itself and no other evidence (such as a reproduction,
photocopy or oral evidence) is admissible as a general rule. The original is preferred because
There is another reason not to bind the petitioners to the final judgment against RBBI. RBBI
it reduces the chance of undetected tampering with the document.[42]
executed the transfer (VLTs) in favor of petitioners prior to the commencement of the
action.Thus, when the action for cancellation of CLOA was filed, RBBI had already
In the instant case, there is no room for the application of the Best Evidence Rule because
divested itself of its title to the two properties involved. Under the rule on res judicata, a
there is no dispute regarding the contents of the documents. It is admitted by the parties that
judgment (in personam) is conclusive only between the parties and their successors-in-
the respondents Deed of Sale referred to TCT No. T-62096 as its subject; while the
interest by title subsequent to the commencement of the action.[40] Thus, when the vendor
petitioners Deeds of Voluntary Land Transfer referred to TCT No. T-62836 as its subject,
which is further described as located in Barangay Murong.
The real issue is whether the admitted contents of these documents adequately and correctly
express the true intention of the parties. As to the Deed of Sale, petitioners (and RBBI)
maintain that while it refers to TCT No. T-62096, the parties actually intended the sale of the
Lantap property (covered by TCT No. T-62836).
As to the VLTs, respondents contend that the reference to TCT No. T-62836 (corresponding
to the Lantap property) reflects the true intention of RBBI and the petitioners, and the
reference to Barangay Murong was a typographical error. On the other hand, petitioners
claim that the reference to Barangay Murong reflects their true intention, while the
reference to TCT No. T-62836 was a mere error. This dispute reflects an intrinsic ambiguity
in the contracts, arising from an apparent failure of the instruments to adequately express the
true intention of the parties. To resolve the ambiguity, resort must be had to evidence outside
of the instruments.
The CA, however, refused to look beyond the literal wording of the documents and rejected
any other evidence that could shed light on the actual intention of the contracting
parties. Though the CA cited the Best Evidence Rule, it appears that what it actually applied
was the Parol Evidence Rule instead, which provides:
When the terms of an agreement have been reduced to writing, it is
considered as containing all the terms agreed upon and there can be,
between the parties and their successors in interest, no evidence of such
terms other than the contents of the written agreement.[43]
The Parol Evidence Rule excludes parol or extrinsic evidence by which a party seeks to
contradict, vary, add to or subtract from the terms of a valid agreement or instrument. Thus,
it appears that what the CA actually applied in its assailed Decision when it refused to look
beyond the words of the contracts was the Parol Evidence Rule, not the Best Evidence
Rule. The appellate court gave primacy to the literal terms of the two contracts and refused
to admit any other evidence that would contradict such terms.
However, even the application of the Parol Evidence Rule is improper in the case at bar. In
the first place, respondents are not parties to the VLTs executed between RBBI and
petitioners; they are strangers to the written contracts. Rule 130, Section 9 specifically
provides that parol evidence rule is exclusive only as between the parties and their
successors-in-interest. The parol evidence rule may not be invoked where at least one of the
parties to the suit is not a party or a privy of a party to the written document in question, and
does not base his claim on the instrument or assert a right originating in the instrument.[44]
Moreover, the instant case falls under the exceptions to the Parol Evidence Rule, as provided
in the second paragraph of Rule 130, Section 9:
However, a party may present evidence to modify, explain or add to the
terms of the written agreement if he puts in issue in his pleading:
(1) An intrinsic ambiguity, mistake or
imperfection in the written agreement;
(2) The failure of the written agreement to
express the true intent and agreement of the parties
thereto;
x x x x (Emphasis supplied)
Here, the petitioners VLTs suffer from intrinsic ambiguity. The VLTs described the subject
property as covered by TCT No. T-62836 (Lantap property), but they also describe the
subject property as being located in Barangay Murong. Even the respondents Deed of Sale
falls under the exception to the Parol Evidence Rule. It refers to TCT No. T-62096 (Murong
property), but RBBI contended that the true intent was to sell the Lantap property. In short, it
was squarely put in issue that the written agreement failed to express the true intent of the
parties.
Based on the foregoing, the resolution of the instant case necessitates an examination of the
parties respective parol evidence, in order to determine the true intent of the parties. Well-
settled is the rule that in case of doubt, it is the intention of the contracting parties that
prevails, for the intention is the soul of a contract, [45] not its wording which is prone to
mistakes, inadequacies, or ambiguities. To hold otherwise would give life, validity, and
precedence to mere typographical errors and defeat the very purpose of agreements.
In this regard, guidance is provided by the following articles of the Civil Code involving the
interpretation of contracts:
Article 1370. If the terms of a contract are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of its
stipulations shall control.
If the words appear to be contrary to the evident intention of the parties,
the latter shall prevail over the former.
Article 1371. In order to judge the intention of the contracting parties,
their contemporaneous and subsequent acts shall be principally
considered.
Rule 130, Section 13 which provides for the rules on the interpretation of documents is
likewise enlightening:
Section 13. Interpretation according to circumstances. For the proper
construction of an instrument, the circumstances under which it was
made, including the situation of the subject thereof and of the parties to
it, may be shown, so that the judge may be placed in the position of
those whose language he is to interpret.
Applying the foregoing guiding rules, it is clear that the Deed of Sale was intended to
transfer the Lantap property to the respondents, while the VLTs were intended to convey the
Murong property to the petitioners. This may be seen from the contemporaneous and
subsequent acts of the parties.
Third issue
Determining the intention of the parties
regarding the subjects of their contracts
We are convinced that the subject of the Deed of Sale between RBBI and the respondents
was the Lantap property, and not the Murong property. After the execution in 1985 of the
Deed of Sale, the respondents did not exercise acts of ownership that could show that they
indeed knew and believed that they repurchased the Murong property. They did not take
possession of the Murong property. As admitted by the parties, the Murong property was in
the possession of the petitioners, who occupied and tilled the same without any objection
from the respondents.Moreover, petitioners paid leasehold rentals for using the Murong
property to RBBI, not to the respondents.
Aside from respondents neglect of their alleged ownership rights over the Murong property,
there is one other circumstance that convinces us that what respondents really repurchased
was the Lantap property. Respondent Nemi (husband of respondent Elenita) is the farmer
actually tilling the Lantap property, without turning over the supposed landowners share to
RBBI. This strongly indicates that the respondents considered themselves (and not RBBI) as
the owners of the Lantap property. For if respondents (particularly spouses Elenita and
Nemi) truly believed that RBBI retained ownership of the Lantap property, how come they
never complied with their obligations as supposed tenants of RBBIs land? The factual
circumstances of the case simply do not support the theory propounded by the respondents.
We are likewise convinced that the subject of the Deeds of Voluntary Land Transfer (VLTs)
in favor of petitioners was the Murong property, and not the Lantap property. When the
VLTs were executed in 1990, petitioners were already the tenant-farmers of the Murong
property, and had been paying rentals to RBBI accordingly. It is therefore natural that the
Murong property and no other was the one that they had intended to acquire from RBBI
with the execution of the VLTs. Moreover, after the execution of the VLTs, petitioners
remained in possession of the Murong property, enjoying and tilling it without any
opposition from anybody. Subsequently, after the petitioners completed their payment of the
total purchase price of P90,000.00 to RBBI, the Department of Agrarian Reform (DAR)
officials conducted their investigation of the Murong property which, with the presumption
of regularity in the performance of official duty, did not reveal any anomaly. Petitioners were
found to be in actual possession of the Murong property and were the qualified beneficiaries
thereof. Thus, the DAR officials issued CLOAs in petitioners favor; and these CLOAs
explicitly refer to the land in Barangay Murong. All this time, petitioners were in possession
of the Murong property, undisturbed by anyone for several long years, until respondents
started the controversy in 1997.
All of these contemporaneous and subsequent actions of RBBI and petitioners support their
position that the subject of their contract (VLTs) is the Murong property, not the Lantap
property.Conversely, there has been no contrary evidence of the parties actuations to indicate
that they intended the sale of the Lantap property. Thus, it appears that the reference in their
VLT to TCT No. T-62836 (Lantap property) was due to their honest but mistaken belief that
the said title covers the Murong property. Such a mistake is not farfetched considering that
TCT No. T-62836 only refers to the Municipality of Bayombong, Nueva Vizcaya, and does
not indicate the particular barangay where the property is located. Moreover, both
properties are bounded by a road and public land. Hence, were it not for the detailed
technical description, the titles for the two properties are very similar.
The respondents attempt to discredit petitioners argument that their VLTs were intrinsically
ambiguous and failed to express their true intention by asking why petitioners never filed an
[46]
action for the reformation of their contract. A cause of action for the reformation of a
contract only arises when one of the contracting parties manifests an intention, by overt acts,
not to abide by the true agreement of the parties.[47] It seems fairly obvious that petitioners
had no cause to reform their VLTs because the parties thereto (RBBI and petitioners) never
had any dispute as to the interpretation and application thereof. They both understood the
VLTs to cover the Murong property (and not the Lantap property). It was only much later,
when strangers to the contracts argued for a different interpretation, that the issue became
relevant for the first time.
All told, we rule that the Deed of Sale dated February 26, 1985 between respondents and
RBBI covers the Lantap property under TCT No. T-62836, while the Deeds of Voluntary
Land Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover
the Murong property under TCT No. T-62096. In consequence, the CAs ruling against
RBBI should not be executed as such execution would be inconsistent with our ruling
herein. Although the CAs decision had already become final and executory as against
RBBI with the dismissal of RBBIs petition in G.R. No. 163320, our ruling herein in favor of
petitioners is a supervening cause which renders the execution of the CA decision against
RBBI unjust and inequitable.
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed
October 7, 2003 Decision, as well as the May 11, 2005 Resolution of the Court of Appeals
in CA-G.R. SP No. 69981 are REVERSED and SET ASIDE. The January 17, 2001
Decision of the DARAB Central Office is REINSTATED. The Deed of Sale dated
February 26, 1985 between respondents and Rural Bank of Bayombong, Inc. covers the
Lantap property under TCT No. T-62836, while the Deeds of Voluntary Land Transfer and
TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the Murong property under
TCT No. T-62096. The Register of Deeds of Nueva Vizcaya is directed to make the
necessary corrections to the titles of the said properties in accordance with this
Decision. Costs against respondents.
SO ORDERED.
G.R. No. 111426 July 11, 1994
NORMA DIZON-PAMINTUAN, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
Puno and Puno for petitioner.
The Solicitor General for respondent.
DAVIDE, JR., J.:
The chief issue presented for our determination in this petition for review under
Rule 45 of the Rules of Court is the correctness of the decision of 29 March 1993
of the Court of Appeals in CA-G.R. CR No. 110241 which affirmed the decision of
Branch 20 of the Regional Trial Court of Manila in Criminal Case No. 88-
649542 finding the petitioner guilty of the violation of the Anti-Fencing Law (P.D.
No. 1612) but set aside the penalty imposed and ordered the trial court to receive
additional evidence on the "correct valuation" of the pieces of jewelry involved for
the sole purpose of determining the penalty to be imposed.
The information in Criminal Case No. 88-64954 charged the petitioner with the
violation of the Anti-Fencing Law in that
on or about and during the period from February 12, to February
24, 1988, inclusive, in the City of Manila, Philippines, the said
accused, with intent of gain for herself or for another, did then
and there wilfully, unlawfully and knowingly buy and keep in her
possession and/or sell or dispose of the following jewelries, to
wit: one (1) set of earrings, a ring studded with diamonds in a
triangular style, one (1) set of earrings (diamond studded) and
one (1) diamond-studded crucifix, or all valued at P105,000.00,
which she knew or should have known to have been derived from
the proceeds of the crime of robbery committed by Joselito
Sacdalan Salinas against the owner Teodoro and Luzviminda
Encarnacion.3
On the basis of the testimonies of prosecution witnesses Teodoro Encarnacion (one
of the offended parties), Cpl. Ignacio Jao, Jr., and Pfc. Emmanuel Sanchez, both of
the Western Police District, the trial court promulgated on 16 November 1990 its
decision, the dispositive portion of which reads:
WHEREFORE, the prosecution having proved the guilty of the
accused for violation of Presidential Decree No. 1612 beyond
reasonable doubt, the accused Norma Dizon-Pamintuan is hereby
sentenced to suffer an indeterminate penalty of imprisonment
from FOURTEEN (14) YEARS of prision mayor to NINETEEN
(19) YEARS of reclusion temporal.
No civil liability in view of the recovery of the items, subject-
matter of this case.
With costs.4
The evidence of the prosecution is summarized by the trial court as follows:
Teodoro Encarnacion, Undersecretary, Department of Public
Works and Highways testified that he has just arrived at his
residence located at Better Living Subdivision, Parañaque at
around 9:45 p.m. of February 12, 1988 coming from the Airport
and immediately proceeded inside the house, leaving behind his
driver and two housemaids outside to pick-up his personal
belongings from his case. It was at this point that five
unidentified masked armed persons appeared from the grassy
portion of the lot beside the house and poked their guns to his
driver and two helpers and dragged them inside his house. That
the men pointed a gun at him and was made to lie face down on
the floor. The other occupants, namely his wife, the maids and his
driver were likewise made to lie on the floor. Thereafter, the
robbers ransacked the house and took away jewelries and other
personal properties including cash. After the intruders left the
house he reported the matter immediately to the police. He was
then interviewed by the Parañaque police and was informed that
an operation group would be assigned to the case.
He likewise reported the matter to the Western Police District on
February 15, 1988. Two days later, a group of WPD operatives
came over to his house and he was asked to prepare a list of items
of jewelry and other valuables that were lost including a sketch of
distinctive items. He was later told that some of the lost items
were in Chinatown area as tipped by the informer the police had
dispatched. That an entrapment would be made with their
participation, on February 14, 1988. As such, they went to Camp
Crame at around 9:00 a.m. and arrived at the vicinity of 733
Florentino Torres Street, Sta. Cruz, Manila at about 10:00 a.m.;
that he is with his wife posed as a buyer and were able to
 recognize items of the jewelry stolen displayed at the stall being
tended by Norma Dizon Pamintuan; the pieces were: 1 earring
and ring studded with diamonds worth P75,000 bought from
estimator Nancy Bacud (Exh. "C-2"), 1 set of earring diamond
worth P15,000 (Exh. "C-3") and 1 gold chain with crucifix worth
P3,000 (Exh. "C-4").
Corporal Ignacio Jao, Jr. of the WPD testified that he was with
the spouses Teodoro Encarnacion, Jr. in the morning of February
24, 1988 and they proceeded to Florentino Torres Street, Sta.
Cruz, Manila at the stall of Norma Dizon-Pamintuan together
with Sgt. Perez. After the spouses Encarnacion recognized the
items subject matter of the robbery at the display window of the
stall being tended by the herein accused, they invited the latter to
the precinct and investigated the same. They likewise brought the
said showcase to the WPD station. He further testified that he has
no prior knowledge of the stolen jewelries of the private
complainant from one store to another.
Pfc. Emmanuel Sanchez of the WPD testified that he reported for
duty on February 24, 1988; that he was with the group who
accompanied the spouses Encarnacion in Sta. Cruz, Manila and
was around when the couple saw some of the lost jewelries in the
display stall of the accused. He was likewise present during the
early part of the investigation of the WPD station.5
The recovery of the pieces of jewelry, on the basis of which the trial court ruled that
no civil liability should be adjudged against the petitioner, took place when, as
testified to by Teodoro Encarnacion, the petitioner "admitted that she got the items
but she did not know they were stolen [and that] she surrendered the items and gave
them to [his] wife."6
On the other hand, the version of the defense, as testified to by Rosito Dizon-
Pamintuan, is summarized by the trial court thus:
The defense presented only the testimony of Rosito Dizon-
Pamintuan who testified that he is the brother of Norma Dizon-
Pamintuan and that sometime around 11:00 a.m. of February 24,
1985, he, together with the accused went infront of the Carinderia
along Florentino Torres Street, Sta. Cruz, Manila waiting for a
vacancy therein to eat lunch. Suddenly, three persons arrived and
he overheard that Cpl. Jao told her sister to get the jewelry from
inside the display window but her sister requested to wait for
Fredo, the owner of the stall. But ten minutes later when said
Fredo did not show up, the police officer opened the display
window and got the contents of the same. The display stall was
hauled to a passenger jeepney and the same, together with the
accused were taken to the police headquarters. He likewise
testified that he accompanied his sister to the station and after
investigation was sent home.7
In convicting the petitioner, the trial court made the following findings:
The prosecution was able to prove by evidence
that the recovered items were part of the loot
and such recovered items belong to the spouses
Encarnacion, the herein private complainants.
That such items were recovered by the Police
Officers from the stall being tended by the
accused at that time. Of importance, is that the
law provides a disputable presumption of
fencing under Section 5 thereof, to wit:
Mere possession of any goods, article, item
object, or anything of value which has been the
subject of robbery or thievery shall be prima
facie evidence of fencing.
There is no doubt that the recovered items were found in the
possession of the accused and she was not able to rebut the
presumption though the evidence for the defense alleged that the
stall is owned by one Fredo. A distinction should likewise be
made between ownership and possession in relation to the act of
fencing. Moreover, as to the value of the jewelries recovered, the
prosecution was able to show that the same is Ninety Three
Thousand Pesos (P93,000.00).8
The petitioner then appealed her conviction to the Court of Appeals (CA-G.R. CR
No. 11024) where she raised two issues: (1) that the judgment was based on a mere
presumption, and (2) that the prosecution failed to show that the value of the
jewelry recovered is P93,000.00.
In its challenged decision of 29 March 1993, the Court of Appeals disposed of the
first issue in this wise:
The guilt of accused-appellant was established beyond reasonable
doubt. All the elements of the crime of fencing in violation of the
Anti-Fencing Law of 1979 (P.D. No. 1612), to wit:
 1. A crime of robbery or theft has been committed;
2. A person, not a participant in said crime, buys, receives,
possesses, keeps, acquires, conceals, sells or disposes, or buys
and sells; or in any manner deals in any article or item, object or
anything of value;
3. With personal knowledge, or should be known to said person
that said item, object or anything of value has been derived from
the proceeds of the crime of robbery or theft;
4. With intent to gain for himself or for another;
have been established by positive and convincing evidence of the
prosecution . . .
...
The fact that a crime of robbery has been committed on February
12, 1988 is established by the testimony of private complainant
Teodoro T. Encarnacion who immediately reported the same to
Parañaque Police Station of the Southern Police District (TSN,
Hearings of October 3, 1988, November 9, 1988 and January 11,
1989; Exh. A) and submitted a list and sketches of the jewelries
robbed, among other things, from their residence located at Better
Living Subdivision, Parañaque, Metro Manila (Exh. C,
C-1 to C-4 and D).
The second element is likewise established by convincing
evidence. On February 24, 1988, accused-appellant was found
selling the jewelries (Exhs. C-2, C-3 and C-4) which was
displayed in a showcase in a stall located at Florentino Street,
Sta. Cruz, Manila. [Testimonies of Teodoro Encarnacion (id.
supra); Cpl. Ignacio Jao (TSN, Hearing of February 13, 1989)
and Pfc. Emmanuel Sanchez (TSN, Hearing of June 4, 1989)].
On the element of knowledge that the items are derived from the
proceeds of the crime of robbery and of intent to gain for herself
or for another, the Anti-Fencing Law provides:
Sec. 5. Presumption of Fencing. — Mere
possession of any good, article, item, object, or
anything of value which has been the subject of
robbery or thievery shall be prima facie
evidence of fencing.
Knowledge and intent to gain are proven by the fact that these
jewelries were found in possession of appellant and they were
displayed for sale in a showcase being tended by her in a stall
along Florentino Street, Sta. Cruz, Manila.9
Nevertheless, the Court of Appeals was of the opinion that there was not enough
evidence to prove the value of the pieces of jewelry recovered, which is essential to
the imposition of the proper penalty under Section 3 of P.D.
No. 1612. It opined that the trial court erred in concluding that "the value of the
recovered jewelries is P93,000.00 based on the bare testimony of the private
complainant and the self-serving list he submitted (Exhs. C, C-2 and C-4, TSN,
Hearing of October 3, 1993)."10
The dispositive portion of the Court of Appeals' decision reads:
WHEREFORE, finding that the trial court did not commit any
reversible error, its decision dated October 26, 1990 convincing
accused appellant is hereby AFFIRMED with the modification
that the penalty imposed is SET ASIDE and the Regional Trial
Court (Branch 20) of Manila is ordered to receive evidence with
respect to the correct valuation of the properties involved in this
case, marked as Exhibits "C", "C-2" and "C-4" for the sole
purpose of determining the proper penalty to be meted out
against accused under Section 3, P.D. No. 1612. Let the original
records be remanded immediately.11
Hence, this petition wherein the petitioner contends that:
I
PUBLIC RESPONDENT COURT OF APPEALS MANIFESTLY
ERRED IN AFFIRMING THE DECISION OF PUBLIC
RESPONDENT JUDGE CAÑEBA, IN BLATANT
DISREGARD OF APPLICABLE LAW AND WELL-
ESTABLISHED JURISPRUDENCE.
II
PUBLIC RESPONDENT COURT OF APPEALS MANIFESTLY
ERRED IN REMANDING THE CASE TO THE COURT A
 QUO FOR RECEPTION OF EVIDENCE FOR THE PURPOSE
OF DETERMINING THE CORRECT PENALTY TO BE
IMPOSED.12
On 23 February 1994, after the public respondents had filed their Comment and the
petitioner her Reply to the Comment, this Court gave due course to the petition and
required the parties to submit their respective memoranda, which they subsequently
complied with.
The first assigned error is without merit.
Fencing, as defined in Section 2 of P.D. No. 1612 (Anti-Fencing Law), is "the act
of any person who, with intent to gain for himself or for another, shall buy, receive,
possess, keep, acquire, conceal, sell or dispose of, or shall buy and sell, or in any
manner deal in any article, item, object or anything of value which he knows, or
should be known to him, to have been derived from the proceeds of the crime of
robbery or theft."
Before P.D. No. 1612, a fence could only be prosecuted for and held liable as
an accessory, as the term is defined in Article 19 of the Revised Penal Code. The
penalty applicable to an accessory is obviously light under the rules prescribed in
Articles 53, 55, and 57 of the Revised Penal Code, subject to the qualification set
forth in Article 60 thereof. Nothing, however, the reports from law enforcement
agencies that "there is rampant robbery and thievery of government and private
properties" and that "such robbery and thievery have become profitable on the part
of the lawless elements because of the existence of ready buyers, commonly known
as fence, of stolen properties," P.D.
No. 1612 was enacted to "impose heavy penalties on persons who profit by the
effects of the crimes of robbery and theft." Evidently, the accessory in the crimes of
robbery and theft could be prosecuted as such under the Revised Penal Code or
under P.D. No. 1612. However, in the latter case, he ceases to be a mere accessory
but becomes aprincipal in the crime of fencing. Elsewise stated, the crimes of
robbery and theft, on the one hand, and fencing, on the other, are separate and
distinct offenses.13 The state may thus choose to prosecute him either under the
Revised Penal Code or P.D. No. 1612, although the preference for the latter would
seem inevitable considering that fencing is a malum prohibitum, and P.D. No. 1612
creates a presumption of fencing14 and prescribes a higher penalty based on the
value of the property.15
The elements of the crime of fencing are:
1. A crime of robbery or theft has been committed;
2. The accused, who is not a principal or accomplice in
the commission of the crime of robbery or theft, buys,
receives, possesses, keeps, acquires, conceals, sells or
disposes, or buys and sells, or in any manner deals in
any article, item, object or anything of value, which has
been derived from the proceeds of the said crime;
3. The accused knows or should have known that the
said article, item, object or anything of value has been
derived from the proceeds of the crime of robbery or
theft; and
4. There is, on the part of the accused, intent to gain for
himself or for another.
In the instant case, there is no doubt that the first, second, and fourth elements were
duly established. A robbery was committed on 12 February 1988 in the house of the
private complainants who afterwards reported the incident to the Parañaque Police,
the Western Police District, the NBI, and the CIS, and submitted a list of the lost
items and sketches of the jewelry taken from them (Exhibits "C" and "D"). Three of
these items stolen, viz., (a) a pair of earrings and ring studded with diamonds worth
P75,000.00 (Exhibit "C-2"); (b) one set of earrings worth P15,000.00 (Exhibit "C-
3"); and (c) a chain with crucifix worth P3,000.00 (Exhibit "C-4"), were displayed
for sale at a stall tended to by the petitioner in Florentino Torres Street, Sta. Cruz,
Manila. The public display of the articles for sale clearly manifested an intent to
gain on the part of the petitioner.
The more crucial issue to be resolved is whether the prosecution proved the
existence of the third element: that the accused knew or should have known that the
items recovered from her were the proceeds of the crime of robbery or theft.
One is deemed to know a particular fact if he has the cognizance, consciousness or
awareness thereof, or is aware of the existence of something, or has the
acquaintance with facts, or if he has something within the mind's grasp with
certitude and clarity.16 When knowledge of the existence of a particular fact is an
element of an offense, such knowledge is established if a person is aware of a high
probability of its existence unless he actually believes that it does not exist.17 On
the other hand, the words "should know" denote the fact that a person of reasonable
prudence and intelligence would ascertain the fact in performance of his duty to
another or would govern his conduct upon assumption that such fact
exists.18 Knowledge refers to a mental state of awareness about a fact. Since the
court cannot penetrate the mind of an accused and state with certainty what is
contained therein, it must determine such knowledge with care from the overt acts
of that person. And given two equally plausible states of cognition or mental
awareness, the court should choose the one which sustains the constitutional
presumption of innocence.19
Since Section 5 of P.D. No. 1612 expressly provides that "[m]ere possession of any
good, article, item, object, or anything of value which has been the subject of
robbery or thievery shall be prima facie evidence of fencing," it follows that the
petitioner is presumed to have knowledge of the fact that the items found in her
possession were the proceeds of robbery or theft. The presumption is reasonable for
no other natural or logical inference can arise from the established fact of her
possession of the proceeds of the crime of robbery or theft. This presumption does
not offend the presumption of innocence enshrined in the fundamental law.20 In the
early case of United States vs.
Luling, 21 this Court held:
It has been frequently decided, in case of statutory crimes, that no
constitutional provision is violated by a statute providing that
proof by the state of some material fact or facts shall
constitute prima facieevidence of guilt, and that then the burden
is shifted to the defendant for the purpose of showing that such
act or acts are innocent and are committed without unlawful
intention. (Commonwealth vs. Minor, 88 Ky., 422.)
In some of the States, as well as in England, there exist what are
known as common law offenses. In the Philippine Islands no act
is a crime unless it is made so by statute. The state having the
right to declare what acts are criminal, within certain well defined
limitations, has a right to specify what act or acts shall constitute
a crime, as well as what proof shall constitute prima
facie evidence of guilt, and then to put upon the defendant the
burden of showing that such act or acts are innocent and are not
committed with any criminal intent or intention.
In his book on constitutional law,22 Mr. Justice Isagani A. Cruz said:
Nevertheless, the constitutional presumption of innocence may
be overcome by contrary presumptions based on the experience
of human conduct [People vs. Labara, April 20, 1954].
Unexplained flight, for example, may lead to an inference of
guilt, as 'the wicked flee when no man pursueth, but the righteous
is as bold as a lion. Failure on the part of the accused to explain
his possession of stolen property may give rise to the reasonable
presumption that it was he himself who had stolen it [U.S. vs.
Espia, 16 Phil. 506]. Under our Revised Penal Code, the inability
of an accountable officer to produce funds or property entrusted
to him will be considered prima facie evidence that he has
appropriated them to his personal use [Art. 217]. According to
Cooley, the constitutional presumption will not apply as long as
there is "some rational connection between the fact proved and
the ultimate fact presumed, and the inference of one fact from
proof of another shall not be so unreasonable as to be purely
arbitrary mandate" [1 Cooley, 639].
The petitioner was unable to rebut the presumption under P.D. No. 1612. She relied
solely on the testimony of her brother which was insufficient to overcome the
presumption, and, on the contrary, even disclosed that the petitioner was engaged in
the purchase and sale of jewelry and that she used to buy from a certain Fredo. 23
Fredo was not presented as a witness and it was not established that he was a
licensed dealer or supplier of jewelry. Section 6 of P.D. No. 1612 provides that "all
stores, establishments or entitles dealing in the buy and sell of any good, article,
item, object or anything of value obtained from an unlicensed dealer or supplier
thereof, shall before offering the same for sale to the public, secure the necessary
clearance or permit from the station commander of the Integrated National Police
in the town or city where such store, establishment or entity is located." Under the
Rules and Regulations24 promulgated to carry out the provisions of Section 6, an
unlicensed dealer/supplier refers to any person, partnership, firm, corporation,
association or any other entity or establishment not licensed by the government to
engage in the business of dealing in or supplying "used secondhand articles," which
refers to any good, article, item, object or anything of value obtained from an
unlicensed dealer or supplier, regardless of whether the same has actually or in fact
been used.
We do not, however, agree with the Court of Appeals that there is insufficient
evidence to prove the actual value of the recovered articles.
As found by the trial court, the recovered articles had a total value of P93,000.00,
broken down as follows:
a) one earring and ring studded with diamonds (Exh. "C-2") —
P75,000.00
b) one set of earring (Exh. "C-3") — P15,000.00
c) one gold chain with crucifix (Exh. "C-4") — P3,000.00
These findings are based on the testimony of Mr. Encarnacion 25 and on
Exhibit "C,"26 a list of the items which were taken by the robbers on 12
 February 1988, together with the corresponding valuation thereof. On
cross-examination, Mr. Encarnacion re-affirmed his testimony on direct
examination that the value of the pieces of jewelry described in Exhibit
"C-2" is P75,000.0027 and that the value of the items described in Exhibit
"C-3" is P15,000.00, although he admitted that only one earring — and
not the pair — was recovered. 28 The cross-examination withheld any
question on the gold chain with crucifix described in Exhibit "C-4." In
view, however, of the admission that only one earring was recovered of
the jewelry described in Exhibit "C-3," it would be reasonable to reduce
the value from P15,000.00 to P7,500.00. Accordingly, the total value of
the pieces of jewelry displayed for sale by the petitioner and established to
be part of the proceeds of the robbery on 12 February 1988 would be
P87,000.00.
Section 3(a) of P.D. No. 1612 provides that the penalty of prision mayor shall be
imposed upon the accused if the value of the property involved is more than
P12,000.00 but does not exceed P22,000.00, and if the value of such property
exceeds the latter sum, the penalty of prision mayor should be imposed in its
maximum period, adding one year for each additional P10,000.00; the total penalty
which may be imposed, however, shall not exceed twenty years. In such cases, the
penalty shall be termed reclusion temporal and the accessory penalty pertaining
thereto provided in the Revised Penal Code shall also be imposed. The maximum
penalty that can be imposed in this case would then be eighteen (18) years and five
(5) months, which is within the range of reclusion temporal maximum. Applying
the Indeterminate Sentence law which allows the imposition of an indeterminate
penalty which, with respect to offenses penalized by a special law, shall range from
a minimum which shall not be lower than the minimum prescribed by the special
law to a maximum which should not exceed the maximum provided therein, the
petitioner can thus be sentenced to an indeterminate penalty ranging from ten (10)
years and one (1) day of prision mayor maximum, as minimum to eighteen (18)
years and five (5) months of reclusion temporal maximum as maximum, with the
accessory penalties corresponding to the latter.
In the light of the foregoing, the Court of Appeals erred in setting aside the penalty
imposed by the trial court and in remanding the case to the trial court for further
reception of evidence to determine the actual value of the pieces of jewelry
recovered from the petitioner and for the imposition of the appropriate penalty.
We do not agree with the petitioner's contention, though, that a remand for further
reception of evidence would place her in double jeopardy. There is double jeopardy
when the following requisites concur: (1) the first jeopardy must have attached
prior to the second, (2) the first jeopardy must have validly been terminated, and
(3) the second jeopardy must be for the same offense as that in the first.29 Such a
concurrence would not occur assuming that the case was remanded to the trial
court.
WHEREFORE, the instant petition is partly GRANTED by setting aside the
challenged decision of the Court of Appeals in CA-G.R. CR No. 11024 insofar as it
sets aside the penalty imposed by Branch 20 of the Regional Trial Court of Manila
in Criminal Case No. 88-64954 and orders the remand of the case for the trial court
to receive evidence with respect to the correct value of the properties involved. The
decision of the Regional Trial Court is AFFIRMED subject to the modification of
the penalty which is hereby reduced to an indeterminate penalty ranging from Ten
(10) years and One (1) day of Prision Mayor maximum as minimum to Eighteen
(18) years and Five (5) months of Reclusion Temporal maximum as maximum, with
the accessory penalties of the latter.
SO ORDERED.
G.R. No. L-39972 & L-40300 August 6, 1986
VICTORIA LECHUGAS, petitioner,
vs.
HON. COURT OF APPEALS, MARINA LOZA, SALVADOR LOZA, ISIDRO
LOZA, CARMELITA LOZA, DAVID LOZA, AMPARO LOZA, ERLINDA
LOZA and ALEJANDRA LOZA, respondents.
A.R. Montemayor for petitioner.
Arturo L. Limoso for private respondents.
GUTIERREZ, JR., J:
This petition for review invokes the parol evidence rule as it imputes grave abuse
of discretion on the part of the appellate court for admitting and giving credence to
the testimony of the vendor regarding the sale of the disputed lot. The testimony is
contrary to the contents of the deed of sale executed by the vendor in favor of the
petitioner.
The petitioner filed a complaint for forcible entry with damages against the private
respondents, alleging that the latter by means of force, intimidation, strategy and
stealth, unlawfully entered lots A and B, corresponding to the middle and northern
portion of the property owned by the petitioner known as Lot No. 5456. She
alleged that they appropriated the produce thereof for themselves, and refused to
surrender the possession of the same despite demands made by the petitioner. The
complaint was dismissed. Petitioner appealed to the then Court of First Instance
(CFI) of Iloilo where the case was docketed as Civil Case No. 5055.
While the above appeal was pending, the petitioner instituted another action before
the CFI of Iloilo for recovery and possession of the same property against the
private respondents.
This case was docketed as Civil Case No. 5303. The two cases were tried jointly.
After trial, the court rendered judgment. The dispositive portion of the decision
states:
Wherefore, premises considered, judgment is rendered, to wit:
a. dismissing the complaints in two cases;
b. declaring defendants except Salvador Anona and Jose Lozada
as owners and lawful possessors of the land in question together
with all the improvements thereon;
c. dismissing the claim for damages of all defendants except that
of Jose Lozada;
d. ordering plaintiff to pay defendant Jose Lozada the sum of
P500.00 as attorney's fees and the amount of P300.00 as litigation
expenses; and
e. ordering plaintiff to pay the costs of both proceedings.
The petitioner appealed to the Court of Appeals but the latter sustained the
dismissal of the cases. Hence, this petition with the petitioner making the following
assignments of errors:
I Sirilan Surveying Office, to survey the land on December 3, 1950
THAT THE RESPONDENT COURT ERRED IN
CONSIDERING PAROL EVIDENCE OVER THE OBJECTION
OF THE PETITIONER IN ORDER TO VARY THE SUBJECT
MATTER OF THE DEED OF DEFINITE SALE (EXHIBIT A)
ALTHOUGH THE LAND THEREIN IS DESCRIBED AND
DELIMITED BY METES AND BOUNDS AND IdENTIFIED
AS LOT NO. 5456 OF LAMBUNAO CADASTRE.
II
THAT THE RESPONDENT COURT ERRED IN
CONSIDERING THE THEORY OF THE DEFENDANTS-
APPELLEES FOR THE FIRST TIME ON APPEAL THAT THE
LAND DESCRIBED IN THE DEED OF SALE (EXHIBIT A) IS
LOT NO. 5522 INSTEAD OF LOT NO. 5456 OF THE
LAMBUNAO CADASTRE, THEIR ORIGINAL THEORY
BEING THAT THE DEED OF SALE (EXHIBIT A) IS NULL
AND VOID AB INITIO BECAUSE LEONCIA LASANGUE
CAN NOT SELL THE LAND IN QUESTION IN 1950 SINCE
IT WAS ALLEGEDLY SOLD IN 1941 BY HER FATHER
EMETERIO LASANGUE.
III
THAT THE RESPONDENT COURT CANNOT REFORM THE
DEED OF DEFINITE SALE BY CHANGING ITS SUBJECT
MATTER IN THE ABSENCE OF STRONG, CLEAR AND
CONVINCING EVIDENCE AND ON THE STRENGTH OF
LONG TESTIMONY OF THE VENDOR AND ALTHOUGH
NO DIRECT ACTION FOR REFORMATION WAS FILED IN
THE COURT OF ORIGIN.
A summary of the facts which brought about the controversy is contained in the
findings of the appellate court:
Plaintiff (petitioner) Victoria Lechugas testified that she bought
the land now subject of this litigation from Leoncia Lasangue as
evidenced by a public "Deed of Absolute Sale" which plaintiff
had caused to be registered in the Office of the Register of Deeds;
preparatory to the execution of the deed Exhibit "A", plaintiff had
the land segregated from the bigger portion of 12 hectares owned
by Leoncia Lasangue by contracting a private land surveyor, the
and establish its boundaries, shape, form and area in accordance
with the said plan which was attached to exhibit A as Annex A
thereof. She also states that she caused the declaration of the said
portion of six hectares subject of Exhibit A in her name beginning
the year 1951 under tax declaration No. 7912, paid taxes on the
same land, and has taken possession of the land through her
tenants Jesus Leoncio, Roberta Losarita and Simeon Guinta, who
shared one-half of the produce of the riceland with her, while she
shouldered some of the expenses in cultivation and seeds, and
one-third share in other crops, like coffee beans, bamboos,
coconuts, corn and the like.
xxx xxx xxx
Plaintiff's declaration is corroborated by her tenant Simeon
Guinta who testifies that the land subject of the complaint was
worked on by him 1954 when its former tenant, Roberto Lazarita,
now deceased, left the land. As tenant thereof, he planted rice,
corn peanuts, coffee, and other minor products, sharing the same
with the owner, plaintiff Victoria Lechugas; that on June 14,
1958, while witness was plowing Lot A preparatory to rice
planting, defendants entered the land and forced him to stop his
work. Salvador Anona and Carmelita Losa, particularly, told
witness that if he (witness) would sign an affidavit recognizing
them as his landlords, they would allow him to continue plowing
the land. On that occasion, Salvador Anona, David Loza and Jose
Loza were carrying unsheathed bolos, which made this witness
very afraid, so much so that he left the land and reported the
matter to Victoria Lechugas who reportedly went to the Chief of
Police of Lambunao to ask the latter to intervene. The advise
however of the chief of police, who responded to the call of
plaintiff, was not heeded by the defendants who stayed adamantly
on Lot A and refused to surrender the possession thereof to
plaintiff appropriating the harvest to themselves. This witness
further declares that on June 24, 1958, defendants entered Lot B
of the land in question, situated on the northern portion, and cut
the bamboo poles growing thereof counted by plaintiff's brother
and overseer in the land, Bienvenido Laranja, to be 620 bamboo
poles all in all. Despite the warning of the overseer Laranja,
defendants did not stop cutting the bamboos, and they remained
on the land, refusing to leave the same. To top it all, in June of
1959, defendants, not contended with just occupying the middle
and northern portions of the land (Lots A and B), grabbed the
whole parcel containing six hectares to the damage and prejudice
of herein plaintiff, so that plaintiff was left with no other recourse
but to file Civil Case No. 5303 for ownership, recovery of
possession and damages.
Defendants, on the other hand, maintain that the land which
plaintiff bought from Leoncia Lasangue in 1950 as evidenced by
the deed exhibit A, is different from the land now subject of this
action, and described in paragraph 2 of plaintiff's complaint. To
prove this point, defendants called as their first witness plaintiff
herself (pp. 6167, t.s.n., Tuble), to elicit from her the reason why
it was that although her vendor Leoncia Lasangue was also
residing at the municipality of Lambunao, Iloilo, plaintiff did not
care to call her to the witness stand to testify regarding the
Identity of the land which she (plaintiff) bought from said vendor
Leoncia Lasangue; to which query witness Lechugas countered
that she had tried to call her vendor, but the latter refused, saying
that she (Lasangue) had already testified in plaintiff's favor in the
forcible entry case in the Justice of the Peace Court. In
connection with her testimony regarding the true Identity of the
land plaintiff, as witness of defendants, stated that before the
execution of Exhibit "A" on December 8, 1950 the lot in question
was surveyed (on December 3, 1950) by the Sirilan Surveyor
Company after due notice to the boundary owners including
Leoncia Lasangue.
Defendant's evidence in chief, as testified to by Carmelita Lozada
(pp. 100-130, t.s.n., Trespeces; pp. 131-192, t.s.n., Tuble) shows
that on April 6, 1931 Hugo Loza father of Carmelita Loza and
predecessor-in-interest of the rest of the heirs of herein
defendants, (with the exception of Jose Loza and Salvador
Anona) purchased a parcel of land from one Victorina Limor as
evidenced by the deed "Venta Definitiva" (exhibit 3, pp. 49-50,
folder of exhibits). This land, containing 53,327 square meters is
bounded on the north by Ramon Lasangue, on the south by
Emeterio Lasangue and covered by tax declaration No. 7346
(exhibit 3-9, p. 67, Id.) in vendor's name; that immediately after
the sale, Hugo Loza took possession of the said parcel of land
and declared the same in his name (exhibit 3-10, p. 67, folder of
exhibits) starting the year 1935. On March 17, 1941, Hugo Loza
bought from Emeterio Lasangue a parcel of land with an area of
four hectares more or less, adjoining the land he (Loza) had
earlier bought from Victoria Limor, and which sale was duly
evidenced by a public instrument (exhibit 2, pp. 35-36, folder of
exhibits). This property had the following boundaries, to wit: on
the north by Eladio Luno, on the south, by Simeon Lasangue, on
the west, by Gregorio Militar and Emeterio Lasangue and on the
east, by Maximo Lasangue and Hipolito Lastica (exhibit 2,
exhibit 2-B, p. 37, Id). After the execution of the deed of sale,
Exhibit 2, Hugo Loza cause the transfer of the declaration in his
own name (tax declaration No. 8832, exh. 2-C, p. 38, Id.)
beginning 1945, and started paying the taxes on the land (exhibits
2-d to 2-i, pp. 39-44, Id.). These two parcels of land (that
purchased by Hugo Loza in 1941 from Emeterio Lasangue, and a
portion of that bought by him from Victoria Limor sometime in
1931) were consolidated and designated, during the cadastral
survey of Lambunao, Iloilo in 1959 as Lot No. 5456; while the
remaining portion of the lot bought from Victorina Limor,
adjoining Lot 5456 on the east, was designated as Lot No. 5515
in the name of the Heirs of Hugo Loza. Defendants claim that the
lot bought by plaintiff from Leoncia Lasangue as evidenced by
exhibit A, is situated south of the land now subject of this action
and designated during cadastral survey of Lambunao as Lot No.
5522, in the name of Victoria Lechugas.
xxx xxx xxx
Leoncia Lasangue, plaintiff's vendor in exhibit A, testifying for
defendants (pp. 182-115, t.s.n., Tambagan; pp. 69-88, t.s.n.,
Tuble) declared that during his lifetime her father, Emeterio
Lasangue, owned a parcel of land in Lambunao, Iloilo,
containing an area of 36 hectares; that said Emeterio Lasangue
sold a slice of 4 hectares of this property to Hugo Loza evidenced
by a deed of sale (Exh. 2) dated March 17, 1941; that other sales
were made to other persons, leaving only some twelve hectares
out of the original 36; that these 12 hectares were transferred by
her parents in her (witness) name, being the only child and heir;
that on December 8, 1950, she (Leoncia Lasangue) sold six
hectares of her inherited property to Victoria Lechugas under a
public instrument (exhibit A) which was prepared at the instance
of Victoria Lechugas and thumbmarked by herself (the vendor).
Refuting plaintiff's contention that the land sold to her is the very
land under question, vendor Leoncia Lasangue testifies that:
Q. But Victoria Lechugas declared here that, by
means of this document, exhibit 'A', you sold to
her this very land in litigation; while you
declared here now that this land in litigation
was not included in the sale you made of
another parcel of land in her favor. What do
you say about that?
A. I only sold six (6) hectares to her.
Q. And that was included in this land in
litigation?
A. No.
xxx xxx xxx
Q. Did you tell her where that land you were
selling to her was situated?
xxx xxx xxx
A. On the South.
Q. South side of what land, of the land in
litigation?
A. The land I sold to her is south of the land in
litigation.
xxx xxx xxx
Q. What portion of these thirty-six (36)
hectares of land did you sell actually, according
to your agreement with Victoria Lechugas, and
was it inside the thirty-six (36) hectares of land
or a portion on one of the sides of thirty-six
(36) hectares?
A. It is on the edge of the whole land.
Q. Where is that edge? on the north, east, west
or south?
A . This edge. (witness indicating the lower
edge of the piece of paper shown into her)
Q. Do you know what is east, that is, the
direction where the sun rises?
A. I know what is east.
Q. Do you know where the sun sets ?
A. The sun sets on the west.
 Q. If you are standing in the middle of your
land containing thirty-six (36) hectares and
facing the east, that is, the direction where the
sun rises, where is that portion of land sold to
Victoria Lechugas, on your left, on your right,
front of you or behind you?
A. On my right side. (Witness indicating
south). (Testimony of Leoncia Lasangue, pp.
209-211, rollo) (emphasis supplied).
On the basis of the above findings and the testimony of vendor Leoncia Lasangue
herself, who although illiterate was able to specifically point out the land which she
sold to the petitioner, the appellate court upheld the trial court's decision except that
the deed of sale (Exhibit A) was declared as not null and void ab initio insofar as
Leoncia Lasangue was concerned because it could pass ownership of the lot in the
south known as Lot No. 5522 of the Lambunao Cadastre which Leoncia Lasangue
intended to sell and actually sold to her vendee, petitioner Victoria Lechugas.
In her first assignment of error, the petitioner contends that the respondent Court
had no legal justification when it subjected the true intent and agreement to parol
evidence over the objection of petitioner and that to impugn a written agreement,
the evidence must be conclusive. Petitioner maintains, moreover, that the
respondent Court relied so much on the testimony of the vendor who did not even
file a case for the reformation of Exhibit A.
The contentions are without merit.
The appellate court acted correctly in upholding the trial court's action in admitting
the testimony of Leoncia Lasangue. The petitioner claims that Leoncia Lasangue
was the vendor of the disputed land. The petitioner denies that Leoncia Lasangue
sold Lot No. 5522 to her. She alleges that this lot was sold to her by one Leonora
Lasangue, who, however, was never presented as witness in any of the proceedings
below by herein petitioner.
As explained by a leading commentator on our Rules of Court, the parol evidence
rule does not apply, and may not properly be invoked by either party to the
litigation against the other, where at least one of the parties to the suit is not party
or a privy of a party to the written instrument in question and does not base a claim
on the instrument or assert a right originating in the instrument or the relation
established thereby. (Francisco on Evidence, Vol. VII, part I of the Rules of Court,
p. 155 citing 32 C.J.S. 79.)
In Horn v. Hansen (57 N.W. 315), the court ruled:
...and the rule therefore applies, that as between parties to a
written agreement, or their privies, parol evidence cannot be
received to contradict or vary its terms. Strangers to a contract
are, of course, not bound by it, and the rule excluding extrinsic
evidence in the construction of writings is inapplicable in such
cases; and it is relaxed where either one of the parties between
whom the question arises is a stranger to the written agreement,
and does not claim under or through one who is party to it. In
such case the rule is binding upon neither. ...
In the case of Camacho v. Municipality of Baliuag, 28 Phil. 466, this Court held
that parol evidence which was introduced by the municipality was competent to
defeat the terms of the plaintiff's deed which the latter executed with the Insular
Government. In his concurring opinion, Justice Moreland stated:
It should be noted in the first place, that there is no written
instrument between the plaintiff and the municipality, that is,
between the parties to the action; and there is, therefore, no
possibility of the question arising as to the admissibility of parol
evidence to vary or contradict the terms of an instrument. The
written instrument that is, the conveyance on which plaintiff
bases his action was between the Insular Government and the
plaintiff, and not between the municipality and the plaintiff; and
therefore, there can arise, as between the plaintiff and defendant
no question relative to the varying or contradicting the terms of a
written instrument between them ...
The petitioner's reliance on the parol evidence rule is misplaced. The rule is not
applicable where the controversy is between one of the parties to the document and
third persons. The deed of sale was executed by Leoncia Lasangue in favor of
Victoria Lechugas. The dispute over what was actually sold is between petitioner
and the private respondents. In the case at bar, through the testimony of Leoncia
Lasangue, it was shown that what she really intended to sell and to be the subject of
Exhibit A was Lot No. 5522 but not being able to read and write and fully relying
on the good faith of her first cousin, the petitioner, she just placed her thumbmark
on a piece of paper which petitioner told her was the document evidencing the sale
of land. The deed of sale described the disputed lot instead.
This fact was clearly shown in Lasangue's testimony:
Q. And how did you know that that was the
description of the land that you wanted to sell
to Victoria Lechugas?
 R. I know that because that land came from me.
S. But how were you able to read the
description or do you know the description?
A. Because, since I do not know how to read
and write and after the document was prepared,
she made me sign it. So I just signed because I
do not know how to read.
xxx xxx xxx
Q. What explanation did she make to you?
A. She said to me, 'Manang, let us have a
document prepared for you to sign on the land
you sold to me.' So, after the document was
prepared, I signed.
Q. Did you tell her where that land you were
selling to her was situated?
xxx xxx xxx
A. On the South.
Q. South side of what land, of the land in
litigation?
A. The land I sold to her is south of the land in
litigation.
Q. Did you tell her that before preparing the
document you signed?
A. Yes, I told her so because I had confidence
in her because she is my first cousin. (pp. 198-
207, rollo)
From the foregoing, there can be no other conclusion but that Lasangue did not
intend to sell as she could not have sold, a piece of land already sold by her father
to the predecessor-in-interest of the respondents.
The fact that vendor Lasangue did not bring an action for the reformation of
Exhibit "A" is of no moment. The undisputed fact is that the respondents have
timely questioned the validity of the instrument and have proven that, indeed
Exhibit "A" does not reflect the true intention of the vendor.
There is likewise no merit in the contention of the petitioner that the respondents
changed their theory on appeal.
Respondents, from the very start, had questioned and denied Leoncia Lasangue's
capacity to sell the disputed lot to petitioner. It was their contention that the lot was
sold by Leoncia's father Emeterio Lasangue to their father, Hugo Loza wayback in
1941 while the alleged sale by Leoncia to the petitioner took place only in 1950. In
essence, therefore, the respondents were already attacking the validity of Exhibit
"A". Moreover, although the prior sale of the lot to their father may have been
emphasized in their defenses in the civil cases filed against them by the petitioner
in the lower court, nevertheless in their affirmative defense, the respondents already
raised doubt on the true intention of Leoncia Lasangue in signing Exhibit "A" when
they alleged that..." Leoncia Lasangue, publicly, and in writing repudiated said
allegation and pretension of the plaintiff, to the effect that the parcel of land now in
litigation in the present case "WAS NOT INCLUDED in the sale she executed in
favor of the plaintiff ... .
Consequently, petitioner cannot impute grave abuse on the part of the appellate
court and state that it allowed a change of theory by the respondents for the first
time on appeal for in reality, there was no such change.
The third issue raised by the petitioner has no merit. There is strong, clear, and
convincing evidence as to which lot was actually sold to her. We see no reason to
reverse the factual findings of both the Court of First Instance and the Court of
Appeals on this point. The "reformation" which the petitioner questions was, in
fact, intended to favor her. Instead of declaring the deed of sale null and void for all
purposes, the Court upheld its having passed ownership of Lot No. 5522 to the
petitioner.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby
DISMISSED for lack of merit with costs against the petitioner.
SO ORDERED.
G.R. No. 170491 April 4, 2007
NATIONAL POWER CORPORATION, Petitioner,
vs.
HON. RAMON G. CODILLA, JR., Presiding Judge, RTC of Cebu, Br. 19,
BANGPAI SHIPPING COMPANY, and WALLEM SHIPPING,
INCORPORATED, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil
Procedure, assailing the Decision1 of the Court of Appeals in CA-G.R. CEB-SP No.
00848, dated 9 November 2005, which dismissed the Petition for Certiorari filed by
the National Power Corporation seeking to set aside the Order2 issued by the
Regional Trial Court (RTC) of Cebu, Branch 19 dated 16 November 2004, denying
admission and excluding from the records plaintiff’s (herein petitioner) Exhibits
"A", "C", "D", "E", "H" and its sub-markings, "I", "J", and its sub-markings, "K",
"L", "M" and its sub-markings, "N" and its sub-markings, "O", "P" and its sub-
markings, "Q" and its sub-markings, "R" and "S" and its sub-markings.
On 20 April 1996, M/V Dibena Win, a vessel of foreign registry owned and
operated by private respondent Bangpai Shipping, Co., allegedly bumped and
damaged petitioner’s Power Barge 209 which was then moored at the Cebu
International Port. Thus, on 26 April 1996, petitioner filed before the Cebu RTC a
complaint for damages against private respondent Bangpai Shipping Co., for the
alleged damages caused on petitioner’s power barges.
Thereafter, petitioner filed an Amended Complaint dated 8 July 1996 impleading
herein private respondent Wallem Shipping, Inc., as additional defendant,
contending that the latter is a ship agent of Bangpai Shipping Co. On 18 September
1996, Wallem Shipping, Inc. filed a Motion to Dismiss which was subsequently
denied by public respondent Judge in an Order dated 20 October 1998. Bangpai
Shipping Co. likewise filed a Motion to Dismiss which was also denied by public
respondent Judge in an Order issued on 24 January 2003.
Petitioner, after adducing evidence during the trial of the case, filed a formal offer
of evidence before the lower court on 2 February 2004 consisting of Exhibits "A"
to "V" together with the sub-marked portions thereof. Consequently, private
respondents Bangpai Shipping Co. and Wallem Shipping, Inc. filed their respective
objections to petitioner’s formal offer of evidence.
On 16 November 2004, public respondent judge issued the assailed order denying
the admission and excluding from the records petitioner’s Exhibits "A", "C", "D",
"E", "H" and its sub-markings, "I", "J" and its sub-markings, "K", "L", "M" and its
sub-markings, "N" and its sub-markings, "O", "P" and its sub-markings, "Q" and its
sub-markings, "R" and "S" and its sub-markings. According to the court a quo:
The Court finds merit in the objections raised and the motion to strike out filed
respectively by the defendants. The record shows that the plaintiff has been given
every opportunity to present the originals of the Xerox or photocopies of the
documents it offered. It never produced the originals. The plaintiff attempted to
justify the admission of the photocopies by contending that "the photocopies
offered are equivalent to the original of the document" on the basis of the
Electronic Evidence (Comment to Defendant Wallem Philippines’ Objections and
Motion to Strike). But as rightly pointed out in defendant Wallem’s Reply to the
Comment of Plaintiff, the Xerox copies do not constitute the electronic evidence
defined in Section 1 of Rule 2 of the Rules on Electronic Evidence as follows:
"(h) "Electronic document" refers to information or the representation of
information, data, figures, symbols or other models of written expression, described
or however represented, by which a right is established or an obligation
extinguished, or by which a fact may be proved and affirmed, which is received,
recorded, transmitted, stored, processed, retrieved or produced electronically. It
includes digitally signed documents and any printout, readable by sight or other
means which accurately reflects the electronic data message or electronic
document. For the purpose of these Rules, the term "electronic document" may be
used interchangeably with "electronic data message".
The information in those Xerox or photocopies was not received, recorded,
retrieved or produced electronically. Moreover, such electronic evidence must be
authenticated (Sections 1 and 2, Rule 5, Rules on Electronic Evidence), which the
plaintiff failed to do. Finally, the required Affidavit to prove the admissibility and
evidentiary weight of the alleged electronic evidence (Sec. 1, Rule 9, Ibid) was not
executed, much less presented in evidence.
The Xerox or photocopies offered should, therefore, be stricken off the record.
Aside from their being not properly identified by any competent witness, the loss of
the principals thereof was not established by any competent proof.
xxxx
WHEREFORE, plaintiff’s Exhibits "A", "C", "D", "E", "H" and its sub-markings,
"I", "J", and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its sub-
markings, "O", "P" and its sub-markings, "Q" and its sub-markings, and "R" are
hereby DENIED admission and excluded from the records. However, these
excluded evidence should be attached to the records of this case to enable the
appellate court to pass upon them should an appeal be taken from the decision on
the merits to be rendered upon the termination of the trial of this case.
Exhibits "S" and its sub-markings are also DENIED admission for lack of proper
identification since the witness who brought these pictures expressly admitted that
he was not present when the photos were taken and had not knowledge when the
same where taken.3
Upon denial of petitioner’s Motion for Reconsideration in an Order dated 20 April
2005, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Civil
Procedure before the Court of Appeals maintaining that public respondent Judge
acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
denying the admission of its Exhibits "A", "C", "D", "E", "H" and its sub-markings,
"I", "J" and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its sub-
markings, "O", "P" and its sub-markings, "Q" and its sub-markings, "R", and "S"
and its sub-markings.
On 9 November 2005, the appellate court issued a Decision dismissing petitioner’s
petition for certiorari, the pertinent portions of which elucidate:
After a judicious scrutiny of the record of the case on hand, together with the rules
and jurisprudence which are applicable in the premises, we have come up with a
finding that the petition for certiorari filed in this case is not meritorious.
It appears that there is no sufficient showing by the petitioner that the respondent
judge acted with grave abuse of discretion in issuing the assailed orders in Civil
Case No. CEB-18662. As what our jurisprudence tells us, grave abuse of discretion
is meant such capricious and whimsical exercise of judgment as would be
equivalent to lack of jurisdiction x x x.
In the case at bench, what has been shown to the contrary by the totality of the
record on hand is that the respondent judge acted correctly and within the pale of
his sound discretion in issuing the assailed order, dated November 16, 2004, in
Civil Case No. CEB-18662.
Indeed, it appears that the pieces of petitioner’s documentary evidence which were
denied admission by the respondent judge were not properly identified by any
competent witness. As pointed out by the respondent Bangpai Shipping Company
in its comment on the petition filed in this case which reproduces some excerpts of
the testimonies in the court a quo of Atty. Marianito De Los Santos, Engr. Nestor
Enriquez, Jr. and Mr. Rodulfo I. Pagaling, the said witnesses did not have personal
knowledge of and participation in the preparation and making of the pieces of
documentary evidence denied admission by respondent judge x x x. In other words,
there was lack of proper identification of said pieces of documentary evidence. x x
x.
Then another ground for denying admission of petitioner’s Exhibits A, C, D, E, H,
I, J, K, L, M, N, O, P, Q, R, and S by the respondent judge is that said pieces of
documentary evidence were merely photocopies of purported documents or papers.
There is no gainsaying the fact that the respondent judge acted within the pale of
his discretion when he denied admission of said documentary evidence. Section 3
of Rule 130 of the Rules of Court of the Philippines is very explicit in providing
that, when the subject of inquiry are the contents of documents, no evidence shall
be admissible other than the original documents themselves, except in certain cases
specifically so enumerated therein, and the petitioner has not shown that the non-
presentation or non-production of its original documentary pieces of evidence falls
under such exceptions. As aptly pointed out by the respondent judge in the order
issued by him on November 16, 2004:
"x x x The record shows that the plaintiff (petitioner herein) has been given every
opportunity to present the originals of the Xerox or photocopies of the documents it
offered. It never produced said originals."
So, the petitioner has only itself to blame for the respondent judge’s denial of
admission of its aforementioned documentary evidence.
Of course, the petitioner tries to contend that the photocopies of documents offered
by it are equivalent to the original documents that it sought to offer in evidence,
based on the Rules on Electronic Evidence which were in force and effect since
August 1, 2001. However, such a contention is devoid of merit. The pieces of
documentary evidence offered by the petitioner in Civil Case CEB-18662 which
were denied admission by the respondent judge do not actually constitute as
electronic evidence as defined in the Rules on Electronic Evidence. The
informations therein were not received, retrieved or produced electronically. The
petitioner has not adequately established that its documentary evidence were
electronic evidence. it has not properly authenticated such evidence as electronic
documents, assuming arguendo that they are. Lastly, the petitioner has not properly
established by affidavit pursuant to Rule 9 of the Rules on Electronic Evidence the
admissibility and evidentiary weight of said documentary evidence.
Thus, by any legal yardstick, it is manifest that the respondent judge did not
commit grave abuse of discretion in denying admission of the aforementioned
documentary evidence of petitioner.
But even if it be granted just for the sake of argument that the respondent judge
committed an error in denying the aforementioned documentary evidence of the
petitioner, still the petition for certiorari filed in this case must fail. Such error
would at most be only an error of law and not an error of jurisdiction. In Lee vs.
People, 393 SCRA 397, the Supreme Court of the Philippines said that certiorari
will not lie in case of an error of law. x x x.
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by
us DISMISSING the petition filed in this case and AFFIRMING the assailed orders
issued by respondent judge in Civil Case No. CEB-18662.4
Aggrieved by the aforequoted decision, petitioner filed the instant petition.
The focal point of this entire controversy is petitioner’s obstinate contention that
the photocopies it offered as formal evidence before the trial court are the
functional equivalent of their original based on its inimitable interpretation of the
Rules on Electronic Evidence.
Petitioner insists that, contrary to the rulings of both the trial court and the appellate
court, the photocopies it presented as documentary evidence actually constitute
electronic evidence based on its own premise that an "electronic document" as
defined under Section 1(h), Rule 2 of the Rules on Electronic Evidence is not
limited to information that is received, recorded, retrieved or produced
electronically. Rather, petitioner maintains that an "electronic document" can also
refer to other modes of written expression that is produced electronically, such as
photocopies, as included in the section’s catch-all proviso: "any print-out or output,
readable by sight or other means".
We do not agree.
In order to shed light to the issue of whether or not the photocopies are indeed
electronic documents as contemplated in Republic Act No. 8792 or the
Implementing Rules and Regulations of the Electronic Commerce Act, as well as
the Rules on Electronic Evidence, we shall enumerate the following documents
offered as evidence by the petitioner, to wit:
1. Exhibit "A" is a photocopy of a letter manually signed by a certain Jose
C. Troyo, with "RECEIVED" stamped thereon, together with a
handwritten date;
2. Exhibit "C" is a photocopy of a list of estimated cost of damages of
petitioner’s power barges 207 and 209 prepared by Hopewell Mobile
Power Systems Corporation and manually signed by Messrs. Rex
Malaluan and Virgilio Asprer;
3. Exhibit "D" is a photocopy of a letter manually signed by a certain
Nestor G. Enriquez, Jr., with "RECEIVED" stamped thereon, together
with a handwritten notation of the date it was received;
4. Exhibit "E" is a photocopy of a Standard Marine Protest Form which
was filled up and accomplished by Rex Joel C. Malaluan in his own
handwriting and signed by him. Portions of the Jurat were handwritten,
and manually signed by the Notary Public;
5. Exhibit "H" is a photocopy of a letter manually signed by Mr. Nestor G.
Enriquez, Jr. with "RECEIVED" stamped thereon, together with a
handwritten notation of the date it was received;
6. Exhibit "I" is a photocopy of a computation of the estimated energy loss
allegedly suffered by petitioner which was manually signed by Mr. Nestor
G. Enriquez, Jr.;
7. Exhibit "J" is a photocopy of a letter containing the breakdown of the
cost estimate, manually signed by Mr. Nestor G. Enriquez, Jr., with
"RECEIVED" stamped thereon, together with a handwritten notation of
the date it was received, and other handwritten notations;
8. Exhibit "K" is a photocopy of the Subpoena Duces Tecum Ad
Testificandum written using a manual typewriter, signed manually by Atty.
Ofelia Polo-De Los Reyes, with a handwritten notation when it was
received by the party;
9. Exhibit "L" is a photocopy of a portion of the electricity supply and
operation and maintenance agreement between petitioner and Hopewell,
containing handwritten notations and every page containing three
unidentified manually placed signatures;
10. Exhibit "M" is a photocopy of the Notice of Termination with
attachments addressed to Rex Joel C. Malaluan, manually signed by Jaime
S. Patinio, with a handwritten notation of the date it was received. The
sub-markings also contain manual signatures and/or handwritten
notations;
11. Exhibit "N" is a photocopy of a letter of termination with attachments
addressed to VIrgilio Asprer and manually signed by Jaime S. Patino. The
sub-markings contain manual signatures and/or handwritten notations;
12. Exhibit "O" is the same photocopied document marked as Annex C;
13. Exhibit "P" is a photocopy of an incident report manually signed by
Messrs. Malaluan and Bautista and by the Notary Public, with other
handwritten notations;
 14. Exhibit "Q" is a photocopy of a letter manually signed by Virgilio
Asprer and by a Notary Public, together with other handwritten notations.
On the other hand, an "electronic document" refers to information or the
representation of information, data, figures, symbols or other models of written
expression, described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed, which is
received, recorded, transmitted, stored, processed, retrieved or produced
electronically.5 It includes digitally signed documents and any printout, readable by
sight or other means which accurately reflects the electronic data message or
electronic document.6
The rules use the word "information" to define an electronic document received,
recorded, transmitted, stored, processed, retrieved or produced electronically. This
would suggest that an electronic document is relevant only in terms of the
information contained therein, similar to any other document which is presented in
evidence as proof of its contents.7 However, what differentiates an electronic
document from a paper-based document is the manner by which the information is
processed; clearly, the information contained in an electronic document is received,
recorded, transmitted, stored, processed, retrieved or produced electronically.
A perusal of the information contained in the photocopies submitted by petitioner
will reveal that not all of the contents therein, such as the signatures of the persons
who purportedly signed the documents, may be recorded or produced
electronically. By no stretch of the imagination can a person’s signature affixed
manually be considered as information electronically received, recorded,
transmitted, stored, processed, retrieved or produced. Hence, the argument of
petitioner that since these paper printouts were produced through an electronic
process, then these photocopies are electronic documents as defined in the Rules on
Electronic Evidence is obviously an erroneous, if not preposterous, interpretation of
the law. Having thus declared that the offered photocopies are not tantamount to
electronic documents, it is consequential that the same may not be considered as
the functional equivalent of their original as decreed in the law.
Furthermore, no error can be ascribed to the court a quo in denying admission and
excluding from the records petitioner’s Exhibits "A", "C", "D", "E", "H" and its
sub-markings, "I", "J" and its sub-markings, "K", "L", "M" and its sub-markings,
"N" and its sub-markings, "O", "P" and its sub-markings, "Q" and its sub-markings,
and "R". The trial court was correct in rejecting these photocopies as they violate
the best evidence rule and are therefore of no probative value being incompetent
pieces of evidence. Before the onset of liberal rules of discovery, and modern
technique of electronic copying, the best evidence rule was designed to guard
against incomplete or fraudulent proof and the introduction of altered copies and
the withholding of the originals.8 But the modern justification for the rule has
expanded from the prevention of fraud to a recognition that writings occupy a
central position in the law.9The importance of the precise terms of writings in the
world of legal relations, the fallibility of the human memory as reliable evidence of
the terms, and the hazards of inaccurate or incomplete duplicate are the concerns
addressed by the best evidence rule.10
Moreover, as mandated under Section 2, Rule 130 of the Rules of Court:
"SECTION 2. Original writing must be produced; exceptions. — There can be no
evidence of a writing the contents of which is the subject of inquiry, other than the
original writing itself, except in the following cases:
(a) When the original has been lost, destroyed, or cannot be produced in
court;
(b) When the original is in the possession of the party against whom the
evidence is offered, and the latter fails to produce it after reasonable
notice;
(c) When the original is a record or other document in the custody of a
public officer;
(d) When the original has been recorded in an existing record a certified
copy of which is made evidence by law;
(e) When the original consists of numerous accounts or other documents
which cannot be examined in court without great loss of time and the fact
sought to be established from them is only the general result of the
whole."
When the original document has been lost or destroyed, or cannot be produced in
court, the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or by
a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated.11 The offeror of secondary evidence is burdened to
prove the predicates thereof: (a) the loss or destruction of the original without bad
faith on the part of the proponent/offeror which can be shown by circumstantial
evidence of routine practices of destruction of documents;12 (b) the proponent must
prove by a fair preponderance of evidence as to raise a reasonable inference of the
loss or destruction of the original copy; and (c) it must be shown that a diligent and
bona fide but unsuccessful search has been made for the document in the proper
place or places.13 However, in the case at bar, though petitioner insisted in offering
the photocopies as documentary evidence, it failed to establish that such offer was
made in accordance with the exceptions as enumerated under the abovequoted rule.
Accordingly, we find no error in the Order of the court a quo denying admissibility
of the photocopies offered by petitioner as documentary evidence.
Finally, it perplexes this Court why petitioner continued to obdurately disregard the
opportunities given by the trial court for it to present the originals of the
photocopies it presented yet comes before us now praying that it be allowed to
present the originals of the exhibits that were denied admission or in case the same
are lost, to lay the predicate for the admission of secondary evidence. Had
petitioner presented the originals of the documents to the court instead of the
photocopies it obstinately offered as evidence, or at the very least laid the predicate
for the admission of said photocopies, this controversy would not have
unnecessarily been brought before the appellate court and finally to this Court for
adjudication. Had it not been for petitioner’s intransigence, the merits of
petitioner’s complaint for damages would have been decided upon by the trial court
long ago. As aptly articulated by the Court of Appeals, petitioner has only itself to
blame for the respondent judge’s denial of admission of its aforementioned
documentary evidence and consequently, the denial of its prayer to be given
another opportunity to present the originals of the documents that were denied
admission nor to lay the predicate for the admission of secondary evidence in case
the same has been lost.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The
Decision of the Court of Appeals in CA-G.R. CEB-SP No. 00848, dated 9
November 2005 is hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 170633 October 17, 2007
MCC INDUSTRIAL SALES CORPORATION, petitioner,
vs.
SSANGYONG CORPORATION, respondents.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari of the Decision1 of the Court
of Appeals in CA-G.R. CV No. 82983 and its Resolution2 denying the motion for
reconsideration thereof.
Petitioner MCC Industrial Sales (MCC), a domestic corporation with office at
Binondo, Manila, is engaged in the business of importing and wholesaling stainless
steel products.3 One of its suppliers is the Ssangyong Corporation (Ssangyong),4 an
international trading company5 with head office in Seoul, South Korea and regional
headquarters in Makati City, Philippines.6 The two corporations conducted business
through telephone calls and facsimile or telecopy transmissions.7 Ssangyong would
send the pro forma invoices containing the details of the steel product order to
MCC; if the latter conforms thereto, its representative affixes his signature on the
faxed copy and sends it back to Ssangyong, again by fax.8
On April 13, 2000, Ssangyong Manila Office sent, by fax, a letter9 addressed to
Gregory Chan, MCC Manager [also the President10 of Sanyo Seiki Stainless Steel
Corporation], to confirm MCC's and Sanyo Seiki's order of 220 metric tons (MT)
of hot rolled stainless steel under a preferential rate of US$1,860.00 per MT. Chan,
on behalf of the corporations, assented and affixed his signature on
the conforme portion of the letter.11
On April 17, 2000, Ssangyong forwarded to MCC Pro Forma Invoice No. ST2-
POSTSO40112 containing the terms and conditions of the transaction. MCC sent
back by fax to Ssangyong the invoice bearing the conformity signature13 of Chan.
As stated in the pro forma invoice, payment for the ordered steel products would be
made through an irrevocable letter of credit (L/C) at sight in favor of
Ssangyong.14 Following their usual practice, delivery of the goods was to be made
after the L/C had been opened.
In the meantime, because of its confirmed transaction with MCC, Ssangyong
placed the order with its steel manufacturer, Pohang Iron and Steel Corporation
(POSCO), in South Korea15 and paid the same in full.
Because MCC could open only a partial letter of credit, the order for 220MT of
steel was split into two,16 one for 110MT covered by Pro Forma Invoice No. ST2-
POSTS0401-117 and another for 110MT covered by ST2-POSTS0401-2,18 both
dated April 17, 2000.
On June 20, 2000, Ssangyong, through its Manila Office, informed Sanyo Seiki and
Chan, by way of a fax transmittal, that it was ready to ship 193.597MT of stainless
steel from Korea to the Philippines. It requested that the opening of the L/C be
facilitated.19 Chan affixed his signature on the fax transmittal and returned the
same, by fax, to Ssangyong.20
Two days later, on June 22, 2000, Ssangyong Manila Office informed Sanyo Seiki,
thru Chan, that it was able to secure a US$30/MT price adjustment on the
contracted price of US$1,860.00/MT for the 200MT stainless steel, and that the
goods were to be shipped in two tranches, the first 100MT on that day and the
second 100MT not later than June 27, 2000. Ssangyong reiterated its request for the
facilitation of the L/C's opening.21
Ssangyong later, through its Manila Office, sent a letter, on June 26, 2000, to the
Treasury Group of Sanyo Seiki that it was looking forward to receiving the L/C
details and a cable copy thereof that day.22 Ssangyong sent a separate letter of the
same date to Sanyo Seiki requesting for the opening of the L/C covering payment
of the first 100MT not later than June 28, 2000.23 Similar letters were transmitted
by Ssangyong Manila Office on June 27, 2000.24 On June 28, 2000, Ssangyong sent
another facsimile letter to MCC stating that its principal in Korea was already in a
difficult situation25 because of the failure of Sanyo Seiki and MCC to open the
L/C's.
The following day, June 29, 2000, Ssangyong received, by fax, a letter signed by
Chan, requesting an extension of time to open the L/C because MCC's credit line
with the bank had been fully availed of in connection with another transaction, and
MCC was waiting for an additional credit line.26 On the same date, Ssangyong
replied, requesting that it be informed of the date when the L/C would be opened,
preferably at the earliest possible time, since its Steel Team 2 in Korea was having
problems and Ssangyong was incurring warehousing costs.27 To maintain their
good business relationship and to support MCC in its financial predicament,
Ssangyong offered to negotiate with its steel manufacturer, POSCO, another
US$20/MT discount on the price of the stainless steel ordered. This was intimated
in Ssangyong's June 30, 2000 letter to MCC.28 On July 6, 2000, another follow-up
letter29 for the opening of the L/C was sent by Ssangyong to MCC.
However, despite Ssangyong's letters, MCC failed to open a letter of
credit.30 Consequently, on August 15, 2000, Ssangyong, through counsel, wrote
Sanyo Seiki that if the L/C's were not opened, Ssangyong would be compelled to
cancel the contract and hold MCC liable for damages for breach thereof amounting
to US$96,132.18, inclusive of warehouse expenses, related interests and charges. 31
Later, Pro Forma Invoice Nos. ST2-POSTS080-132 and ST2-POSTS080-233 dated
August 16, 2000 were issued by Ssangyong and sent via fax to MCC. The invoices
slightly varied the terms of the earlier pro forma invoices (ST2-POSTSO401, ST2-
POSTS0401-1 and ST2-POSTS0401-2), in that the quantity was now
officially 100MT per invoice and the price was reduced to US$1,700.00 per MT.
As can be gleaned from the photocopies of the said August 16, 2000 invoices
submitted to the court, they both bear the conformity signature of MCC Manager
Chan.
On August 17, 2000, MCC finally opened an L/C with PCIBank for
US$170,000.00 covering payment for 100MT of stainless steel coil under Pro
Forma Invoice No. ST2-POSTS080-2.34 The goods covered by the said invoice
were then shipped to and received by MCC.35
MCC then faxed to Ssangyong a letter dated August 22, 2000 signed by Chan,
requesting for a price adjustment of the order stated in Pro Forma Invoice No.
ST2-POSTS080-1, considering that the prevailing price of steel at that time was
US$1,500.00/MT, and that MCC lost a lot of money due to a recent strike.36
Ssangyong rejected the request, and, on August 23, 2000, sent a demand letter37 to
Chan for the opening of the second and last L/C of US$170,000.00 with a warning
that, if the said L/C was not opened by MCC on August 26, 2000, Ssangyong
would be constrained to cancel the contract and hold MCC liable for US$64,066.99
(representing cost difference, warehousing expenses, interests and charges as of
August 15, 2000) and other damages for breach. Chan failed to reply.
Exasperated, Ssangyong through counsel wrote a letter to MCC, on September 11,
2000, canceling the sales contract under ST2-POSTS0401-1 /ST2-POSTS0401-2,
and demanding payment of US$97,317.37 representing losses, warehousing
expenses, interests and charges.38
Ssangyong then filed, on November 16, 2001, a civil action for damages due to
breach of contract against defendants MCC, Sanyo Seiki and Gregory Chan before
the Regional Trial Court of Makati City. In its complaint,39Ssangyong alleged that
defendants breached their contract when they refused to open the L/C in the
amount of US$170,000.00 for the remaining 100MT of steel under Pro
Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2.
After Ssangyong rested its case, defendants filed a Demurrer to Evidence40 alleging
that Ssangyong failed to present the original copies of the pro forma invoices on
which the civil action was based. In an Order dated April 24, 2003, the court denied
the demurrer, ruling that the documentary evidence presented had already been
admitted in the December 16, 2002 Order41 and their admissibility finds support in
Republic Act (R.A.) No. 8792, otherwise known as the Electronic Commerce Act
of 2000. Considering that both testimonial and documentary evidence tended to
substantiate the material allegations in the complaint, Ssangyong's evidence
sufficed for purposes of a prima facie case.42
After trial on the merits, the RTC rendered its Decision43 on March 24, 2004, in
favor of Ssangyong. The trial court ruled that when plaintiff agreed to sell and
defendants agreed to buy the 220MT of steel products for the price of US$1,860
per MT, the contract was perfected. The subject transaction was evidenced by Pro
Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2, which were later
amended only in terms of reduction of volume as well as the price per MT,
following Pro Forma Invoice Nos. ST2-POSTS080-1 and ST2-POSTS080-2. The
RTC, however, excluded Sanyo Seiki from liability for lack of competent evidence.
The fallo of the decision reads:
WHEREFORE, premises considered, Judgment is hereby rendered
ordering defendants MCC Industrial Sales Corporation and Gregory Chan,
to pay plaintiff, jointly and severally the following:
1) Actual damages of US$93,493.87 representing the outstanding principal
claim plus interest at the rate of 6% per annum from March 30, 2001.
2) Attorney's fees in the sum of P50,000.00 plus P2,000.00 per counsel's
appearance in court, the same being deemed just and equitable considering
that by reason of defendants' breach of their obligation under the subject
contract, plaintiff was constrained to litigate to enforce its rights and
recover for the damages it sustained, and therefore had to engage the
services of a lawyer.
3) Costs of suit.
No award of exemplary damages for lack of sufficient basis.
SO ORDERED.44
On April 22, 2004, MCC and Chan, through their counsel of record, Atty. Eladio B.
Samson, filed their Notice of Appeal.45 On June 8, 2004, the law office of Castillo
Zamora & Poblador entered its appearance as their collaborating counsel.
In their Appeal Brief filed on March 9, 2005,46 MCC and Chan raised before the
CA the following errors of the RTC:
I. THE HONORABLE COURT A QUO PLAINLY ERRED IN FINDING
THAT APPELLANTS VIOLATED THEIR CONTRACT WITH
APPELLEE
A. THE HONORABLE COURT A QUO PLAINLY ERRED IN
FINDING THAT APPELLANTS AGREED TO PURCHASE 200
METRIC TONS OF STEEL PRODUCTS FROM APPELLEE,
INSTEAD OF ONLY 100 METRIC TONS.
1. THE HONORABLE COURT A QUO PLAINLY
ERRED IN ADMITTING IN EVIDENCE THE PRO
FORMA INVOICES WITH REFERENCE NOS. ST2-
POSTS0401-1 AND ST2-POSTS0401-2.
II. THE HONORABLE COURT A QUO PLAINLY ERRED IN
AWARDING ACTUAL DAMAGES TO APPELLEE.
III. THE HONORABLE COURT A QUO PLAINLY ERRED IN
AWARDING ATTORNEY'S FEES TO APPELLEE.
IV. THE HONORABLE COURT A QUO PLAINLY ERRED IN
FINDING APPELLANT GREGORY CHAN JOINTLY AND
SEVERALLY LIABLE WITH APPELLANT MCC.47
On August 31, 2005, the CA rendered its Decision48 affirming the ruling of the trial
court, but absolving Chan of any liability. The appellate court ruled, among others,
that Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-
2 (Exhibits "E", "E-1" and "F") were admissible in evidence, although they were
mere facsimile printouts of MCC's steel orders.49 The dispositive portion of the
appellate court's decision reads:
WHEREFORE, premises considered, the Court holds:
(1) The award of actual damages, with interest, attorney's fees and costs
ordered by the lower court is hereby AFFIRMED.
(2) Appellant Gregory Chan is hereby ABSOLVED from any liability.
SO ORDERED.50
A copy of the said Decision was received by MCC's and Chan's principal counsel,
Atty. Eladio B. Samson, on September 14, 2005.51 Their collaborating counsel,
Castillo Zamora & Poblador,52 likewise, received a copy of the CA decision on
September 19, 2005.53
On October 4, 2005, Castillo Zamora & Poblador, on behalf of MCC, filed a
motion for reconsideration of the said decision.54 Ssangyong opposed the motion
contending that the decision of the CA had become final and executory on account
of the failure of MCC to file the said motion within the reglementary period. The
appellate court resolved, on November 22, 2005, to deny the motion on its
merits,55 without, however, ruling on the procedural issue raised.
Aggrieved, MCC filed a petition for review on certiorari56 before this Court,
imputing the following errors to the Court of Appeals:
THE COURT OF APPEALS DECIDED A LEGAL QUESTION NOT IN
ACCORDANCE WITH JURISPRUDENCE AND SANCTIONED A
 DEPARTURE FROM THE USUAL AND ACCEPTED COURSE OF
JUDICIAL PROCEEDINGS BY REVERSING THE COURT A
QUO'S DISMISSAL OF THE COMPLAINT IN CIVIL CASE NO. 02-
124 CONSIDERING THAT:
I. THE COURT OF APPEALS ERRED IN SUSTAINING THE
ADMISSIBILITY IN EVIDENCE OF THE PRO-FORMA
INVOICES WITH REFERENCE NOS. ST2-POSTSO401-1
AND ST2-POSTSO401-2, DESPITE THE FACT THAT THE
SAME WERE MERE PHOTOCOPIES OF FACSIMILE
PRINTOUTS.
II. THE COURT OF APPEALS FAILED TO APPRECIATE THE
OBVIOUS FACT THAT, EVEN ASSUMING PETITIONER
BREACHED THE SUPPOSED CONTRACT, THE FACT IS
THAT PETITIONER FAILED TO PROVE THAT IT
SUFFERED ANY DAMAGES AND THE AMOUNT
THEREOF.
III. THE AWARD OF ACTUAL DAMAGES IN THE AMOUNT
OF US$93,493.87 IS SIMPLY UNCONSCIONABLE AND
SHOULD HAVE BEEN AT LEAST REDUCED, IF NOT
DELETED BY THE COURT OF APPEALS.57
In its Comment, Ssangyong sought the dismissal of the petition, raising the
following arguments: that the CA decision dated 15 August 2005 is already final
and executory, because MCC's motion for reconsideration was filed beyond the
reglementary period of 15 days from receipt of a copy thereof, and that, in any
case, it was a pro formamotion; that MCC breached the contract for the purchase of
the steel products when it failed to open the required letter of credit; that the
printout copies and/or photocopies of facsimile or telecopy transmissions were
properly admitted by the trial court because they are considered original documents
under R.A. No. 8792; and that MCC is liable for actual damages and attorney's fees
because of its breach, thus, compelling Ssangyong to litigate.
The principal issues that this Court is called upon to resolve are the following:
I – Whether the CA decision dated 15 August 2005 is already final and executory;
II – Whether the print-out and/or photocopies of facsimile transmissions are
electronic evidence and admissible as such;
III – Whether there was a perfected contract of sale between MCC and Ssangyong,
and, if in the affirmative, whether MCC breached the said contract; and
IV – Whether the award of actual damages and attorney's fees in favor of
Ssangyong is proper and justified.
-I-
It cannot be gainsaid that in Albano v. Court of Appeals,58 we held that receipt of a
copy of the decision by one of several counsels on record is notice to all, and the
period to appeal commences on such date even if the other counsel has not yet
received a copy of the decision. In this case, when Atty. Samson received a copy of
the CA decision on September 14, 2005, MCC had only fifteen (15) days within
which to file a motion for reconsideration conformably with Section 1, Rule 52 of
the Rules of Court, or to file a petition for review on certiorari in accordance with
Section 2, Rule 45. The period should not be reckoned from September 29, 2005
(when Castillo Zamora & Poblador received their copy of the decision) because
notice to Atty. Samson is deemed notice to collaborating counsel.
We note, however, from the records of the CA, that it was Castillo Zamora &
Poblador, not Atty. Samson, which filed both MCC's and Chan's Brief and Reply
Brief. Apparently, the arrangement between the two counsels was for the
collaborating, not the principal, counsel to file the appeal brief and subsequent
pleadings in the CA. This explains why it was Castillo Zamora & Poblador which
filed the motion for the reconsideration of the CA decision, and they did so on
October 5, 2005, well within the 15-day period from September 29, 2005, when
they received their copy of the CA decision. This could also be the reason why the
CA did not find it necessary to resolve the question of the timeliness of petitioner's
motion for reconsideration, even as the CA denied the same.
Independent of this consideration though, this Court assiduously reviewed the
records and found that strong concerns of substantial justice warrant the relaxation
of this rule.
In Philippine Ports Authority v. Sargasso Construction and Development
Corporation,59 we ruled that:
In Orata v. Intermediate Appellate Court, we held that where strong
considerations of substantive justice are manifest in the petition, this Court
may relax the strict application of the rules of procedure in the exercise of
its legal jurisdiction. In addition to the basic merits of the main case, such
a petition usually embodies justifying circumstance which warrants our
heeding to the petitioner's cry for justice in spite of the earlier negligence
of counsel. As we held in Obut v. Court of Appeals:
 [W]e cannot look with favor on a course of action which would
place the administration of justice in a straight jacket for then the
result would be a poor kind of justice if there would be justice at
all. Verily, judicial orders, such as the one subject of this petition,
are issued to be obeyed, nonetheless a non-compliance is to be
dealt with as the circumstances attending the case may warrant.
What should guide judicial action is the principle that a party-
litigant is to be given the fullest opportunity to establish the
merits of his complaint or defense rather than for him to lose life,
liberty, honor or property on technicalities.
The rules of procedure are used only to secure and not override or frustrate
justice. A six-day delay in the perfection of the appeal, as in this case, does
not warrant the outright dismissal of the appeal. In Development Bank of
the Philippines vs. Court of Appeals, we gave due course to the petitioner's
appeal despite the late filing of its brief in the appellate court because such
appeal involved public interest. We stated in the said case that the Court
may exempt a particular case from a strict application of the rules of
procedure where the appellant failed to perfect its appeal within the
reglementary period, resulting in the appellate court's failure to obtain
jurisdiction over the case. In Republic vs. Imperial, Jr., we also held that
there is more leeway to exempt a case from the strictness of procedural
rules when the appellate court has already obtained jurisdiction over the
appealed case. We emphasize that:
[T]he rules of procedure are mere tools intended to facilitate the
attainment of justice, rather than frustrate it. A strict and rigid
application of the rules must always be eschewed when it would
subvert the rule's primary objective of enhancing fair trials and
expediting justice. Technicalities should never be used to defeat
the substantive rights of the other party. Every party-litigant must
be afforded the amplest opportunity for the proper and just
determination of his cause, free from the constraints of
technicalities.60
Moreover, it should be remembered that the Rules were promulgated to set
guidelines in the orderly administration of justice, not to shackle the hand that
dispenses it. Otherwise, the courts would be consigned to being mere slaves to
technical rules, deprived of their judicial discretion. Technicalities must take a
backseat to substantive rights. After all, it is circumspect leniency in this respect
that will give the parties the fullest opportunity to ventilate the merits of their
respective causes, rather than have them lose life, liberty, honor or property on
sheer technicalities.61
The other technical issue posed by respondent is the alleged pro forma nature of
MCC's motion for reconsideration, ostensibly because it merely restated the
arguments previously raised and passed upon by the CA.
In this connection, suffice it to say that the mere restatement of arguments in a
motion for reconsideration does not per se result in a pro forma motion. In Security
Bank and Trust Company, Inc. v. Cuenca,62 we held that a motion for
reconsideration may not be necessarily pro forma even if it reiterates the arguments
earlier passed upon and rejected by the appellate court. A movant may raise the
same arguments precisely to convince the court that its ruling was erroneous.
Furthermore, the pro forma rule will not apply if the arguments were not
sufficiently passed upon and answered in the decision sought to be reconsidered.
- II -
The second issue poses a novel question that the Court welcomes. It provides the
occasion for this Court to pronounce a definitive interpretation of the equally
innovative provisions of the Electronic Commerce Act of 2000 (R.A. No.
8792) vis-à-vis the Rules on Electronic Evidence.
Although the parties did not raise the question whether the original facsimile
transmissions are "electronic data messages" or "electronic documents" within the
context of the Electronic Commerce Act (the petitioner merely assails as
inadmissible evidence the photocopies of the said facsimile transmissions), we
deem it appropriate to determine first whether the said fax transmissions are indeed
within the coverage of R.A. No. 8792 before ruling on whether the photocopies
thereof are covered by the law. In any case, this Court has ample authority to go
beyond the pleadings when, in the interest of justice or for the promotion of public
policy, there is a need to make its own findings in order to support its conclusions.63
Petitioner contends that the photocopies of the pro forma invoices presented by
respondent Ssangyong to prove the perfection of their supposed contract of sale are
inadmissible in evidence and do not fall within the ambit of R.A. No. 8792,
because the law merely admits as the best evidence the original fax transmittal. On
the other hand, respondent posits that, from a reading of the law and the Rules on
Electronic Evidence, the original facsimile transmittal of the pro forma invoice is
admissible in evidence since it is an electronic document and, therefore, the best
evidence under the law and the Rules. Respondent further claims that the
photocopies of these fax transmittals (specifically ST2-POSTS0401-1 and ST2-
POSTS0401-2) are admissible under the Rules on Evidence because the
respondent sufficiently explained the non-production of the original fax
transmittals.
In resolving this issue, the appellate court ruled as follows:
 Admissibility of Pro Forma
Invoices; Breach of Contract
by Appellants
Turning first to the appellants' argument against the admissibility of the
Pro Forma Invoices with Reference Nos. ST2-POSTS0401-1 and ST2-
POSTS0401-2 (Exhibits "E", "E-1" and "F", pp. 215-218, Records),
appellants argue that the said documents are inadmissible (sic) being
violative of the best evidence rule.
The argument is untenable.
The copies of the said pro-forma invoices submitted by the appellee are
admissible in evidence, although they are mere electronic facsimile
printouts of appellant's orders. Such facsimile printouts are considered
Electronic Documents under the New Rules on Electronic Evidence,
which came into effect on August 1, 2001. (Rule 2, Section 1 [h], A.M.
No. 01-7-01-SC).
"(h) 'Electronic document' refers to information or the
representation of information, data, figures, symbols or other
modes of written expression, described or however represented,
by which a right is established or an obligation extinguished, or
by which a fact may be proved and affirmed, which is received,
recorded, transmitted, stored, processed, retrieved or produced
electronically. It includes digitally signed documents and any
printout or output, readable by sight or other means, which
accurately reflects the electronic data message or electronic
document. For purposes of these Rules, the term 'electronic
document' may be used interchangeably with 'electronic data
message'.
An electronic document shall be regarded as the equivalent of an original
document under the Best Evidence Rule, as long as it is a printout or
output readable by sight or other means, showing to reflect the data
accurately. (Rule 4, Section 1, A.M. No. 01-7-01-SC)
The ruling of the Appellate Court is incorrect. R.A. No. 8792,64 otherwise known as
the Electronic Commerce Act of 2000, considers an electronic data message or an
electronic document as the functional equivalent of a written document for
evidentiary purposes.65 The Rules on Electronic Evidence66 regards an electronic
document as admissible in evidence if it complies with the rules on admissibility
prescribed by the Rules of Court and related laws, and is authenticated in the
manner prescribed by the said Rules.67 An electronic document is also the
equivalent of an original document under the Best Evidence Rule, if it is a printout
or output readable by sight or other means, shown to reflect the data accurately. 68
Thus, to be admissible in evidence as an electronic data message or to be
considered as the functional equivalent of an original document under the Best
Evidence Rule, the writing must foremost be an "electronic data message" or an
"electronic document."
The Electronic Commerce Act of 2000 defines electronic data message and
electronic document as follows:
Sec. 5. Definition of Terms. For the purposes of this Act, the following
terms are defined, as follows:
xxx
c. "Electronic Data Message" refers to information generated, sent,
received or stored by electronic, optical or similar means.
xxx
f. "Electronic Document" refers to information or the representation of
information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or
produced electronically.
The Implementing Rules and Regulations (IRR) of R.A. No. 8792,69 which was
signed on July 13, 2000 by the then Secretaries of the Department of Trade and
Industry, the Department of Budget and Management, and then Governor of
the Bangko Sentral ng Pilipinas, defines the terms as:
Sec. 6. Definition of Terms. For the purposes of this Act and these Rules,
the following terms are defined, as follows:
xxx
(e) "Electronic Data Message" refers to information generated, sent,
received or stored by electronic, optical or similar means, but not limited
to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy. Throughout these Rules, the term "electronic data message"
 shall be equivalent to and be used interchangeably with "electronic
document."
xxxx
(h) "Electronic Document" refers to information or the representation of
information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or
produced electronically. Throughout these Rules, the term "electronic
document" shall be equivalent to and be used interchangeably with
"electronic data message."
The phrase "but not limited to, electronic data interchange (EDI), electronic mail,
telegram, telex or telecopy" in the IRR's definition of "electronic data message" is
copied from the Model Law on Electronic Commerce adopted by the United
Nations Commission on International Trade Law (UNCITRAL),70 from which
majority of the provisions of R.A. No. 8792 were taken.71 While Congress deleted
this phrase in the Electronic Commerce Act of 2000, the drafters of the IRR
reinstated it. The deletion by Congress of the said phrase is significant and pivotal,
as discussed hereunder.
The clause on the interchangeability of the terms "electronic data message" and
"electronic document" was the result of the Senate of the Philippines' adoption, in
Senate Bill 1902, of the phrase "electronic data message" and the House of
Representative's employment, in House Bill 9971, of the term "electronic
document."72 In order to expedite the reconciliation of the two versions, the
technical working group of the Bicameral Conference Committee adopted both
terms and intended them to be the equivalent of each one.73 Be that as it may, there
is a slight difference between the two terms. While "data message" has reference
to information electronically sent, stored or transmitted, it does not necessarily
mean that it will give rise to a right or extinguish an obligation,74 unlike an
electronic document. Evident from the law, however, is the legislative intent to give
the two terms the same construction.
The Rules on Electronic Evidence promulgated by this Court defines the said terms
in the following manner:
SECTION 1. Definition of Terms. – For purposes of these Rules, the
following terms are defined, as follows:
xxxx
(g) "Electronic data message" refers to information generated, sent,
received or stored by electronic, optical or similar means.
(h) "Electronic document" refers to information or the representation of
information, data, figures, symbols or other modes of written expression,
described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be proved and affirmed,
which is received, recorded, transmitted, stored, processed, retrieved or
produced electronically. It includes digitally signed documents and print-
out or output, readable by sight or other means, which accurately reflects
the electronic data message or electronic document. For purposes of these
Rules, the term "electronic document" may be used interchangeably with
"electronic data message."
Given these definitions, we go back to the original question: Is an original printout
of a facsimile transmission an electronic data message or electronic document?
The definitions under the Electronic Commerce Act of 2000, its IRR and the Rules
on Electronic Evidence, at first glance, convey the impression that facsimile
transmissions are electronic data messages or electronic documents because they
are sent by electronic means. The expanded definition of an "electronic data
message" under the IRR, consistent with the UNCITRAL Model Law, further
supports this theory considering that the enumeration "xxx [is] not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy." And
to telecopy is to send a document from one place to another via a fax machine.75
As further guide for the Court in its task of statutory construction, Section 37 of the
Electronic Commerce Act of 2000 provides that
Unless otherwise expressly provided for, the interpretation of this
Act shall give due regard to its international origin and the need to
promote uniformity in its application and the observance of good faith in
international trade relations. The generally accepted principles of
international law and convention on electronic commerce shall likewise be
considered.
Obviously, the "international origin" mentioned in this section can only refer to the
UNCITRAL Model Law, and the UNCITRAL's definition of "data message":
"Data message" means information generated, sent, received or stored by
electronic, optical or similar means including, but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy.76
is substantially the same as the IRR's characterization of an "electronic data
message."
However, Congress deleted the phrase, "but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy," and replaced the
term "data message" (as found in the UNCITRAL Model Law ) with "electronic
data message." This legislative divergence from what is assumed as the term's
"international origin" has bred uncertainty and now impels the Court to make an
inquiry into the true intent of the framers of the law. Indeed, in the construction or
interpretation of a legislative measure, the primary rule is to search for and
determine the intent and spirit of the law.77 A construction should be rejected that
gives to the language used in a statute a meaning that does not accomplish the
purpose for which the statute was enacted, and that tends to defeat the ends which
are sought to be attained by the enactment.78
Interestingly, when Senator Ramon B. Magsaysay, Jr., the principal author of
Senate Bill 1902 (the predecessor of R.A. No. 8792), sponsored the bill on second
reading, he proposed to adopt the term "data message" as formulated and defined in
the UNCITRAL Model Law.79 During the period of amendments, however, the
term evolved into "electronic data message," and the phrase "but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy" in
the UNCITRAL Model Law was deleted. Furthermore, the term "electronic data
message," though maintaining its description under the UNCITRAL Model Law,
except for the aforesaid deleted phrase, conveyed a different meaning, as revealed
in the following proceedings:
xxxx
Senator Santiago. Yes, Mr. President. I will furnish a copy together with
the explanation of this proposed amendment.
And then finally, before I leave the Floor, may I please be allowed to go
back to Section 5; the Definition of Terms. In light of the acceptance by
the good Senator of my proposed amendments, it will then become
necessary to add certain terms in our list of terms to be defined. I would
like to add a definition on what is "data," what is "electronic record" and
what is an "electronic record system."
If the gentleman will give me permission, I will proceed with the proposed
amendment on Definition of Terms, Section 5.
Senator Magsaysay. Please go ahead, Senator Santiago.
Senator Santiago. We are in Part 1, short title on the Declaration of Policy,
Section 5, Definition of Terms.
At the appropriate places in the listing of these terms that have to be
defined since these are arranged alphabetically, Mr. President, I would like
to insert the term DATA and its definition. So, the amendment will read:
"DATA" MEANS REPRESENTATION, IN ANY FORM, OF
INFORMATION OR CONCEPTS.
The explanation is this: This definition of "data" or "data" as it is now
fashionably pronounced in America - - the definition of "data" ensures that
our bill applies to any form of information in an electronic record, whether
these are figures, facts or ideas.
So again, the proposed amendment is this: "DATA" MEANS
REPRESENTATIONS, IN ANY FORM, OF INFORMATION OR
CONCEPTS.
Senator Magsaysay. May I know how will this affect the definition of
"Data Message" which encompasses electronic records, electronic
writings and electronic documents?
Senator Santiago. These are completely congruent with each other. These
are compatible. When we define "data," we are simply reinforcing the
definition of what is a data message.
Senator Magsaysay. It is accepted, Mr. President.
Senator Santiago. Thank you. The next term is "ELECTRONIC
RECORD." The proposed amendment is as follows:
"ELECTRONIC RECORD" MEANS DATA THAT IS RECORDED OR
STORED ON ANY MEDIUM IN OR BY A COMPUTER SYSTEM OR
OTHER SIMILAR DEVICE, THAT CAN BE READ OR PERCEIVED
BY A PERSON OR A COMPUTER SYSTEM OR OTHER SIMILAR
DEVICE. IT INCLUDES A DISPLAY, PRINTOUT OR OTHER
OUTPUT OF THAT DATA.
The explanation for this term and its definition is as follows: The term
"ELECTRONIC RECORD" fixes the scope of our bill. The record is the
data. The record may be on any medium. It is electronic because it is
recorded or stored in or by a computer system or a similar device.
The amendment is intended to apply, for example, to data on magnetic
strips on cards or in Smart cards. As drafted, it would not apply to telexes
or faxes, except computer-generated faxes, unlike the United Nations
model law on electronic commerce. It would also not apply to regular
digital telephone conversations since the information is not recorded. It
would apply to voice mail since the information has been recorded in or
by a device similar to a computer. Likewise, video records are not covered.
Though when the video is transferred to a website, it would be covered
because of the involvement of the computer. Music recorded by a
computer system on a compact disc would be covered.
In short, not all data recorded or stored in digital form is covered. A
computer or a similar device has to be involved in its creation or storage.
The term "similar device" does not extend to all devices that create or
store data in digital form. Although things that are not recorded or
preserved by or in a computer system are omitted from this bill, these may
well be admissible under other rules of law. This provision focuses on
replacing the search for originality proving the reliability of systems
instead of that of individual records and using standards to show systems
reliability.
Paper records that are produced directly by a computer system such as
printouts are themselves electronic records being just the means of
intelligible display of the contents of the record. Photocopies of the
printout would be paper record subject to the usual rules about copies,
but the original printout would be subject to the rules of admissibility of
this bill.
However, printouts that are used only as paper records and whose
computer origin is never again called on are treated as paper records. In
that case, the reliability of the computer system that produces the record is
irrelevant to its reliability.
Senator Magsaysay. Mr. President, if my memory does not fail me, earlier,
the lady Senator accepted that we use the term "Data Message" rather than
"ELECTRONIC RECORD" in being consistent with the UNCITRAL term
of "Data Message." So with the new amendment of defining
"ELECTRONIC RECORD," will this affect her accepting of the use of
"Data Message" instead of "ELECTRONIC RECORD"?
Senator Santiago. No, it will not. Thank you for reminding me. The term I
would like to insert is ELECTRONIC DATA MESSAGE in lieu of
"ELECTRONIC RECORD."
Senator Magsaysay. Then we are, in effect, amending the term of the
definition of "Data Message" on page 2A, line 31, to which we have no
objection.
Senator Santiago. Thank you, Mr. President.
xxxx
Senator Santiago. Mr. President, I have proposed all the amendments that I
desire to, including the amendment on the effect of error or change. I will
provide the language of the amendment together with the explanation
supporting that amendment to the distinguished sponsor and then he can
feel free to take it up in any session without any further intervention.
Senator Magsaysay. Before we end, Mr. President, I understand from the
proponent of these amendments that these are based on the Canadian E-
commerce Law of 1998. Is that not right?
Senator Santiago. That is correct.80
Thus, when the Senate consequently voted to adopt the term "electronic data
message," it was consonant with the explanation of Senator Miriam Defensor-
Santiago that it would not apply "to telexes or faxes, except computer-generated
faxes, unlike the United Nations model law on electronic commerce." In explaining
the term "electronic record" patterned after the E-Commerce Law of Canada,
Senator Defensor-Santiago had in mind the term "electronic data message." This
term then, while maintaining part of the UNCITRAL Model Law's terminology of
"data message," has assumed a different context, this time, consonant with the term
"electronic record" in the law of Canada. It accounts for the addition of the word
"electronic" and the deletion of the phrase "but not limited to, electronic data
interchange (EDI), electronic mail, telegram, telex or telecopy." Noteworthy is that
the Uniform Law Conference of Canada, explains the term "electronic record," as
drafted in the Uniform Electronic Evidence Act, in a manner strikingly similar to
Sen. Santiago's explanation during the Senate deliberations:
"Electronic record" fixes the scope of the Act. The record is the data. The
record may be any medium. It is "electronic" because it is recorded or
stored in or by a computer system or similar device. The Act is intended to
apply, for example, to data on magnetic strips on cards, or in smart cards.
As drafted, it would not apply to telexes or faxes (except computer-
generated faxes), unlike the United Nations Model Law on Electronic
Commerce. It would also not apply to regular digital telephone
conversations, since the information is not recorded. It would apply to
voice mail, since the information has been recorded in or by a device
 similar to a computer. Likewise video records are not covered, though
when the video is transferred to a Web site it would be, because of the
involvement of the computer. Music recorded by a computer system on a
compact disk would be covered.
In short, not all data recorded or stored in "digital" form is covered. A
computer or similar device has to be involved in its creation or storage.
The term "similar device" does not extend to all devices that create or
store data in digital form. Although things that are not recorded or
preserved by or in a computer system are omitted from this Act, they may
well be admissible under other rules of law. This Act focuses on replacing
the search for originality, proving the reliability of systems instead of that
of individual records, and using standards to show systems reliability.
Paper records that are produced directly by a computer system, such as
printouts, are themselves electronic records, being just the means of
intelligible display of the contents of the record. Photocopies of the
printout would be paper records subject to the usual rules about copies, but
the "original" printout would be subject to the rules of admissibility of this
Act.
However, printouts that are used only as paper records, and whose
computer origin is never again called on, are treated as paper records. See
subsection 4(2). In this case the reliability of the computer system that
produced the record is relevant to its reliability.81
There is no question then that when Congress formulated the term "electronic data
message," it intended the same meaning as the term "electronic record" in the
Canada law. This construction of the term "electronic data message,"
which excludes telexes or faxes, except computer-generated faxes, is in harmony
with the Electronic Commerce Law's focus on "paperless" communications and the
"functional equivalent approach"82 that it espouses. In fact, the deliberations of the
Legislature are replete with discussions on paperless and digital transactions.
Facsimile transmissions are not, in this sense, "paperless," but verily are paper-
based.
A facsimile machine, which was first patented in 1843 by Alexander Bain,83 is a
device that can send or receive pictures and text over a telephone line. It works by
digitizing an image—dividing it into a grid of dots. Each dot is either on or off,
depending on whether it is black or white. Electronically, each dot is represented by
a bit that has a value of either 0 (off) or 1 (on). In this way, the fax machine
translates a picture into a series of zeros and ones (called a bit map) that can be
transmitted like normal computer data. On the receiving side, a fax machine reads
the incoming data, translates the zeros and ones back into dots, and reprints the
picture.84 A fax machine is essentially an image scanner, a modem and a computer
printer combined into a highly specialized package. The scanner converts the
content of a physical document into a digital image, the modem sends the image
data over a phone line, and the printer at the other end makes a duplicate of the
original document.85 Thus, in Garvida v. Sales, Jr.,86where we explained the
unacceptability of filing pleadings through fax machines, we ruled that:
A facsimile or fax transmission is a process involving the transmission and
reproduction of printed and graphic matter by scanning an original copy,
one elemental area at a time, and representing the shade or tone of each
area by a specified amount of electric current. The current is transmitted as
a signal over regular telephone lines or via microwave relay and is used by
the receiver to reproduce an image of the elemental area in the proper
position and the correct shade. The receiver is equipped with a stylus or
other device that produces a printed record on paper referred to as a
facsimile.
x x x A facsimile is not a genuine and authentic pleading. It is, at best, an
exact copy preserving all the marks of an original. Without the original,
there is no way of determining on its face whether the facsimile pleading
is genuine and authentic and was originally signed by the party and his
counsel. It may, in fact, be a sham pleading.87
Accordingly, in an ordinary facsimile transmission, there exists an original paper-
based information or data that is scanned, sent through a phone line, and re-printed
at the receiving end. Be it noted that in enacting the Electronic Commerce Act of
2000, Congress intended virtual or paperless writings to be
the functional equivalent and to have the same legal function as paper-based
documents.88 Further, in a virtual or paperless environment, technically, there is no
original copy to speak of, as all direct printouts of the virtual reality are the same,
in all respects, and are considered as originals.89 Ineluctably, the law's definition of
"electronic data message," which, as aforesaid, is interchangeable with "electronic
document," could not have included facsimile transmissions, which have
an original paper-based copy as sent and a paper-based facsimile copy as received.
These two copies are distinct from each other, and have different legal effects.
While Congress anticipated future developments in communications and computer
technology90 when it drafted the law, it excluded the early forms of technology, like
telegraph, telex and telecopy (except computer-generated faxes, which is a newer
development as compared to the ordinary fax machine to fax machine
transmission), when it defined the term "electronic data message."
Clearly then, the IRR went beyond the parameters of the law when it adopted
verbatim the UNCITRAL Model Law's definition of "data message," without
considering the intention of Congress when the latter deleted the phrase "but not
limited to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy." The inclusion of this phrase in the IRR offends a basic tenet in the
exercise of the rule-making power of administrative agencies. After all, the power
of administrative officials to promulgate rules in the implementation of a statute is
necessarily limited to what is found in the legislative enactment itself. The
implementing rules and regulations of a law cannot extend the law or expand its
coverage, as the power to amend or repeal a statute is vested in the
Legislature.91 Thus, if a discrepancy occurs between the basic law and an
implementing rule or regulation, it is the former that prevails, because the law
cannot be broadened by a mere administrative issuance—an administrative agency
certainly cannot amend an act of Congress.92 Had the Legislature really wanted
ordinary fax transmissions to be covered by the mantle of the Electronic Commerce
Act of 2000, it could have easily lifted without a bit of tatter the entire wordings of
the UNCITRAL Model Law.
Incidentally, the National Statistical Coordination Board Task Force on the
Measurement of E-Commerce,93 on November 22, 2006, recommended a working
definition of "electronic commerce," as "[a]ny commercial transaction conducted
through electronic, optical and similar medium, mode, instrumentality and
technology. The transaction includes the sale or purchase of goods and services,
between individuals, households, businesses and governments conducted over
computer-mediated networks through the Internet, mobile phones, electronic data
interchange (EDI) and other channels through open and closed networks." The Task
Force's proposed definition is similar to the Organization of Economic Cooperation
and Development's (OECD's) broad definition as it covers transactions made over
any network, and, in addition, it adopted the following provisions of the OECD
definition: (1) for transactions, it covers sale or purchase of goods and services; (2)
for channel/network, it considers any computer-mediated network and NOT limited
to Internet alone; (3) it excludes transactions received/placed using fax, telephone
or non-interactive mail; (4) it considers payments done online or offline; and (5) it
considers delivery made online (like downloading of purchased books, music or
software programs) or offline (deliveries of goods).94
We, therefore, conclude that the terms "electronic data message" and "electronic
document," as defined under the Electronic Commerce Act of 2000, do not include
a facsimile transmission. Accordingly, a facsimile transmissioncannot be
considered as electronic evidence. It is not the functional equivalent of an original
under the Best Evidence Rule and is not admissible as electronic evidence.
Since a facsimile transmission is not an "electronic data message" or an "electronic
document," and cannot be considered as electronic evidence by the Court, with
greater reason is a photocopy of such a fax transmission not electronic evidence. In
the present case, therefore, Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-
POSTS0401-2 (Exhibits "E" and "F"), which are mere photocopies of the original
fax transmittals, are not electronic evidence, contrary to the position of both the
trial and the appellate courts.
- III -
Nevertheless, despite the pro forma invoices not being electronic evidence, this
Court finds that respondent has proven by preponderance of evidence the existence
of a perfected contract of sale.
In an action for damages due to a breach of a contract, it is essential that the
claimant proves (1) the existence of a perfected contract, (2) the breach thereof by
the other contracting party and (3) the damages which he/she sustained due to such
breach. Actori incumbit onus probandi. The burden of proof rests on the party who
advances a proposition affirmatively. 95 In other words, a plaintiff in a civil action
must establish his case by a preponderance of evidence, that is, evidence that has
greater weight, or is more convincing than that which is offered in opposition to
it.96
In general, contracts are perfected by mere consent,97 which is manifested by the
meeting of the offer and the acceptance upon the thing and the cause which are to
constitute the contract. The offer must be certain and the acceptance
absolute.98 They are, moreover, obligatory in whatever form they may have been
entered into, provided all the essential requisites for their validity are
present.99 Sale, being a consensual contract, follows the general rule that it is
perfected at the moment there is a meeting of the minds upon the thing which is the
object of the contract and upon the price. From that moment, the parties may
reciprocally demand performance, subject to the provisions of the law governing
the form of contracts.100
The essential elements of a contract of sale are (1) consent or meeting of the minds,
that is, to transfer ownership in exchange for the price, (2) object certain which is
the subject matter of the contract, and (3) cause of the obligation which is
established.101
In this case, to establish the existence of a perfected contract of sale between the
parties, respondent Ssangyong formally offered in evidence the testimonies of its
witnesses and the following exhibits:
Exhibit Description Purpose
E Pro forma Invoice dated 17 April To show that defendants co
 2000 with Contract No. ST2-
POSTS0401-1, photocopy
E-1 Pro forma Invoice dated 17 April
2000 with Contract No. ST2-
POSTS0401, contained in
facsimile/thermal paper faxed by
defendants to plaintiff showing the
printed transmission details on the
upper portion of said paper as
coming from defendant MCC on 26
Apr 00 08:41AM
plaintiff for the delivery of 110 MT of of the schedules of its L/C o
stainless steel from Korea payable by way of
an irrevocable letter of credit in favor of
I Letter to defendants dated 26 June To prove that plaintiff repea
plaintiff, among other conditions.
2000, original defendants for the agreed o
Letters of Credit, defendant
To show that defendants sent their refusal to comply with their
J Letter to defendants dated 26 June
confirmation of the (i) delivery to it of the the problems of plaintiff is
2000, original
specified stainless steel products, (ii) of defendants' failure and re
defendants' payment thereof by way of an L/Cs.
irrevocable letter of credit in favorKof plaintiff, Letter to defendants dated 27 June
among other conditions. 2000, original
L Facsimile message to defendants
dated 28 June 2000, photocopy

E-2 Conforme signature of Mr. Gregory
Chan, contained in facsimile/thermal
paper faxed by defendants to
plaintiff showing the printed
transmission details on the upper
portion of said paper as coming from
defendant MCC on 26 Apr 00
08:41AM
To show that defendants sent their M
confirmation of the (i) delivery to it of the
total of 220MT specified stainless steel
products, (ii) defendants' payment thereof by
way of an irrevocable letter of credit in favor
of plaintiff, among other conditions.
Letter from defendants dated 29 June
2000, contained in facsimile/thermal
paper faxed by defendants to
plaintiff showing the printed
transmission details on the upper
portion of said paper as coming from
defendant MCC on 29 June 00 11:12
AM
To prove that defendants ad
liabilities to plaintiff, that th
"more extension" of time fo
the Letter of Credit, and beg
understanding and consider

F Pro forma Invoice dated 17 April To show that defendants contractedM-1 with Signature of defendant Gregory
2000 with Contract No. ST2- plaintiff for delivery of another 110 MT of Chan, contained in facsimile/thermal
POSTSO401-2, photocopy stainless steel from Korea payable by way of paper faxed by defendants to
an irrevocable letter of credit in favor of plaintiff showing the printed
plaintiff, among other conditions. transmission details on the upper
portion of said paper as coming from
G Letter to defendant SANYO SEIKE To prove that defendants were informed of the defendant MCC on June 00 11:12
dated 20 June 2000, contained in date of L/C opening and AM
facsimile/thermal paper defendant's conforme
N Letter to defendants dated 29 June
G-1 Signature of defendant Gregory 2000, original
Chan, contained in facsimile/thermal
paper. O Letter to defendants dated 30 June To prove that plaintiff reiter
2000, photocopy defendants to L/C opening
H Letter to defendants dated 22 June To prove that defendants were informed of the request for extension of tim
2000, original successful price adjustments secured by defendants' failure and refu
plaintiff in favor of former and were advised therewith extension of time
P Letter to defendants dated 06 July
2000, original
Q Demand letter to defendants dated 15 To prove that plaintiff was constrained to
Aug 2000, original
R Demand letter to defendants dated 23 To prove that defendants opened the first L/C
Aug 2000, original
S Demand letter to defendants dated 11 To show defendants' refusal and failure to
Sept 2000, original
W Letter from plaintiff SSANGYONG
to defendant SANYO SEIKI dated
13 April 2000, with fax back from
defendants SANYO SEIKI/MCC to
plaintiff SSANGYONG, contained
in facsimile/thermal paper with
back-up photocopy
W-1 Conforme signature of defendant
Gregory Chan, contained in
facsimile/thermal paper with back-
up photocopy
W-2 Name of sender MCC Industrial
Sales Corporation
X Pro forma Invoice dated 16 August
2000, photocopy
X-1
engaged services of a lawyer for collection
efforts.
X-2
in favor of plaintiff, requested for further
X-3
postponement of the final L/C and for minimal
amounts, were urged to open the final L/C on
time, and were informed that failure to comply
will cancel the contract.
open the final L/C on time, the cancellation of
the contract as a consequence thereof, and
final demand upon defendants to remit its
DD
obligations.
To prove that there was a perfected sale and
purchase agreement between the parties for
220 metric tons of steel products at the price
of US$1,860/ton.
DD-1
To prove that defendants, acting through
Gregory Chan, agreed to the sale and purchase
of 220 metric tons of steel products at the
price of US$1,860/ton.
To prove that defendants sent their conformity
to the sale and purchase agreement by
facsimile transmission. DD-2
To prove that defendant MCC agreed to adjust
and split the confirmed purchase order into 2
shipments at 100 metric tons each at the
Notation "1/2", photocopy
Ref. No. ST2-POSTS080-
1, photocopy
Conforme signature of defendant
Gregory Chan, photocopy
Letter from defendant MCC to
plaintiff SSANGYONG dated 22
August 2000, contained in
facsimile/thermal paper with back-
up photocopy
Ref. No. ST2-POSTS080-
1, contained in facsimile/thermal
paper with back-up photocopy
Signature of defendant Gregory
Chan, contained in facsimile/thermal Gregory Chan, agreed to th
paper with back-up photocopy
discounted price of US$1,7
To prove that the present Pr
was the first of 2 pro forma
To prove that the present Pr
was the first of 2 pro forma
To prove that defendant MC
Gregory Chan, agreed to th
of the balance of 100 metric
discounted price of US$1,7
the other order and shipmen
tons which was delivered b
SSANGYONG and paid fo
MCC.
To prove that there was a pe
purchase agreement betwee
SSANGYONG and defenda
balance of 100 metric tons,
other order and shipment of
which was delivered by pla
SSANGYONG and paid fo
MCC.
To prove that there was a pe
purchase agreement betwee
SSANGYONG and defenda
balance of 100 metric tons,
other order and shipment of
which was delivered by pla
SSANGYONG and paid fo
MCC.
To prove that defendant MC
of the balance of 100 metric
the other order and shipmen
tons which was delivered b
Ssangyong and paid for by
Significantly, among these documentary evidence presented by respondent, MCC,
in its petition before this Court, assails the admissibility only of Pro Forma Invoice
Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"). After
sifting through the records, the Court found that these invoices are mere
photocopies of their original fax transmittals. Ssangyong avers that these
documents were prepared after MCC asked for the splitting of the original order
into two, so that the latter can apply for an L/C with greater facility. It, however,
failed to explain why the originals of these documents were not presented.
To determine whether these documents are admissible in evidence, we apply the
ordinary Rules on Evidence, for as discussed above we cannot apply the Electronic
Commerce Act of 2000 and the Rules on Electronic Evidence.
Because these documents are mere photocopies, they are simply secondary
evidence, admissible only upon compliance with Rule 130, Section 5, which states,
"[w]hen the original document has been lost or destroyed, or cannot be produced in
court, the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by a copy, or by
a recital of its contents in some authentic document, or by the testimony of
witnesses in the order stated." Furthermore, the offeror of secondary evidence must
prove the predicates thereof, namely: (a) the loss or destruction of the original
without bad faith on the part of the proponent/offeror which can be shown by
circumstantial evidence of routine practices of destruction of documents; (b) the
proponent must prove by a fair preponderance of evidence as to raise a reasonable
inference of the loss or destruction of the original copy; and (c) it must be shown
that a diligent and bona fide but unsuccessful search has been made for the
document in the proper place or places. It has been held that where the missing
document is the foundation of the action, more strictness in proof is required than
where the document is only collaterally involved.103
Given these norms, we find that respondent failed to prove the existence of the
original fax transmissions of Exhibits E and F, and likewise did not sufficiently
prove the loss or destruction of the originals. Thus, Exhibits E and F cannot be
admitted in evidence and accorded probative weight.
It is observed, however, that respondent Ssangyong did not rely merely on Exhibits
E and F to prove the perfected contract. It also introduced in evidence a variety of
other documents, as enumerated above, together with the testimonies of its
witnesses. Notable among them are Pro Forma Invoice Nos. ST2-POSTS080-
1 and ST2-POSTS080-2 which were issued by Ssangyong and sent via fax to
MCC. As already mentioned, these invoices slightly varied the terms of the earlier
invoices such that the quantity was now officially 100MT per invoice and the price
reduced to US$1,700.00 per MT. The copies of the said August 16, 2000 invoices
submitted to the court bear the conformity signature of MCC Manager Chan.
Pro Forma Invoice No. ST2-POSTS080-1 (Exhibit "X"), however, is a mere
photocopy of its original. But then again, petitioner MCC does not assail the
admissibility of this document in the instant petition. Verily, evidence not objected
to is deemed admitted and may be validly considered by the court in arriving at its
judgment.104 Issues not raised on appeal are deemed abandoned.
As to Pro Forma Invoice No. ST2-POSTS080-2 (Exhibits "1-A" and "2-C"),
which was certified by PCIBank as a true copy of its original,105 it was, in fact,
petitioner MCC which introduced this document in evidence. Petitioner MCC paid
for the order stated in this invoice. Its admissibility, therefore, is not open to
question.
These invoices (ST2-POSTS0401, ST2-POSTS080-1 and ST2-POSTS080-2),
along with the other unchallenged documentary evidence of respondent Ssangyong,
preponderate in favor of the claim that a contract of sale was perfected by the
parties.
This Court also finds merit in the following observations of the trial court:
Defendants presented Letter of Credit (Exhibits "1", "1-A" to "1-R")
referring to Pro Forma Invoice for Contract No. ST2POSTS080-2, in the
amount of US$170,000.00, and which bears the signature of Gregory
Chan, General Manager of MCC. Plaintiff, on the other hand, presented
Pro Forma Invoice referring to Contract No. ST2-POSTS080-1, in the
amount of US$170,000.00, which likewise bears the signature of Gregory
Chan, MCC. Plaintiff accounted for the notation "1/2" on the right upper
portion of the Invoice, that is, that it was the first of two (2) pro forma
invoices covering the subject contract between plaintiff and the
defendants. Defendants, on the other hand, failed to account for the
notation "2/2" in its Pro Forma Invoice (Exhibit "1-A"). Observably
further, both Pro Forma Invoices bear the same date and details, which
logically mean that they both apply to one and the same transaction. 106
Indeed, why would petitioner open an L/C for the second half of the transaction if
there was no first half to speak of?
The logical chain of events, as gleaned from the evidence of both parties, started
with the petitioner and the respondent agreeing on the sale and purchase of 220MT
of stainless steel at US$1,860.00 per MT. This initial contract was perfected. Later,
as petitioner asked for several extensions to pay, adjustments in the delivery dates,
and discounts in the price as originally agreed, the parties slightly varied the terms
of their contract, without necessarily novating it, to the effect that the original order
was reduced to 200MT, split into two deliveries, and the price discounted to
US$1,700 per MT. Petitioner, however, paid only half of its obligation and failed to
open an L/C for the other 100MT. Notably, the conduct of both parties sufficiently
established the existence of a contract of sale, even if the writings of the parties,
because of their contested admissibility, were not as explicit in establishing a
contract.107 Appropriate conduct by the parties may be sufficient to establish an
agreement, and while there may be instances where the exchange of
correspondence does not disclose the exact point at which the deal was closed, the
actions of the parties may indicate that a binding obligation has been undertaken. 108
With our finding that there is a valid contract, it is crystal-clear that when petitioner
did not open the L/C for the first half of the transaction (100MT), despite numerous
demands from respondent Ssangyong, petitioner breached its contractual
obligation. It is a well-entrenched rule that the failure of a buyer to furnish an
agreed letter of credit is a breach of the contract between buyer and seller. Indeed,
where the buyer fails to open a letter of credit as stipulated, the seller or exporter is
entitled to claim damages for such breach. Damages for failure to open a
commercial credit may, in appropriate cases, include the loss of profit which the
seller would reasonably have made had the transaction been carried out.109
- IV -
This Court, however, finds that the award of actual damages is not in accord with
the evidence on record. It is axiomatic that actual or compensatory damages cannot
be presumed, but must be proven with a reasonable degree of
certainty.110 In Villafuerte v. Court of Appeals,111 we explained that:
Actual or compensatory damages are those awarded in order to
compensate a party for an injury or loss he suffered. They arise out of a
sense of natural justice and are aimed at repairing the wrong done. Except
as provided by law or by stipulation, a party is entitled to an adequate
compensation only for such pecuniary loss as he has duly proven. It is
hornbook doctrine that to be able to recover actual damages, the claimant
bears the onus of presenting before the court actual proof of the damages
alleged to have been suffered, thus:
A party is entitled to an adequate compensation for such
pecuniary loss actually suffered by him as he has duly proved.
Such damages, to be recoverable, must not only be capable of
proof, but must actually be proved with a reasonable degree of
certainty. We have emphasized that these damages cannot be
presumed and courts, in making an award must point out specific
facts which could afford a basis for measuring whatever
compensatory or actual damages are borne.112
In the instant case, the trial court awarded to respondent Ssangyong US$93,493.87
as actual damages. On appeal, the same was affirmed by the appellate court.
Noticeably, however, the trial and the appellate courts, in making the said award,
relied on the following documents submitted in evidence by the respondent: (1)
Exhibit "U," the Statement of Account dated March 30, 2001; (2) Exhibit "U-1,"
the details of the said Statement of Account); (3) Exhibit "V," the contract of the
alleged resale of the goods to a Korean corporation; and (4) Exhibit "V-1," the
authentication of the resale contract from the Korean Embassy and certification
from the Philippine Consular Office.
The statement of account and the details of the losses sustained by respondent due
to the said breach are, at best, self-serving. It was respondent Ssangyong itself
which prepared the said documents. The items therein are not even substantiated by
official receipts. In the absence of corroborative evidence, the said statement of
account is not sufficient basis to award actual damages. The court cannot simply
rely on speculation, conjecture or guesswork as to the fact and amount of damages,
but must depend on competent proof that the claimant had suffered, and on
evidence of, the actual amount thereof.113
Furthermore, the sales contract and its authentication certificates, Exhibits "V" and
"V-1," allegedly evidencing the resale at a loss of the stainless steel subject of the
parties' breached contract, fail to convince this Court of the veracity of its contents.
The steel items indicated in the sales contract114 with a Korean corporation are
different in all respects from the items ordered by petitioner MCC, even in size and
quantity. We observed the following discrepancies:
List of commodities as stated in Exhibit "V":
COMMODITY: Stainless Steel HR Sheet in Coil, Slit Edge
SPEC: SUS304 NO. 1
SIZE/Q'TY:
2.8MM X 1,219MM X C 8.193MT
3.0MM X 1,219MM X C 7.736MT
3.0MM X 1,219MM X C 7.885MT
3.0MM X 1,219MM X C 8.629MT
 4.0MM X 1,219MM X C
4.0MM X 1,219MM X C
4.5MM X 1,219MM X C
4.5MM X 1,219MM X C
5.0MM X 1,219MM X C
6.0MM X 1,219MM X C
6.0MM X 1,219MM X C
6.0MM X 1,219MM X C
TOTAL:
List of commodities as stated in Exhibit "X" (the invoice that was not
paid):
DESCRIPTION: Hot Rolled Stainless Steel Coil SUS 304
SIZE AND QUANTITY:
2.6 MM X 4' X C
3.0 MM X 4' X C
4.0 MM X 4' X C
4.5 MM X 4' X C
5.0 MM X 4' X C
7.307MT 6.0 MM X 4' X C 25.0MT
7.247MT TOTAL: 100MT116
8.450MT From the foregoing, we find merit in the contention of MCC that Ssangyong did
not adequately prove that the items resold at a loss were the same items ordered by
the petitioner. Therefore, as the claim for actual damages was not proven, the Court
8.870MT cannot sanction the award.
8.391MT Nonetheless, the Court finds that petitioner knowingly breached its contractual
obligation and obstinately refused to pay despite repeated demands from
6.589MT respondent. Petitioner even asked for several extensions of time for it to make good
its obligation. But in spite of respondent's continuous accommodation, petitioner
completely reneged on its contractual duty. For such inattention and insensitivity,
7.878MT MCC must be held liable for nominal damages. "Nominal damages are 'recoverable
where a legal right is technically violated and must be vindicated against an
8.397MT invasion that has produced no actual present loss of any kind or where there has
been a breach of contract and no substantial injury or actual damages whatsoever
have been or can be shown.'"117 Accordingly, the Court awards nominal damages
95.562MT115 of P200,000.00 to respondent Ssangyong.
As to the award of attorney's fees, it is well settled that no premium should be
placed on the right to litigate and not every winning party is entitled to an
automatic grant of attorney's fees. The party must show that he falls under one of
the instances enumerated in Article 2208 of the Civil Code.118 In the instant case,
however, the Court finds the award of attorney's fees proper, considering that
petitioner MCC's unjustified refusal to pay has compelled respondent Ssangyong to
litigate and to incur expenses to protect its rights.
WHEREFORE, PREMISES CONSIDERED, the appeal is PARTIALLY
10.0MT GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 82983
is MODIFIED in that the award of actual damages is DELETED. However,
petitioner is ORDERED to pay respondent NOMINAL DAMAGES in the
25.0MT amount of P200,000.00, and the ATTORNEY'S FEES as awarded by the trial
court.
15.0MT
SO ORDERED.
15.0MT
EN BANC
10.0MT
ASSOCIATE JUSTICE DELILAH A.M. No. CA-05-20-P
VIDALLON-MAGTOLIS, COURT (Formerly OCA IPI No. 05- paragraphs (p), (t) and (u), Rule XIV of the Omnibus
OF APPEALS, 81-CA-P) Rules Implementing the Civil Service Law. [1]
Complainant,
Present:
The Facts
DAVIDE, JR., C.J.,*
PUNO,*
PANGANIBAN,**
QUISUMBING,* Melchor Lagua was found guilty of homicide in Criminal Case Nos.
YNARES-SANTIAGO,*
SANDOVAL-GUTIERREZ, 118032-H and 118033-H before the Regional Trial Court of Pasig City, Branch
- versus - CARPIO,
AUSTRIA- 163.[2] On appeal, the case was assigned to the Sixth Division of the Court of
MARTINEZ,
CORONA, Appeals, docketed as CA-G.R. CR No. 27423. Lagua, who was then detained at the
CARPIO
MORALES,* Bureau of Prisons National Penitentiary in Muntinlupa City, filed a Very Urgent
CALLEJO, SR.,
AZCUNA,*
Petition for Bail. Finding the petition well-taken, the appellate court issued a
TINGA,
CHICO-NAZARIO, and
Resolution on October 9, 2003, directing him to post a P200,000.00 bond.
GARCIA, JJ.
CIELITO M. SALUD,
CLERK IV, COURT OF APPEALS, Promulgated:
Respondent. Laguas bond was approved in a Resolution[3] dated November 6, 2003,
September
9, 2005 where the appellate court also directed the issuance of an order of release in favor
x--------------------------------------------------x
DECISION of Lagua. The resolution was then brought to the Office of the Division Clerk of

Court, Atty. Maria Isabel M. Pattugalan-Madarang, for promulgation.

CALLEJO, SR., J.:

Irma Del Rosario, Utility Worker, noticed the respondents unusual interest

Cielito Salud, Clerk IV, Mailing Section of the Judicial Records Division, in the Lagua case. The respondent had apparently been making inquiries whether

Court of Appeals (CA) stands charged with the following offenses: the appellate court had already directed the issuance of an order of release in the

1. Inefficiency and incompetence in the performance of said case and was initially told there was none yet. Due to his persistence, the
official duties;
2. Conduct grossly prejudicial to the best interest of the records of the case were eventually found.[4] Atty. Madarang then directed the
service; and
3. Directly or indirectly having financial and material typing of the Order of Release Upon Bond,[5] and to notify the mailing section that
interest in an official transaction, under Section 22,

[6]
there were orders requiring personal service. At around 4:00 p.m., the respondent
then went to Atty. Madarangs office and assisted in arranging and stapling the
papers for release. He brought the said resolutions and other papers himself to the
Mailing Section.[7]
On November 7, 2003, the respondent went to the National Penitentiary to
serve the resolution and order of release in the Lagua case. The respondent left the
prison compound at around 2:30 p.m.[8]
In the meantime, Atty. Madarang received a telephone call from a certain
Melissa Melchor, who introduced herself as Laguas relative. It was about 2:00 p.m.
The caller asked her how much more they had to give to facilitate Laguas
provisional liberty. The caller also told Atty. Madarang that they had sought the
help of a certain Rhodora Valdez of the Regional Trial Court (RTC) of Pasig, where
the criminal case originated, but were told that they still had a balance to be given
to Justice Magtolis and Atty. Madarang through the respondent. Atty. Madarang
then called the said court and asked to speak to Ms. Valdez, pretending to be
Laguas relative.
What transpired thereafter is contained in Atty. Madarangs Affidavit dated
December 8, 2003, as follows:
4. That upon telephone queries made with the office of the
Clerk of Court of RTC Pasig, I learned that Rhodora Valdez
is the incumbent Process Server of RTC, [Branch] 163, Pasig
City, from which the original case against accused-appellant
Lagua originated. Disguising myself as accused-appellant
Laguas relative, I dialed [Branch] 163, RTC, Pasig
(6314273) but Rhodora Valdez did not report for work that
day, according to Baby (also known as Ester), her officemate
(who) answered my call. She added that Rhodora Valdez has
been waiting for us (Laguas relatives) to call. Her exact
words were these: Wala si Rhodora. Meron lang siyang
nilakad. Pero kahapon pa nya hinihintay ang tawag nyo. May
kulang pa kayo eh. Kailangan kasing i-en banc sa Court of
Appeals ang kaso ni Lagua.
5. That I coordinated with Ms. Cecil Secarro, the Acting Chief
of the Mailing Section, to inquire if it was usual/normal for
her to text her process servers on the field for an update of
their deliveries, to which she answered in the affirmative.
While she was in the office, she texted Salud for his
whereabouts and he replied, that he was on his way back to
Quezon City. That was before 4 p.m., adding that his
deliveries were ok.
6. That I got Saluds mobile phone number from Ms. Secarro
and started texting him at about the same time Ms. Secarro
did. I represented myself as Arlyn, Laguas relative. Most of
his text messages are still stored in my mobile phone. In fact,
I received one text message from him while I was at the
office of Justice Magtolis, (the Chairman of the 6 th Division
and the ponente of C.R. No. 27423) in the late afternoon of
November 7, 2003 while reporting to her this incident. Those
stored in my phone are the following:
1. bkit, C rhodora to. 639204439082. Nov.
2003, 15:36:15
2. CNO KAMAGANAK AT ANONG
PANGALAN MO 639204439082, 7 Nov 2003
16:14:47
3. SINO K KC NAGHIWALAY N KAMI
639204439082, 7 Nov 2003 16:40:21
4. TAWAG K S AKIN 639204439082 7 Nov
2003 17:18:47
5. NARELEASE N C MR. LAGUA.
NAGKITA N B KAYO 639204439082-7 Nov
2003 19:44:52
6. Magkano b and binigay nyo sa middle nyo.
Puede bang malaman 639184470111-7 Nov
2003 20:32:05
7. Gud evening. May gusto lng akong
malaman. Sana alang makaalam kahit cino.
Lito 6391844701117 Nov. 2003 19:54:20
8. Cno ang kausap n Rhodora. Pwede bang
malaman 639184470111-7 Nov 2003 20:37:57
9. May landline ka. Tawagan kta bukas nang
umaga 639184470111-7 Nov 2003 20:56:31
10. Wag s Court of Appeal. Txt na lang kta
kung saan. 639184470111-7 Nov 2003
20:52:58
11. Gusto mo bukas nang umaga magkita tyo.
639184470111 7 Nov 2003 20:57:10
12. D ba pwede bukas tyo kita. May gusto lang
ako malaman 639184470111 7 Nov 2003
21:02:41
13. D 2ngkol kay rhodora duon sa kasama ko
kaninang lalakeng pinsan 639184470111 7 Nov
2003, 21:04:28
14. Ala po ako sa Lunes sa opis. Sa hapon po
puede kyo 639184470111, 7 Nov 2003
21:07:23
15. Kay Melchor Lagua 639184470111 7 Nov
2003 21:08:19
16. Kasama ko cya kanina nang lumabas
639184470111 7 Nov. 2003 21:13:05
17. Ano m ba Melchor Lagua 639184470111 7
Nov 2003 21:15:52
18. Between 5 and 5:30 ng hapon. Bkit.
639184470111 7 Nov. 2003 21:54:24
19. 3 PM PUWEDE KB 639004039082 10
Nov 2003 12:09:32
20. Kilala mo b c rhodora. Nagkita na b kayo.
Ala naman problema sa kanya. Ok naman
639184470111 7 Nov 2003, 21:57:13
21. MAGKITA N LANG TAYO
639204439082 10 Nov. 2003, 12:20:16
22. A, OK, NAGKITA N B KAYO NG
KAMAGANAK MO 639204439082 10 Nov
2003 15:12:14
23. D TALAGA AKO DARATING DAHIL
WALA AKONG KAILANGAN S IYO.
639204439082 10 Nov 2003 18:36:03
7. That Salud called me up in the morning of November 8,
2003 at around 7:33 but I purposely did not answer him.
Why did he need to call me up?
8. That I personally called up the Bureau of Prisons for the
exact time the Order of Release was delivered and when
accused appellant Lagua was released. I learned that the
Order of Release was received at 9:15 A.M. and that Lagua
was released between 5-5:30 P.M. of November 7, 2003.
9. That I was able to talk to Rhodora Valdez the following
Monday, November 10, 2003. Again, I introduced myself as
Laguas relative, Arlyn and told her I only wanted to know
how much more we had to pay for Laguas release. She
refused to entertain me because according to her, Hindi ikaw
ang kausap ko. Duda ako sa yo. Kung gusto mo, puntahan
mo ako dito bukas, para magkita tayo. Pero lumabas na si
Lagua. Itinawag sa akin ni Lito Salud. Then, she [hung] up.
10. That on Tuesday, November 11, 2003, I brought Salud,
accompanied by Ms. Secarro to Justice Magtolis. Out of the
confrontation, we discovered that Salud did not properly
serve the copies of the Resolution and Order of Release upon
 the accused-appellant and his counsel, Atty. Salvador C.
Quimpo of the Quimpo Dingayan-Quimpo and Associates.
He gave them to a certain Art, allegedly Laguas relative who
he claimed approached him at the Bureau of Prisons in the
morning of November 7, 2003. He told Justice Magtolis that
he gave these documents to Art, who promised to take care
of them, even before he could deliver the copy addressed to
the Director of Prisons. He never mentioned that this Art was
connected with the office of accused-appellants counsel.
Because of this information from Salud himself, I did not
sign the Certificate of Service, Annex C.
11. That several days later, Salud accompanied by Ms. Secarro,
came to my office to apologize. But before he could even say
a word, he broke down in [wails]. In between his loud cries,
he uttered, Boss, patawad po, alang-alang sa aking mga anak.
[9]
On November 11, 2003, Justice Magtolis called the respondent to her
office. When confronted, the respondent denied extorting or receiving money for
Laguas release, or in any other case. He, however, admitted serving the copies of
resolution and order of release intended for Lagua and his counsel to Art Baluran.
[10]
Justice Magtolis then called the respondent to a meeting with Clerk of Court
Atty. Tessie L. Gatmaitan, who stated that she would transfer the respondent to
another office which has nothing to do with cases.
Justice Magtolis lodged the complaint against the respondent in a Letter
dated November 14, 2003, containing, among others, the following allegations:
The delivery of resolutions/orders to unauthorized
persons and complete strangers who promised to take care
thereof (siya na raw ang bahala) constitutes not only neglect of
duty but also conduct prejudicial to the best interest of the
service. Staying for the whole day within the vicinity of the
National Bilibid Prisons to the point of failing to fulfill his other
duties for the day constitutes inefficiency and incompetence in
the performance of official duties. On the other hand, the use of
my name and that of our Division Clerk of Court to illegally
solicit financial or material benefit from parties with pending
cases before this Court is illegal per se.
In view of the foregoing, it is respectfully requested that
Cielito Salud be subjected to an administrative investigation and
disciplinary action.[11]
Attached to the complaint were the following documents to support the charges:
ANNEX A - Record of the cases received by Salud on November
6, 2003 for delivery/service the following day, November 7,
2003. Please note that in each of the 3 cases assigned to him,
there are several parties/counsels to be served.
ANNEX B - Certificate of Service signed by Salud, attested by
the Acting Chief of the Mailing Section and Division Clerk of
Court Ma. Ramona L. Ledesma, showing that the parties/counsel
in SP-67586 were served only on November 10, 2003 (not on
November 7, 2003).
ANNEX C - Certificate of Service for CR-27423, and
corresponding Delivery Receipts.
C-1 - Delivery Receipts for Defense Counsel Salvador Quimpo
signed by someone whose signature was identified by Salud [as]
Art a cousin of appellant Melchor Lagua.
C-2 - Delivery Receipt for the accused-appellant, received by the
same Art and not served thru the Director of Prisons.
C-3 - Delivery Receipt for the OSG, showing that it was
delivered/received by the said office on November 10, 2003, not
on November 7, 2003.
C-4 - Delivery Receipt for the Director of Prisons showing
receipt on November 7, 2003.
ANNEX D - Record of Resolutions in 3 other cases (SP-80241,
SP-65404 and SP-77957) received for service by Salud on
November 10, 2003. The resolutions/processes in these 3 cases
were delivered/served to the parties/counsel on November 10,
 2003 together with undelivered resolutions left
unserved/undelivered on November 7, 2003.
ANNEX E - Certification signed by Salud showing service to
parties/counsel in SP-65404 (received by Salud on November 10,
2003) on November 10, 2003 (same date)
ANNEX F, F-1 & F-2 - Delivery Receipts for parties/counsel in
SP-65404, showing service/delivery on November 10, 2003 in
contrast to his minimal delivery/services on November 7, 2003
only in Muntinlupa.
ANNEX G - Copy of the resolution dated November 6, 2003 of
the 6th Division approving the appellants bond and directing the
issuance of an order of release.
ANNEX H - Copy of the Order of Release upon Bond, which
Salud was supposed to deliver, among others on November 7,
2003 to the defense counsel, the appellant and the OSG.[12]
In his counter-affidavit,[13] the respondent vehemently denied the charges.
He never demanded money from Laguas relative; his name had been used by
someone and was, thus, a mere victim of the circumstances. Moreover, the fact that
he immediately released the CA order in question was clear proof that he had no
financial interest in the transaction. His version of the events that occurred that day
is as follows:
4.1 That on November 6, 2003 at around 1:38 p.m. the
Acting Chief of the Mailing Section gave me an
assignment to deliver the Writ of Habeas Corpus
(hearing on November 26, 2003 at RTC, Zamboanga)
for CA-G.R. SP No. 80238 for delivery to NBI, PAO,
Quezon City, Muntinlupa;
4.2 That I delivered a copy of the Writ of Habeas Corpus
to [the National] Bureau of Investigation (NBI);
4.3 That while I was at the NBI, I received a text
message from my boss, requesting me to return to the
office immediately because there is another notice of
resolution coming from Atty. Ledesma which I have to
serve to Quezon City and Las Pias;
4.4 In compliance with the request, I returned to the
Office and arrived at around 3:15 p.m.;
4.5 That when I received the resolution, I read the same
and found out that the hearing is still scheduled on
December 10, 2003 at 10:30 a.m.;
4.6 That when I was about to leave to deliver the Writ of
Habeas Corpus and the Notice of Hearing to the PAO,
Quezon City, my officemate Jun Vicencio told me to
wait because Irma, the staff of Atty. Madarang requested
me to standby because I need to deliver the Order of
Release to the New Bilibid Prison, Muntinlupa;
4.7 That because of the request I waited until 4:00 p.m.;
4.8 That because its already late, I decided to go to Atty.
Madarangs office to inquire about the Order of Release
which I need to deliver to the New Bilibid Prison,
Muntinlupa;
4.9 That Atty. Madarang told me to wait a little while
because the order is about to be finished. So I waited.
4.10 That Atty. Madarang gave to me the Order of Release
at 4:15 p.m.
4.11 That because I am aware that I may not reach [the]
New Bilibid Prison on time, I told Atty. Madarang that I
can deliver it on November 7, 2003, early in the
morning. She agreed and told me THANK YOU Ikaw
na ang bahala;
4.12 That I informed my boss about the Order of Release
that was assigned to me and she had it listed in our
logbook. I asked my boss [Cecil Secarro] if I can deliver
the Notice of Hearing for SP 67586 and the others on
Monday if I cannot finish delivering them on November
7, 2003. She agreed but told me to be sure that the Order
 of Release will be served first and the others be served
not later than Monday, November 10, 2003. Thereafter, I
went home.
4.13 That on November 7, 2003, I went straight to [the]
New Bilibid Prison and arrived there before 8:00 [a.m.]
Unfortunately, all the staff wearing white uniforms and
the security guards were falling in line in front of the
building of the New Bilibid Prison. So I could not enter
the administration office.
4.14 That while I was standing in front of the building
where the administrative office is located, a certain ART
approached me and asked me if I am the personnel of
the Court of Appeals who will deliver the Order of
Release.
4.15 That I said yes, and he told me his name and said that
he is a relative of MELCHOR LAGUA (prisoner) and is
connected with the office of Atty. [Quimpo].
4.16 That at around 9:30 [a.m.] I was able to enter the
administrative offices but because there was no staff
inside I went to the documentation office. The staff in
the documentation office told me to submit the Order of
Release to the administrative office. He said that they
will prepare the documents of MELCHOR LAGUA
(prisoner) but also told me that the prisoner might be
released on Monday yet because the signatories are busy
attending the ongoing 98 anniversary celebration;
4.17 That I returned to the administrative office and was
able to find Mr. JUANITO TORRES, Administrative
Officer III, who received the copy for the Director but
refused to receive the copy of Mr. LAGUA. He told me
to wait for his staff to receive the copy of Mr. LAGUA;
4.18 That because the staff were not around, I went to the
canteen to buy softdrinks to quench my thirst;
4.19 That Mr. ART followed me in the canteen and told me
to assist in the release of Mr. LAGUA because there
were no personnel attending to the Order of Release;
4.20 That since my boss told me to insure the release of the
prisoner, I waited for my staff to arrive who will attend
to the matter;
4.21 That I delivered the copy of Mr. LAGUA to the staff.
But ART told them he can receive the copy of Mr.
LAGUA because he is his relative so, the staff told me
to give the copy to ART.
4.22 That I gave the copy of the Order of Release for the
accused to ART. ART also told me that he is authorized
to receive the copy for Atty. Quimpo because he is also
the representative of the law office. Hence, I also gave
the copy for Atty. Quimpo to ART;
4.23 That I was able to finish my duty at the New Bilibid
Prison at around 2:30 [p.m.] and I proceeded to Purok I,
6A Bayanan, Muntinlupa to serve the Writ of Habeas
Corpus in CA-G.R. SP No. 80238;
4.24 That because of [sic] the address of the addressee was
incomplete, I found a hard time locating the address of
the addressee and when I found Purok I, 6A, the persons
thereat do not know JOEL DE LA PAZ. I asked for their
help but nobody in the place knew JOEL DE LA PAZ;
4.25 That I left Muntinlupa late in the afternoon and due to
the lack of time I decided to deliver the other documents
on the next working day which is Monday, November
10, 2003;
4.26 That I delivered the other documents on Monday,
November 10, 2003, without any problem;
4.27 That I was surprised when Atty. Madarang later on
accused me that I used her name and the name of Justice
Magtolis to demand money from Mr. LAGUAS relative.
[14]
 Considering the gravity of the charges, then Acting Presiding Justice However, the entrapment did not materialize. The respondent thereafter came to her

Cancio C. Garcia[15] referred the matter to Atty. Elisa B. Pilar-Longalong, Assistant office, where he was asked why he was unable to serve all the other papers and

Clerk of Court, for investigation, report, and recommendation. documents that day.[18] He also admitted that he served a copy of the resolution to

the wrong person (Baluran). Justice Magtolis also stated that she threatened to

The Investigation transfer the respondent, and that the latter vehemently objected, pleaded, and cried

saying, Huwag naman pong pa-transfer. When asked why, the respondent said that

The requisite hearings were held from December 12, 2003 to August 4, he has children in school and something like, Dyan po ako kumikita.[19]

2004.
Another witness was Cristy Flores, convicted of three counts of estafa

Atty. Madarang affirmed the contents of her Affidavit [16] dated December 8, 2003. who served time at the Correctional Institute for Women in Batangas City. She

She testified that the respondent later came to her office along with Ms. Secarro. testified that the respondent was introduced to her in December 1998 by a certain

Amidst his cries, he pleaded, Boss, patawad po, alang-alang sa aking mga anak. Crisanta Gamil.[20] Gamil was also detained at the correctional facility; the

She replied, Wait, wala ka namang kasalanan sa akin. Ikaw ang nagpasimuno ng respondent had worked on her appeal bond papers and asked for P20,000.00 to

lahat ng ito. The respondent repeated, Boss, patawad po alang alang sa aking mga facilitate the issuance of the appeal bond. [21] The payment was made right in front

anak, and Atty. Madarang answered, Okey lang, pinatawad na kita. Hindi naman of her, and the respondent issued a receipt. [22] The witness also testified that Gamil

ako galit sa iyo.[17] told her, O, at least dyan mo ipalakad ang papel mo. Okay ′yan, sigurado.[23] The

respondent visited her in May 1999, as she had asked him to fix her appeal bond.
Justice Magtolis testified that Atty. Madarang reported having received a
During the visit, the respondent took the pertinent documents from her. [24] The
telephone call from the alleged relative of Lagua. She narrated that she gave the
witness also stated that she gave the respondent a partial payment
name Arlyn to the caller, and, thereafter, exchanged text messages with the
of P7,000.00[25] on May 16, 1999 and he issued a receipt. [26] They then proceeded to
respondent. Justice Magtolis instructed Atty. Madarang to continue communicating
the Documents Section where they secured copies of the court decision, certificate
with the respondent and, if possible, to see it through a possible pay-off where a
of manifestation and her picture. She made the last payment of P13,000.00 in June
National Bureau of Investigation (NBI) agent would be asked to assist them.
13, 1999, and also issued a receipt. The respondent was also asking for an
The respondent admitted that he was in the Correctional Institute for
additional payment of P15,000.00, which she was unable to give.
Women in Mandaluyong City on May 16, 1999, as he was then visiting Vilma
Flores narrated that she introduced another detainee to the respondent,
Dalawangbayan. He also saw Flores.[30] When asked why he visited
Dalawangbayan, whom the latter was also able to help. She stated that according to
Dalawangbayan, the respondent replied that Flores had written a letter to him
Dalawangbayan, the respondent asked for P200,000.00. She further testified that
(which he dubbed as maintrigang sulat)[31]addressed Lito Salud, Mailing Section,
[27]
she knew the respondent as Joselito M. Salud, and not Cielito Salud. After the
Court of Appeals. In the said letter, Flores asked him to help Dalawangbayan, just
incident, she wrote a letter to Associate Justice Conrado Vasquez, Jr. to ask for
like he had helped Gamil. The respondent then showed the letter to then Chief of
assistance regarding her appeal bond.
Office Prudencio B. Aguilar, who told him, Puntahan mo yan, Lito at maintriga

Atty. Salvador Quimpo, Laguas counsel, testified that it was Engineer Art ′yang sulat na yan, baka tayo mapahamak dyan. [32] Thus, he went to the

Baluran who hired him as counsel of the said accused. He stated that he gave an Correctional Institute in Mandaluyong City to sort things out with Dalawangbayan

oral authorization to Baluran to get the CA resolutions or orders; Baluran was the and Gamil. The respondent, however, stated that he could not find the letter

one who furnished him a copy of the resolution. [28] He called Mr. Baluran to say anywhere and had already been lost.[33]

that an order for Laguas release had already been issued by the appellate court. The
During his May 16, 1999 visit to the correctional facility, Flores
witness stated, however, that he had never seen the respondent before. [29]
approached him in the visiting hall, and said suddenly, Sandali lang, Kuya, then
The respondent testified that he has been a CA employee since 1991. He
left. He then talked to Dalawangbayan about the controversial letter, explaining that
admitted that he knew Flores, and met her in January 1999 when he brought Gamils
his job in the Court of Appeals was only to remand the records and deliver the
order of release in the Batangas City Jail. He claimed that he was waiting for the
Orders for release, just like what he did in Gamils case. [34] He again visited
relatives of Gamil as they were the ones who would pay for his fare home, and
Dalawangbayan on June 13, 1999[35] as evidenced by the entries in the visitors
while waiting, he talked to the jailguard/warden. Flores then approached him and
logbook. He was no longer able to speak to Flores, but made five other such visits
asked him if he was from the CA. When the respondent answered in the
to Dalawangbayan in the correctional facility.
affirmative, Flores replied that Justice Vasquez was her neighbor in Bian, Laguna.
 The Findings of the Investigating Officer of the penalty for the first offense which is suspension for 1 year
[may be] imposed on the respondent.

2. Considering that the prescribed penalty for the

In her Report dated January 21, 2005, Atty. Longalong found that the offense exceeds one month suspension, the case may now be
referred to the Supreme Court for appropriate action, pursuant to
respondent was guilty as charged, and made the following recommendation: Circular No. 30-91 of the Office of the Court Administrator.[36]

In view of all the foregoing, there is substantial

evidence to hold respondent liable for the offenses charged. He is
liable for inefficiency and incompetence in the performance of
his official duties and for conduct prejudicial to the best interest
of the service when he admittedly served the copies of the The Ruling of the Court
resolution and order of release in the Lagua case intended for
detained appellant and his counsel on Mr. Baluran whom he
admitted to have met only on that day, against the rules and On the charge of inefficiency, the respondent is clearly administratively
normal office procedure on personal service. His long stay in the
Bureau of Prisons also caused the delay in the service of other liable. After serving Laguas copy of the resolution and order of release to the prison
court processes assigned to him for service on that day. He is also
liable for having financial or material interest in an official Director, he should have immediately returned to his station or served the other
transaction considering his undue interest in the service of the
order of release and actual release of Lagua to the point of resolutions and documents for personal service. As an officer of the court, the
staying almost the whole day in the Bureau of Prisons and the
aborted deal as can be concluded from the phone call of Melissa respondent plays an essential part in the administration of justice. He is required to
Melchor to Atty. Madarang and subsequent exchange of text
messages with Atty. Madarang disguising as Laguas relative. live up to the stringent standards of his office, and his conduct must, at all times, be
RECOMMENDATION: above reproach and suspicion. He must steer clear of any act which would tend to
1. Rule IV, Section 52 of Civil Service Commission
undermine his integrity, or erode somehow the peoples faith and trust in the courts.
Memorandum Circular No. 19, S. 1999, issued pursuant to Book
V of the Administrative Code of 1987, provides that the penalty [37]
As the respondent himself admitted, he stayed on until 2:30 p.m. without any
for the first offense of inefficiency and incompetence in the
performance of official duties, for conduct prejudicial to the best
interest of the service and for directly or indirectly having valid reason, despite the fact that he knew he still had to serve several orders and
financial and material interest in any official transaction is
suspension for a period of 6 months, 1 day to 1 year. Pursuant to resolutions. As pointed out by the Investigating Officer, inefficiency and
Section 55 of the same Memorandum Circular, if the respondent
is found guilty of 2 or more charges, the penalty to be imposed incompetence in the performance of official duties is classified as a grave offense,
should be that corresponding to the most serious charge and the
rest shall be considered as aggravating circumstances. Section and is punishable by suspension for six months and one day to one year. [38]
54-c of the same Memorandum Circular provides that the
maximum of the penalty shall be imposed where only
aggravating and no mitigating circumstances are present. Since in
this case, the penalty is the same for all 3 offenses, the maximum
 Indeed, the complainant in administrative proceedings has the burden of First. The respondent admitted that he was the sender of the first three text

proving the allegations in the complaint by substantial evidence. If a court messages in Atty. Madarangs cellphone: bkit, C rhodora to; CNO KAMAGANAK

employee is to be disciplined for a grave offense, the evidence against him must be AT ANONG PANGALAN MO; and SINO K KC NAGHIWALAY N KAMI. The

competent and derived from direct knowledge; as such, charges based on mere respondents testimony on the matter is as follows:

suspicion and speculation cannot be given credence. Thus, if the complainant fails Q: In the hearing of December 2, 2003, in the TSN on page 32
onwards
to substantiate a claim of corruption and bribery, relying on mere conjectures and
ATTY. ROSERO:
suppositions, the administrative complaint must be dismissed for lack of merit.
Is that the testimony of Atty. Madarang, Justice?
[39]
However, in administrative proceedings, the quantum of proof required to
JUSTICE MAGTOLIS:
establish malfeasance is not proof beyond reasonable doubt but substantial
Oo. I will just refer to your admission through your
counsel that Cellphone No. 6392044390[8]2 is yours.
evidence, i.e., that amount of relevant evidence that a reasonable mind might accept
You admitted that?
as adequate to support a conclusion, is required. [40] The findings of investigating
ATTY. ROSERO:
magistrates on the credibility of witnesses are given great weight by reason of their I think we made an admission as to that matter, Justice.
Well just check the affidavit of Atty. Madarang.
unmatched opportunity to see the deportment of the witnesses as they testified. [41]
JUSTICE MAGTOLIS:
Here, admitted. Basahin mo.
To determine the credibility and probative weight of the testimony of a
ATTY. ROSERO:
witness, such testimony must be considered in its entirety and not in truncated
Yes, Justice, admitted but not the cellphone number
parts. To determine which contradicting statements of a witness is to prevail as to
JUSTICE MAGTOLIS:
the truth, the other evidence received must be considered. [42] Thus, while it is true
Sige, ulitin natin, 6392044390[9]2.
that there is no direct evidence that the respondent received any money to facilitate
ATTY. ROSERO:
the release of detained Lagua, the following circumstances must be taken as Yes, admitted. That is his cellphone.

contrary to the respondents plea of innocence: JUSTICE MAGTOLIS:

This cellphone is yours.

Q: Do you also admit that you called Atty. Madarang several
times on November 7, 2003?
ATTY. ROSERO:
November 7 is a Friday. Tumawag ka daw several times
kay Atty. Madarang, November 7?
JUSTICE MAGTOLIS:
Texted, Im sorry I will correct that, texted.
A: Nauna po siyang magtext sa akin, Justice, hindi po ako
nagtext sa kanya. Nagtext po siya sa akin sumagot po
ako sa kanya.
Q: There was an exchange several times?
A: Nuong pong text niya sa akin hindi po several times dahil
kung makita ′nyo po dyan.
JUSTICE MAGTOLIS:
Let me see the affidavit of Atty. Madarang. After this question,
may I ask for a continuance?
ATTY. ROSERO:
No objection, Your Honor.
JUSTICE MAGTOLIS:
All these text messages were checked by us with your
counsel in the cellphone of Atty. Madarang which were
preserved until we allowed her to erase these. There are
exchanges here: 6392044390[8]2, November 7. When
she texted she answered, Bkit c Rhodora 2 and then
second was, Cnong kamaganak anong pangalan mo?
This is addressed to you, this is your telephone?
A: Opo.
Q: But the one who answered is Rhodora?
A: Ako po ′yun.
Q: Ikaw ang sumasagot. Why did you say that you are Rhodora?
A: Justice, nung ma-receive ko po ′yong text niya apat na beses
ko pong na-receive ang text ni Arlene.
INVESTIGATOR:
Who is Arlene?
A: Atty. Madarang. Arlene, sa text po niya sa akin, Sir Lito,
kamaganak po ito ni Mr. Lagua. Magkano pa po ba ang
kakulangang pera para ibigay ko sa inyo. Si Rhodora ba
kasama? Hindi ko po sinagot yon. Pangalawa, ′yun din
po ang message nya. Ano ito? Sa akin pong kuan, sa
pag-iisip ko lang po, bakit dahil si Mr. Art Baluran
kamag-anak na, ano ito? Text pa ulit pa sya ng pangatlo.
Nang-iintriga na ′to. Pang-apat, intriga ′to. Text ko nga
rin ′to, lokohan lang tayo. Bkit si Rhodora ′to yun po
ang sagot ko sa kanya.
Q: So at that time you already knew about Rhodora?
A: Hindi po, dun, duon po sa text niya nakalagay po dun eh, Si
Rhodora kasama ba? So ikinuan ko po na si Rhodora ′to,
dun po sa text nya.
Q: Nakipaglokohan ka?
A: Sa text niya nakalagay dun na Si Rhodora ba kasama kaya po
ako nakipaglokohan dun.[43]
As pointed out by the Investigating Officer, the respondents claim of
joking around (nakipaglokohan) with an unknown sender of a text message by
replying thereto is contrary to a normal persons reaction. This is made even more
apparent by the fact that the respondent even admitted that he called Atty.
Madarang twice, and when asked why, gave a vague answer, and, when further
questioned, even broke down in tears.[44]

The respondents claim that the admission of the text messages as evidence
against him constitutes a violation of his right to privacy is unavailing. Text
messages have been classified as ephemeral electronic communication under
Section 1(k), Rule 2 of the Rules on Electronic Evidence, [45] and shall be proven by
the testimony of a person who was a party to the same or has personal knowledge
thereof. Any question as to the admissibility of such messages is now moot and
academic, as the respondent himself, as well as his counsel, already admitted that
he was the sender of the first three messages on Atty. Madarangs cell phone.
This was also the ruling of the Court in the recent case of Zaldy Nuez v.
Elvira Cruz-Apao.[46] In that case, the Court, in finding the respondent therein guilty
of dishonesty and grave misconduct, considered text messages addressed to the
complainant asking for a million pesos in exchange for a favorable decision in a
case pending before the CA. The Court had the occasion to state:
The text messages were properly admitted by the
Committee since the same are now covered by Section 1(k), Rule
2 of the Rules on Electronic Evidence, which provides:
Ephemeral electronic communication refers to
telephone conversations, text messages and other
electronic forms of communication the evidence of
which is not recorded or retained.
Under Section 2, Rule 11 of the [said rules], Ephemeral
electronic communications shall be proven by the testimony of a
person who was a party to the same or who has personal
knowledge thereof . In this case, complainant who was the
recipient of the said messages and therefore had personal
knowledge thereof testified on their contents and import.
Respondent herself admitted that the cellphone number reflected
in complainants cellphone from which the messages originated
was hers. Moreover, any doubt respondent may have had as to
the admissibility of the text messages had been laid to rest when
she and her counsel signed and attested to the veracity of the text
messages between her and complainant. It is also well to
remember that in administrative cases, technical rules of
procedure and evidence are not strictly applied. We have no
doubt as to the probative value of the text messages as evidence
in determining the guilt or lack thereof of respondent in this case.
Second. The respondents testimony during the hearings held before
Investigating Officer Atty. Longalong is replete with inconsistencies and loopholes.
He claimed that he made inquiries from other CA staff and learned that there was
indeed a deal between someone in the criminal section and a certain Rhodora of
the RTC, Pasig. He further claimed that the said parties wanted to get back at him
for immediately serving the release order which prevented them from demanding
the balance of the deal from Laguas relative. However, this bare claim was not
corroborated by any witness. Moreover, the respondent alleged that two anonymous
callers claimed to know something about the case against him; when asked about
it, he stated that he no longer exerted efforts to find out who they were as they did
not give out their names:
JUSTICE MAGTOLIS:
Q: On page 5 of your affidavit, you said in paragraph 8 That I
made some inquiry and some personnel of the Court of
Appeals told me that there is indeed a deal between a
staff in the Criminal Section and Rhodora of RTC,
Pasig. Can you tell us who is this staff?
A: Ah dito po Justice, hindi po siya nagpakilala, sa telephono po.
INVESTIGATOR: INVESTIGATOR:

Sino siya? Hinahanap daw siya.

A: Hindi po siya ′yong tawag po niya sa akin sa telepono nang JUSTICE MAGTOLIS:
malaman po dito sa CA na ako ay kinasuhan ninyo
tumawag po siya sa Personnel. Q: Hinahanap ka, okay, when you answered the phone, what did
you say?
JUSTICE MAGTOLIS: A: Ang sabi ko po sa kanya, pupuwede mo ba akong matulungan
sa paggawa ng affidavit dahil kinasuhan nga ako ni
Q: Who is siya? Justice Magtolis.
A: Ay hindi po siya nagpakilala.

INVESTIGATOR:
Q: But you do not know who you were talking to?
Lalaki o babae? A: Tinanong ko nga po kung sino siya eh tumutulong lang daw
siya sa akin dahil ang naririnig niyang tsismis din dyan
A: Una po babae tapos ′yong pangalawa po lalaki. eh baka po si Rhodora ang may ka-kuan sa Criminal.

INVESTIGATOR: Q: Saan ′yong ka-kuan?

A: Ang may kausap sa Criminal.
Sinong kinakausap?
Q: Who said na baka si Rhodora ang may kausap sa Criminal?
A: Ako po. A: ′Yon pong kausap ko sa kabilang linya.

INVESTIGATOR: Q: The name you do not know?

A: Eh tinanong ko naman po kung sino siya ayaw naman po
Hinahanap ka? niyang magpakilala. Matutulungan mo ba ako, ibinaba
na po ang telepono.
A: Hinahanap po nila ako.
INVESTIGATOR:
JUSTICE MAGTOLIS:
Anonymous caller.
Q: What did he tell you? He, lalaki, ano?
A: Sa babae muna po? JUSTICE MAGTOLIS:

Q: Oo, babaet lalake ba? You are very fond of answering calls. You dont even know the
A: Opo. name.

Q: Who was the first caller, the lady or the gentleman? Q: That anonymous caller told you that there must be some deals
A: Babae po. between Rhodora and someone from the Criminal
Section?
Q: Were you the one who answered the phone? A: ′Yun din daw po ang naririnig niyang tsismis dyan sa labas.
A: Hindi po.
Q: Tsismis, that was that the caller told you?
A: Opo.
JUSTICE MAGTOLIS:
Q: And she wanted to help you?
A: Kaya po sinabi din sa akin na tsismis eh hindi pa po pwedeng Q: Alright, you were not the one who answered the call?
A: Hindi po.
Q: What did you answer her?
Q: Somebody called you that theres a phone call?
INVESTIGATOR: A: Opo.

Anong sagot mo raw? Q: When you answered, what was your first word?
A: Hello!
JUSTICE MAGTOLIS:
Q: What was the answer at the other end of the line?
Q: Anong sagot niya sa tulungan kasi nakakarinig siyang tsismis? A: Hello rin po.

INVESTIGATOR: Q: What next?

A: Alam mo, ang sabi po niya sa akin ganito po
Q Ano ang sagot mo?
A: Eh iyon nga ang gusto kong malaman, ang katotohanan. Baka Q: Who was the first one who said something other than hello?
naman pupuwede mo akong matulungan. Sino ba ′to? A: Siya po ang nauna.

JUSTICE MAGTOLIS: Q: What did she say, the exact words?

Q: Di ba she was the one who offered to help?
A: Ay ayaw daw po naman niyang masabit po ang pangalan niya.
Q: But she was the one who called you?
A: Opo.
Q: Okay. How did your talk end with this girl or lady?
A: Nung pagsalita ko nga pong baka pupuwede akong tulungan,
wala na.
Q: How about the man, the gentleman or the boy who called?
A: Same kuan din po ang kanilang kuan e.
JUSTICE MAGTOLIS:
A: Exact words, sa naalala kong sinabi niya Alam mo, Mr. Salud,
Salud po ang kuan niya sa akin, narinig ko sa labas,
istoryahan dyan sa labas na baka si Rhodora ang may
ka-kuan dito sa Criminal. Ang sabi ko po sa kanya Iyan
din ang itinawag sa akin kahapon. Eh dalawa na kayo eh
baka naman pupuwede nyo akong matulungan. Puede
ko bang malaman ang pangalan mo? Ganun din po,
ayaw na pong magsalita ibinaba na [ang] telepono.
Q: Do you know Rhodora?
A: Hindi po.
Q: You never met her?
A: Hindi po.

Dont use kuan. Q: You never talked to her?

A: Nung pong ipinakiusap nyo sa akin sa telepono po nung tayo
ATTY. ROSERO: poy

Sige, Lito, ipaliwanag mo. Q: After the conversation with the lady and that gentleman who
called you to offer some help and afterwards did not
A: Same kuento rin po, sinabi niya na ganuon din po na narinig help at all, what happened?
din po niya sa labas. A: Wala na po.
 Q: Did you not check with Rhodora, What is this they are talking
about that it might be between you and someone in the
Criminal Section? You never asked her that?
A: Hindi ko na rin po
Q: You did not. But I thought you wanted help from those people
who can help you?
A: Eh hindi na nga po sila nagbanggit po ng pangalan dahil po
sabi ng unang babae ayaw nga rin po niyang sumabit sa
kaso.[47]
This respondents actuation on this matter, if at all true, is again contrary to
the normal reaction of one who has been administratively charged, and wants to
clear his name of any wrongdoing.
The respondent also admitted visiting an inmate (Vilma Dalawangbayan)
at the correctional facility eight times for no apparent reason. This admission lends
some credence to the testimony of Flores, that she was the one who introduced him
to Dalawangbayan, the person he was visiting. When asked why he frequently
visited, he stated that he found her beautiful (Maganda po siya, Justice), and was
on the verge of courting her (Para na nga po akong nanliligaw). The Court
believes that this allegation was concocted by the respondent as a mere
afterthought, to cover up for his misdeeds.
The Investigating Officer also found that the respondent was high-strung
during his testimony, and this finding must be accorded respect. Indeed, when the
issue is the credibility of witnesses, the function of evaluating it is primarily lodged
in the investigating judge. The rule which concedes due respect, and even finality,
to the assessment of the credibility of witnesses by trial judges in civil and criminal
cases where preponderance of evidence and proof beyond reasonable doubt,
respectively, are required, applies a fortiori in administrative cases where the
quantum of proof required is only substantial evidence. The investigating judge is
in a better position to pass judgment on the credibility of witnesses, having
personally heard them when they testified, and observed their deportment and
manner of testifying.[48] Thus, the following findings of Atty. Longalong are well
taken:
However, respondent denied receiving P20,000 from
Gamil and P15,000 from Flores and signing LM Salud on Flores
notebooks (Exhibits E-1 and F-1) but admitted visiting Vilma at
the Correctional Institute for Women 8 times from May to August
1999. Respondents denial here appears self-serving and
incredible considering his admission of going to the Correctional
Institute for Women several times for no valid official reason.
Moreover, although Flores is a convict for estafa, her
testimony on the matter was more consistent and credible.
Likewise, respondent admitted seeing Flores at the Correctional
Institute for Women and that Flores mailed her letter to him on
May 16, 1999 which he called maintriga. He also admitted that
he told Flores to seek the help of Justice Vasquez on her case.
The foregoing, plus the fact that Flores eventually wrote Justice
Vasquez, confirms the truth of Flores testimony on the matter.
With the aforecited admissions by respondent, the
substantial evidence presented by the complainant and her
witnesses with their positive and forthright testimonies deserve
more credence than respondents self-serving denial and
inconsistent and vague testimony. Even the demeanor of
complainant and her witnesses give credence to their testimonies
than the nervous and [high-strung] demeanor of respondent
during his testimony. Moreover, complainant and her witnesses,
including the superiors of respondent, have no reason or motive
whatsoever to testify falsely against him. Respondents defense of
 denial is inherently a weak defense. It is well settled that denial,
to be believed, must be buttressed by strong evidence of non- character, improper or wrong behavior,[51] while gross, has been defined as out of
culpability, otherwise the denial is purely self-serving and with
nil evidentiary value (People of the Philippines v. Arlee, 323 all measure; beyond allowance; flagrant; shameful; such conduct as is not to be
SCRA 201). Like the defense of alibi, denial crumbles in the light
of positive declarations (People of the Philippines vs. Ricafranca, excused.[52] Under the Omnibus Civil Service Rules and Regulations, grave
323 SCRA 652).
misconduct is punishable by dismissal from the service even for the first offense, as
Indeed, the Court is looked upon by people with high respect, a sacred place where
it is classified as a grave offense. However, considering that the respondent has not
litigants are heard, rights and conflicts settled and justice solemnly dispensed with.
been previously charged nor administratively sanctioned, the Court finds that a
Misbehavior within or around the vicinity diminishes its sanctity and dignity. The
penalty of suspension for one year and six months will serve the purpose of
conduct and behavior required of every court personnel, from the presiding judge to
disciplining the respondent.
the lowliest clerk, must always be beyond reproach and circumscribed with the

heavy burden of responsibility. Their conduct must, at all times, be characterized Court personnel, from the lowliest employee to the clerk of court or any

by, among other things, propriety and decorum so as to earn and keep the publics position lower than that of a judge or justice, are involved in the dispensation of

respect and confidence in the judicial service. [49] Public service requires the utmost justice, and parties seeking redress from the courts for grievances look upon them

integrity and strictest discipline. Thus, a public servant must exhibit at all times the as part of the Judiciary. They serve as sentinels of justice, and any act of

highest sense of honesty and integrity not only in the performance of his official impropriety on their part immeasurably affect the honor and dignity of the

duties but in his personal and private dealings with other people.[50] Judiciary and the peoples confidence in it. [53] Thus, any conduct which tends to

While there is no direct evidence to suggest that he actually extorted diminish the image of the Judiciary cannot be countenanced.

money to facilitate the issuance of the appeal bond and release order which he
IN LIGHT OF ALL THE FOREGOING, respondent Cielito M. Salud
himself served, the surrounding circumstances, as well as the inconsistencies in his
is found GUILTY of inefficiency and gross misconduct. He is SUSPENDED for a
testimony, point towards administrative culpability. The respondents actuations fall
period of One (1) Year and Six (6) Months, effective immediately. He is
short of the standard required of a public servant. He is guilty of gross or grave
further DIRECTED to inform the Court as to the date of his receipt of this
misconduct. Misconduct is a transgression of some established and definite rule of
Decision to determine when his suspension shall have taken effect.
action, a forbidden act, a dereliction from duty, unlawful behavior, willful in

The Office of the Court Administrator is also DIRECTED to conduct a
discreet investigation on the possible involvement of Rhodora Valdez (Utility
Worker), and other personnel of the Regional Trial Court of Pasig City, Branch 163.
SO ORDERED.
FIRST DIVISION
[G.R. No. 148220. June 15, 2005]
ROSENDO HERRERA, petitioner, vs. ROSENDO ALBA, minor, represented
by his mother ARMI A. ALBA, and HON. NIMFA CUESTA-
VILCHES, Presiding Judge, Branch 48, Regional Trial Court,
Manila, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review[1] to set aside the Decision[2] dated 29 November
2000 of the Court of Appeals (appellate court) in CA-G.R. SP No. 59766. The
appellate court affirmed two Orders[3] issued by Branch 48 of the Regional Trial
Court of Manila (trial court) in SP No. 98-88759. The Order dated 3 February 2000
directed Rosendo Herrera (petitioner) to submit to deoxyribonucleic acid (DNA)
paternity testing, while the Order dated 8 June 2000 denied petitioners motion for
reconsideration.
The Facts
On 14 May 1998, then thirteen-year-old Rosendo Alba (respondent),
represented by his mother Armi Alba, filed before the trial court a petition for
compulsory recognition, support and damages against petitioner. On 7 August
1998, petitioner filed his answer with counterclaim where he denied that he is the
biological father of respondent. Petitioner also denied physical contact with
respondents mother.
Respondent filed a motion to direct the taking of DNA paternity testing to
abbreviate the proceedings. To support the motion, respondent presented the
testimony of Saturnina C. Halos, Ph.D. When she testified, Dr. Halos was an
Associate Professor at De La Salle University where she taught Cell Biology. She
was also head of the University of the Philippines Natural Sciences Research
Institute (UP-NSRI), a DNA analysis laboratory. She was a former professor at the
University of the Philippines in Diliman, Quezon City, where she developed the
Molecular Biology Program and taught Molecular Biology. In her testimony, Dr.
Halos described the process for DNA paternity testing and asserted that the test had
an accuracy rate of 99.9999% in establishing paternity.[4]
Petitioner opposed DNA paternity testing and contended that it has not gained
acceptability. Petitioner further argued that DNA paternity testing violates his right
against self-incrimination.
The Ruling of the Trial Court
In an Order dated 3 February 2000, the trial court granted respondents motion
to conduct DNA paternity testing on petitioner, respondent and Armi Alba. Thus:
In view of the foregoing, the motion of the petitioner is GRANTED and the
relevant individuals, namely: the petitioner, the minor child, and respondent
are directed to undergo DNA paternity testing in a laboratory of their
common choice within a period of thirty (30) days from receipt of the Order,
and to submit the results thereof within a period of ninety (90) days from
completion. The parties are further reminded of the hearing set on 24
February 2000 for the reception of other evidence in support of the petition.
IT IS SO ORDERED.[5] (Emphasis in the original)
Petitioner filed a motion for reconsideration of the 3 February 2000 Order. He
asserted that under the present circumstances, the DNA test [he] is compelled to
take would be inconclusive, irrelevant and the coercive process to obtain the
requisite specimen, unconstitutional.
In an Order dated 8 June 2000, the trial court denied petitioners motion for
reconsideration.[6]
 On 18 July 2000, petitioner filed before the appellate court a petition
for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. He asserted that
the trial court rendered the Orders dated 3 February 2000 and 8 June 2000 in excess
of, or without jurisdiction and/or with grave abuse of discretion amounting to lack
or excess of jurisdiction. Petitioner further contended that there is no appeal nor
any [other] plain, adequate and speedy remedy in the ordinary course of law.
Petitioner maintained his previous objections to the taking of DNA paternity
testing. He submitted the following grounds to support his objection:
1. Public respondent misread and misapplied the ruling in Lim vs. Court
of Appeals (270 SCRA 2).
2. Public respondent ruled to accept DNA test without considering the
limitations on, and conditions precedent for the admissibility of
DNA testing and ignoring the serious constraints affecting the
reliability of the test as admitted by private respondents expert
witness.
3. Subject Orders lack legal and factual support, with public respondent
relying on scientific findings and conclusions unfit for judicial
notice and unsupported by experts in the field and scientific
treatises.
4. Under the present circumstances the DNA testing petitioner [is]
compelled to take will be inconclusive, irrelevant and the coercive
process to obtain the requisite specimen from the petitioner,
unconstitutional.[7]
The Ruling of the Court of Appeals
On 29 November 2000, the appellate court issued a decision denying the
petition and affirming the questioned Orders of the trial court. The appellate court
stated that petitioner merely desires to correct the trial courts evaluation of
evidence. Thus, appeal is an available remedy for an error of judgment that the
court may commit in the exercise of its jurisdiction. The appellate court also stated
that the proposed DNA paternity testing does not violate his right against self-
incrimination because the right applies only to testimonial compulsion. Finally, the
appellate court pointed out that petitioner can still refute a possible adverse result of
the DNA paternity testing. The dispositive portion of the appellate courts decision
reads:
WHEREFORE, foregoing premises considered, the Petition is
hereby DENIED DUE COURSE, and ordered dismissed, and the challenged
orders of the Trial Court AFFIRMED, with costs to Petitioner.
SO ORDERED.[8]
Petitioner moved for reconsideration, which the appellate court denied in its
Resolution dated 23 May 2001.[9]
Issues
Petitioner raises the issue of whether a DNA test is a valid probative tool in
this jurisdiction to determine filiation. Petitioner asks for the conditions under
which DNA technology may be integrated into our judicial system and the
prerequisites for the admissibility of DNA test results in a paternity suit.[10]
Petitioner further submits that the appellate court gravely abused its discretion
when it authorized the trial court to embark in [sic] a new procedure xxx to
determine filiation despite the absence of legislation to ensure its reliability and
integrity, want of official recognition as made clear in Lim vs. Court of Appeals and
the presence of technical and legal constraints in respect of [sic] its
implementation.[11] Petitioner maintains that the proposed DNA paternity testing
violates his right against self-incrimination.[12]
The Ruling of the Court
The petition has no merit.
Before discussing the issues on DNA paternity testing, we deem it appropriate
to give an overview of a paternity suit and apply it to the facts of this case. We shall
consider the requirements of the Family Code and of the Rules of Evidence to
establish paternity and filiation.
An Overview of the Paternity and Filiation Suit
Filiation proceedings are usually filed not just to adjudicate paternity but also
to secure a legal right associated with paternity, such as citizenship, [13] support (as
in the present case), or inheritance. The burden of proving paternity is on the
person who alleges that the putative father is the biological father of the child.
There are four significant procedural aspects of a traditional paternity action which
parties have to face: a prima facie case, affirmative defenses, presumption of
legitimacy, and physical resemblance between the putative father and child.[14]
A prima facie case exists if a woman declares that she had sexual relations
with the putative father. In our jurisdiction, corroborative proof is required to carry
the burden forward and shift it to the putative father. [15]
There are two affirmative defenses available to the putative father. The
putative father may show incapability of sexual relations with the mother, because
of either physical absence or impotency.[16] The putative father may also show that
the mother had sexual relations with other men at the time of conception.
A child born to a husband and wife during a valid marriage is presumed
legitimate.[17] The childs legitimacy may be impugned only under the strict
standards provided by law.[18]
Finally, physical resemblance between the putative father and child may be
offered as part of evidence of paternity. Resemblance is a trial technique unique to
a paternity proceeding. However, although likeness is a function of heredity, there
is no mathematical formula that could quantify how much a child must or must not
look like his biological father. [19] This kind of evidence appeals to the emotions of
the trier of fact.
In the present case, the trial court encountered three of the four aspects. Armi
Alba, respondents mother, put forward a prima facie case when she asserted that
petitioner is respondents biological father. Aware that her assertion is not enough to
convince the trial court, she offered corroborative proof in the form of letters and
pictures. Petitioner, on the other hand, denied Armi Albas assertion. He denied ever
having sexual relations with Armi Alba and stated that respondent is Armi Albas
child with another man. Armi Alba countered petitioners denial by submitting
pictures of respondent and petitioner side by side, to show how much they resemble
each other.
Paternity and filiation disputes can easily become credibility contests. We now
look to the law, rules, and governing jurisprudence to help us determine what
evidence of incriminating acts on paternity and filiation are allowed in this
jurisdiction.
Laws, Rules, and Jurisprudence
Establishing Filiation
The relevant provisions of the Family Code provide as follows:
ART. 175. Illegitimate children may establish their illegitimate filiation in the
same way and on the same evidence as legitimate children.
xxx
ART. 172. The filiation of legitimate children is established by any of the
following:
(1) The record of birth appearing in the civil register or a final
judgment; or
(2) An admission of legitimate filiation in a public document or a
private handwritten instrument and signed by the parent
concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be
proved by:
(1) The open and continuous possession of the status of a legitimate
child; or
(2) Any other means allowed by the Rules of Court and special laws.
The Rules on Evidence include provisions on pedigree. The relevant sections
of Rule 130 provide:
SEC. 39. Act or declaration about pedigree.The act or declaration of a person
deceased, or unable to testify, in respect to the pedigree of another person
related to him by birth or marriage, may be received in evidence where it
occurred before the controversy, and the relationship between the two persons
is shown by evidence other than such act or declaration. The word pedigree
includes relationship, family genealogy, birth, marriage, death, the dates when
and the places where these facts occurred, and the names of the relatives. It
embraces also facts of family history intimately connected with pedigree.
SEC. 40. Family reputation or tradition regarding pedigree.The reputation or
tradition existing in a family previous to the controversy, in respect to the
pedigree of any one of its members, may be received in evidence if the witness
testifying thereon be also a member of the family, either by consanguinity or
affinity. Entries in family bibles or other family books or charts, engraving on
rings, family portraits and the like, may be received as evidence of pedigree.
 This Courts rulings further specify what incriminating acts are acceptable as
evidence to establish filiation. In Pe Lim v. CA,[20] a case petitioner often cites, we
stated that the issue of paternity still has to be resolved by such conventional
evidence as the relevant incriminating verbal and written acts by the putative
father. Under Article 278 of the New Civil Code, voluntary recognition by a parent
shall be made in the record of birth, a will, a statement before a court of record, or
in any authentic writing. To be effective, the claim of filiation must be made by the
putative father himself and the writing must be the writing of the putative father.
[21]
A notarial agreement to support a child whose filiation is admitted by the
putative father was considered acceptable evidence. [22] Letters to the mother vowing
to be a good father to the child and pictures of the putative father cuddling the child
on various occasions, together with the certificate of live birth, proved filiation.
[23]
However, a student permanent record, a written consent to a fathers operation,
or a marriage contract where the putative father gave consent, cannot be taken as
authentic writing.[24] Standing alone, neither a certificate of baptism [25] nor family
pictures[26] are sufficient to establish filiation.
So far, the laws, rules, and jurisprudence seemingly limit evidence of
paternity and filiation to incriminating acts alone. However, advances in science
show that sources of evidence of paternity and filiation need not be limited to
incriminating acts. There is now almost universal scientific agreement that blood
grouping tests are conclusive on non-paternity, although inconclusive on paternity.
[27]
In Co Tao v. Court of Appeals,[28] the result of the blood grouping test showed
that the putative father was a possible father of the child. Paternity was imputed to
the putative father after the possibility of paternity was proven on presentation
during trial of facts and circumstances other than the results of the blood grouping
test.
In Jao v. Court of Appeals,[29] the child, the mother, and the putative father
agreed to submit themselves to a blood grouping test. The National Bureau of
Investigation (NBI) conducted the test, which indicated that the child could not
have been the possible offspring of the mother and the putative father. We held that
the result of the blood grouping test was conclusive on the non-paternity of the
putative father.
The present case asks us to go one step further. We are now asked whether
DNA analysis may be admitted as evidence to prove paternity.
DNA Analysis as Evidence
DNA is the fundamental building block of a persons entire genetic make-up.
DNA is found in all human cells and is the same in every cell of the same person.
Genetic identity is unique. Hence, a persons DNA profile can determine his
identity.[30]
DNA analysis is a procedure in which DNA extracted from a biological
sample obtained from an individual is examined. The DNA is processed to generate
a pattern, or a DNA profile, for the individual from whom the sample is taken. This
DNA profile is unique for each person, except for identical twins. [31] We quote
relevant portions of the trial courts 3 February 2000 Order with approval:
Everyone is born with a distinct genetic blueprint
called DNA (deoxyribonucleic acid). It is exclusive to an individual (except in
the rare occurrence of identical twins that share a single, fertilized egg), and
DNA is unchanging throughout life. Being a component of every cell in the
human body, the DNA of an individuals blood is the very DNA in his or her
skin cells, hair follicles, muscles, semen, samples from buccal swabs, saliva, or
other body parts.
The chemical structure of DNA has four bases. They are known
as A (adenine), G (guanine), C (cystosine) and T (thymine). The order in which
the four bases appear in an individuals DNA determines his or her physical
makeup. And since DNA is a double-stranded molecule, it is composed of two
specific paired bases, A-T or T-A and G-C or C-G. These are called genes.
Every gene has a certain number of the above base pairs distributed in a
particular sequence. This gives a person his or her genetic code. Somewhere in
the DNA framework, nonetheless, are sections that differ. They are known
as polymorphic loci, which are the areas analyzed in DNA typing (profiling,
tests, fingerprinting, or analysis/DNA fingerprinting/genetic tests or
fingerprinting). In other words, DNA typing simply means determining
the polymorphic loci.
How is DNA typing performed? From a DNA sample obtained or extracted, a
molecular biologist may proceed to analyze it in several ways. There are five
(5) techniques to conduct DNA typing. They are: the RFLP (restriction
fragment length polymorphism); reverse dot blot or HLA DQ a/Pm loci which
was used in 287 cases that were admitted as evidence by 37 courts in the U.S.
as of November 1994; mtDNA process; VNTR (variable number tandem
repeats); and the most recent which is known as the PCR-([polymerase] chain
reaction) based STR (short tandem repeats) method which, as of 1996, was
availed of by most forensic laboratories in the world. PCR is the process of
replicating or copying DNA in an evidence sample a million times through
repeated cycling of a reaction involving the so-called DNA polymerize
enzyme. STR, on the other hand, takes measurements in 13 separate places
and can match two (2) samples with a reported theoretical error rate of less
than one (1) in a trillion.
Just like in fingerprint analysis, in DNA typing, matches are determined. To
illustrate, when DNA or fingerprint tests are done to identify a suspect in a
criminal case, the evidence collected from the crime scene is compared with
the known print. If a substantial amount of the identifying features are the
same, the DNA or fingerprint is deemed to be a match. But then, even if only
one feature of the DNA or fingerprint is different, it is deemed not to have
come from the suspect.
As earlier stated, certain regions of human DNA show variations between
people. In each of these regions, a person possesses two genetic types
called allele, one inherited from each parent. In [a] paternity test, the forensic
scientist looks at a number of these variable regions in an individual to
produce a DNA profile. Comparing next the DNA profiles of the mother and
child, it is possible to determine which half of the childs DNA was inherited
from the mother. The other half must have been inherited from the biological
father. The alleged fathers profile is then examined to ascertain whether he has
the DNA types in his profile, which match the paternal types in the child. If the
mans DNA types do not match that of the child, the man is excluded as the
father. If the DNA types match, then he is not excluded as the father.
[32]
(Emphasis in the original)
Although the term DNA testing was mentioned in the 1995 case of People v.
Teehankee, Jr.,[33] it was only in the 2001 case of Tijing v. Court of Appeals[34] that
more than a passing mention was given to DNA analysis. In Tijing, we issued a
writ of habeas corpus against respondent who abducted petitioners youngest son.
Testimonial and documentary evidence and physical resemblance were used to
establish parentage. However, we observed that:
Parentage will still be resolved using conventional methods unless we adopt
the modern and scientific ways available. Fortunately, we have now the facility
and expertise in using DNA test for identification and parentage testing. The
University of the Philippines Natural Science Research Institute (UP-NSRI)
DNA Analysis Laboratory has now the capability to conduct DNA typing using
short tandem repeat (STR) analysis. xxx For it was said, that courts should
apply the results of science when completely obtained in aid of situations
presented, since to reject said result is to deny progress. Though it is not
necessary in this case to resort to DNA testing, in [the] future it would be
useful to all concerned in the prompt resolution of parentage and identity
issues.
Admissibility of
DNA Analysis as Evidence
The 2002 case of People v. Vallejo[35] discussed DNA analysis as evidence.
This may be considered a 180 degree turn from the Courts wary attitude towards
DNA testing in the 1997 Pe Lim case,[36] where we stated that DNA, being a
relatively new science, xxx has not yet been accorded official recognition by our
courts. In Vallejo, the DNA profile from the vaginal swabs taken from the rape
victim matched the accuseds DNA profile. We affirmed the accuseds conviction of
rape with homicide and sentenced him to death. We declared:
In assessing the probative value of DNA evidence, therefore, courts should
consider, among other things, the following data: how the samples were
collected, how they were handled, the possibility of contamination of the
samples, the procedure followed in analyzing the samples, whether the proper
standards and procedures were followed in conducting the tests, and the
qualification of the analyst who conducted the tests.[37]
Vallejo discussed the probative value, not admissibility, of DNA evidence. By
2002, there was no longer any question on the validity of the use of DNA analysis
as evidence. The Court moved from the issue of according official recognition to
DNA analysis as evidence to the issue of observance of procedures in conducting
DNA analysis.
In 2004, there were two other cases that had a significant impact on
jurisprudence on DNA testing: People v. Yatar[38] and In re: The Writ of Habeas
Corpus for Reynaldo de Villa.[39]In Yatar, a match existed between the DNA profile
of the semen found in the victim and the DNA profile of the blood sample given by
appellant in open court. The Court, following Vallejosfootsteps, affirmed the
conviction of appellant because the physical evidence, corroborated by
circumstantial evidence, showed appellant guilty of rape with homicide. In De
Villa, the convict-petitioner presented DNA test results to prove that he is not the
father of the child conceived at the time of commission of the rape. The Court ruled
that a difference between the DNA profile of the convict-petitioner and the DNA
profile of the victims child does not preclude the convict-petitioners commission of
rape.
In the present case, the various pleadings filed by petitioner and respondent
refer to two United States cases to support their respective positions on the
admissibility of DNA analysis as evidence: Frye v. U.S.[40] and Daubert v. Merrell
Dow Pharmaceuticals.[41] In Frye v. U.S., the trial court convicted Frye of murder.
Frye appealed his conviction to the Supreme Court of the District of Columbia.
During trial, Fryes counsel offered an expert witness to testify on the result of a
systolic blood pressure deception test [42] made on defendant. The state Supreme
Court affirmed Fryes conviction and ruled that the systolic blood pressure
deception test has not yet gained such standing and scientific recognition among
physiological and psychological authorities as would justify the courts in admitting
expert testimony deduced from the discovery, development, and experiments thus
far made. The Frye standard of general acceptance states as follows:
Just when a scientific principle or discovery crosses the line between the
experimental and demonstrable stages is difficult to define. Somewhere in this
twilight zone the evidential force of the principle must be recognized, and
while courts will go a long way in admitting expert testimony deduced from a
well recognized scientific principle or discovery, the thing from which the
deduction is made must be sufficiently established to have gained general
acceptance in the particular field in which it belongs.
In 1989, State v. Schwartz[43] modified the Frye standard. Schwartz was
charged with stabbing and murder. Bloodstained articles and blood samples of the
accused and the victim were submitted for DNA testing to a government facility
and a private facility. The prosecution introduced the private testing facilitys results
over Schwartzs objection. One of the issues brought before the state Supreme Court
included the admissibility of DNA test results in a criminal proceeding. The state
Supreme Court concluded that:
While we agree with the trial court that forensic DNA typing has gained
general acceptance in the scientific community, we hold that admissibility of
specific test results in a particular case hinges on the laboratorys compliance
with appropriate standards and controls, and the availability of their testing
data and results.[44]
In 1993, Daubert v. Merrell Dow Pharmaceuticals, Inc.[45] further modified
the Frye-Schwartz standard. Daubert was a product liability case where both the
trial and appellate courts denied the admissibility of an experts testimony because it
failed to meet the Frye standard of general acceptance. The United States Supreme
Court ruled that in federal trials, the Federal Rules of Evidence have superseded
the Frye standard. Rule 401 defines relevant evidence, while Rule 402 provides the
foundation for admissibility of evidence. Thus:
Rule 401. Relevant evidence is defined as that which has any tendency to make
the existence of any fact that is of consequence to the determination of the
action more probable or less probable than it would be without the evidence.
Rule 402. All relevant evidence is admissible, except as otherwise provided by
the Constitution of the United States, by Act of Congress, by these rules, or by
other rules prescribed by the Supreme Court pursuant to statutory authority.
Evidence which is not relevant is not admissible.
Rule 702 of the Federal Rules of Evidence governing expert testimony
provides:
If scientific, technical, or other specialized knowledge will assist the trier of
fact to understand the evidence or to determine a fact in issue, a witness
qualified as an expert by knowledge, skill, experience, training, or education,
may testify thereto in the form of an opinion or otherwise.
Daubert cautions that departure from the Frye standard of general acceptance
does not mean that the Federal Rules do not place limits on the admissibility of
scientific evidence. Rather, the judge must ensure that the testimonys reasoning or
method is scientifically valid and is relevant to the issue. Admissibility would
depend on factors such as (1) whether the theory or technique can be or has been
tested; (2) whether the theory or technique has been subjected to peer review and
publication; (3) the known or potential rate of error; (4) the existence and
maintenance of standards controlling the techniques operation; and (5) whether the
theory or technique is generally accepted in the scientific community.
Another product liability case, Kumho Tires Co. v. Carmichael,[46] further
modified the Daubert standard. This led to the amendment of Rule 702 in 2000 and
which now reads as follows:
If scientific, technical or other specialized knowledge will assist the trier of fact
to understand the evidence or to determine a fact in issue, a witness qualified
as an expert by knowledge, skill, experience, training, or education, may
testify thereto in the form of an opinion or otherwise, if (1) the testimony is
based upon sufficient facts or data, (2) the testimony is the product of reliable
principles and methods, and (3) the witness has applied the principles and
methods reliably to the facts of the case.
We now determine the applicability in this jurisdiction of these American
cases. Obviously, neither the Frye-Schwartz standard nor the Daubert-
Kumho standard is controlling in the Philippines.[47] At best, American
jurisprudence merely has a persuasive effect on our decisions. Here, evidence is
admissible when it is relevant to the fact in issue and is not otherwise excluded by
statute or the Rules of Court.[48] Evidence is relevant when it has such a relation to
the fact in issue as to induce belief in its existence or non-existence. [49] Section 49
of Rule 130, which governs the admissibility of expert testimony, provides as
follows:
The opinion of a witness on a matter requiring special knowledge, skill,
experience or training which he is shown to possess may be received in
evidence.
This Rule does not pose any legal obstacle to the admissibility of DNA analysis as
evidence. Indeed, even evidence on collateral matters is allowed when it tends in
any reasonable degree to establish the probability or improbability of the fact in
issue.[50]
Indeed, it would have been convenient to merely refer petitioner to our
decisions in Tijing, Vallejo and Yatar to illustrate that DNA analysis is admissible
as evidence. In our jurisdiction, the restrictive tests for admissibility established
by Frye-Schwartz and Daubert-Kumho go into the weight of the evidence.
Probative Value of
DNA Analysis as Evidence
Despite our relatively liberal rules on admissibility, trial courts should be
cautious in giving credence to DNA analysis as evidence. We reiterate our
statement in Vallejo:
In assessing the probative value of DNA evidence, therefore, courts should
consider, among other things, the following data: how the samples were
collected, how they were handled, the possibility of contamination of the
samples, the procedure followed in analyzing the samples, whether the proper
standards and procedures were followed in conducting the tests, and the
qualification of the analyst who conducted the tests.[51]
We also repeat the trial courts explanation of DNA analysis used in paternity
cases:
In [a] paternity test, the forensic scientist looks at a number of these variable
regions in an individual to produce a DNA profile. Comparing next the DNA
profiles of the mother and child, it is possible to determine which half of the
childs DNA was inherited from the mother. The other half must have been
inherited from the biological father. The alleged fathers profile is then
examined to ascertain whether he has the DNA types in his profile, which
match the paternal types in the child. If the mans DNA types do not match
that of the child, the man is excluded as the father. If the DNA types match,
then he is not excluded as the father.[52]
It is not enough to state that the childs DNA profile matches that of the putative
father. A complete match between the DNA profile of the child and the DNA profile
of the putative father does not necessarily establish paternity. For this reason,
following the highest standard adopted in an American jurisdiction, [53] trial courts
should require at least 99.9% as a minimum value of the Probability of Paternity
(W) prior to a paternity inclusion. W is a numerical estimate for the likelihood of
paternity of a putative father compared to the probability of a random match of two
unrelated individuals. An appropriate reference population database, such as the
Philippine population database, is required to compute for W. Due to the
probabilistic nature of paternity inclusions, W will never equal to 100%. However,
the accuracy of W estimates is higher when the putative father, mother and child
are subjected to DNA analysis compared to those conducted between the putative
father and child alone.[54]
DNA analysis that excludes the putative father from paternity should be
conclusive proof of non-paternity. If the value of W is less than 99.9%, the results
of the DNA analysis should be considered as corroborative evidence. If the value of
W is 99.9% or higher, then there is refutable presumption of paternity.[55] This
refutable presumption of paternity should be subjected to the Vallejo standards.
Right Against
Self-Incrimination
Section 17, Article 3 of the 1987 Constitution provides that no person shall be
compelled to be a witness against himself. Petitioner asserts that obtaining samples
from him for DNA testing violates his right against self-incrimination. Petitioner
ignores our earlier pronouncements that the privilege is applicable only to
testimonial evidence. Again, we quote relevant portions of the trial courts 3
February 2000 Order with approval:
Obtaining DNA samples from an accused in a criminal case or from the
respondent in a paternity case, contrary to the belief of respondent in this
action, will not violate the right against self-incrimination. This privilege
applies only to evidence that is communicative in essence taken under duress
(People vs. Olvis, 154 SCRA 513, 1987). The Supreme Court has ruled that the
right against self-incrimination is just a prohibition on the use of physical or
moral compulsion to extort communication (testimonial evidence) from a
defendant, not an exclusion of evidence taken from his body when it may be
material. As such, a defendant can be required to submit to a test to extract
virus from his body (as cited in People vs. Olvis, Supra); the substance
emitting from the body of the accused was received as evidence for acts of
lasciviousness (US vs. Tan Teng, 23 Phil. 145); morphine forced out of the
mouth was received as proof (US vs. Ong Siu Hong, 36 Phil. 735); an order by
the judge for the witness to put on pair of pants for size was allowed (People
vs. Otadora, 86 Phil. 244); and the court can compel a woman accused of
adultery to submit for pregnancy test (Villaflor vs. Summers, 41 Phil. 62),
since the gist of the privilege is the restriction on testimonial compulsion.[56]
The policy of the Family Code to liberalize the rule on the investigation of the
paternity and filiation of children, especially of illegitimate children, is without
prejudice to the right of the putative parent to claim his or her own defenses.
[57]
Where the evidence to aid this investigation is obtainable through the facilities
of modern science and technology, such evidence should be considered subject to
the limits established by the law, rules, and jurisprudence.
WHEREFORE, we DISMISS the petition. We AFFIRM the Decision of the
Court of Appeals dated 29 November 2000 in CA-G.R. SP No. 59766. We also
AFFIRM the Orders dated 3 February 2000 and 8 June 2000 issued by Branch 48
of the Regional Trial Court of Manila in Civil Case No. SP-98-88759.
SO ORDERED.
G.R. No. L-11310 January 31, 1918
CARLOS PALANCA, plaintiff-appellant,
vs.
FRED WILSON & CO., defendant-appellee.
Alfredo Chicote and Jose Arnaiz for appellant.
Gilbert, Cohn and Fisher for appellee.
MALCOLM, J.:
As the culmination of negotiations, on June 11, 1913, Song Fo and Co., of Manila,
through its manager Carlos Palanca, entered into a contract with Fred Wilson and
Co. for the purchase of a distilling apparatus for P10,000. Wilson and Co. ordered
the apparatus of Turner, Schon and Co., London, installing it in January, 1914. On
May 18, 1914, or about five months after the machine was installed, Palanca wrote
Wilson and Co. that the rectifying machine had been examined by a number of
competent persons who stated that the machine was not capable of producing the
amount of alcohol stipulated in the contract. Getting no satisfaction from the reply
of Wilson and Co., action for damages for breach of contract was begun in the
Court of First Instance of the city of Manila, praying first that the defendant be
ordered to comply strictly with the terms of the contract and second that the
defendant be ordered to pay as damages the amount of P16,713.80.
Defendant answered with a general denial and a cross-complaint asking judgment
against the plaintiff in the sum of P5,000, the final installment claimed to be due as
the purchase price of the machine. By the judgment handed down by the Honorable
James A. Ostrand, judge of first instance, it was ordered that the plaintiff take
nothing by his action, and that the defendant have and recovered judgment against
the plaintiff for the sum of P5,000, with interest thereon at the rate of 12 per cent
per annum from the first day of September, 1914, without special findings as to
costs.
It is around the first clause of the contract (Exhibit D) that all the argument centers.
This clause reads: "Un aparato; 'Guillaume' para la destilacion-rectificacion directa
y continua; tipo 'C,' Agricola, de una capacidad de 6,000 litros cada 24 horas de
trabajo, de un grado de 96-97 Gay Lussac, todo segun el grabado de la pagina 30
del catalogo Egrot, edicion de 1907." We believe in the first place, that it is
undeniable from the evidence, that the apparatus in question, while it could treat
6,000 liters of raw material a day, did not produce 6,000 liters a day, but on the
contrary only something over 480 liters a day of rectified alcohol of the required
grade. This being true, appellant vigorously asserts that there has been a breach of
the contract in that instead of the machine having a capacity of 6,000 liters for
every 24 hours of work, it only had (a producing) capacity of 480 liters for this
period of time. Appellant would require that all the terms of the contract be given
effect with special emphasis upon the phrase "de un grado de 96-97 Gay Lussac."
This last phrase in connection with the previous one "de una capacidad de 6,000
litros cada 24 horas de trabajo" according to appellant could not possibly mean that
the machine was only to take in 6,000 liters for this would be improbable in view
of the express mention of the grade of the product. Appellee on the other hand
relies on the ordinary meaning of the word "capacity" as indicating receptivity and
on the preliminary negotiations as explaining the intention of the parties. The
evidence is of little assistance in resolving the question. Thus, Carlos Palanca, the
manager of Song Fo and Co., and now the successor of the company, testified that
he told the agents of Wilson and Co. that he need a machine that would produce at
least 6,000 liters of alcohol a day. The agent of Wilson and Co., James F. Loader,
squarely contradicted this on the stand and said that Palanca asked him to get on
an apparatus to treat 6,000 liters.
Beginning anew, in order to reach a proper conclusion as to the meaning of clause
one of the contract, we approach the subject from two directions. Under the first
view, we take up the meaning of the words themselves. Under the second, believing
that it is necessary to explain intrinsic ambiguity in the contract, we can go, as we
are permitted to do under chapter IV title II, book IV of the Civil Code, and chapter
X of the Code of Civil Procedure, especially section 285, to evidence of the
circumstances under which the agreement was made.
The terms of the contract disclose the following essential constituents: (1) A
machine Guillaume, type "C" (Agricola) as described on page 30 of the Catalogue
Egrot, edition of 1907; (2) a machine of a capacity of 6,000 liters for every 24
hours of work, and (3) a machine producing alcohol of a grade 96-97 Gay Lussac.
Type C (Agricola) as described on pages 30 and 31 of the catalogue mentions the
grade of alcohol guaranteed of 96-97 Gay Lussac, but contains no mention of a
capacity of 6,000 liters a day. Passing the second element for the moment, there is
no dispute in the record, or more properly speaking the plaintiff did not prove, that
the machine did not turn out alcohol of the grade 96-97 Gay Lussac. Predicated
therefore on the description to be found in the catalogue, it is plain that the
defendant sold to the plaintiff the machine there mentioned. This leaves for
interpretation the one word "capacity."

That in connection with the distilling of liquor, the word "capacity" may have
different meanings unless restricted in terminology, is disclosed by the decision of
the United States Supreme Court in Chicago Distilling Co. vs. Stone ([1891] 140
U. S., 647), where the qualifying phrases "working capacity" and "producing
capacity" are specifically" mentioned. The ordinary meaning of the word is defined
in the English Dictionaries as "ability to receive or contain; cubic extent; carrying
power or space; said of that within which any solid or fluid may be placed, and also
used figuratively; as the keg has a capacity of 10 gallons; the ship's capacity is
1,000 tons." The ordinary meaning of the Spanish equivalent "capacidad" as
disclosed by the Spanish Dictionaries is "ambito que tiene alguna cosa y es
suficiente para contener en si otra; como el de una vasijia, arca, etc. En el vaso se
debe atender la disposicion y capacidad." Both definitions denote that which
anything can receive or contain.

We think, however, that it can be laid down as a premise for further discussion that
there is intrinsic ambiguity in the contract which needs explanation. Section 285 of
the Code of Civil Procedure providing that a written agreement shall be presumed
to contain all the terms, nevertheless "does not exclude other evidence of the
circumstances under which the agreement was made, or to which it relates, or to
explain an intrinsic ambiguity." Turning, therefore, to the surrounding
circumstances, we find the following: Wilson and Co. in their offer to Song Fo and
Co. on June 9, 1913, while mentioning capacity, only did so in express connection
with the name and description of the machine as illustrated in the catalogue. They
furnished Song Fo and Co. with plans and specifications of the distilling apparatus;
and these describe a capacity of 6,000 liters of jus (ferment). Wilson and Co.'s
order to manufacturer, while mentioning a capacity of 6,000 liters per day, does so
again in connection with the description in the maker's catalogue. And, finally, it
was stated during the trial, and it has not been denied, that a machine capable of
producing 6,000 liters of rectified alcohol every 24 hours from nipa ferment would
cost between P35,000 and P40,000.

We are accordingly constrained to hold that the proper construction of clause 1 of

the contract, in question in connection with the conduct of the parties and
surrounding circumstances, is that Wilson and Co. were to furnish Song Fo and
CO. a distilling apparatus, type C (Agricola), as described on page 30 of the
maker's catalogue, capable of receiving or treating 6,000 liters every 24 hours of
work and of producing alcohol of a grade 96-97 Gay Lussac.

We conclude that the judgment of the trial court should be affirmed without special
finding as to costs. So ordered.