Del Castillo 31-36

Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
SELWYN F. LAO AND G.R. No. 164791

EDGAR MANANSALA,
Petitioners, Present:
CORONA, C.J., Chairperson,

VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
SPECIAL PLANS, INC., Promulgated:

Respondent. June 29, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In Roman Law, compensation was the reciprocal extinction of claims between mutual debtors. In
the earlier stages of that system the practice did not exist as a matter of right but its application was
discretionary with the judex. Later the praetor applied it by incorporating into the formula, which he
prepared for the judex, an exception doli, that is, an authorization to take into account any circumstances
which would render inequitable the enforcement of the claim. The effect was to cause a dismissal of the
claim, however large, if a counterclaim, however small, was proven and the indirect result was to compel
the actor (plaintiff) to deduct the counterclaim in advance.[1]
Factual Antecedents
Petitioners Selwyn F. Lao (Lao) and Edgar Manansala (Manansala), together with Benjamin Jim
(Jim), entered into a Contract of Lease[2] with respondent Special Plans, Inc. (SPI) for the period January
16, 1993 to January 15, 1995 over SPIs building at No. 354 Quezon Avenue, Quezon City. Petitioners
intended to use the premises for their karaoke and restaurant business known as Saporro Restaurant.
Upon expiration of the lease contract, it was renewed for a period of eight months at a rental rate
of P23,000.00 per month.
On June 3, 1996, SPI sent a Demand Letter[3] to the petitioners asking for full payment of rentals
in arrears.
Receiving no payment, SPI filed on July 23, 1996 a Complaint[4] for sum of money with the
Metropolitan Trial Court (MeTC) of Quezon City, claiming that Jim and petitioners have accumulated
unpaid rentals of P118,000.00 covering the period March 16, 1996 to August 16, 1996.
After service of summons, petitioners filed their Verified Answer[5] faulting SPI for making them
believe that it owns the leased property. They likewise asserted that SPI did not deliver the leased
premises in a condition fit for petitioners intended use. Thus, petitioners claimed that they were
constrained to incur expenses for necessary repairs as well as expenses for the repair of structural defects,
which SPI failed and refused to reimburse. Petitioners prayed that the complaint be dismissed and
judgment on their counterclaims be rendered ordering SPI to pay them the sum of P422,920.40 as actual
damages, as well as moral damages, attorneys fees and exemplary damages.
After the issues were joined, trial on the merits ensued. As culled from the MeTC Decision, the
following account was presented by SPI:
Delfin Cruz, president of Special Plans, Inc. testified that on January 7, 1993,
plaintiff-corporation and herein defendants entered into a two-year Contract of Lease
(Exhibit A inclusive, with sub-markings) starting January 16, 1993 until January 15, 1995,
involving a portion of said plaintiff-corporations office building which used to be the Bahay
Namin Food and Drinks at 354 Quezon Avenue, Quezon City. Defendants used the leased
premises for their karaoke and restaurant business known as Saporro Restaurant. Upon
[expiration of the lease], defendants, through defendant Lao requested in writing (Exhibit
B) for a renewal of the contract of lease, but plaintiff-corporation agreed only for an eight-
month extension of [the] contract with all its terms and conditions on a month-to-month
basis at a monthly rental of P23,000.00.
This witness further testified that while defendants paid the sum of P23,000.00 in
August 1996 they nevertheless failed to pay the agreed rental since March 16, 1996, thus
the accumulated unpaid rentals shot up to P118,000.00. Plaintiff-corporation demanded
upon defendants payment therefor in a letter dated June 3, 1996 (Exhibit D inclusive with
sub-markings).
On cross, Delfin Cruz admitted that plaintiff-corporation did not inform defendants
that it was not the owner of the leased premises during the signing of the contract of
lease and that said defendants did not inform him of the structural defects of the subject
premises, including the repair works conducted thereon.
Antonio San Mateo, vice-president for legal affairs of plaintiff-corporation, averred

that he made the demand to pay upon defendants for their failure to settle their agreed
monthly rentals starting March 16, 1996 to August 15, 1996; and that for the period
covering September 16, 1995 to October 15, 1995, defendants paid only P20,000.00,
hence, the balance of P3,000.00 (Exhibit
E).[6]
In their defense, Jim and petitioners proffered the following:
Meanwhile, defendant Benjamin Jim testified that he was one of the signatories
[to] the original contract of lease involving the subject premises whose facilities, including
the roof, were already dilapidated: thus prompting the group to renovate the same. After
a year of operation, Saporro lost so he decided to back out but defendant Lao convinced
him to stay with the group for another x x x year. But the business lost even more so he
finally called it quits with the consent of the group. He pulled out his audio-video
equipment, refrigerator, and air-conditioning unit on January 2, 1995, thirteen (13) days
before the expiration of the contract of lease. He further denied having signed the request
for the extension of the contract.
On cross, he stated that he did not sign documents for and in behalf of Saporro;
and, that he allowed defendant Lao and Victor San Luis to sign for the group.
Testifying for defendant Jim, Atty. Maria Rosario Carmela Nova declared that
defendant Jim sought her services on August 30, 1996 for the recovery of his money
invested at Mount Fuji and Saporro but Atty. Cesa, who acted as counsel for defendants
Lao and Manansala, refused to return the same in a letter-reply dated September 23,
1996 (Exhibit 1-Jim inclusive with sub-markings).
Defendant Selwyn Lao testified that the group was not able to inspect the leased
premises since Delfin Cruz had no key thereon during the signing of the contract of lease
on January 7, 1993. He stated that paragraph 6 of the said contract provides that the
LESSEE shall maintain the leased premises, including the parking lot, in good, clean and
sanitary condition and shall make all necessary repairs thereon at his own expense except
repairs of structural defects which shall be the responsibility of the LESSOR (Exhibit 1-Lao
and Manansala). When the group took possession of the leased premises on January 16,
1993, the equipment and furniture, among others, were found to be not in good
condition. The trusses, roof and ceiling of the premises were already dilapidated. Rain
seeped through the floor. When the group talked with Delfin Cruz about the condition of
the leased property, the latter would just tell the former not to worry about it.
The group conducted structural and necessary repairs thereon, thus incurring the
sum of P545,000.00 (Exhibit 2-Lao and Manansala inclusive, with sub-
markings), P125,000.00 of which was spent on structural defects, as follows:
Roofing repair - P 45,000.00 (Exhibit 2-A)

Ceiling repair - 50,000.00 (Exhibit 2-B)
Flooring repair - 20,000.00 (Exhibit 2-C)
Waterproofing - 10,000.00 (Exhibit 2-D)
Defendant Lao further testified that Delfin Cruz told him to proceed with the repair
work without informing him (Lao) that plaintiff-corporation was not the owner of the
leased premises. The witness added that the group paid the sum of P23,000.00 on July
21, 1996 for the period March 16, 1996 to April 15, 1996.
On cross, he averred that he sought the expertise of Gregorio Tamayo to repair

the premises for P545,000.00; and that he had a verbal authority to sign for and in behalf
of defendant Jim who took his audio-video equipment on January 2, 1996.
Presented at the witness stand to testify for defendant Lao and Manansala,
Gregorio Tamayo admitted that defendant Lao sought his services to undertake both
structural and finishing works on the subject property at a cost of P545,00.00.
On cross, he declared that he was the subcontractor of defendant Lao.[7]
Ruling of the Metropolitan Trial Court
On December 15, 1999,the MeTC rendered its Decision[8] finding that the unpaid rentals stood at
only P95,000.00. It also found that SPI is solely responsible for repairing the structural defects of the
leased premises, for which the petitioners spent P125,000.00. It held that even assuming that petitioners
did not notify SPI about the structural defects and the urgency to repair the same, Article 1663 of the Civil
Code allows the lessee to make urgent repairs in order to avoid an imminent danger at the lessors
cost. Hence, the MeTC dismissed the complaint for lack of cause of action. The dispositive portion of
the Decision reads:
Wherefore, in view of the foregoing considerations, let this case be, as it

is, hereby ordered DISMISSED for lack of cause of action. No costs.
The counterclaim and cross-claim of the defendants are likewise DENIED
for lack of merit.
SO ORDERED.[9]
Ruling of the Regional Trial Court
Aggrieved, SPI filed an appeal before the RTC of Quezon City. Both parties filed their respective
memoranda.[10] However, on November 24, 2000, counsel for SPI filed his Withdrawal of
Appearance[11] with the conformity of SPI, through its Vice President Antonio L. San Mateo.[12] In an
Order[13] dated January 5, 2001, the RTC granted the Withdrawal of Appearance and ordered that all
notices, orders and other court processes in the case be forwarded to SPI at its address at 354 Quezon
Avenue, Quezon City.
On March 12, 2001, the RTC rendered a Decision[14] affirming with modification the MeTC Decision
by ordering petitioners to pay SPI the amount of P95,000.00 for unpaid rentals.[15] The RTC disagreed
with the MeTC on the aspect of off-setting the amount allegedly spent by petitioners for the repairs of the
structural defects of subject property with their unpaid rentals. The dispositive portion of the RTC Decision
reads:
FROM THE GOING MILLIEU, premises considered, the lower courts (Branch 38)
decision dated December 15, 1999 is modified to the effect that Defendants Selwyn Lao
and Edgar Manansala are ordered to pay to the plaintiff-corporation the amount of Ninety
Five Thousand (P95,000.00) pesos for unpaid rentals. With respect to the other aspect of
the decision, there being no cogent reason to disturb the lower courts ruling, the same
stands.
SO ORDERED.[16]
Ruling of the Court of Appeals
On April 25, 2003, petitioners Lao and Manansala filed a Petition for Review with the CA.[17] Jim
did not join them. Hence, the appealed Decision of the RTC had become final insofar as Jim is concerned.
On June 30, 2003, the CA rendered a Decision[18] affirming in toto the RTC Decision. Petitioners
moved for reconsideration, but it was denied in a Resolution[19] dated August 9, 2004.
Issues
Petitioners do not take issue that the unpaid rentals amount to P95,000.00.[20]
Nonetheless, they assert that the amount of P545,000.00 they spent for repairs, P125,000.00 of which
was spent on structural repairs, should be judicially compensated against the said unpaid rentals
amounting to P95,000.00.[21] On the other hand, SPI avers that petitioners have not shown proof that
they spent these amounts.[22]
Our Ruling
The petition is without merit.
The Civil Code provides that compensation shall take place when two persons, in their own right,
are creditors and debtors of each other.[23] In order for compensation to be proper, it is necessary that:
1. Each one of the obligors be bound principally and that he be at the same time a
principal creditor of the other;
2. 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. The two debts are due:
4. The debts are liquidated and demandable;
5. Over neither of them be any retention or controversy, commenced by third parties and
communicated in due time to the debtor. [24]
Petitioners failed to properly discharge their burden to

show that the debts are liquidated and demandable.
Consequently, legal compensation is inapplicable.
A claim is liquidated when the amount and time of payment is fixed.[25] If
acknowledged by the debtor, although not in writing, the claim must be treated as liquidated.[26] When
the defendant, who has an unliquidated claim, sets it up by way of counterclaim, and a judgment is
rendered liquidating such claim, it can be compensated against the plaintiffs claim from the moment it is
liquidated by judgment.[27] We have restated this in Solinap v. Hon. Del Rosario[28] where we held that
compensation takes place only if both obligations are liquidated.
In addition, paragraph 6 of the contract of lease between the petitioners and the respondent
reads:
The lessee shall maintain the leased premises including the parking lot in good, clean and
sanitary condition and shall make all the necessary repairs thereon at their own
expense except repairs of the structural defects which shall be the responsibility of the
lessor. x x x (Emphasis supplied)
As the contract contrastingly treats necessary repairs, which are on the account of the lessee, and
repairs of structural defects, which are the responsibility of the lessor, the onus of the petitioners is two-
fold: (1) to establish the existence, amount and demandability of their claim; and (2) to show that these
expenses were incurred in the repair of structural defects.
Respecting these issues, petitioner Lao testified as follows:[29]
Q: When you took possession of the premises on January 16, 1993, were you able to
notice or discover anything about the structure of the premises, if any?
A: Being an engineer, when I took possession of the premises I have noticed the structure
of the premises specially the trusses and the roof and the ceiling were already
dilapidated.
Q: What else if any were you able to discover?

A: We discovered that when it is raining, water [seeped] through the floor and it caused
a lot of mess especially the carpet getting wet.
Q: What did you do next after having discovered the defects in the premises?
A: I tried to talk to Mr. Cruz regarding our position because based on our agreement the
rental is high because according to him we can move in immediately without so
much cost to our company thats why the 3 of us came up only with P120,000.00
for the immediate operation of the Karaoke but Mr. Cruz told us never mind, pag-
usapan na natin sa ibang araw yan.
Q: What happened next after you were [able] to talk to Mr. Cruz?
A: The group decided not to waste time because our rental expenses are already running
so, we decided that I will [be] the one to shoulder first the construction and repair
of the premises.
Q: How much did you spend and were you able to repair the defects?
A: I was able to repair the defects but it caused me a lot of time and money because
usually repairs cannot be controlled and my expenses reached more
than P500,000.00.
Q: I am showing to you a document can you please go over it and identify it if this is the
document?
A: This is the contract signed by me and the sub-contractor who was assigned to renovate
and prepare the whole structure.
Q: According to this document you submitted a quotation?

A: Yes, sir.
Q: And whose signature appears above the name Gregorio Tamayo?

A: The signature of an engineer/contractor, sir.
Q: Among the list of scope of work can you please specify the repairs done x x x.
A: It was indicated here that the roofing repair works costs around P45,000.00; the ceiling
repair works is P50,000.00; the floor repair works is P50,000.00; and the water
proofing works is P10,000.00.
Q: And what happened to the repairs?

A: It was completed, sir.
xxxx
Q: All in all how much did it cost you in Exh. 2?

A: More than P500,00.00 sir.
xxxx
Q: With respect to the roofing repair works, the ceiling repair works, the flooring repair
works and the water proofing works, all in all how much is total amount you
incurred in these repairs?
A: P 140,000.00 sir
xxxx
Q: And, what happened next after informing the lessor.

A: He told me that I being an engineer/contractor, just proceed with the repair works and
then he said, saka na lang pag-usapan yan maliit lang naman na bagay yan.
Q: Were you able to talk to him some other day with respect to these repairs?
A: Yes, sir.
Q: What happened when you were able to talk to Mr. Cruz?

A: He is shy on us sometime but dont talk to us, sir.
On the basis of Laos testimony, the MeTC found that the group conducted structural and
necessary repairs thereon, incurring the sum of P545,000.00, P125,000.00 of which was spent on
structural defects.
We are not persuaded. The evidence presented by the petitioners failed to establish by
preponderant evidence that they have indeed spent the amounts they claim. Based on the arguments
presented by both parties, we agree with the observation of the CA that:
Petitioners did not present any convincing evidence of proof which could support
their allegation on structural defects and the subsequent repairs made on the leased
premises, i.e. documentary evidence (receipts of payments made to subcontractor
Tamayo for the repairs made on the building) except for the self-serving testimony of
petitioner Lao. They (petitioners) merely submitted an estimated statement of account
which did not show that there were actual expenses made for the alleged structural
defects. Neither were they able to submit proofs of actual expenses made on the alleged
structural defects. Besides, it is contrary to human experience that a lessee would
continually renew the lease contract if the subject property were not in good condition
free from structural defects.
Further, the testimony of Tamayo, the alleged subcontractor who made the
repairs on the leased premises did not convince Us that there were repairs made thereat
since he failed to present any receipts of acknowledgments of payments which was
allegedly made to him.[30]
Further manifesting the present appeals lack of merit, petitioner Lao, as shown above in his
testimony, did not define the lessors and the lessees understanding of the demarcation between repairs
of structural defects and necessary repairs. Even petitioners second witness, Gregorio Tamayo, the
contractor who supposedly performed the repair work on the leased premises, did not credibly and
categorically testify on classification of structural repairs:
Q: Insofar as you are concerned, what do you mean by structural?
A: Because when I inspect the building
Q: In this room, what is the structural defect?

A: Rocks on the wall.
Q: It has something to do with the foundation?

A: Maybe, sir.[31] (Emphasis supplied)
The petitioners attempted to prove that they spent for the repair of the roofing, ceiling and
flooring, as well as for waterproofing. However, they failed to appreciate that, as per their lease contract,
only structural repairs are for the account of the lessor, herein respondent SPI. In which case, they
overlooked the need to establish that aforesaid repairs are structural in nature, in the context of their
earlier agreement. It would have been an altogether different matter if the lessor was informed of the
said structural repairs and he implicitly or expressly consented and agreed to take responsibility for the
said expenses. Such want of evidence on this respect is fatal to this appeal. Consequently, their claim
remains unliquidated and, legal compensation is inapplicable.
For failure to timely appeal the RTC Decision before the

CA and subsequently the latters Decision before this
Court, SPI can no longer ask for affirmative reliefs.
In its Memorandum, SPI prays that petitioners be ordered to pay 3% interest monthly as
stipulated in the Contract for Lease, plus attorneys fees. However, as SPI did not appeal the RTC Decision
before the appellate court, we cannot act on the same.
It is well-settled that a party who has not appealed from a Decision cannot seek any relief other
than what is provided in the judgment appealed from.[32] SPI did not appeal, thus it cannot obtain from
the appellate court any affirmative relief other than those granted in the Decision of the court below.[33] It
can only advance any argument that it may deem necessary to defeat petitioners claim or to uphold the
Decision that is being disputed, and it can assign errors in its brief if such is required to strengthen the
views expressed by the court a quo.[34] These assigned errors, in turn, may be considered by the appellate
court solely to maintain the appealed decision on other grounds, but not for the purpose of reversing or
modifying the judgment in SPI's favor and giving it other reliefs.[35]
We find on record that SPIs counsel, with the concurrence of its Vice President, withdrew his
appearance on November 24, 2000. The RTC granted said withdrawal in its Order dated January 5,
2001. Subsequently, the case was decided by the RTC and appealed by the petitioners to the CA. In due
time, the CA rendered judgment on the same and petitioners filed this Petition for Review on Certiorari. SPI
did not interpose an appeal from the RTC Decision nor from the CA Decision. After more than six years,
on September 13, 2007, a new law firm entered its appearance as counsel of SPI.[36] SPI now claims that
it was not able to appeal the Decision of the RTC and subsequently of the CA which failed to impose 3%
monthly interest as provided in the Contract of Lease because it never received said Decisions, considering
that its counsel has migrated to another country and that petitioners misled the courts about SPIs
address.[37]
We are not persuaded. SPI failed to exercise due diligence in keeping itself updated on the
developments of the case. That its erstwhile counsel has not communicated for a long period of time and
has migrated abroad, should have cautioned it that something was amiss with the case. By that time, SPI
should have initiated moves to locate its counsel or to inquire from the court on the progress of the case. It
should have ensured that its address on record with the court is updated and current. Thus, it has been
equally stressed that litigants represented by counsel should not expect that all they need to do is sit back,
relax and await the outcome of the case.[38] Instead, they should give the necessary assistance to their
counsel and exercise due diligence to monitor the status of the case for what is at stake is ultimately their
interest.
WHEREFORE, the instant petition is DENIED. The June 30, 2003 Decision of the Court of Appeals in
CA-G.R. SP No. 76631 ordering the petitioners to pay P95,000.00 as unpaid rentals and the August 9,
2004 Resolution denying the motion for reconsideration are AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO

Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice
JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Courts Division.
RENATO C. CORONA
Chief Justice
[1]
12 C.J. 224.
[2]
Rollo, pp. 547-552.
[3]
Id. at 553.
[4]
Id. at 70-73.
[5]
Id. at 74-95.
[6]
Id. at 96-97.
[7]
Id. at 97-99.
[8]
Id. at 96-101; penned by Presiding Judge Augustus C. Diaz, Pairing Judge for MeTC Branch
38.
[9]
Id. at 101.
[10]
CA rollo, p. 78-97.
[11]
Id. at 98-99.
[12]
Id. at 98.
[13]
Rollo, 314.
[14]
Id. at 560-562; penned by Judge Percival Mandap Lopez.
[15]
Id. at 562.
[16]
Id.
[17]
Id. at 2.
[18]
Id. at 108-116; penned by Associate Justice Bienvenido L. Reyes and concurred in by Associate
Justices Salvador J. Valdez, Jr. and Danilo B. Pine.
[19]
Id. at 162-163.
[20]
CA rollo, p. 487.
[21]
Id. at 487-486.
[22]
Id. at 524.
[23]
CIVIL CODE, Art. 1278.
[24]
CIVIL CODE, Art. 1279.
[25]
Sentence Spanish Supr. Trib. March 21, 1898, 83 Jur. Civ. 679.
[26]
Ogden v. Cain, 5 La. Ann. 160; Reynaud v. His Creditors, 4 Rob. (La.) 514.
[27]
TOLENTINO, CIVIL CODE OF THE PHILIPPINES VOL. IV (1973 edition), 354
citing Manresa 409-410.
[28]
208 Phil. 561, 565 (1983).
[29]
Rollo, p. 107-115.
[30]
Id. at 37.
[31]
Id. at 532-533.
[32]
Solidbank Corp. v. Court of Appeals, 456 Phil. 879, 887 (2003).
[33]
Quezon Development Bank v. Court of Appeals, 360 Phil. 392, 399 (1998).
[34]
Spouses Buot v. Court of Appeals, 410 Phil. 183, 200 (2001).
[35]
Spouses Custodio v. Court of Appeals, 323 Phil. 575, 584 (1996).
[36]
Rollo at 430-433.
[37]
Id. at 464.
[38]
Friend v. Union Bank of the Philippines, G.R. No. 165767, November 29, 2005, 476 SCRA 453,
549.

Supreme Court
Manila
FIRST DIVISION
PEOPLE OF THE PHILIPPINES, G.R. No. 185209
Appellee,
Present:
- versus -
CORONA, C. J., Chairperson,
VELASCO, JR.,
RENE BARON y TANGAROCAN, LEONARDO-DE CASTRO,
Appellant. DEL CASTILLO, and
PEREZ, JJ.
REY VILLATIMA and alias
DEDONG BARGO, Promulgated:
Accused. June 28, 2010
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Circumstantial evidence is sufficient to produce a conviction that the appellant conspired with his
co-accused in committing the crime of robbery with homicide. His claim that he acted under the impulse
of uncontrollable fear of an equal or greater injury could not be sustained because there was no genuine,
imminent, and reasonable threat, preventing his escape that compelled him to take part in the commission
of the offense charged.
Factual Antecedents
On July 19, 1995, an Information[1] was filed before the Regional Trial Court of Cadiz City, Negros
Occidental, Branch 60, charging Rene Baron y Tangarocan (appellant), Rey Villatima (Villatima), and alias
Dedong Bargo (Bargo) with the special complex crime of robbery with homicide committed against Juanito
Berallo (Berallo). The Information contained the following accusatory allegations:
That on or about 9 oclock in the evening of June 28, 1995 at Hda. Sta. Ana, Brgy.
Burgos, Cadiz City, Negros Occidental, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, conspiring, confederating and helping one
another with evident premeditation and treachery and with intent to kill, did then and
there, willfully, unlawfully and feloniously assault, attack and stab to death one Juanito
Berallo in order to rob, steal and take away the following:
1) sidecar of the tricycle which costs P16,000.00;

2) motorcycle described as Kawasaki HDX colored black with Engine No. G7E-
088086 and Chassis No. HDX-849776 which is worth P103,536.00;
3) wallet with cash money of P1,250.00;
4) wrist watch and ring worth P3,800.00.
and inflicting upon the person of Juanito Berallo the following injuries, to wit:
1. Gaping incised wound, shallow at the extremeties and deeper at the middle
portion, 7 cms. long, from right lateral aspect of the neck going slightly
downward and to the left of anterior neck.
2. Stabbed wound, 2 cm. long, 14 cm. deep, directed slightly upward and to the
right, located on the upper chest below wound # 1.
3. Stabbed wound, 2 cm. long, 12 cm. deep, directed to the right, located at the
left chest, level of 3rd rib.
4. Stabbed wound, 2 cm. long 20 cm. deep, directed slightly downward and to
the left, located at the middle of the chest, level of 5th rib.
5. Incised wound 1 cm long, right cheek.
6. Stabbed wound, 2 cm. long, 6 cm. deep, directed downward located at the
medial aspect of the upper back, right.
7. Stabbed wound, 2 cm. long, 10 cm. deep, located at the upper outer quadrant
of the back, right.
8. Incised wound, 2 cm. long, located at the middle of the upper quadrant of
back, right.
medial aspect of upper inner quadrant of back, left.
10. Stabbed wound, 2 cm. long, 5 cm deep, directed downward, located at the
middle of upper quadrant of back, left.
11. Incised wound, 2 cm long, located 2 cm to the left of wound # 10.
middle of lower back, left.
13. Incised wound, 6 cm. long, distal third left forearm.
14. Incised wound, 3 cm. long palmar surface left hand.
15. Incised wound, 5 cm. long palmar surface left hand, 2 cm. below wound #
13.
CAUSE OF DEATH: Severe hemorrhage due to Multiple Stabbed wounds,
which directly caused the death of the victim Juanito Berallo, to the damage and prejudice
of the heirs of the victim in the amount, to wit:
P 50, 000.00 - as indemnity for the death of the victim.

P 150, 000.00 - as indemnity for the loss of earning capacity, or such amount to
be fixed by the court.
ACT CONTRARY TO LAW.
Only the appellant was arrested. Villatima and Bargo remain at-large to date. Appellant entered a
plea of not guilty when arraigned. After the termination of the pre-trial conference, trial ensued.
The Prosecutions Version
Culled from the evidence presented by the prosecution, the case against the appellant is as
follows:
On June 28, 1995, at around 8:30 in the evening, Ernesto Joquino, Jr. (Joquino), a tricycle driver,
was having a conversation with Canni Ballesteros (Ballesteros) in front of Julies Bakeshop at Magsaysay
St., Cadiz City. Berallo arrived and parked his tricycle in front of the bakeshop. The appellant approached
Berallo and asked if he could take him and his companions to Hacienda Caridad for P30.00. When Berallo
agreed, the appellant called Villatima, then wearing a fatigue jacket, and Bargo. They then rode Berallos
tricycle.
Pacita Caratao, a dressmaker, was also in Julies Bakeshop at around the same time Joquino and
Ballesteros were in front of the premises. She noticed Berallo sitting on a parked tricycle while the appellant
was seated behind him. After buying bread, she approached Berallo and asked if he was going home to
Lag-asan, hoping that she could ride with him. However, Berallo replied that he still had to ferry
passengers. She thus decided to cross the street and take a passenger jeep. While inside the jeep, she
saw two more persons boarding Berallos tricycle.
On June 29, 1995, SPO2 Jude dela Rama received a report of a robbery with homicide incident. Together
with other policemen, he proceeded to Hacienda Sta. Ana, Cadiz City, where he saw Berallo lying dead in
a sugarcane plantation about 20 meters away from the highway. They also noticed several traces of
footprints near Berallos body and a tricycle sidecar in a canal beside the Martesan Bridge. Beside the
sidecar was a fatigue jacket.
Dr. Merle Jane B. Regalado conducted the post-mortem examination on the cadaver of Berallo. She found
that the victim sustained 15 stab wounds and died of severe hemorrhage due to multiple stab
wounds. Five of them were considered as fatal and caused the immediate death of Berallo. The wounds
also indicated that they could have been inflicted by more than one person.
The follow-up investigation of the police team identified the appellant as one of the suspects. After having
been apprised of his rights, appellant admitted that he and his co-accused took Berallos tricycle and, after
detaching the motorcycle from the sidecar, brought the motorcycle to Barangay Oringao, Kabankalan,
Negros Occidental and left the same at the house of Villatimas aunt, Natividad Camparicio (Natividad).
Natividad denied knowledge of the incident but admitted that her nephew Villatima, together with the
appellant, and another companion, were the ones who brought the motorcycle to her house in
Kabankalan.
Nemia Berallo (Nemia) identified the motorcycle recovered from the house of Natividad as the one stolen
from her deceased husband. She also testified on the sum of money and the value of the personal
property stolen from her husband. She allegedly spent the sum of P2,400.00 for the purchase of the burial
lot.
The Version of the Defense
Appellant denied any participation in the crime. He claimed that on June 28, 1995, at around 7 oclock in
the evening, he bought rice and other necessities for his family and proceeded to the public transport
terminal to get a ride home. A tricycle with two passengers passed by and its driver inquired if he wanted
a ride up to Segundo Diez. He boarded the tricycle and told the driver that he would alight at Canibugan,
but the driver requested him to accompany them up to Segundo Diez. He agreed out of concern for the
safety of the driver. Upon reaching Bangga Doldol, however, the passengers announced a hold-up. Armed
with guns, the passengers told him and the driver not to make any wrong move, or they would be
killed. Thereafter, the passengers tied the hands of the driver and dragged him towards the sugarcane
fields. He no longer knew what happened to the driver since he remained in the tricycle. However, he
suspected that the driver was killed by the two passengers.
Thereafter, the passengers went to Taytay Martesan and detached the sidecar of the tricycle. They then
took him to a house at Barangay Oringao and did not allow him to leave the premises.The following
morning, they returned to Cadiz City. The two passengers even accompanied him to his house and
threatened him and his wife at gunpoint not to report the incident to the police authorities.
On June 30, 1995, at around 10:00 oclock in the evening, policemen came to his house and asked where
the motorcycle was taken. He told them of the location of the vehicle and insisted that he had nothing to
do with the incident. He stressed that the two passengers whose names he did not know, were responsible
for the crime committed.

On February 12, 2002, the trial court rendered a Decision[2] finding the appellant guilty beyond
reasonable doubt of the complex crime of robbery with homicide. It disposed as follows:
WHEREFORE, in view of the foregoing, this Court finds accused RENE BARON Y
TANGAROCAN (detained) GUILTY beyond reasonable doubt of the complex crime of
Robbery with Homicide as charged in the information and there being the attendance of
the aggravating circumstance of treachery hereby sentences him to suffer the penalty of
DEATH.
The accused is further ordered to pay the heirs of the victim the amount
of P50,000.00 by way of indemnity for the death of the victim, Juanito Berallo and the
amount of P5,050.00 for the cash and the value of the wrist watch and ring of the victim
plus the amount of P2,400.00 for the purchase of the burial lot by way of reparation and
in addition the amount of P100,000.00 as moral damages and P50,000.00 as exemplary
damages. The sidecar and the motorcycle are hereby ordered returned to the heirs of the
victim.
The accused is further ordered to be immediately committed to the National

Penitentiary for service of his sentence.
The Clerk of Court of this Court is hereby ordered to immediately forward the
records of this case together with the Decision of this Court to the Supreme Court for
automatic review.
The case against Rey Villatima and alias Dedong Bargo [both of whom are] at-
large is hereby ordered archived and [to] be immediately revived upon their arrest.
Cost against accused Rene Baron.
SO ORDERED.[3]
Before the appellate court, appellant alleged that the trial court erred in finding him guilty as charged and
in not appreciating in his favor the exempting circumstance of irresistible force and/or uncontrollable fear
of an equal or greater injury. However, the same was disregarded by the CA holding that all the requisites
for said circumstances were lacking. The appellate court found that the alleged threat, if at all, was not
real or imminent. Appellant had every opportunity to escape but did not take advantage of the
same. Instead, he waited inside the tricycle as if he was one of the malefactors. The dispositive portion of
the CA Decision[4] reads as follows:
WHEREFORE, the APPEAL is DISMISSED. The Decision dated February 12, 2002,
of the Regional Trial Court (RTC), Cadiz City, Negros Occidental, Branch 60, in Criminal
Case No. 1675-C finding accused-appellant Rene Baron y Tangarocan guilty of robbery
with homicide is AFFIRMED with MODIFICATION reducing the death penalty to reclusion
perpetua without parole conformably with R.A. 9346 and reducing the award of moral
damages from P100,000.00 to P50,000.00 and exemplary damages from P50,000.00
to P25,000.00.
Costs against accused-appellant.
SO ORDERED.
Issues
Still aggrieved, the appellant comes to us for a final review of his case. In his brief, he assigns the following
correlated errors:
I
THE TRIAL COURT GRAVELY ERRED IN FAILING TO APPRECIATE THE EXEMPTING
CIRCUMSTANCES OF IRRESISTABLE FORCE AND/OR UNCONTROLLABLE FEAR OF AN
EQUAL OR GREATER INJURY.
II
THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY
BEYOND REASONABLE DOUBT OF THE CRIME CHARGED.[5]
Our Ruling
The appeal is unmeritorious.

Robbery with homicide exists when a homicide is committed either by reason, or on occasion, of
the robbery. To sustain a conviction for robbery with homicide, the prosecution must prove the following
elements: (1) the taking of personal property belonging to another; (2) with intent to gain; (3) with the
use of violence or intimidation against a person; and (4) on the occasion or by reason of the robbery, the
crime of homicide, as used in the generic sense, was committed. A conviction needs certainty that the
robbery is the central purpose and objective of the malefactor and the killing is merely incidental to the
robbery. The intent to rob must precede the taking of human life but the killing may occur before, during
or after the robbery.[6]
In this case, the prosecution successfully adduced proof beyond reasonable doubt that the real
intention of the appellant and his companions was to rob the victim. The appellant and his companions
boarded the tricycle of the victim pretending to be passengers. Midway to their destination, one of the
accused declared a hold-up and at gun point, tied the hands of the victim and brought him towards the
sugarcane field where he was stabbed to death. The victim was divested of his wallet
containing P1,250.00, a wrist watch and ring. Emerging from the sugarcane plantation, they boarded the
tricycle of the victim, detached the sidecar and dumped the same in a canal beside
the Martesan Bridge with the fatigue jacket of one of the accused. They proceeded to Barangay Oringao,
Kabankalan and hid the motorcycle in the house of Villatimas aunt, Natividad.
Concededly, there is no direct evidence proving that the appellant conspired and participated in
committing the crime. However, his complicity may be proved by circumstantial evidence, which consists
of proof of collateral facts and circumstances from which the existence of the main fact may be inferred
according to reason and common experience.[7]Circumstantial evidence is sufficient to sustain conviction
if: (a) there is more than one circumstance; (b) the facts from which the inferences are derived have been
established; (c) the combination of all circumstances is such as to warrant a finding of guilt beyond
reasonable doubt.[8] A judgment of conviction based on circumstantial evidence can be sustained when
the circumstances proved form an unbroken chain that results to a fair and reasonable conclusion pointing
to the accused, to the exclusion of all others, as the perpetrator.[9]
In this case, the circumstantial evidence presented by the prosecution leads to the inescapable
conclusion that the appellant and his co-accused conspired to commit robbery with homicide. When
considered together, the circumstances point to them and no one else as the culprits. We thus agree with
the observation of the trial court that:
A careful examination of the records of this case reveals, [that] no eye witness was
presented by the prosecution pointing to the three accused to be actually responsible in
the perpetration of the crime charged except the extra-judicial narration of the accused
Rene Baron but who also tried to exculpate himself from the commission of the crime by
denying his [complicity] in the crime.
Despite this finding however, this Court found from the records of this case, numerous
and cumulative material circumstantial evidence from which one can derive a logical and
necessary inference clearly showing the three accused to be responsible for the crime
charged and these are the following; to wit:
1. The fact that at about 8:30 in the evening of June 28, 1995 witness Ernesto
Joquino, Jr. while in front of Julies Bakeshop saw the victim Juanito Berallo
[park] the latters tricycle in front of the bakeshop when accused Rene Baron
hired the tricycle of the victim in going to Hda. Caridad and whose
companions were Rey Villatima and Dedong Bargo (TSN-Tan, January 18,
1996, pp. 6-10).Thus, the excerpts of the Transcript of the Stenographic
Notes has this to reveal in vivid fashion, to wit:
Q. Mr. Joquino, on June 28, 1995 at about 8:30 in the evening where were
you?
A. I was in front of Julies Bakeshop.
Q. Where is this Julies Bakeshop located x x x?

A. At Magsaysay Street, Cadiz City.
Q. What were you doing at Julies Bakeshop at that particular date and time?
A. I was x x x having a conversation with Canni Ballesteros.
Q. While you were x x x in front of Julies Bakeshop, was there anything that
transpired?
A. Yes, maam.
Q. Can you tell us what was that?

A. I saw Juanito Berallo park his tricycle in front of Julies Bakeshop.
Q. When you saw Juanito Berallo park his tricycle x x x in front of Julies
Bakeshop, what transpired after that?
A. Rene Baron approached Juanito Berallo and asked him if he can conduct
Rene Baron to Hda. Caridad.
Q. By the way, do you know Rene Baron before June 28, 1995?
A. Yes, maam, I know him because we are all drivers of the tricycle.
Q. What about this Juanito Berallo, do you know him before June 28, 1995?
A. Yes maam.
Q. Why do you know him?

A. Because he ran as councilor in Cadiz City.
Q. So going back to the incident where you said Rene Baron approached
Juanito Berallo and asked Berallo if the latter would conduct him to Hda.
Caridad, what was the answer of Juanito Berallo to Rene Baron?
A. Juanito Berallo asked Rene Baron how much he will pay [to] him and then
Rene Baron said that he will pay Juanito Berallo the amount of P30.00
and then again Juanito Berallo asked Rene Baron how many x x x will
ride on the tricycle and Rene Baron said that there were three of them.
Q. By the way, how far were you from where Juanito Berallo and Rene Baron
were talking?
A. From here up there. (Witness pointed to a distance of about four (4)
meters.)
Q. After Juanito Berallo agreed with Rene Baron and his companions to
conduct them to Hda. Caridad, what did Rene Baron do if there was any?
A. Rene Baron called his companions who were just across the street.
Q. Were you able to recognize x x x the two companions whom Rene Baron
called from across the street?
A. Yes, sir.
Q. And who were they if you know?

A. Rey Villatima and Dedong Bargo.
(TSN-Tan, January 18, 1996, pp. 6-10)
2. The fact the Rey Villatima was wearing a fatigue jacket when the latter boarded
the tricycle of the victim and proceeded to Hda. Caridad (ibid, p. 12) and it
was the same fatigue jacket recovered by the police from the sidecar of the
tricycle at the scene of the crime and this was the last time that the victim
was seen alive;
3. The fact that witness Pacita Caratao corroborated the testimony of Ernesto
Joquino, Jr. and Berallo sitting on the latters tricycle parked near Julies
Bakeshop and saw Rene Baron sitting behind Juanito Berallo and the witness
even asked the former if he will be going to Lag-asan to which the victim
Juanito Berallo refused because he has some passengers to be conducted
(TSN-Tan, March 13, 1997, pp. 3-4) and has referred to the accused Rene
Baron and his two companions (TSN-Tan, March 13, 1997, pp. 4-5) as his
passengers;
4. The fact that the during the police investigation witness SPO2 Jude de la Rama
found the dead body of the victim inside the sugarcane plantation in Hda.
Sta. Ana and found many traces of footsteps inside the sugarcane fields (TSN-
Tan, July 8, 1997, p. 4) indicating that more than one person conspired and
co-operated with each other in killing the victim;
5. The fact that the witness De la Rama found the sidecar of the tricycle beside
the Martisan Bridge which is just beside the scene of the incident and also
beside the sidecar of the tricycle they found a fatigue jacket and has
recovered inside its pocket a used soap (ibid, p. 5);
6. The fact that when the police officers invited Rene Baron for interview, Rene
Baron pointed to his co-accused, Rey Villatima as the one who was wearing
the fatigue jacket the police officers recovered as well as had named his
(Baron) other companion as alias Dedong Bargo (ibid, p. 7);
7. The fact that after the three accused had detached the motorcycle from its
sidecar, Rey Villatima was pointed to by the accused Rene Baron as the one
who drove it while he (Rene Baron) and Dedong Bargo rode behind and all
of them immediately proceeded to the house of the aunt of Rey Villatima in
Brgy. Oringao, Kabankalan, Negros Occidental (ibid);
8. The fact that it was accused Rene Baron who had guided the police
investigators to Kabankalan City, Negros Occidental, a city in the southern
portion of Negros Occidental which is about 150 kilometers away from Cadiz
City in the north, the scene of the crime; and with the cooperation of the Chief
of Police of the former place proceeded to the house of a certain Natividad
Camparicio, the aunt of accused Rey Villatima (ibid, pp. 7-8);
9. The fact that Natividad Camparicio affirmed that the stolen motorcycle was
brought to her house at around 1:15 in the morning of July 1, 1995 by her
nephew, Rey Villatima together with the latters companions and pinpointed
to accused Rene Baron as one of them (ibid, p. 9);
10. The fact that prosecution witness, Police Insp. Eduardo Berena also confirmed
they were able to recover the stolen motorcycle which was kept in the ground
floor of the house of Mrs. Camparicio (TSN-Guanzon, October 2, 1997, pp. 8-
15);
11. The fact that the stolen motorcycle was positively identified by witness Nemia
Berallo as the same motorcycle driven, owned and registered in the name of
the victim, Juanito Berallo (TSN-Guanzon, October 2, 1997, pp. 9-10);
12. The fact that accused Rene Baron admitted during his testimony that he rode
in the tricycle driven by the victim together with the two passengers in going
to Segundo Diez but reached only the area of Bangga Doldol where the actual
robbery and killing took place (TSN-Tan, May 11, 1999, pp. 9-12);
13. The fact that when the two hold-up men brought the driver inside the
sugarcane field, accused Rene Baron who was left on the road outside the
sugarcane field (ibid, p. 11) did nothing and instead of escaping and seeking
help, accused Rene Baron leisurely stayed in the tricycle as if everything [was]
normal and nothing [happened], thus indicating that he (Baron) [was] in
conspiracy to rob and kill the victim since as the facts are depicted x x x Rene
Baron would clearly appear that he (Baron) acted as a look out while the two
companions were killing the victim and to make matters worse, he (Baron)
even went along with the two other accused up to Oringao, Kabankalan City
where they hid the stolen motorcycle (ibid, pp. 12-13);
14. The fact that the accused Baron was left unharmed by the killers of the victim
in spite of the fact that he (Baron) is a potential witness to the serious crime
of Robbery with Homicide; and when they were in Oringao, ate breakfast
with them then rode a passenger jeep with many passengers; alighted in
Kabankalan proper from Barangay Oringao; stood and waited in a public
place at the Ceres Bus Terminal; rode a public transportation bus to Bacolod
City for three (3) hours then alighted in Libertad Street in Bacolod City; and
again rode a passenger jeepney going to a place known as Shopping to take
another passenger bus in going back to Cadiz City (ibid, pp. 21-30).
From [this] series of proven circumstantial evidence, the inescapable and natural
conclusion is the three accused were in conspiracy with one another to kill the victim and
cart away the motorcycle as the combination of these numerous circumstantial evidence
[is] enough to produce the strong moral certainty from an unbiased and [unprejudiced]
mind to safely conclude that no other persons but the three accused conspired to
perpetrate the crime as clearly the series of events indubitably [shows] that there was
unity of purpose, concurrence of will, and that they all acted in concert towards the same
end, the accused being together with a group when they rode the tricycle of the victim;
all of them were together at the scene of the crime, they all rode in the same stolen
motorcycle going to Barangay Oringao, Kabankalan City; all of them were together in
hiding the stolen motorcycle in the house of Natividad Camparicio; and they were together
as a group going to Cadiz City from Kabankalan City passing [through] and stopping [at]
various cities and municipalities.[10]
The concerted manner in which the appellant and his companions perpetrated the crime showed
beyond reasonable doubt the presence of conspiracy. When a homicide takes place by reason of or on
the occasion of the robbery, all those who took part shall be guilty of the special complex crime of robbery
with homicide whether they actually participated in the killing, unless there is proof that there was an
endeavor to prevent the killing.[11] There was no evidence adduced in this case that the appellant
attempted to prevent the killing. Thus, regardless of the acts individually performed by the appellant and
his co-accused, and applying the basic principle in conspiracy that the act of one is the act of all, the
appellant is guilty as a co-conspirator. As a result, the criminal liabilities of the appellant and his co-accused
are one and the same.[12]
The appellants attempt to evade criminal liability by insisting that he acted under the impulse of
an uncontrollable fear of an equal or greater injury fails to impress. To avail of this exempting
circumstance, the evidence must establish: (1) the existence of an uncontrollable fear; (2) that the fear
must be real and imminent; and (3) the fear of an injury is greater than or at least equal to that
committed.[13] A threat of future injury is insufficient. The compulsion must be of such a character as to
leave no opportunity for the accused to escape.[14]
We find nothing in the records to substantiate appellants insistence that he was under duress
from his co-accused in participating in the crime. In fact, the evidence is to the contrary.Villatima and
Bargo dragged the victim towards the sugarcane field and left the appellant inside the tricycle that was
parked by the roadside. While all alone, he had every opportunity to escape since he was no longer
subjected to a real, imminent or reasonable fear. Surprisingly, he opted to wait for his co-accused to return
and even rode with them to Kabankalan, Negros Occidental to hide the victims motorcycle in the house
of Villatimas aunt.
The appellant had other opportunities to escape since he traveled with his co-accused for more
than 10 hours and passed several transportation terminals. However, he never tried to escape or at least
request for assistance from the people around him.
Robbery with Homicide is a single indivisible crime punishable with reclusion perpetua to death under
paragraph 1, Article 294 of the Revised Penal Code. We find that the trial court correctly appreciated the
aggravating circumstance of treachery, which exists when the offender commits any of the crimes against
persons, employing means, methods or forms in the execution thereof that tend directly and specifically
to insure its execution without risk to himself arising from the defense that the offended party might
make.[15] The evidence points that one of the co-conspirators tied the hands of the victim before dragging
him to the sugarcane field.[16] Thus, he was unable to defend and protect himself against his malefactors
who were superior in number and armed with knives and guns.
As thoroughly discussed in People v. Escote, Jr.,[17] treachery is not a qualifying circumstance but a generic
aggravating circumstance to robbery with homicide although said crime is classified as a crime against
property and a single and indivisible crime.[18] Corollarily, Article 62, paragraph 1 of the Revised Penal Code
provides that in diminishing or increasing the penalty for a crime, aggravating circumstances shall be taken
into account. However, aggravating circumstances which in themselves constitute a crime especially
punishable by law or which are included by the law in defining a crime and prescribing a penalty therefor
shall not be taken into account for the purpose of increasing the penalty.[19] In the case at bar, treachery
is not an element of robbery with homicide.[20] Neither is it inherent in the crime of robbery with
homicide.[21] As such, treachery may be properly considered in increasing the penalty for crime.
In this case, the presence of treachery as a generic aggravating circumstance would have merited the
imposition of the death penalty. However, in view of the subsequent passage of Republic Act (RA) No.
9346, entitled An Act Prohibiting the Imposition of the Death Penalty in the Philippines, we are mandated
to impose on the appellant the penalty of reclusion perpetua without eligibility for parole.[22]
In line with current jurisprudence, if the death penalty would have been imposed if not for the proscription
in RA 9346, the civil indemnity for the victim shall be P75,000.00.[23] As compensatory damages, the award
of P2,400.00 for the burial lot of the victim must be deleted since this expense was not supported by
receipts.[24] However, the heirs are entitled to an award of temperate damages in the sum
of P25,000.00.[25] The existence of one aggravating circumstance merits the award of exemplary damages
under Article 2230 of the New Civil Code. Thus, the award of exemplary damages is proper. However, it
must be increased from P25,000.00 to P30,000.00.[26] Moral damages must also be increased
from P25,000.00 to P75,000.00.[27]Moreover, the appellant is ordered to return the stolen items that were
not recovered. Should this no longer be possible, there must be restitution in the total amount
of P5,050.00 representing the cash contained in the victims wallet, as well as the value of the wrist watch,
the ring, the motorcycle and sidecar taken by the appellant and his co-accused.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CR HC No. 00638 finding appellant guilty
beyond reasonable doubt of Robbery with Homicide and sentencing him to suffer the penalty
of reclusion perpetua is AFFIRMED with MODIFICATIONS. The appellant is hereby ordered
to PAY the heirs of the victim P75,000.00 as civil indemnity; P75,000.00 as moral damages,
and P30,000.00 as exemplary damages. Actual damages is DELETED, and in lieu thereof, appellant is
ordered to pay temperate damages in the amount of P25,000.00.The appellant is also ordered to return
the cash of P5,050.00 taken from the victims wallet and the other pieces of personal property also taken
but not recovered, more particularly his wrist watch, ring, his Kawasaki HDX motorcycle and its
sidecar. Should restitution be no longer possible, the appellant must pay the equivalent value of the
unreturned items.
SO ORDERED.

Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
RENATO C. CORONA
Chief Justice
[1]
Records, pp. 1-3.
[2]
Id. at 202-221; penned by Executive Judge Renato D. Munez.
[3]
Id. at 221.
[4]
CA rollo, pp. 146-166; penned by Associate Justice Amy C. Lazaro-Javier and concurred in by
Associate Justices Pampio A. Abarintos and Francisco P. Acosta.
[5]
Id. at 61.
[6]
People v. Dela Cruz, G.R. No. 168173, December 24, 2008, 575 SCRA 412, 436.
[7]
People v. Darilay, 465 Phil. 747, 767 (2004).
[8]
RULES OF COURT, Rule 133, Section 4.
[9]
People v. Pascual, G.R. No. 172326, January 19, 2009, 576 SCRA 242, 252.
[10]
Records, pp. 212-217.
[11]
People v. Reyes, 369 Phil. 61, 80 (1999).
[12]
Supra note 7.
[13]
REVISED PENAL CODE, Article 12(6); People v. Petenia, 227 Phil. 337, 345 (1986).
[14]
People v. Palencia, 162 Phil. 695, 711 (1976).
[15]
REVISED PENAL CODE, Article 14(16).
[16]
TSN, May 11, 1999, p. 10.
[17]
448 Phil 749 (2003).
[18]
Id. at 791.
[19]
Id.
[20]
Id. at 792.
[21]
Id.
[22]
People v. Villanueva, G.R. No. 187152, July 22, 2009, 593 SCRA 523, 547-548. See also People
v. Darilay, supra note 7.
[23]
People v. Villanueva, supra.
[24]
People v. Escote, Jr., supra note 17 at 796.
[25]
People v. Diaz, G.R. No. 185841, August 4, 2009.
[26]
Supra note 7.
[27]
Id.

Supreme Court
Manila
FIRST DIVISION
SOUTHEASTERN SHIPPING, G.R. No. 167678

SOUTHEASTERN SHIPPING
GROUP, LTD.,

VELASCO, JR.,
- versus - LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
FEDERICO U. NAVARRA, JR., Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Money claims arising from employer-employee relations, including those specified in the Standard
Employment Contract for Seafarers, prescribe within three years from the time the cause of action
accrues.[1] However, for death benefit claims to prosper, the seafarers death must have occurred during
the effectivity of said contract.
This Petition for Review assails the January 31, 2005 Decision[2] and the April 4, 2005 Resolution[3] of the
Court of Appeals (CA) in CA-G.R. SP. No. 85584. The CA dismissed the petition for certiorari filed before it
assailing the May 7, 2003 Decision[4] of the National Labor Relations Commission (NLRC) ordering
petitioners to pay to Evelyn J. Navarra (Evelyn), the surviving spouse of deceased Federico U. Navarra,
Jr. (Federico), death compensation, allowances of the three minor children, burial expenses plus 10% of
the total monetary awards as and for attorney's fees.
Factual Antecedents
Petitioner Southeastern Shipping, on behalf of its foreign principal, petitioner Southeastern Shipping
Group, Ltd., hired Federico to work on board the vessel "George McLeod." Federico signed 10 successive
separate employment contracts of varying durations covering the period from October 5, 1995 to March
30, 1998. His latest contract was approved by the Philippine Overseas Employment Administration (POEA)
on January 21, 1998 for 56 days extendible for another 56 days. He worked as roustabout during the first
contract and as a motorman during the succeeding contracts.
On March 6, 1998, Federico, while on board the vessel, complained of having a sore throat and on and
off fever with chills. He also developed a soft mass on the left side of his neck. He was given medication.
On March 30, 1998, Federico arrived back in the Philippines. On April 21, 1998 the specimen excised from
his neck lymph node was found negative for malignancy.[5] On June 4, 1998, he was diagnosed at the
Philippine General Hospital to be suffering from a form of cancer called Hodgkin's Lymphoma, Nodular
Sclerosing Type (also known as Hodgkin's Disease). This diagnosis was confirmed in another test
conducted at the Medical Center Manila on June 8, 1998.
On September 6, 1999, Federico filed a complaint against petitioners with the arbitration branch of the
NLRC claiming entitlement to disability benefits, loss of earning capacity, moral and exemplary damages,
and attorney's fees.
During the pendency of the case, on April 29, 2000, Federico died. His widow, Evelyn, substituted him as
party complainant on her own behalf and in behalf of their three children. The claim for disability benefits
was then converted into a claim for death benefits.
Ruling of the Labor Arbiter
On May 10, 2000, Labor Arbiter Ermita T. Abrasaldo-Cuyuca rendered a Decision dismissing the complaint
on the ground that "Hodgkin's Lymphoma is not one of the occupational or compensable diseases or the
exact cause is not known," the dispositive portion of which states:
WHEREFORE, premises considered judgment is hereby rendered dismissing the complaint
for lack of merit.
SO ORDERED.[6]
Evelyn appealed the Decision to the NLRC.
Ruling of the NLRC
On May 7, 2003, the NLRC rendered a Decision reversing that of the Labor Arbiter, the dispositive portion
of which provides:
WHEREFORE, the appealed decision is REVERSED and SET ASIDE. Judgment is hereby
rendered ordering the respondents Southeastern Shipping/Southeastern Shipping Group
Ltd. jointly and severally, to pay complainant Evelyn J. Navarra the following:
Death compensation - US$ 50,000.00

Minor child allowance
(3 x US$ 7,000) - 21,000.00
Burial expense - 1,000.00
Total US$ 72,000.00
Plus 10% of the total monetary awards as and for attorney's fees.
SO ORDERED.[7]
Petitioners filed a Motion for Reconsideration which was denied by the NLRC. They, thus, filed a petition
for certiorari with the CA.
The CA found that the claim for benefits had not yet prescribed despite the complaint being filed more
than one year after Federico's return to the Philippines. It also found that although Federico died 17
months after his contract had expired, his heirs could still claim death benefits because the cause of his
death was the same illness for which he was repatriated. The dispositive portion of the CA Decision states:
WHEREFORE, premises considered, petition is hereby DISMISSED for lack of merit and
the May 7, 2003 Decision of the National Labor Relations Commission is hereby AFFIRMED
en toto.
SO ORDERED.[8]
After the denial by the CA of their motion for reconsideration, petitioners filed the present petition for
review.
Issues
Petitioners raise the following issues:
I
THE HON. COURT OF APPEALS ERRED IN RULING THAT PRESCRIPTION DOES NOT
APPLY DESPITE THE LATE FILING OF THE COMPLAINT OF THE RESPONDENT
FEDERICO U. NAVARRA, JR.
II
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT HODGKIN'S DISEASE
IS A COMPENSABLE ILLNESS.
III
THE HON. COURT OF APPEALS ERRED IN ITS CONCLUSION THAT PETITIONERS ARE
LIABLE FOR THE DEATH OF THE RESPONDENT AS SUCH DEATH WAS DURING THE
TERM OF HIS EMPLOYMENT CONTRACT.[9]
Petitioners' Arguments
Petitioners contend that the factual findings of the CA were not supported by sufficient evidence. They
argue that as can be seen from the medical report of Dr. Salim Marangat Paul, Federico suffered from
and was treated for Acute Respiratory Tract Infection, not Hodgkin's Disease, during his employment in
March 1998. They further contend that Federico returned to the Philippines on March 30, 1998 because
he had already finished his contract, not because he had to undergo further medical treatment.
They also insist that the complaint has already prescribed. Despite having been diagnosed on June 4,
1998 of Hodgkin's Disease, the complaint was filed only on September 6, 1999, one year and five months
after Federico arrived in Manila from Qatar.
They also posit that respondents are not entitled to the benefits claimed because Federico did not die
during the term of his contract and the cause of his death was not contracted by him during the term of
his contract.
Respondents' Arguments
Respondents on the other hand contend that the complaint has not prescribed and that the prescriptive
period for filing seafarer claims is three years from the time the cause of action accrued. They claim that
in case of conflict between the law and the POEA Contract, it is the law that prevails.
Respondents also submit that Federico contracted on board the vessel the illness which later caused his
death, hence it is compensable.
Our Ruling
The petition is partly meritorious.
Prescription
The employment contract signed by Federico stated that "the same shall be deemed an integral part of
the Standard Employment Contract for Seafarers," Section 28 of which states:
SECTION 28. JURISDICTION
The Philippine Overseas Employment Administration (POEA) or the National Labor

Relations Commission (NLRC) shall have original and exclusive jurisdiction over any and
all disputes or controversies arising out of or by virtue of this Contract.
Recognizing the peculiar nature of overseas shipboard employment, the employer and
the seafarer agree that all claims arising from this contract shall be made within one (1)
year from the date of the seafarer's return to the point of hire.
On the other hand, the Labor Code states:
Art. 291. Money claims.-All money claims arising from employer-employee relations
during the effectivity of this Code shall be filed within three (3) years from the time the
cause of action accrued; otherwise they shall forever be barred.
The Constitution affirms labor as a primary social economic force.[10] Along this vein, the State vowed to
afford full protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.[11]
"The employment of seafarers, including claims for death benefits, is governed by the contracts they sign
every time they are hired or rehired; and as long as the stipulations therein are not contrary to law, morals,
public order or public policy, they have the force of law between the parties."[12]
In Cadalin v. POEA's Administrator,[13] we held that Article 291 of the Labor Code covers all money claims
from employer-employee relationship. It is not limited to money claims recoverable under the
Labor Code, but applies also to claims of overseas contract workers.[14]
Based on the foregoing, it is therefore clear that Article 291 is the law governing the prescription of money
claims of seafarers, a class of overseas contract workers. This law prevails over Section 28 of the Standard
Employment Contract for Seafarers which provides for claims to be brought only within one year from the
date of the seafarers return to the point of hire. Thus, for the guidance of all, Section 28 of the Standard
Employment Contract for Seafarers, insofar as it limits the prescriptive period within which the seafarers
may file their money claims, is hereby declared null and void. The applicable provision is Article 291 of the
Labor Code, it being more favorable to the seafarers and more in accord with the States declared policy
to afford full protection to labor. The prescriptive period in the present case is thus three years from the
time the cause of action accrues.
In the present case, there is no exact showing of when the cause of action accrued. Nevertheless, it could
not have accrued earlier than January 21, 1998 which is the date of his last contract.Hence, the claim has
not yet prescribed, since the complaint was filed with the arbitration branch of the NLRC on September 6,
1999.
Compensability and Liability
In petitions for review on certiorari, only questions of law may be raised, the only exceptions being when
the factual findings of the appellate court are erroneous, absurd, speculative, conjectural, conflicting, or
contrary to the findings culled by the court of origin. Considering the conflicting findings of the NLRC, the
CA and the Labor Arbiter, we are impelled to resolve the factual issues in this case along with the legal
ones.[15]
Section 20 of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-
Board Ocean-Going Vessels states:
A. COMPENSATION AND BENEFITS FOR DEATH
1. In case of death of the seafarer during the term of his contact, the
employer shall pay his beneficiaries the Philippine currency equivalent to
the amount of Fifty Thousand US Dollars (US$50,000) and an additional
amount of Seven Thousand US Dollars (US$7,000) to each child under
the age of twenty-one (21) but not exceeding four children, at the
exchange rate prevailing during the time of payment. (Emphasis
supplied)
Thus, as we declared in Gau Sheng Phils., Inc. v. Joaquin, Hermogenes v. Oseo Shipping Services, Inc.,
Prudential Shipping and Management Corporation v. Sta. Rita, Klaveness Maritime Agency, Inc. v.
Beneficiaries of Allas, in order to avail of death benefits, the death of the employee should occur during
the effectivity of the employment contract.[16] For emphasis, we reiterate that the death of a seaman
during the term of employment makes the employer liable to his heirs for death compensation benefits,
but if the seaman dies after the termination of his contract of employment, his beneficiaries are not entitled
to the death benefits.[17] Federico did not die while he was under the employ of petitioners. His contract
of employment ceased when he arrived in the Philippines on March 30, 1998, whereas he died on April
29, 2000. Thus, his beneficiaries are not entitled to the death benefits under the Standard Employment
Contract for Seafarers.
Moreover, there is no showing that the cancer was brought about by Federico's stint on board petitioners'
vessel. The records show that he got sick a month after he boarded M/V George Mcleod. He was then
brought to a doctor who diagnosed him to have acute respiratory tract infection. It was only on June 6,
1998, more than two months after his contract with petitioners had expired, that he was diagnosed to
have Hodgkin's Disease. There is no proof and we are not convinced that his exposure to the motor fumes
of the vessel, as alleged by Federico, caused or aggravated his Hodgkin's Disease.
While the Court adheres to the principle of liberality in favor of the seafarer in construing the Standard
Employment Contract, we cannot allow claims for compensation based on surmises. When the evidence
presented negates compensability, we have no choice but to deny the claim, lest we cause injustice to
the employer.
The law in protecting the rights of the employees, authorizes neither oppression nor self-destruction of
the employer there may be cases where the circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted as to result in an injustice to the employer.[18]
WHEREFORE, the petition is PARTLY GRANTED. The January 31, 2005 Decision of the Court of
Appeals in CA-G.R. SP No. 85584 holding that the claim for death benefits has not yet prescribed
is AFFIRMED with MODIFICATION that petitioners are not liable to pay to respondents death
compensation benefits for lack of showing that Federicos disease was brought about by his stint on board
petitioners vessels and also considering that his death occurred after the effectivity of his contract.
SO ORDERED.

Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
RENATO C. CORONA
Chief Justice
[1]
LABOR CODE, Art. 291.
[2]
Rollo, pp. 8-17; penned by Associate Justice Vicente Q. Roxas and concurred in by Associate
Justices Salvador J. Valdez, Jr. and Juan Q. Enriquez, Jr.
[3]
Id. at 7.
[4]
Id. at 386-395.
[5]
Id. at 280.
[6]
Id. at 152.
[7]
Id. at 184.
[8]
Id. at 17.
[9]
Id. at 339.
[10]
CONSTITUTION, Article II, Section 18.
[11]
CONSTITUTION, Article XIII, Section 3.
[12]
Coastal Safeway Marine Services, Inc. v. Delgado, G.R. No. 168210, June 17, 2008, 554 SCRA
590, 595-596.
[13]
G.R. Nos. 104776 and 104911-14, December 5, 1994, 238 SCRA 721, 764.
[14]
Degamo v. Avantgarde Shipping Corp., G.R. No. 154460, November 22, 2005, 475 SCRA 671, 676-
677.
[15]
Prudential Shipping and Management Corporation v. Sta. Rita, G.R. No. 166580, February 8, 2007,
515 SCRA 157, 167. See also White Diamond Trading Corporation v. National Labor Relations
Commission, G.R. No. 186019, March 29, 2010.
[16]
Estate of Posedio Ortega v. Court of Appeals, G.R. No. 175005, April 30, 2008, 553 SCRA 649,
655-656.
[17]
Prudential Shipping and Management Corporation v. Sta. Rita, supra at 168-169.
[18]
Ledesma, Jr. v. National Labor Relations Commission, 537 SCRA 358, 371.

Supreme Court
Manila
FIRST DIVISION
JOSE DELOS REYES, G.R. No. 169135
Petitioner,
Present:

- versus - VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
JOSEPHINE ANNE B. RAMNANI, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A judgment debt is enforced by the levy and sale of the debtors property.[1] The issuance of the
final certificate of sale to the purchaser at the execution sale is a mere formality upon the debtors failure
to redeem the property within the redemption period.
This Petition for Review on Certiorari seeks to reverse and set aside the May 13, 2005 Decision[2] of
the Court of Appeals (CA) in CA-G.R. SP No. 87972, which affirmed the August 19, 2004[3] and November
10, 2004[4] Orders of the Regional Trial Court (RTC) of Pasig City, Branch 159 in Civil Case No. 24858. Also
assailed is the August 3, 2005 Resolution[5]denying petitioners motion for reconsideration.
Factual Antecedents
On October 11, 1977, the trial court rendered a Decision in Civil Case No. 24858 in favor of respondent
Josephine Anne B. Ramnani. Thereafter, a writ of execution was issued by the trial court. On June 6,
1978, then Branch Sheriff Pedro T. Alarcon conducted a public bidding and auction sale over the property
covered by Transfer Certificate of Title (TCT) No. 480537 (subject property) during which respondent was
the highest bidder. Consequently, a certificate of sale was executed in her favor on even date. On
November 17, 1978, a writ of possession was issued by the trial court. On March 8, 1990, the certificate
of sale was annotated at the back of TCT No. 480537. Thereafter, the taxes due on the sale of the subject
property were paid on September 26, 2001.
On February 17, 2004, respondent filed a motion (subject motion) for the issuance of an order directing
the sheriff to execute the final certificate of sale in her favor. Petitioner opposed on the twin grounds that
the subject motion was not accompanied by a notice of hearing and that the trial courts October 11, 1977
Decision can no longer be executed as it is barred by prescription.
In its August 19, 2004 Order, the trial court granted the motion:
WHEREFORE, premises considered, the motion is hereby GRANTED; and this Court
hereby directs the Branch Sheriff of this Court to issue the corresponding Final Certificate
of Sale in the above-entitled case in accordance with the rules immediately upon receipt
hereof.
SO ORDERED.[6]
The trial court ruled that the prescription for the issuance of a writ of execution is not applicable in this
case. Less than a year from the October 11, 1977 Decision, respondent exercised her right to enforce the
same through the levy and sale of the subject property on June 6, 1978. Although the certificate of sale
was annotated on TCT No. 480537 only on March 8, 1990, petitioner did not exercise his right to redeem
the subject property within one year from said registration. Thus, what remains to be done is the issuance
of the final certificate of sale which was, however, not promptly accomplished at that time due to the
demise of the trial courts sheriff. The issuance of the final certificate of sale is a ministerial duty of the
sheriff in order to complete the already enforced judgment.
Petitioner moved for reconsideration which was denied by the trial court in its November 10, 2004
Order. Petitioner thereafter sought review via certiorari before the CA.
The CA denied the petition in its assailed May 13, 2005 Decision:
WHEREFORE, premises considered, the petition is hereby DENIED. The orders dated
August 19, 2004 and November 10, 2004 of the RTC, Branch 159, Pasig City in Civil Case
No. 24858 are hereby AFFIRMED.
SO ORDERED.[7]
In affirming the ruling of the trial court, the CA noted that the subject motion is a non-litigious motion,
hence, the three-day notice rule does not apply. Further, it agreed with the trial court that the issuance of
the final certificate of sale is not barred by prescription, laches or estoppel because the October 11, 1977
Decision was already executed through the levy and sale of the subject property on June 6,
1978. Respondent is entitled to the issuance of the final certificate of sale as a matter of right because
petitioner failed to redeem the subject property.
Issues
1. Whether the trial court acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in taking cognizance of the fatally defective motion and the subsequent issuance of
the Orders dated August 19, 2004 and November 10, 2004;
2. Whether respondent is barred by prescription, laches or estoppel.[8]
Petitioners Arguments
Petitioner contends that the motion dated February 16, 2004 filed by respondent to compel the
sheriff to execute the final certificate of sale is fatally defective because it does not contain a notice of
hearing. He further claims that the subject motion seeks to enforce the trial courts October 11, 1977
Decision which can no longer be done because 27 years have elapsed from the finality of said Decision.
Respondents Arguments
Respondent contends that the subject motion is a non-litigious motion and that petitioner was not
denied due process because he was given an opportunity to be heard by the trial court. She also points
out that said motion is not barred by prescription, laches and estoppel considering that the levy and sale
of the subject property was conducted on June 6, 1978 and petitioner failed to redeem the same.
Our Ruling
The petition lacks merit.
Respondent is entitled to the issuance of the final

certificate of sale as a matter of right.
Petitioner, in essence, argues that the October 11, 1977 Decision was not timely executed because
of respondents failure to secure the final certificate of sale within 10 years from the entry of said
judgment. This is erroneous. It is not disputed that shortly after the trial court rendered the aforesaid
judgment, respondent moved for execution which was granted by the trial court. On June 6, 1978, the
subject property was sold on execution sale. Respondent emerged as the highest bidder, thus, a certificate
of sale was executed by the sheriff in her favor on the same day. As correctly held by the trial court, the
October 11, 1977 Decision was already enforced when the subject property was levied and sold on June
6, 1978 which is within the five-year period for the execution of a judgment by motion under Section
6,[9] Rule 39 of the Rules of Court.
It is, likewise, not disputed that petitioner failed to redeem the subject property within one year
from the annotation of the certificate of sale on TCT No. 480537. The expiration of the one-year
redemption period foreclosed petitioners right to redeem the subject property and the sale thereby
became absolute. The issuance thereafter of a final certificate of sale is a mere formality and confirmation
of the title that is already vested in respondent.[10] Thus, the trial court properly granted the motion for
issuance of the final certificate of sale.
As to petitioners claim that the subject motion is defective for lack of a notice of hearing, the CA
correctly ruled that the subject motion is a non-litigious motion. While, as a general rule, all written motions
should be set for hearing under Section 4,[11] Rule 15 of the Rules of Court, excepted from this rule are
non-litigious motions or motions which may be acted upon by the court without prejudicing the rights of
the adverse party.[12] As already discussed, respondent is entitled to the issuance of the final certificate of
sale as a matter of right and petitioner is powerless to oppose the same.[13] Hence, the subject motion
falls under the class of non-litigious motions. At any rate, the trial court gave petitioner an opportunity to
oppose the subject motion as in fact he filed a Comment/ Opposition[14] on March 1, 2004 before the trial
court. Petitioner cannot, therefore, validly claim that he was denied his day in court.
WHEREFORE, the petition is DENIED. The May 13, 2005 Decision and August 3, 2005
Resolution of the Court of Appeals in CA-G.R. SP No. 87972 are AFFIRMED.
Costs against petitioner.
SO ORDERED.

Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
RENATO C. CORONA
Chief Justice
[1]
Jalandoni v. Philippine National Bank, 195 Phil. 1, 5 (1981).
[2]
Rollo, pp. 28-34; penned by Associate Justice Remedios A. Salazar-Fernando and concurred in
by Associate Justices Rosmari D. Carandang and Monina Arevalo-Zenarosa.
[3]
Id. at 60-62; penned by Judge Rodolfo R. Bonifacio.
[4]
Id. at 69.
[5]
Id. at 42; penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by
Associate Justices Rosmari D. Carandang and Monina Arevalo-Zearosa.
[6]
Id. at 62.
[7]
Id. at 33.
[8]
Id. at 15.
[9]
SECTION 6. Execution by motion or by independent action. A final and executory judgment or
order may be executed on motion within five (5) years from the date of its entry. After the
lapse of such time, and before it is barred by the statute of limitations, a judgment may be
enforced by action. The revived judgment may also be enforced by motion within five (5)
years from the date of its entry and thereafter by action before it is barred by the statute of
limitations.
[10]
Calacala v. Republic of the Philippines, 502 Phil. 681, 691 (2005).
[11]
SECTION 4. Hearing of motion. Except for motions which the court may act upon without
prejudicing the rights of the adverse party, every written motion shall be set for hearing by
the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served
in such a manner as to ensure its receipt by the other party at least three (3) days before the
date of hearing, unless the court for good cause sets the hearing on shorter notice.
[12]
Id.
[13]
Section 33, Rule 39 provides:
SECTION 33. Deed and possession to be given at expiration of redemption period; by whom
executed or given. If no redemption be made within one (1) year from the date of the
registration of the certificate of sale, the purchaser is entitled to a conveyance and possession
of the property; x x x. The deed shall be executed by the officer making the sale or by his
successor in office, and in the latter case shall have the same validity as though the officer
making the sale had continued in office and executed it.
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted
to and acquire all the rights, title, interest and claim of the judgment obligor to the property
as of the time of the levy. The possession of the property shall be given to the purchaser or
last redemptioner by the same officer unless a third party is actually holding the property
adversely to the judgment obligor.
[14]
Rollo, pp. 92-94.

Supreme Court
Manila
FIRST DIVISION
ERIBERTO S. MASANGKAY, G.R. No. 164443

Petitioner,
Present:

- versus - VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
PEOPLE OF THE PHILIPPINES, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Every criminal conviction must draw its strength from the prosecutions evidence. The evidence must be
such that the constitutional presumption of innocence is overthrown and guilt is established beyond
reasonable doubt. The prosecutorial burden is not met when the circumstances can yield to different
inferences. Such equivocation betrays a lack of moral certainty to support a judgment of conviction.
This Petition for Review[1] assails the March 16, 2004 Decision[2] and the July 9, 2004 Resolution[3] of the
Court of Appeals (CA) in CA-G.R. CR No. 25775. The dispositive portion of the assailed Decision reads:
WHEREFORE, the petition is DENIED, and the appealed Decision is AFFIRMED with the
MODIFICATION that Eriberto Masangkay is instead meted the penalty of imprisonment
for a term of Six (6) months and One (1) day of prision correccional minimum.
SO ORDERED.[4]
Factual Antecedents
Petitioner Eriberto Masangkay (Eriberto), his common-law wife Magdalena Ricaros (Magdalena),
Cesar Masangkay (Cesar) and his wife Elizabeth Masangkay (Elizabeth), and Eric Dullano were the
incorporators and directors of Megatel Factors, Inc. (MFI) which was incorporated in June 1990.[5]
On December 29, 1993 Eriberto filed with the Securities and Exchange Commission (SEC) a
Petition for the Involuntary Dissolution[6] of MFI for violation of Section 6 of Presidential Decree (PD) No.
902-A. The named respondents were MFI, Cesar and Elizabeth.[7] The said petition was made under oath
before a notary public, and alleged among others:
3. At or around September 1, 1993, respondent Elizabeth A. Masangkay

prepared or caused to be prepared a Secretarys Certificate which states:
That at a special meeting of the Board of Directors of the said
corporation held at its principal office on December 5, 1992, the following
resolution by unanimous votes of the directors present at said meeting
and constituting a quorum was approved and adopted:
RESOLVED, as it is hereby resolved that Lot No. 2069-A-2

situated at Bo. Canlalay, Bian, Laguna containing an area of 3,014 square
meters covered by Transfer Certificate of Title No. T-210746 be
exchanged with 3,700 shares of stock of the corporation worth or valued
at P370,000.00 by way of a Deed of Exchange with Cancellation of
Usufruct.
xxxx
4. Said secretarys certificate is absolutely fictitious and simulated because
the alleged meeting of the Board of Directors held on December 5, 1992 did not actually
materialize.
xxxx
5. Using the said falsified and spurious document, x x x respondents

executed another fictitious document known as the Deed of Exchange with Cancellation
of Usufruct.
The contract purporting to be a transfer of 3,700 shares of stock of MFI in return

for a piece of a land (Lot No. 2064-A-2) located at Canlalay, Bian, Laguna and owned by
minor child Gilberto Ricaros Masangkay is void.
Article 1409 of the New Civil Code states:
Art. 1409. The following contracts are inexistent and void from
the beginning.
xxxx
(2) Those which are absolutely simulated or fictitious;
(3) Those whose cause or object did not exist at the time of the
transaction;
xxxx
These contracts cannot be ratified. Neither can the right to set up

the defense of illegality be waived.
The aforementioned contract is indeed simulated and fictitious because they

defrauded minor child Gilberto Ricaros Masangkay and deprived him of his own property
without any consideration at all.
Records of the MFI revealed that minor child Gilberto Ricaros Masangkay [or] his
alleged guardian Magdalena S. Ricaros never became a stockholder at any point in time
of MFI.
x x x x[8]
The case remains pending to date.[9]

Claiming that Eriberto lied under oath when he said that there was no meeting of the Board held
on December 5, 1992 and that the Deed of Exchange with Cancellation of Usufruct is a fictitious
instrument, the respondent in the SEC case, Cesar, filed a complaint for perjury[10] against Eriberto before
the Office of the Provincial Prosecutor of Rizal.
Eriberto raised the defense of primary jurisdiction. He argued that what is involved is primarily an
intra-corporate controversy; hence, jurisdiction lies with the SEC pursuant to Section 6 of PD 902-A, as
amended by PD No. 1758. He also insisted that there was a prejudicial question because the truth of the
allegations contained in his petition for involuntary dissolution has yet to be determined by the SEC. These
defenses were sustained by the assistant provincial prosecutor and the complaint for perjury was
dismissed for lack of merit.[11]
It was however reinstated upon petition for review[12] before the Department of Justice.[13] Chief
State Prosecutor Zenon L. De Guia held that the petition for involuntary dissolution is an administrative
case only and thus cannot possibly constitute a prejudicial question to the criminal case. He also rejected
the claim that the SEC has exclusive authority over the case. The Chief State Prosecutor explained that
the prosecution and enforcement department of the SEC has jurisdiction only over criminal and civil cases
involving a violation of a law, rule, or regulation that is administered and enforced by the SEC. Perjury,
penalized under Article 183 of the Revised Penal Code (RPC), is not within the SECs authority.[14] Thus, he
ordered the conduct of a preliminary investigation, which eventually resulted in the filing of the following
information:
That sometime in the month of December 1992,[15] in the City of Mandaluyong,

Philippines, a place within the jurisdiction of this Honorable Court, the above-named
accused, did then and there, willfully, unlawfully and feloniously commit acts of perjury in
his Petition for Involuntary Dissolution of Megatel Factors, Inc. based on violation of
Section 6 of Presidential Decree 902-A against Megatel Factors, Inc., Cesar Masangkay,
Jr. and Elizabeth Masangkay which he made under oath before a notary authorized to
receive and administer oath and filed with the Securities and Exchange Commission,
wherein he made willful and deliberate assertion of a falsehood on a material matter when
he declared the following, to wit: a) the secretary certificate dated September 1, 1993,
proposed by Elizabeth Masangkay is fictitious and simulated because the alleged
December 5, 1992, meeting never took place; and, b) the Deed of Exchange with
Cancellation of Usufruct is a fictitious document, whereby the respondents defrauded the
minor child Gilberto Ricaros Masangkay, by exchanging the childs 3,014 square meters
lot with 3, 700 shares of stock of the corporation, when in fact no consideration for the
transfer was made as Gilberto Ricaros Masangkay or his guardian Magdalena Ricaros has
never been a stockholder of the Corporation at any point in time, when in truth and in
fact the accused well knew that the same statements he made in his petition and which
he reaffirmed and made use as part of his evidence in the Securities and Exchange
Commission (SEC) are false.[16]
The information was docketed as Criminal Case No. 56495 and raffled to the Metropolitan Trial Court
(MeTC) of Mandaluyong City, Branch 59.
Eriberto filed a motion to quash,[17] insisting that it is the SEC which has primary jurisdiction over
the case. He also argued that the truth of the allegations contained in the information is still pending
resolution in SEC Case No. 12-93-4650, thereby constituting a prejudicial question to the perjury case.
The MeTC denied the motion to quash for lack of merit.[18] It held that the fact that the parties to
the criminal case are mostly stockholders of the same corporation does not automatically make the case
an intra-corporate dispute that is within the SEC jurisdiction. It likewise held that the fact that the parties
are stockholders is merely incidental and that the subject of the case is a criminal act and hence within
the general jurisdiction of the MeTC. As regards the issue of prejudicial question, the MeTC ruled that the
petition before the SEC has nothing to do with the criminal case. The truth of the statements for which he
is being indicted is a matter of defense which the defendant may raise in the criminal case.
Eriberto filed a petition for certiorari before Branch 158 of the Pasig City Regional Trial Court (RTC)
to assail the denial of his motion to quash. The denial was affirmed.[19] He then filed a petition
for certiorari before the CA, which was denied for being a wrong mode of appeal.[20]
Failing to suspend the criminal proceedings, Eriberto entered a plea of not guilty during
arraignment.[21] He then waived the conduct of a pre-trial conference.[22]
During trial, the prosecution presented the private complainant Cesar as its sole witness.[23] He
testified that on December 5, 1992, a meeting of the Board of Directors was held at 9:00 oclock in the
morning at the office of MFI in Canlalay, Bian, Laguna. He presented the minutes of the alleged meeting
and reiterated the details contained therein indicating that the Board unanimously approved Magdalenas
proposal to exchange her sons (Gilberto Masangkay [Gilberto]) property with MFI shares of stock.[24] The
prosecution established that one of the signatures appearing in the minutes belongs to Eriberto.[25] This
allegedly belies Eribertos statement that the December 5, 1992 meeting did not actually materialize, and
shows that he knew his statement to be false because he had attended the meeting and signed the
minutes thereof. The prosecution also pointed out that in the proceedings before the guardianship court
to obtain approval for the exchange of properties, Eriberto had testified in support of the exchange.[26] The
guardianship court subsequently approved the proposed transaction.[27] The resulting Deed of Exchange
contained Eribertos signature as first party.[28]
As for Eribertos statement that the Deed of Exchange was simulated, the prosecution disputed
this by again using the minutes of the December 5, 1992 meeting, which states that the property of
Gilberto will be exchanged for 3,700 MFI shares.
For his defense, Eriberto asserted that the December 5, 1992 meeting did not actually take
place. While he admitted signing, reading and understanding the minutes of the alleged meeting, he
explained that the minutes were only brought by Cesar and Elizabeth to his house for signing, but there
was no actual meeting.[29]
To support the claim that no meeting took place in 1992, the defense presented Elizabeth, the
MFI corporate secretary, who could not remember with certainty if she had sent out any notice for the
December 5, 1992 meeting and could not produce any copy thereof.
The defense also presented a notice of meeting dated October 19, 1993, which called for the MFI
boards initial meeting since its business operations started, to be held on November 9, 1993. Emphasizing
the words initial meeting, Eriberto argued that this proves that prior to November 9, 1993, no meeting
(including the December 5, 1992 meeting) had ever taken place.
As for the charge that he perjured himself when he stated that the Deed of Exchange was fictitious
and simulated for lack of consideration, Eriberto explained that MFI never issued stock certificates in favor
of his son Gilberto. Corporate secretary Elizabeth corroborated this statement and admitted that stock
certificates were never issued to Gilberto or any of the stockholders.[30]
While he admitted supporting the proposed exchange and seeking its approval by the
guardianship court, Eriberto maintained that he did so because he was convinced by private complainant
Cesar that the exchange would benefit his son Gilberto. He however reiterated that, to date, Gilberto is
not a stockholder of MFI, thus has not received any consideration for the exchange.
On rebuttal, the prosecution refuted Eribertos claim that the board had its first actual meeting
only on November 9, 1993. It explained that the November 9, 1993 meeting was the initial meeting since
business operations began, because MFI obtained permit to conduct business only in 1993. But
the November 9, 1993 meeting was not the first meeting ever held by the board of directors. The
prosecution presented the secretarys certificates of board meetings held on April 6,
1992 [31]
and September 5, 1992 [32]
-- both before November 9, 1993 and both signed by Eriberto. [33]
At
this time, business operations have not yet begun because the companys hotel building was still under
construction. The said secretarys certificates in fact show that MFI was still sourcing additional funds for
the construction of its hotel.[34]
On October 18, 2000, the MeTC rendered a judgment[35] holding that the prosecution was able to
prove that the December 5, 1992 meeting actually took place and that petitioner attended the same as
evidenced by his signature in the minutes thereof. As for Eribertos statement that the Deed of Exchange
was fictitious, the MeTC held that his participation in the approval and execution of the document, as well
as his avowals before the guardianship court regarding the proposed exchange all militate against his
previous statement. Petitioner was thus found guilty as charged and sentenced to imprisonment of two
months of arresto mayor minimum and medium, as minimum, to one year and one day of arresto
mayor maximum and prison correccional minimum, as maximum.[36]
Eriberto appealed[37] his conviction to the RTC of Mandaluyong City, Branch 213, which eventually affirmed
the appealed judgment.[38] The fallo of the Decision states that:
WHEREFORE, the decision of October 18, 2000 by Metropolitan Trial Court, Branch
59, Mandaluyong City, convicting the accused-appellant Eriberto S. Masangkay of the
crime of perjury under Article 183 of the Revised Penal Code is hereby affirmed in toto.
SO ORDERED.[39]
The CA affirmed the appealed ruling of the trial courts, holding that the prosecution was able to prove
that the falsehoods in the petition for involuntary dissolution were deliberately made. It explained that
Eribertos signatures on the two allegedly fictitious documents show that he participated in the execution
of the Deed of Exchange and was present in the December 5, 1992meeting. Having participated in these
two matters, Eriberto knew that these were not simulated and fictitious, as he claimed in his verified
petition for involuntary dissolution of MFI. Thus, he deliberately lied in his petition.[40]
The CA rejected petitioners argument that the two statements were not material. It ruled that they were
material because petitioner even cited them as principal basis for his petition for involuntary dissolution.[41]
The appellate court found no merit in the issue of prejudicial question. It held that the result of the petition
for involuntary dissolution will not be determinative of the criminal case, which can be resolved
independently.[42]
The CA however, corrected the imposed penalty on the ground that the trial court was imprecise in its
application of the Indeterminate Sentence Law. The CA meted the penalty of imprisonment for a term of
six months and one day of prision correccional minimum.[43]
Petitioner moved for reconsideration[44] which was denied.[45]
Hence, this petition.[46]
Issues
Petitioner submits the following issues for review:

I
WHETHER THERE WAS DELIBERATE ASSERTION OF FALSEHOOD
II
WHETHER THE TRUTHFUL ALLEGATION IN THE PETITION FOR INVOLUNTARY
DISSOLUTION THAT THERE WAS NO MEETING IS MATERIAL TO THE PETITION
III
WHETHER PERJURY COULD PROSPER WHILE THE MAIN CASE REMAINS PENDING[47]
Since this is a case involving a conviction in a criminal case, the issues boil down to whether the prosecution
was able to prove the accuseds guilt beyond reasonable doubt.
Our Ruling
We rule that the prosecution failed to prove the crime of perjury beyond reasonable doubt.
Article 183 of the RPC provides:
False testimony in other cases and perjury in solemn affirmation. The penalty of arresto
mayor in its maximum period to prision correccional in its minimum period shall be
imposed upon any person who, knowingly making untruthful statements and not being
included in the provisions of the next preceding articles shall testify under oath, or make
an affidavit, upon any material matter before a competent person authorized to
administer an oath in cases in which the law so requires.
Any person who, in case of a solemn affirmation made in lieu of an oath, shall
commit any of the falsehoods mentioned in this and the three preceding articles of this
section, shall suffer the respective penalties provided therein.
For perjury to exist, (1) there must be a sworn statement that is required by law; (2) it must be made
under oath before a competent officer; (3) the statement contains a deliberate assertion of falsehood;
and (4) the false declaration is with regard to a material matter.[48]
The presence of the first two elements is not disputed by the petitioner and they are indeed present in
the instant case. The sworn statements which contained the alleged falsehoods in this case were
submitted in support of the petition for involuntary dissolution, as required by Sections 105 and 121 of the
Corporation Code.
The petition was also verified by the petitioner before a notary public[49]an officer duly authorized
by law to administer oaths. This verification was done in compliance with Section 121 of the Corporation
Code.[50]
It is the elements of deliberate falsehood and materiality of the false statements to the petition for
involuntary dissolution which are contested.
On the element of materiality, a material matter is the main fact which is the subject of the inquiry or any
fact or circumstance which tends to prove that fact, or any fact or circumstance which tends to corroborate
or strengthen the testimony relative to the subject of inquiry, or which legitimately affects the credit of
any witness who testifies.[51]
Petitioner filed a petition for involuntary dissolution of MFI based on Section 105 of the Corporate
Code, which states:
Section 105. Withdrawal of stockholder or dissolution of corporation. In addition
and without prejudice to the other rights and remedies available to a stockholder under
this Title, any stockholder of a close corporation may, for any reason, compel the said
corporation to purchase his shares at their fair value, which shall not be less than their
par or issued value, when the corporation has sufficient assets in his books to cover its
debts and liabilities exclusive of capital stock: Provided, That any stockholder of a close
corporation may, by written petition to the Securities and Exchange Commission, compel
the dissolution of such corporation whenever any of the acts of the directors, officers or
those in control of the corporation is illegal, or fraudulent, or dishonest, or oppressive or
unfairly prejudicial to the corporation or any stockholder, or whenever corporate assets
are being misapplied or wasted.
He stated in his petition for involuntary dissolution that:
xxxx
4. Said secretarys certificate is absolutely fictitious and simulated,

because the alleged meeting of the Board of Directors held on December 5, 1992 did not
actually materialize.
xxxx
5. Using the said falsified and spurious document, x x x respondents

executed another fictitious document known as the Deed of Exchange with Cancellation
of Usufruct.
xxxx

defrauded minor child Gilberto Ricaros Masangkay and deprived him of his own property
without any consideration at all.
xxxx
8. The foregoing acts and deeds of the respondents, done in evident

bad faith and in conspiracy with one another, are seriously fraudulent and illegal because
they constitute estafa through falsification of documents, punishable under Articles 315
and 171 of the Revised Penal Code.
9. Likewise, said acts and deeds are feloniously prejudicial to the

stockholders of MFI, including petitioner, as corporate assets are being misapplied and
wasted.
10. MFI should therefore be ordered dissolved after appropriate

proceedings before this Honorable Commission, in accordance with Sections 105 and 121
of the New Corporation Code x x x.[52]
The statements for which the petitioner is tried for perjury are the very grounds he relied upon in his
petition for corporate dissolution. They refer to acts of the MFI directors which are allegedly fraudulent,
illegal and prejudicial, and which would allegedly justify corporate dissolution under Section 105 of the
Corporation Code. Evidently, these statements are material to his petition for involuntary dissolution. The
element of materiality is therefore present.
The prosecution, however, failed to prove the element of deliberate falsehood.
The prosecution has the burden of proving beyond reasonable doubt the falsehood of petitioners
statement that the December 5, 1992 meeting did not actually materialize. In other words, the
prosecution has to establish that the said meeting in fact took place, i.e., that the directors were actually
and physically present in one place at the same time and conferred with each other.
To discharge this burden, the prosecution relied mainly on the minutes of the alleged December
5, 1992 meeting, signed by the accused, which are inconsistent with his statement that the December 5,
1992 meeting did not actually materialize. According to the minutes, a meeting actually took place. On
the other hand, according to the petitioners statement in the petition for dissolution, the meeting did not
actually materialize or take place. The two statements are obviously contradictory or inconsistent with
each other. But the mere contradiction or inconsistency between the two statements merely means that
one of them is false. It cannot tell us which of the two statements is actually false. The minutes could be
true and the sworn statement false. But it is equally possible that the minutes are false and the sworn
statement is true, as explained by the petitioner who testified that the minutes were simply brought to his
house for signature, but no meeting actually transpired. Given the alternative possibilities, it is the
prosecutions burden to affirmatively prove beyond reasonable doubt that the first statement (the minutes)
is the true one, while the other statement (in the petition for dissolution) is the false one.
We have held before that a conviction for perjury cannot be obtained by the prosecution by merely
showing the inconsistent or contradictory statements of the accused, even if both statements are
sworn. The prosecution must additionally prove which of the two statements is false and must show the
statement to be false by evidence other than the contradictory statement.[53] The rationale for requiring
evidence other than a contradictory statement is explained thus:
x x x Proof that accused has given contradictory testimony under oath at a

different time will not be sufficient to establish the falsity of his testimony charged as
perjury, for this would leave simply one oath of the defendant as against another, and it
would not appear that the testimony charged was false rather than the testimony
contradictory thereof. The two statements will simply neutralize each other; there must
be some corroboration of the contradictory testimony. Such corroboration, however, may
be furnished by evidence aliunde tending to show perjury independently of the
declarations of testimony of the accused.[54]
In this case, however, the prosecution was unable to prove, by convincing evidence other than
the minutes, that the December 5, 1992 meeting actually took place. It merely presented, aside from the
minutes, the testimony of private complainant Cesar, who is a respondent in the corporate dissolution
case filed by the petitioner and is therefore not a neutral or disinterested witness.[55] The prosecution did
not present the testimony of the other directors or participants in the alleged meeting who could have
testified that the meeting actually occurred. Neither did the prosecution offer any explanation why such
testimony was not presented. It likewise failed to present any evidence that might circumstantially prove
that on December 5, 1992, the directors were physically gathered at a single place, and there conferred
with each other and came up with certain resolutions. Notably, the prosecution failed to present
the notice for the alleged meeting. The corporate secretary, Elizabeth, who was presented by the
petitioner, could not even remember whether she had sent out a prior notice to the directors for the
alleged December 5, 1992 meeting. The lack of certainty as to the sending of a notice raises serious doubt
as to whether a meeting actually took place, for how could the directors have been gathered for a meeting
if they had not been clearly notified that such a meeting would be taking place?
The insufficiency of the prosecutions evidence is particularly glaring considering that the petitioner had
already explained the presence of his signature in the minutes of the meeting. He testified that while the
meeting did not actually take place, the minutes were brought to his house for his signature. He affixed
his signature thereto because he believed that the proposed exchange of the assets, which was the subject
of the minutes, would be beneficial to his child, Gilberto. Acting on this belief, he also supported the
approval of the exchange by the guardianship court.
Under these circumstances, we cannot say with moral certainty that the prosecution was able to prove
beyond reasonable doubt that the December 5, 1992 meeting actually took place and that the petitioners
statement denying the same was a deliberate falsehood.
The second statement in the petition for involuntary dissolution claimed to be perjurious reads:
5. Using the said falsified and spurious document, respondents executed

another fictitious document known as the Deed of Exchange with Cancellation of Usufruct.
The contract purporting to be a transfer of 3,700 shares of stock of MFI in return
for a piece of land (Lot No. 2064-A-2) located at Canlalay, Bian, Laguna and owned by
minor child Gilberto Masangkay is void.
Article 1409 of the New Civil Code states:
Article 1409. The following contracts are inexistent and void from
the beginning:
xxxx
(2) those which are absolutely simulated or fictitious;
(3) those whose cause or object did not exist at the time of the
transaction;
xxxx
These contracts cannot be ratified. Neither can the right to set up

the defense of illegality be waived.

defrauded minor child Gilberto Ricaros Masangkay and deprived him of his own
property without any consideration at all.
Records of the MFI revealed that minor child Gilberto Ricaros Masangkay [or] his
alleged guardian Magdalena S. Ricaros never became a stockholder at any point in time
of MFI.
In short, the petitioner is being charged with deliberate falsehood for his statement that the deed of
exchange is fictitious. To support the accusation, the prosecution proved that petitioner assented to the
said Deed of Exchange by virtue of his signatures in the minutes of the alleged December 5, 1992 meeting
and on the instrument itself, and his participation in procuring the guardianship courts approval of the
transaction. These allegedly show that the exchange was not fictitious and that Eriberto knew it.
We cannot agree with this line of reasoning. Petitioners imputation of fictitiousness to the Deed of
Exchange should not be taken out of context. He explained in paragraph 5 of his petition for involuntary
dissolution that the Deed of Exchange is simulated and fictitious pursuant to Article 1409 of the Civil Code,
because it deprived Gilberto Masangkay of his property without any consideration at all. To justify his
allegation that Gilberto did not receive anything for the exchange, he stated in the same paragraph that
Gilberto never became a stockholder of MFI (MFI stocks were supposed to be the consideration for
Gilbertos land). This fact was subsequently proven by the petitioner through the corporate secretary
Elizabeth, who admitted that MFI never issued stocks in favor of the stockholders. This testimony was
never explained or rebutted by the prosecution. Thus, petitioners statement that the exchange was
simulated and fictitious x x x because they x x x deprived [Gilberto] of his own property without any
consideration at all cannot be considered a deliberate falsehood. It is simply his characterization of the
transaction, based on the fact that Gilberto did not receive consideration for the exchange of his land.
As importantly, petitioners statements in paragraph 5 of the petition for involuntary dissolution about the
nature of the Deed of Exchange are conclusions of law, and not factual statements which are susceptible
of truth or falsity. They are his opinion regarding the legal character of the Deed of Exchange. He opined
that the Deed of Exchange was fictitious or simulated under Article 1409 of the Civil Code, because MFI
supposedly did not perform its reciprocal obligation to issue stocks to Gilberto in exchange for his land. His
opinion or legal conclusion may have been wrong (as failure of consideration does not make a contract
simulated or fictitious),[56] but it is an opinion or legal conclusion nevertheless. An opinion or a judgment
cannot be taken as an intentional false statement of facts.[57]
We recognize that perjury strikes at the very administration of the laws; that it is the policy of the
law that judicial proceedings and judgments shall be fair and free from fraud; that litigants and parties be
encouraged to tell the truth, and that they be punished if they do not.[58] However, it is also at the heart
of every criminal proceeding that every person is presumed innocent until proven guilty beyond reasonable
doubt.
Given the foregoing findings, there is no more need to discuss the issue involving the propriety of
proceeding with the perjury case while the civil case for corporate dissolution is pending.
WHEREFORE, the petition is GRANTED. The assailed March 16, 2004 Decision of the Court of Appeals
in CA-G.R. GR No. 25775 and its July 9, 2004 Resolution, are REVERSED and SET ASIDE. Petitioner
Eriberto S. Masangkay is ACQUITTED of the charge of perjury on the ground
of REASONABLE DOUBT.
SO ORDERED.

Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
RENATO C. CORONA
Chief Justice
[1]
Rollo, pp. 9-35.
[2]
Id. at 37-45; penned by Associate Justice Roberto A. Barrios and concurred in by Associate
Justices Juan Q. Enriquez, Jr. and Fernanda Lampas Peralta.
[3]
Id. at 47-48.
[4]
Id. at 44.
[5]
Records, Vol. III, pp. 762-774.
[6]
Rollo, pp. 49-64.
[7]
Id. at 49. The petition was docketed as Case No. 12-93-4650.
[8]
Id. at 50-52.
[9]
The case was transferred to and remains pending in Branch 90 of the Quezon City Regional
Trial Court pursuant to Republic Act (RA) No. 8799 or the Securities Regulation Code, which
took effect on August 9, 2000 (See Suzuki v. De Guzman, G.R. No. 146979, July 27, 2006,
496 SCRA 651, 666). The said Code transferred jurisdiction over intra-corporate disputes to
regular courts. Section 5 of RA 8799 reads:
Section 5. Powers and Functions of the Commission. x x x
5.2. The Commissions jurisdiction over all cases enumerated under Section 5 of Presidential
Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate
Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall exercise jurisdiction over these cases.
The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes
submitted for final resolution which should be resolved within one (1) year from the enactment
of this Code. The Commission shall retain jurisdiction over pending suspension of
payment/rehabilitation cases filed as of June 30, 2000 until finally disposed.
Section 5 of PD No. 902-A reads:
Section 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with
it as expressly granted under existing laws and decrees, it shall have original and exclusive
jurisdiction to hear and decide cases involving:
a) Devices or schemes employed by or any acts, of the board of directors, business associates,
its officers or partnership, amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the stockholder, partners, members of
associations or organizations registered with the Commission.
b) Controversies arising out of intra-corporate or partnership relations, between and among
stockholders, members, or associates; between any or all of them and the corporation,
partnership or association of which they are stockholders, members or associates,
respectively; and between such corporation, partnership or association and the state insofar
as it concerns their individual franchise or right to exist as such entity;
c) Controversies in the election or appointments of directors, trustees, officers or managers of
such corporations, partnerships or associations.
[10]
Records, Vol. IV, pp. 1009-1011.
[11]
Rollo, pp. 65-67.
[12]
Records, Vol. IV, pp. 1012-1026.
[13]
Rollo, pp. 68-69.
[14]
Id.
[15]
Order dated March 27, 1996 (id. at 89) granting the prosecutions motion to amend the
information.
[16]
CA rollo, p. 65.
[17]
Rollo, pp. 70-83.
[18]
Id. at 84-85.
[19]
Records, Vol. II, pp. 382-387.
[20]
Id. at 576-577, 620.
[21]
Records, Vol. I, p. 79.
[22]
Id. at 144.
[23]
Records, Vol. II, pp. 673-691 and Records, Vol. III, pp. 695-709.
[24]
Records, Vol. III, p. 752.
[25]
Id.
[26]
Id at 793-794.
[27]
Id. at 812-814 and 819.
[28]
Id. at 817.
[29]
Id. at 911.
[30]
Id. at 912-913.
[31]
Id. at 900.
[32]
Id. at 901.
[33]
Id. at 900-901.
[34]
Id.
[35]
Rollo, pp. 90-98.
[36]
Id. at 98.
[37]
Id. at 100-118.
[38]
CA rollo, pp. 22-24.
[39]
Id. at 24.
[40]
Id. at 42.
[41]
Id. at 43.
[42]
Id.
[43]
Id. at 44.
[44]
Id. at 142-153.
[45]
Id. at 47-48.
[46]
Defendants motion for extension was initially denied by the Court (id. at 7) in its Resolution
dated August 16, 2004, which states:
[Defendants] motion for extension of thirty (30) days from August 4, 2004 within which to file
petition for review on certiorari is DENIED for lack of sufficient showing that [defendant] has
not lost the fifteen (15)-day reglementary period to appeal pursuant to Section 2, Rule 45 of
the 1997 Rules of Civil Procedure, as amended, in view of the lack of statement of whether
the assailed Court of Appeals resolution dated July 9, 2004 received on July 20, 2004 is a
denial/dismissal of the petition or the motion for reconsideration thereof.
Upon [defendants] Motion for Reconsideration (id. at 154-157), the Court granted the motion for
extension (id. at 160) and eventually gave due course to the Petition for Review (id. at 232-
233).
[47]
Id. at 240.
[48]
Sy Tiong Shiou v. Sy Chim and Chan Sy, G.R. Nos. 174168 and 179438, March 30, 2009, 582
SCRA 517, 534.
[49]
Rollo, p. 59.
[50]
Section 121. Involuntary Dissolution. A corporation may be dissolved by the Securities and
Exchange Commission upon filing a verified complaint and after proper notice and hearing on
grounds provided by existing laws, rules and regulations.
[51]
United States v. Estraa, 16 Phil. 520, 529 (1910).
[52]
Rollo, pp. 50-54.
[53]
Villanueva v. Secretary of Justice, G.R. No. 162187, November 18, 2005, 475 SCRA 495, 514-
515.
[54]
Id. at 515, citing People v. McClintic, 160 N.W. 461 (1916).
[55]
See also Magat v. People, G.R. No. 92201, August 21, 1991, 201 SCRA 21, 36 and Mercury
Drug, Co., Inc. v. Court of Industrial Relations, 155 Phil. 636, 644, 648 (1974).
[56]
Simulated or fictitious contracts are defective contracts, those not really desired or intended
to produce legal effects or in any way alter the juridical situation of the parties (Vda. de
Rodriguez v. Rodriguez, 127 Phil. 294, 301 (1967). Failure of consideration or failure to pay
the consideration does not make a contract defective; it merely gives rise to a cause of action
for specific performance or rescission (Montecillo v. Reynes, 434 Phil. 456, 468-469 (2002).
[57]
See also People v. Yanza, 107 Phil. 888, 891 (1960).
[58]
People v. Cainglet, 123 Phil. 568, 575 (1966).
Supreme Court
Manila
SECOND DIVISION
FELISA R. FERRER, G.R. No. 170956

Petitioner,
Present:
- versus - CARPIO, J., Chairperson,

BRION,
DEL CASTILLO,
DOMINGO CARGANILLO, ABAD, and
SERGIO CARGANILLO, PEREZ, JJ.
SOLEDAD AGUSTIN and
MARCELINA SOLIS, Promulgated:
Respondents. May 12, 2010
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - x
DECISION
DEL CASTILLO, J.:
The concept of social function of private property which today is presented as one of the possible
justifications for agrarian and urban land reform has its roots in the cosmogenic and philosophical concept
which maintains that man must answer to the Creator for the use of the resources entrusted to him. It is
an old concept and is ultimately related to the genesis of society itself. Hence, the use, enjoyment,
occupation or disposition of private property is not absolute. It is predicated on the social functions of
property. It is restricted in a sense so as to bring about maximum benefits to all and not to a few chosen
individuals.[1]
This petition concerns four cases, involving herein petitioner Felisa R. Ferrer, jointly heard by the
Provincial Agrarian Reform Adjudicator (PARAD), appealed to the Department of Agrarian Reform
Adjudication Board (DARAB) and subsequently further appealed to the Court of Appeals (CA), to wit:
1. DARAB Case No. 7862 Felisa R. Ferrer v. Domingo Carganillo and Sergio
Carganillo for Ejectment and Damages;
2. DARAB Case No. 7863 Felisa R. Ferrer v. Soledad Agustin for Ejectment and
Damages;
3. DARAB Case No. 7864 Rosa Pajarito, Elvira Madolora and Anastacia Lagado
represented by Felisa R. Ferrer v. Marcelina Solis for Ejectment and Damages;
4. DARAB Case No. 7865 Irene Aguinaldo and Felisa R. Ferrer v. Marcelina
Solis for Ejectment and Damages.
For clarity, each case will be tackled independently as each involved different set of facts.
Factual Antecedents
a) DARAB Case No. 7862
In her Complaint,[2] petitioner Felisa R. Ferrer (Felisa) alleged that she is the owner of a 6,000-
square meters lot under Tax Declaration No. 42-06462, situated at Brgy. Legaspi, Tayug, Pangasinan and
being tenanted by respondent Domingo Carganillo (Domingo). Without her knowledge and consent,
Domingo subleased the subject landholding to his brother, herein respondent Sergio Carganillo (Sergio)
for P15,000.00. Felisa only knew of this fact when she visited the place and found Sergio in actual
possession and cultivation of the landholding in question.
In his Answer,[3] Domingo denied that he mortgaged his possessory rights to Sergio and asserted
that he is still in actual, continuous and peaceful possession of subject property.
Meanwhile, upon a verbal complaint lodged by Felisa with the Municipal

Agrarian Reform Office (MARO) of Tayug, Pangasinan, MARO Legal Officer Dionisio G. Estimada
(Estimada) conducted an investigation on the matter.
In his December 19, 1997 Investigation Report,[4] Estimada stated that based on the testimony
he had gathered from other people, the cultivation and possession of the subject landholding was
subleased by Domingo to Sergio as the former was applying for work abroad.[5] In fact, Domingo admitted
the existence of the sublease.[6] Thus, based on the foregoing, Estimada recommended that Sergio and
Domingo be ejected from the subject landholding.[7]
The Affidavit of Angela N. Clarion (Clarion) was also submitted to corroborate the Investigation
Report.[8] Clarion averred that Domingo mortgaged his tenancy rights over the subject agricultural land to
Sergio, and that the latter is presently cultivating the said land by virtue of such mortgage.[9]
Ruling of the PARAD
In an Order[10] dated January 20, 1998, the PARAD required the parties to submit their respective
position papers within 20 days from said date. Felisa filed her position paper for all the four cases, attaching
thereto the Investigation Report of Estimada, as well as the corroborating affidavits of Clarion and Gelacio
Gano (Gano). Sergio, on the other hand, admitted that he helps his older brother, Domingo, in cultivating
the landholding[11] but he denied subleasing the same from Domingo.[12]
In addition, respondents presented the affidavits of (1) Mariano Orina

(Mariano), tenant of the adjacent agricultural land, who attested that Domingo is the one who supervises
the activities in his tenanted land;[13] (2) Barangay Agrarian Reform Council (BARC) Chairman Valentin
Costales (Costales), who stated that he does not know of any violation that Domingo has committed
against the landowner;[14] and (3) Barangay KagawadArsenio R. Frago (Frago), who maintained that
Domingo has not violated any provision of the Land Reform Code.[15]
On April 8, 1998, PARAD Rodolfo A. Caddarao (Caddarao) issued a Decision[16] holding that:
In a situation such as this, the complainant has the burden of proof to show by convincing
evidence the truth of her allegations. In the case at bar the complainant failed to prove
by clear and convincing evidence that there is subleasing or mortgage of the property by
the respondent tenant. Hence, the herein action must necessarily fail.
WHEREFORE, premises considered, the complaint in the instant case is hereby
DISMISSED for lack of evidence and merit.
SO ORDERED.
Aggrieved, Felisa appealed to the DARAB.
Ruling of the DARAB
In her appeal memorandum[17] dated October 7, 1998, Felisa asserted that the PARAD erred in
failing to give credence to the Investigation Report of the MARO legal officer. She likewise presented for
the first time an original copy of the Katulagan[18] (Agreement) to prove that Domingo obtained a loan in
the amount of P15,000.00 from Sergio. Felisa argued that she has established, by more than substantial
evidence, that Domingo has indeed conveyed his leasehold rights to Sergio for said amount.
On January 27, 2004, the DARAB rendered its Decision[19] affirming the findings of the PARAD
that Felisa failed to substantiate her allegation of subleasing.
Felisa thence elevated the matter to the CA through a Petition for Review[20] dated December 6,
2004.
On August 22, 2005, the CA rendered a Decision[21] affirming the DARAB Decision. The dispositive
portion of the CA Decision reads:
WHEREFORE, premises considered, the petition is hereby DISMISSED. The

assailed Decision dated January 27, 2004 and the Resolution dated October 18, 2004 are
hereby AFFIRMED.[22]
Our Ruling
a) DARAB Case No. 7862
Petitioner argues that the CA erred in not finding that Domingo subleased or mortgaged his
landholding rights to Sergio which warrants their ejectment from the subject landholding.Petitioner asserts
that: (1) the law is explicit that the tenant and his immediate family must work directly on the land; (2)
Sergio cannot pass as Domingos immediate family; (3) as evidenced by the Katulagan, Sergio has been
cultivating the land for more than two years prior to the filing of the complaint; and (4) when Domingo
subleased the land to Sergio, he is considered as having abandoned the land as a tenant.[23] She further
stresses that respondents admission, coupled with the finding of the DARAB that Sergio is tilling the land,
proved subtenancy. Consequently, she prays that the lease tenancy relationship between the contending
parties be declared terminated.
Domingo, on the other hand, denies that he subleased or mortgaged his tenancy rights to
anyone. He claims that he complied with all his obligations under the leasehold agreement over the subject
agricultural land, and thus prays for the dismissal of the case.
The petition is impressed with merit.
The DARAB erred in disregarding the Katulagan

(Agreement) as evidence.
The DARAB held that the Katulagan is inadmissible in evidence because it was not formally offered
before the PARAD, citing our ruling in People v. Mongado.[24] On appeal, however, the CA considered
the Katulagan, but found the same to be a mere promissory note tending to prove indebtedness and not
as an evidence of mortgage.
We cannot subscribe with the reasoning of the DARAB. The Rules of Court, particularly the Revised
Rules on Evidence, are specifically applicable to judicial proceedings, to wit:
Section 1. Evidence defined. Evidence is the means, sanctioned by these rules, of

ascertaining in a judicial proceeding the truth respecting a matter of fact.
Sec. 2. Scope. The rules of evidence shall be the same in all courts and in all trials and
hearings except as otherwise provided by law or these rules.[25] (Emphasis supplied)
In quasi judicial proceedings, the said rules shall not apply except by analogy or in a suppletory
character and whenever practicable and convenient.[26] In the instant case, the then prevailing DARAB
Rules of Procedures[27] provide that:
Section 2. Construction. These Rules shall be liberally construed to carry out the objectives
of agrarian reform and to promote just, expeditious and inexpensive adjudication and
settlement of agrarian cases, disputes or controversies.
xxxx
Section 3. Technical Rules Not Applicable. The Board and its Regional and Provincial
Adjudicators shall not be bound by technical rules of procedure and evidence as
prescribed in the Rules of Court, but shall proceed to hear and decide all agrarian cases,
disputes or controversies in a most expeditious manner, employing all reasonable means
to ascertain the facts of every case in accordance with justice and equity.
a) If and when a case comes up for adjudication wherein there is no applicable provision
under these rules, the procedural law and jurisprudence generally applicable to agrarian
disputes shall be applied;
b) The Adjudication Board (Board), and its Regional Agrarian Reform Adjudicators
(RARADs) and Provincial Agrarian Reform Adjudicators (PARADs) hereinafter referred to
as Adjudicators, shall have the authority to adopt any appropriate measure or procedure
in any given situation or matter not covered by these Rules. All such special measures or
procedures and the situations to which they have been applied must be reported to the
Board; and
c) The provisions of the Rules of Court shall not apply even in a suppletory
character unless adopted herein or by resolution of the Board. However, due process of
the law shall be observed and followed in all instances. (Emphasis supplied)
The DARAB Rules of Procedures explicitly provides that the Agrarian Reform Adjudicators are not
bound by technical rules of procedure and evidence in the Rules of Court nor shall the latter apply even
in a suppletory manner. Thus, we find that the DARAB erred in holding the Katulagan as inadmissible
since it was not formally offered and admitted.[28] Moreover, reliance on our ruling in People v.
Mongado, i.e., that "[t]he court shall consider no evidence which has not been formally offered," is
misplaced. We simply cannot find any legal basis for the DARAB to cite our ruling in a criminal case;[29] the
fundamental rule found in Rule 132 of the Rules of Court does not find any application in this agrarian
case.
Petitioner has sufficiently proven by clear and

convincing evidence the fact of subleasing.
The PARAD summed up the evidence presented by both parties as follows:
In the instant case, the evidence for the complainant are as follows:
1. Exhibit 1 Photocopy of an Investigation Report dated December 19, 1997 submitted by
Legal Officer I Dionisio Estimada to the Legal Services Division of DAR wherein he stated
in his findings that Verily, the tenants, particularly Domingo Carganillo, who actually and
finally accepted that he subleased the land to another is clear and blatant violation against
the landowner and co-owner for that matter. Hence, he recommended that Domingo
Carganillo and Sergio Carganillo be ejected from the landholding.
2. Exhibit 2 Affidavit dated January 21, 1998 of one Angela [Clarion] wherein she stated
that she knew for a fact that Domingo Carganillo mortgaged his tenancy rights in 1995 to
his brother Sergio Carganillo.
On the part of the respondent Domingo Carganillo, his evidence are:
1. Exhibit 1 The affidavit of one Sergio Carganillo, the other respondent and brother of
respondent Domingo Carganillo denying that the land was mortgaged by his brother to
him and stated that he usually help his brother to do some works in the landholding.
2. Exhibit 2 Affidavit dated February 3, 1998 of one Mariano Orina stating that being a
tenant in the adjoining landholding, he knows that Domingo Carganillo is always present
doing or supervising the activities in his field.
3. Exhibit 3 Sworn statement of Valentin Costales, the incumbent Barangay Agrarian

Reform Council Chairman of the place where the property is located attesting that
Domingo and Sergio Carganillo never violated any agrarian laws.
4. Exhbit 4 Sworn statement issued by one of the incumbent Barangay Kagawads having
jurisdiction of the land in suit, stating also to the fact that respondents never violated any
agrarian laws.
The PARAD assessed the evidence submitted and held that Felisa failed to discharge the burden
of proof of establishing her allegations, to wit:
After a careful assessment of the facts and evidence presented, the Board is of the view
and so holds that there is no evidence showing that respondent Domingo Carganillo
subleased the land to his brother Sergio Carganillo. The investigation report
dated December 19, 1997 of Legal Officer I Dionisio Estimada (Exhibit 1 of complaint) is
not conclusive. His conclusion that Domingo Carganillo accepted to him that he subleased
the property could not be accepted by this Board as fact. There is no evidence showing
that Domingo Carganillo accepted said matter to him. The Board cannot be compelled to
accept the report as true since, in the first place it had not ordered such investigation.
On appeal, the DARAB concurred with the findings of the PARAD stating that:
One of the contentions invoked by the complainant-appellant is that the landholding in
question was subleased by herein respondent-appellee to his co-respondent Sergio
Carganillo, who is in actual possession and cultivation thereof. This contention, however,
cannot be given due consideration. The Honorable Adjudicator a quo correctly ruled that
there was no subleasing in this case.
At this juncture, it is better to define what a sub-lessee means. In the case of Santiago vs.
Rodrigo, et al., CA-G.R. No. 33651-R, June 3, 1965, sub-tenant or sub-lessee has been
defined as a person who rents all, or a portion of the leased premises, from the lessor for
a term less than the original one, leaving a reversionary interest in the first lessee. Sub-
leasing therefore, creates a new estate dependent upon, out of, and distinct from, the
original leasehold. However, this is not true in the case at bar. Granting that Sergio
Carganillo is working on the land tenanted by respondent-appellee, such is not in the
nature of being a sub-lessee, but is merely helping his brother as an immediate member
of the family to cultivate the land. The employment of respondent-appellees brother to
cultivate the landholding in question is not in any way prejudicial to the interest of the
landowner. Also, it was ruled that the employment by the lessee of the members of his
immediate farm household does not come within the prohibition (De Guzman v. Santos,
6 SCRA 796, November 30, 1962).
Since the issue of sub-leasing was not properly proved by substantial evidence, the same
cannot be given favorable consideration.
On further appeal, the CA held thus:
Clearly, petitioners assertion that respondent Domingo subleased the subject landholding
to respondent Sergio cannot be given weight. She failed to prove with sufficient evidence
neither the fact of subleasing the subject landholding nor the mortgaging of the
possessory rights thereof to respondent Sergio. The document belatedly presented by
petitioner and denominated as Katulagan, is merely a promissory note which is a proof of
indebtedness and not as evidence to prove mortgage.
We disagree with the findings of fact of the CA and the agencies below. The confluence of
evidence shows that Felisa has clearly and convincingly established her allegation that Domingo subleased
his landholding to Sergio, to wit:
a) The investigation conducted by MARO Legal Officer Estimada shows that Domingo admitted
that the cultivation and possession of the subject landholding was subleased to Sergio as he was then
applying for work abroad.[30]
b) In her complaint, Felisa stressed that in one of her visits to the subject landholding prior to the
filing of the said complaint, she discovered that Sergio, the sublessee, was in actual possession and
cultivation of the landholding in question.[31] Petitioner further contended that Domingo subleased the said
agricultural leasehold to Sergio for the amount of P15,000.00.[32]
c) The Katulagan or Agreement establishes that indeed Domingo was indebted to Sergio in the
amount of P15,000.00.
d) The affidavit of Clarion, a resident of the municipality where the subject landholding lies, further
corroborates the said facts when she narrated the series of events leading up to Sergios possession of
said agricultural land:
xxxx
That I know for a fact that the above-described parcel of land was under cultivation by
one RICARDO PADILLO of Brgy. Amistad, Tayug, Pangasinan, formerly, but when the
same went abroad, he transferred his tenancy right to DOMINGO CARGANILLO, who in
the year 1995 mortgaged his tenancy rights to SERGIO CARGANILLO, his own brother;
That at present, the said parcel of land is under the cultivation of said SERGIO
CARGANILLO;
xxxx
Domingo did not even affirm or deny in his answer that Estimada conducted an investigation and
during such investigation, he admitted that he subleased subject landholding. It is totally against our
human nature to just remain reticent and say nothing in the face of false accusations. The natural instinct
of man impels him to resist an unfounded imputation. Hence, silence in such cases is almost always
construed as implied admission of the truth thereof.
Likewise, the attestations of BARC Chairman Costales and Barangay Kagawad Frago that
Domingo never violated his agreement with Felisa or any provision of the Land Reform Code, are
conclusions of law bereft of any factual basis. Time and again, we have held that general statements,
which are mere conclusions of law and not factual proof, are unavailing and do not suffice.
In view of the sublease, Domingo and Sergio

should be dispossessed of the subject agricultural
landholding.
Republic Act (RA) No. 3844 or the Agricultural Land Reform Code[33] is the
governing statute in actions involving leasehold of agricultural land. The pertinent provisions thereof state
as follows:
Sec. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to

the period or future surrender of the land, an agricultural lessee shall continue in the
enjoyment and possession of his landholding except when his dispossession has
been authorized by the Court in a judgment that is final and executory if after
due hearing it is shown that:
xxxx
(7) the lessee employed a sub-lessee on his landholding in violation of the terms
of paragraph 2 of Section twenty seven.[34] (Emphasis supplied)
Sec. 37. Burden of Proof. The burden of proof to show the existence of a lawful cause for
the ejectment of an agricultural lessee shall rest upon the agricultural lessor.
The prohibition against subleasing an agricultural lease has already been in our statute books
even prior to the enactment of RA 3844. RA 1199, of The Agricultural Tenancy Act enacted in 1954,
similarly provides that:
SECTION 24. Prohibitions to Tenant:
xxxx
(2) It shall be unlawful for a share-tenant to employ a sub-tenant to furnish

labor or any phase of the work required of him under this Act, except in cases of
illness or any temporary incapacity on his part, in which eventuality the tenant or any
member of his immediate farm household is under obligation to report such illness or
incapacity to the landholder. Payment to the sub-tenant, in whatever form, for services
rendered on the land under this circumstance, shall be for the account of the tenant.
(Emphasis supplied)
However, Section 4[35] of RA 3844 declared all share tenancy to be contrary to public policy and,
in its stead, provided for the compulsory conversion of the sharing system into leasehold system where
the tenant continues in possession of the land for cultivation.
In this case, Domingo subleased his agricultural landholding to Sergio. It is prohibited, except in
the case of illness or temporary incapacity where he may employ laborers. Domingo does not claim illness
or temporary incapacity in his Answer. Therefore, we hereby declare the dispossession of Domingo and
Sergio from the subject agricultural land of the leaseholder.
b) DARAB Case No. 7863
Felisa is the owner of a parcel of land with an approximate area of 4,667 square meters registered
under Transfer Certificate of Title No. T-51201.[36] She alleged that the duly instituted lessee of the
agricultural land is the late Isabelo Ramirez (Isabelo).[37] During Isabelos lifetime, he subleased said
landholding to Soledad Agustin (Soledad), without Felisas knowledge and consent.[38] She argued that the
said act of her now deceased tenant is a ground for ejectment of Soledad, who is a mere sublessee.[39]
Ruling of the PARAD
After service of summons, Soledad filed her Answer dated January 20, 1998 affirming that Isabelo
was the duly instituted tenant of the subject landholding. [40] Upon his death, his possessory rights passed
on to his surviving spouse, who was not named in the Answer.[41] Soledad likewise alleged that said
surviving spouse continues to cultivate the subject landholding.[42]
In compliance with the PARADs Order dated January 20, 1998[43] requiring the parties to submit
their respective position papers, Felisa filed a position paper for all four cases,[44]attaching thereto a copy
of the Investigation Report of Estimada[45] and corroborating affidavit of Gano.[46]
The Investigation Report of the MARO Legal Officer Estimada stated that the lawful tenant was
the late Isabelo and not Soledad. Meanwhile, Gano declared in his affidavit that he knew that Isabelo
mortgaged his tenancy rights and possession to Soledad. He further averred that Soledad is presently
cultivating said landholding, having acquired her tenancy rights from Isabelo through the alleged
mortgage.
On the other hand, Soledad submitted the following affidavits: (1) her own affidavit wherein she
denied that she is Felisas tenant and contended that the true tenant is her sister-in-law Marina O. Ramirez
(Marina), the widow of her brother, the deceased Isabelo; (2) Marina, who affirmed that she is the true
tenant of Felisa as evidenced by the renewal of their leasehold contract dated May 30, 1997 and
corroborated Soledads statement that the latter does not possess any landholding owned or administered
by Felisa; (3) BARC Chairman Costales, who declared that as per their records, Soledad is not the
registered tenant of the petitioner nor has Soledad managed the activities of the said landholding; (4)
Timoteo Orina, owner of the adjoining agricultural land, who attested that Soledad never became a tenant,
tiller or manager of subject landholding; and (5) Silverio C. Bugayong, incumbent Barangay
Kagawad of Brgy. Amistad, who stated that Marina continued tilling the subject land after the death of
her husband.[47] In addition, Soledad submitted the leasehold contract dated May 30, 1997 (Tulag ti
Panagabang ti Talon), which showed that the leasehold formerly held by the deceased Isabelo is now
with his widow, Marina.
On April 13, 1998, PARAD Caddarao, dismissed the complaint for lack of merit.[48]
Aggrieved, petitioner filed a Notice of Appeal dated April 30, 1998 with the PARAD signifying her
intention to elevate the latters April 13, 1998 Decision.[49]
Ruling of the DARAB
On January 7, 2004, the DARAB promulgated a Decision dismissing the appeal for lack of merit.[50]
In her Memorandum, petitioner asserted that the DARAB failed to resolve the issue of non-
payment of lease raised in the companion cases.[51] The respondents did not file their memorandum.
On August 22, 2005, the CA rendered a Decision affirming the DARAB Decision.
Our Ruling
b) DARAB Case No. 7863
Felisa submits that the CA gravely erred in affirming the DARAB Decision dated January 7, 2004 by
assuming that the case against Soledad was already subsumed in the said Decision and in not ordering
or remanding the case to the DARAB for disposition or decision. Hence, Felisa now prays that we take a
second hard look at the assailed CA Decision and Resolution in order to avoid a miscarriage of justice.
The new evidence presented by the petitioner in

the Supplemental Motion for Reconsideration
with Manifestation to the DARAB cannot be
admitted.
On March 24, 2004, Felisa filed a Supplemental Motion for Reconsideration with Manifestation
with the DARAB, allegedly as an expanded discussion on what she averred in her Motion for
Reconsideration.[52]
We note though that aside from amplifying her arguments, petitioner likewise attached and
referred to new pieces of evidence in the form of: (1) affidavit of Rudy O. Tubiera dated September 14,
2001;[53] (2) affidavit of Liberato Cabigas;[54] (3) affidavit of Alberto A. Millan dated July 26, 2002[55] and
(4) survey plan.[56]
Section 12, Rule VIII of the 1994 DARAB New Rules of Procedures provide that only one motion
for reconsideration shall be allowed a party which shall be based on the ground that: (a) the findings
of facts in the said decision, order or resolution are not supported by substantial evidence,
or (b) the conclusions stated therein are against the law and jurisprudence. As expressed by
the Rule, the office of the Motion for Reconsideration is not for the reception of new evidence. Hence,
when Felisa submitted new pieces of evidence in her Supplemental Motion for Reconsideration, she went
beyond the stated purpose of the Motion for Reconsideration. In which case, we rule that the new
evidence presented by Felisa in the Supplemental Motion for Reconsideration with Manifestation to the
DARAB cannot be admitted.
Petitioner has not established her claim of
sublease.
We exhaustively went over the Petition for Review and Felisas Memorandum submitted to the CA
and found the same bereft of any issue, whether of fact or law, involving the case against Soledad. In her
petition before the CA, Felisa presented the following arguments: (1) The DARAB erred in holding that
there exists no valid ground to warrant the ejectment of Domingo and Sergio; and (2) The DARAB erred
in considering only the issue of subleasing without giving credence to the issue of non-payment of lease
rentals as ground for ejectment.Nowhere in the discussion portion of either pleadings can the
name Soledad be found. Moreover, the issue presented in the case against Soledad is alleged subleasing
and not non-payment of lease rentals. If there is no issue presented, then there is no controversy to
resolve.
Similarly, in her appeal by certiorari before this Court, Felisa did not expound specifically on her
issues with the decisions of the agencies below with respect to Soledad. Petitioner, however, questions
the CAs affirmation of the DARAB Decision dated January 27, 2004.
We reiterate that the petitioner, as agricultural lessor, has the burden of

proof to show the existence of a lawful cause for the ejectment of an agricultural lessee.[57] In support of
her allegations, Felisa presented the Investigation Report of MARO Legal Officer Estimada and an affidavit
of a resident of the barangay where both the original leaseholder Isabelo and the alleged
sublessee, Soledad, reside. The full text of the Investigation Report with respect to his factual findings on
the case against Soledad is as follows:
In the dispute against Soledad Agustin, the lawful tenant was Isabelo Ramirez and not
Soledad Agustin. In the conference/mediation that was conducted it was discovered that
the cultivator and possessor of the land is actually Isabelo Ramirez. This is also being
covered by an Agricultural leasehold Contract.
The findings of fact as expressed above are not relevant and material to the question of sublease
which the petitioner alleges.
On the other hand, the affidavit of Gano reads as follows:

xxxx
That I know for a fact that the above-described parcel of land was being cultivated
formerly by the late, Isabelo Ramirez, a resident of Brgy. Amistad,
Tayug, Pangasinan, Philippines;
That I also have the knowledge that prior to the death of said Isabelo Ramirez, the same
mortgaged his tenancy rights and possession to Soledad Agustin and in fact, said Soledad
Agustin is at present cultivating and in possession of the above-described landholding;
That to the best of my knowledge, the transfer of tenancy rights and possession from
Isabelo Ramirez to Soledad Agustin by way of mortgage was made without the
knowledge and consent of the owners thereof;
That I know of the above facts because being a resident of the same barangay with the
former tenant and the present tenant of the said landholding, it is of common knowledge
in our community that Soledad Agustin is presently cultivating the same landholding and
that she acquired such tenancy rights from its former tenant by way of mortgage;
xxxx
In contrast to the Carganillo case above, the evidence presented by Felisa with respect
to Soledad is uncorroborated and unsubstantial. Hence, we rule that Felisa has not discharged her burden
of establishing her claim of sublease.
c) DARAB Case No. 7864 and d) DARAB Case No. 7865
In DARAB Case No. 7864, the first case against respondent Marcelina Solis (Marcelina), Felisa
represented that the tenant of the landholding, Pedro Solis (Pedro), died in June 1997 and was survived
by his wife, Marcelina.[58] She further alleged that Marcelina took over the cultivation of the 14,000-square
meter landholding without her knowledge and consent.[59] In addition, during the lifetime of Pedro, the
latter failed to pay lease rentals for three consecutive years from 1995 to 1997.[60] Hence, the case for
ejectment against Marcelina.[61]
With respect to the second case (DARAB Case No. 7865), Irene Aguinaldo and Felisa co-owned a
6,830.5-square meter landholding tenanted by Marcelina.[62] Felisa averred that Marcelina has not fully
paid the rental for the use of the land on the third cropping season.[63] Hence, the second case for
ejectment against Marcelina.[64]
Ruling of the PARAD
In her Answer, Marcelina specifically denied Felisas allegation of arrears in lease rentals from 1995
to 1997.[65] With respect to the second complaint, she admitted that while it is true that there were times
that the subject landholding were planted with palay on third cropping, this is not regular.[66] Moreover,
she averred that if ever the said landholding were planted with palay on third cropping and yields produce,
the landowner is given her due share.[67]
After submission of their respective position papers, the PARAD promulgated a Decision
dated April 14, 1998 dismissing both cases for lack of merit and evidence.[68]
Rulings of the DARAB and the Court of Appeals
The DARAB dismissed the appeal for lack of merit and affirmed the Decision of the PARAD in
toto.[69] On Petition for Review under Rule 43 to the CA, the appellate court affirmed the ruling of the
DARAB with respect to the issue of non-payment of lease rentals. On which basis, the CA dismissed the
petition.
Our Ruling
c) DARAB Case No. 7864 and d) DARAB Case No. 7865
DARAB Case No. 7864 should be dismissed for

failure of Felisa to properly indicate the appealing
party.
With respect to the first case against Marcelina, we resolve to dismiss the appeal of Felisa. Section
5 of Rule 45 provides that the failure of the petitioner to comply, among others, with the contents of the
petition for review on certiorari shall be sufficient ground for the dismissal thereof. Section 4 of the same
rule mandates, among others, that the petition should state the full name of the appealing party as the
petitioner. In this case, Felisa indicated in the caption as well as in the parties portion of the petition that
she is the landowner. Even in the verification and certification of non-forum shopping, Felisa attested that
she is the petitioner in the instant case. However, it appears in the PARAD records that the owners of the
subject 14,000-square meter agricultural land are Rosa R. Pajarito (Pajarito), Elvira A. Madolora (Madolora)
and Anastacia F. Lagado (Lagado).[70] Felisa is only the representative of the said landowners with respect
to the first case against Marcelina.[71] Thus, for failure of Felisa to indicate the appealing party with respect
to the said case, the appeal must perforce be dismissed. However, such failure does not affect the appeal
on the other three cases as Felisa is the owner/co-owner of the landholdings subject of said three cases.
Procedural lapse aside, DARAB Case No. 7864

should still be dismissed for failure of Felisa to
establish her principals claim.
In her Complaint dated October 6, 1997, Felisa, in representation of landowners Pajarito,

Madolora and Lagado, alleged that Pedro failed to pay the lease rental for the 14,000-square meter land
for agricultural years 1995, 1996 and 1997.[72] Subsequently, Pedro died and his widow, Marcelina took
over the tenancy and cultivation of the said land.[73] On the other hand, Marcelina sufficiently rebutted the
allegation of non-payment by presenting evidence to show that the landowners share was received by
therein complainants administrator, to wit:
Exhibit 1 Receipt dated March 30, 1995 issued by Irene M. Aguinaldo evidencing receipt
of their share of the produce of the subject land;
Exhibit 4 Receipt dated October 21, 1995 issued by Irene M. Aguinaldo evidencing receipt
of their share of the produce;
Exhibit 5 Receipt dated March 23, 1996 issued by Irene M. Aguinaldo evidencing receipt
of their share of the produce;
Exhibit 7 Receipt dated November 17, 1996 issued by Irene M. Aguinaldo evidencing
receipt of their share of the produce;
Exhibit 8 Receipt dated April 10, 1997 issued by Irene M. Aguinaldo evidencing receipt of
their share of the produce;
We hence agree with the PARAD that therein complainants were unable to produce substantial
proof to support their allegation of non-payment.
DARAB Case No. 7865 should likewise be

dismissed for failure of Felisa to establish her
claim.
With respect to the second case against Marcelina, Felisa alleged that the landholding in question
is principally devoted to the planting of palay three times a year.[74] However, Marcelina did not deliver her
share in the third cropping.[75]
In her Answer, Marcelina admitted that she is the tenant of the subject parcel of land co-owned
by Felisa and Irene Aguinaldo.[76] Marcelina, however, averred that while it was true that there were times
that the landholding was planted with palay on third cropping, this was not regular.[77] She further asserted
that she would give to the landowners their due shares if ever there was third cropping.[78]
In an Order dated January 20, 1998, the PARAD directed the parties to submit their position
papers, affidavits of witnesses and other evidence to support their respective claims.[79]
Felisa submitted her position paper[80] for the four cases subject of this Decision, together with the
Investigation Report of Estimada[81] and the affidavit of Camilo G. Taganas.[82]The Investigation Report
declared that the former tenant who was the husband of Marcelina did not pay any rental to
Felisa[83] because he recognized only the other co-owners of the land, who among others are the sisters
of Felisa.[84] In addition, in the affidavit of Camilo G. Taganas, the authorized administrator of the subject
parcel of land, he declared that Marcelina did not deliver the share of the landowners on the subject
landholding.[85]
On the other hand, Marcelina filed her individual compliance, supported by the following affidavits
and the purposes for which they were offered:
Exhibit 1 Notice of threshing and reaping dated March 14, 1995 addressed to Mrs. Irene
Aguinaldo, administrator and landowner of the property in question.
Exhibit 2 -- Receipt dated March 30, 1995 issued by Mrs. Irene Aguinaldo acknowledging
that respondent has duly complied with her obligations for this season.
Exhibit 3 -- Notice of reaping and threshing dated Nov. 6, 1995 to the landowner.
Exhibit 4 Receipt issued to respondent by Mrs. Irene Aguinaldo dated Nov. 10,
1995 acknowledging the fact that shares due to them was duly given and
delivered.
Exhibit 5 Receipt dated March 19, 1996 duly issued by Mrs. Irene Aguinaldo, the
landowner/administrator of the subject property.
Exhibit 6 -- Notice of reaping and threshing dated March 5, 1996 to prove that respondent
has been religiously fulfilling her obligations.
Exhibit 7 -- Notice sent to Mrs. Aguinaldo dated Sept. 2, 1996 informing him that since
they unreasonably refused to receive the shares due them, it was sold
and the proceeds thereof was deposited in the bank.
Exhibit 8 -- Notice of reaping and threshing dated Nov. 7, 1996 proving that respondent
has been faithfully complying with her obligations.
Exhibit 9 -- Acknowledgment and/or receipt duly issued by the landowner/administrator,
Mrs. Irene Aguinaldo dated November 17, 1996 to prove that the
obligations of the respondent for this date has been faithfully complied
with.
Exhibit 10 -- Receipt dated April 4, 1997 issued and signed by the
landowner/administrator, Mrs. Irene Aguinaldo, acknowledging the
delivery of the legal shares due them;
Exhibit 11 -- Notice of threshing and reaping dated March 26, 1997 showing that
obligations to do so was [sic]complied with.
Exhibit 12 -- Notice of reaping and threshing dated Oct. 14, 1997 to prove that landowner
of the landholding in question was duly notified.
Exhibit 13 -- Certification from the office of the BARC and issued by the BARC Chairman
himself attesting to the fact that shares due to landowners for Oct., 1997
was sold and deposited because of the unjustified refusal to receive them.
Exhibit 14 -- Receipt bearing the amount which represents the legal shares of the
landowners and deposited in the bank.
Exhibit 15 -- The name of the bank ROSBANK from which the proceeds of the sold shares
due to the landowner was deposited and it was deposited by Pedro Solis
and/or Marcelina Solis in the name of Irene Aguinaldo.
Exhibit 16 -- The passbook with account no. T-01689-5, containing the amount deposited
due to the landowners for those years stated therein.
Exhibit 17 -- Leasehold contract or Tulag ti Panagabang ti Talon, executed by and
between Irene Aguinaldo and Pedro Solis, landowner and tenant,
respectively. The purpose is to prove that tenancy relationships exists and
the same passes to respondent Marclina Solis, the surviving spouse of
Pedro Solis upon his death.
Exhibit 18 -- Investigation report conducted by the office of the BARC. The purpose of
which is to show that the then tenant and now succeeded by his wife
Marcelina Solis, has been duly complying with their obligations as
bonafide tenant thereof.
Exhibit 19 -- A sworn statement made by one Herminigildo P. Vinluan, a resident and
landowner of the lot adjacent or adjoining to the subject property,
attesting to the fact that the then tenant and now succeeded by herein
respondent never failed to comply with their obligations.
Exhibit 20 -- A sworn statement made by one Arsenio B. Orina, incumbent Brgy. Kgd. of
the barangay where the property is located attesting that respondent is
indeed the bonafide tenant of Mrs. Irene Aguinaldo.
Exhibit 21 -- Affidavit of Valentine O. Costales, the incumbent BARC Chairman of Brgy.
Amistad, Tayug, Pangasinan, proving and attesting the fact that Pedro
Solis and now succeeded by his wife Marcelina Solis is the bonafide tenant
of the subject landholding and that they are complying faithfully and
religiously with their obligations as such.
Exhibit 22 -- The sworn statement of Marcelina Solis, the respondent and successor of the
former tenant, swearing to the Hon. Board and to the public, that she
never failed or neglected any of the obligations imposed by law.
As held earlier, the petitioner, as agricultural lessor, has the burden of proof to show the existence
of a lawful cause for the ejectment of an agricultural lessee. In the instant case, we have carefully studied
the evidence presented by the petitioner and found the same wanting on the matter of third cropping
over the subject land. Other than the bare allegations in her complaint before the PARAD, Felisa did not
present any evidence to establish her claim that the subject agricultural land can regularly support a third
cropping. Neither did she present evidence to establish that their leasehold agreement includes a provision
on third cropping. Hence, her allegation of non-payment of the leasehold rentals for the third cropping
likewise finds no support in evidence.
In addition, we find that the evidence presented by Felisa is inconsistent on major points. In her
Complaint dated October 3, 1997, Felisa alleged that Marcelina is not delivering the shares of the land
with respect to the third cropping.[86] However, the said statement is contradicted in the Estimada
Investigation Report where it was indicated that Marcelina is not giving any rentals/shares to Felisa.
The contention of non-payment of the leasehold shares of the landowner has been effectively
rebutted by the evidence presented by Marcelina. Through Marcelinas evidence, we have established that
she had regularly complied with the leasehold contract, as supported by:
1. Notice of Reaping dated March 14, 1995
Receipt of Rental dated March 30, 1995 for 2nd crop 94-95
2. Notice of Reaping dated Nov. 6, 1995
Receipt of Rental dated November 10, 1995 for 1st crop 95
Receipt of Rental dated March 19, 1996 for 2nd crop 95-96
4. Notice of Reaping dated November 7, 1996
Receipt of Rental dated November 17, 1996 for 1st crop 96
Receipt of Rental dated April 5, 1997 for 2nd crop 96-97
6. Notice of Reaping dated October 14, 1997
Rental for 1st crop 1997 deposited in bank in land co-owner Irene
Aguinaldos name, as per BARC Certification dated October 27, 1997.
In addition, we have held earlier that the additional pieces of evidence Felisa attached and referred
to in her Supplemental Motion for Reconsideration with Manifestation cannot be admitted as reception of
new evidence is not within the office of a Motion for Reconsideration.
On the basis of the evidence presented, we cannot find sufficient evidence to support Felisas
claims. Hence, we agree with the factual findings of the CA and the agrarian tribunals that Felisa failed to
discharge the burden of proving her claim with the necessary quantum of proof.
With respect to all four cases, petitioner further alleges that (1) the Decision of the DARAB dated
January 27, 2004 and of the CA dated August 22, 2005 only disposed of the first case; and (2) the DARAB
failed to issue a consolidation order informing the parties of the consolidation of the four appealed cases
considering that these four cases have different parties and causes of action.[87]
Article VIII, Section 14 of the Constitution states that no decision shall be rendered by any court
without expressing clearly and distinctly the facts and the law on which it is based. Petitioner argues that
the CA practically closed its eyes in affirming the Boards Decision.[88]
We do not agree. The Decision of the CA detailed the evidence presented by the parties.
Thereafter, it weighed the respective pieces of evidence submitted by the petitioner and the respondent
and chose the one that to its mind, deserved credence. Said Decision contained findings of facts as well
as an application of case law. The Decision states, thus:
With respect to the issue of non-payment of lease rentals, We affirm the ruling of the
DARAB as follows:
With respect to Case No. 01-1567, we find [that] the allegations of complainant
that respondents husband, Pedro Solis, deliberately failed to pay lease rentals for
the crop years 1995, 1996 and 1997 bereft of any evidence. The complainants
were unable to produce any proof to prove their accusations.
On the other hand, respondent has shown (be) substantial evidence that she or
her husband have complied with the duties of lawful tenant. The evidence
submitted by respondents (Exhibits 1 to 10) duly show that the representatives
of the complainants, Mrs. Irene R. Aguinaldo, received the landowners share for
agricultural year 1995 to 1997. This is shown specifically by Exhibits 1, 4, 5, 7 and
8.Moreover, the complainants were informed of the date of reaping and threshing
as shown by other evidence.
As to case No. 01-1568, the Board again fails to find any evidence showing that
respondent Marcelina Solis deliberately failed to deliver the produce for the third
cropping. The bare allegations of the complainant are insufficient to prove that
the said tenants have been remiss [sic] in her duties.
Respondent Marcelina Solis, on the other hand, has substantially proven by her
evidence her compliance with her obligation as a tenant. She has informed the
complainants through their administrator, Mrs. Irene Aguinaldo, the date of
threshing and reaping (Exhibits 1, 3, 6, 8, 11 and 12). She also submitted
evidence to show that the landowners share is received by complainants
administrator (Exhibit 2, 4, 5, 9 and 10). Other evidence submitted by respondent
is Exh. 7, wherein she informed Mrs. Aguinaldo that she deposited the proceeds
of the landowners share with the bank because she (Mrs. Aguinaldo) refused to
received (sic) it (Decision dated April 14, 1998, pp. 4-5, Rollo pp. 61-62).
In appeals of agrarian cases, this Court cannot make its own factual findings and
substitute the same for that of the DARAB, as the only function of this Court is to
determine whether the DARABs findings of fact are supported by substantial
evidence (Reyes vs. Reyes, 388 SCRA 471). Substantial Evidence is that amount of
relevant evidence that a reasonable mind might accept as adequate to support a
conclusion (Resngit-Marquez vs. Llamas, Jr., 385 SCRA 6). [89]
In any event, there was an earlier statement of the facts and the law involved in the decisions
rendered by the PARAD dated April 8, 1998, April 13, 1998 and April 14, 1998. In these decisions, the
facts and the law on which they were based were clearly and distinctly stated. Furthermore, in this case,
the Court has exhaustively gone through the records and made its own findings of facts, rather than
further delay the disposition of the case by remanding the records for further proceedings.
With regard to the issue of consolidation, we find in the records that although petitioner filed
separate notices of appeal for the four cases, she but filed one consolidated Appeal Memorandum
dated October 7, 1998 to the DARAB, putting into the caption all the appealed cases.[90] She persisted in
consolidating the said cases in her Motion for Reconsideration of the DARAB Decision, Supplemental
Motion for Reconsideration with Manifestation dated March 24, 2004,[91] Petition for Review
dated December 6, 2004 to the CA,[92] Motion for Reconsideration (ad cautelam) dated September 13
2005[93] and the Petition for Review on Certiorari dated January 20, 2006 to this Court.[94] In all of these
pleadings where petitioner consolidated the said four cases, petitioner sought the jurisdiction of this Court
and the agencies below for relief. Gainsaid on equitable ground of estoppel, she cannot now come to this
Court assailing the consolidation of said cases, which was brought about by her own acts.
WHEREFORE, we partially GRANT the petition.
1. In DARAB Case No. 7862, we hereby AUTHORIZE THE DISPOSSESSION of

respondents Domingo and Sergio Carganillo from the subject landholding.
2. In DARAB Case No. 7863, we AFFIRM the dismissal of the complaint against
respondent Soledad Agustin for failure of the petition to establish her claim.
respondent Marcelina Solis for failure of the petitioner to establish her claim and to properly indicate
the appealing party in violation of Section 4 in relation to Section 5 Rule 45 of the Rules of Court.
respondent Marcelina Solis for failure of the petitioner to establish her claim.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION ROBERTO A. ABAD
JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons attestation, it is
hereby certified that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
[1]
German, Milagros A., Agrarian Law in the New Society 7 (1980).
[2]
DARAB records, pp. 3-1.
[3]
Id. at 31.
[4]
Id. at 46.
[5]
Id.
[6]
Id.
[7]
Id.
[8]
Id at 44.
[9]
Id
[10]
Id. at 32.
[11]
Id. at 52.
[12]
Id.
[13]
Id. at 51.
[14]
Id. at 50.
[15]
Id. at 49.
[16]
Id. at 61-54.
[17]
Id at 65-63.
[18]
Id. at 62.
It reads:
Ilocano (original) English Translation

Katulagan Agreement
Siak ni Domingo Caganillo agnaed ditoy I, Domingo Carganillo, residing at Brgy.
Brgy. Sitio Cabuaan, Tayug, Sitio Cabuaan, Tayug, Pangasinan, of legal
Pangasinan. Nahustuan ti edad, gapu ti age, due to necessity, have borrowed
panagkasapulak nakabuludak ti kuarta nga money to the amount of P10,000.00 +
aggatad ti P10,000.00 + 4,000.00 + 4,000.00 + 1,000.00 from Mr. & Mrs.
1,000.00 kada Mr. & Mrs. Sergio Carganillo, Sergio Carganillo, residing at Brgy. Legaspi,
agnaed ti Brgy. Legaspi, Tayug, Tayug, Pangasinan, and as evidence of this
Pangasinan, ket bilang pammaneknek loan, I have signed below together with the
daytoy a bulod to, ipirmak ti nagan ko witnesses today the 20th of April 1995. This
agraman dagiti saksi iti daytoy met lang a constitutes as proof of our agreement.
petsa April 20, 1995. Agserbi daytoy nga (Sgd.) Domingo Carganillo
pammatalged iti daytoy nga katulagan mi. (Sgd.) Sergio Caganillo
(Sgd.) Domingo Carganillo by: Mary Ann Carganillo
(Sgd.) Sergio Caganillo (wife)
by: Mary Ann Carganillo (Sgd.) witnesses
(wife)
(Sgd.) witnesses
[19]
Id. at 85-79; penned by Assistant Secretary Augusto P. Quijano, with Undersecretary Rolando
G. Mangulabnan, Assistant Secretaries Lorenzo R. Reyes, Edgar A. Igano and Rustico T. Belen,
concurring.
[20]
CA rollo, pp. 8-21.
[21]
Id. at 107-113; penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by
Associate Justices Portia Alino-Hormachuelos and Vicente Q. Roxas.
[22]
Id. at 113.
[23]
Id. at 9-11.
[24]
138 Phil. 699 (1969).
[25]
RULES OF COURT, Rule 128.
[26]
RULES OF COURT, Rule 1, Section 4 provides:
SEC. 4. In what cases not applicable. These Rules shall not apply to election cases, land
registration cases, cadastral, naturalization and insolvency proceedings, and other cases not
herein provided for, except by analogy or in a suppletory character and whenever practicable
and convenient.
[27]
Adopted on May 30, 1994 by the DARAB. Subsequently repealed on January 17, 2003 and
on September 1, 2009.
[28]
RULES OF COURT, Rule 132, Sec. 34 provides:
Sec. 34. Offer of Evidence. The court shall consider no evidence which has not been formally
offered. The purpose for which evidence is offered must be specified.
[29]
Supra note 24 at 706.
[30]
Rollo, p. 65.
[31]
Id. at 29.
[32]
Id. at 129.
[33]
Approved August 8, 1963.
[34]
SECTION 27. Prohibitions to Agricultural Lessee. It shall be unlawful for the agricultural lessee:
xxxx
(2) To employ a sub-lessee on his landholding: Provided, however, That in case of illness or
temporary incapacity he may employ laborers whose services on his landholding shall be on
his account.
[35]
SECTION 4. Abolition of Agricultural Share Tenancy. Agricultural share tenancy, as
herein defined, is hereby declared to be contrary to public policy and shall be
abolished: Provided, That existing share tenancy contracts may continue in force and effect
in any region or locality, to be governed in the meantime by the pertinent provisions of
Republic Act Numbered Eleven hundred and ninety-nine, as amended, until the end of the
agricultural year when the National Land Reform Council proclaims that all the government
machineries and agencies in that region or locality relating to leasehold envisioned in this
Code are operating, unless such contracts provide for a shorter period or the tenant sooner
exercises his option to elect the leasehold system: Provided, further, That in order not to
jeopardize international commitments, lands devoted to crops covered by marketing
allotments shall be made the subject of a separate proclamation that adequate provisions,
such as the organization of cooperatives, marketing agreements, or other similar workable
arrangements, have been made to insure efficient management on all matters requiring
synchronization of the agricultural with the processing phases of such crops: Provided,
furthermore, That where the agricultural share tenancy contract has ceased to be
operative by virtue of this Code, or where such a tenancy contract has been
entered into in violation of the provisions of this Code and is, therefore, null and
void, and the tenant continues in possession of the land for cultivation, there shall
be presumed to exist a leasehold relationship under the provisions of this Code, without
prejudice to the right of the landowner and the former tenant to enter into any other lawful
contract in relation to the land formerly under tenancy contract, as long as in the interim the
security of tenure of the former tenant under Republic Act Numbered Eleven hundred and
ninety-nine, as amended, and as provided in this Code, is not impaired: Provided, finally, That
if a lawful leasehold tenancy contract was entered into prior to the effectivity of this Code,
the rights and obligations arising therefrom shall continue to subsist until modified by the
parties in accordance with the provisions of this Code. (Emphasis supplied)
[36]
PARAD records, pp. 2-1.
[37]
Id.
[38]
Id.
[39]
Id.
[40]
Id. at 6.
[41]
Id.
[42]
Id.
[43]
Id. at 16.
[44]
[45]
Id at 46-44.
[46]
Id at 43.
[47]
[48]
Id. at 17-15.
[49]
Id. at 18.
[50]
DARAB records, p. 80.
[51]
CA rollo, p. 104.
[52]
[53]
Annex G.
[54]
Annex H.
[55]
Annex I.
[56]
Annex J.
[57]
REPUBLIC ACT NO. 3844, Section 37.
[58]
Rollo, p. 130.
[59]
Id.
[60]
Id.
[61]
Id.
[62]
Id at 131.
[63]
Id.
[64]
Id.
[65]
PARAD records, p. 9.
[66]
Id.
[67]
Id.
[68]
Id. at 38-34.
[69]
Rollo, p. 33.
[70]
PARAD records, p. 4.
[71]
Id.
[72]
Id. at 3.
[73]
Id.
[74]
Id. at 2.
[75]
Id.
[76]
Id. at 11.
[77]
Id.
[78]
Id.
[79]
Id. at 12.
[80]
[81]
Id. at 46-45.
[82]
Id. at 42.
[83]
[84]
Id.
[85]
Id. at 42.
[86]
Id. at 2.
[87]
Rollo, p. 14.
[88]
Id. at 13.
[89]
Id. at 24-25.
[90]
[91]
Id. at 183-174.
[92]
CA rollo, pp. 8-21.
[93]
Id. at 116-126.
[94]
Rollo, pp. 3-17.

Supreme Court
Manila
SECOND DIVISION
ANUNCIO C. BUSTILLO, G.R. No. 160718

EMILIO SUMILHIG, JR., and
AGUSTIN BILLEDO, JR.,
Petitioners,
Present:
CARPIO, J., Chairperson,

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.

Respondent. May 12, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
It is disputably presumed that official duty has been regularly performed. In this case, this presumption
remains unrebutted; hence, petitioners who were charged with violations of Section 3(e) of Republic Act
(RA) No. 3019, deserve an acquittal. It was not proven that they gave undue preference or acted in
evident bad faith in effecting the transfer of the properties owned by the local government unit.
This Petition for Review on Certiorari[1] assails the July 31, 2003 Decision[2] of the Sandiganbayan in
Criminal Case No. 24741, finding herein petitioners guilty beyond reasonable doubt of violation of Section
3(e) of RA 3019. Also assailed is the November 6, 2003 Resolution[3] denying the Motion for
Reconsideration.
Factual Antecedents
Congressman Ceferino Paredes, Jr. (Congressman Paredes) used a portion of his Countryside
Development Fund (CDF) to purchase one unit of Toyota Tamaraw FX and six units
of Kawasakimotorcycles. All vehicles were registered in the name of the Municipality of Bunawan and
were turned over to the municipality through its mayor, herein petitioner Anuncio C. Bustillo (Bustillo).
On May 17, 1995, the Sangguniang Bayan of Bunawan passed Resolution No. 95-27[4] which authorized
the transfer without cost of the aforesaid vehicles to the San Francisco Water District (SFWD). Pursuant
thereto, Bustillo executed on June 19, 1995, a Deed of Transfer[5] relative to the aforementioned vehicles
in favor of the SFWD represented by its General Manager, Elmer T. Luzon (Luzon).
On July 27, 1995, the Sangguniang Panlalawigan of Agusan del Sur passed Resolution No.
183[6] disapproving the Sangguniang Bayans Resolution No. 95-27 for being violative of Section 381[7] of
RA 7160 or the Local Government Code. On August 17, 1995, it passed Resolution No. 246[8] canceling
and declaring the Deed of Transfer as null and void for being highly irregular and grossly violative of
Section 381 of RA 7160.
On May 23, 1996, a complaint[9] was filed charging Bustillo, Vice-Mayor Agustin Billedo, Jr. (Billedo),
and Sangguniang Bayan members Teogenes Tortor (Tortor), Emilio Sumilhig, Jr. (Sumilhig), Ruth C. Orot
(Orot), and Ernesto Amador, Jr., with violation of Section 3(e) of RA 3019. Also included in the complaint
were Antonio Taotao and Luzon, the Board Secretary and General Manager, respectively, of SFWD.
On August 13, 1996, the Office of the Ombudsman for Mindanao issued a Resolution which
provides:
WHEREFORE, PREMISES CONSIDERED, this Office finds probable cause to

prosecute respondents Antonio C. Bustillo, Agustin Billedo, Jr., Teogenes Tortor, Emilio
Sumilhig, Jr., Ruth C. Orot, Ernesto Amador, Jr., and Elmer T. Luzon for violation of Section
3 (e) of Republic Act 3019. It is hereby recommended that the enclosed Information be
filed with the Sandiganbayan against the above-named respondents.
FINDING insufficient evidence to hold respondent Antonio Taotao, Board
Secretary of SFWD, liable for the charge, let the instant case against him be dismissed.
SO RESOLVED.[10]
Consequently, on June 24, 1998, an Information was filed with the Sandiganbayan docketed as Criminal
Case No. 24741 charging Bustillo, Billedo, Tortor, Sumilhig, Orot, Amador, and Luzon, for violation of
Section 3(e) of RA 3019, committed as follows:
That on or about 19 June 1995, or shortly prior or subsequent thereto, in San
Francisco, Agusan del Sur, and within the jurisdiction of this Honorable Court, the accused
Anuncio C. Bustillo, a public officer being then the Mayor of Bunawan, Agusan del Sur,
with salary grade 27, Agustin Billedo, Jr., Vice Mayor of Bunawan, Agusan del Sur,
Teogenes Tortor, Emilio Sumilhig, Jr., Ruth C. Orot, Ernesto Amador, being then members
of the Sangguniang Bayan (SB) of Bunawan, and Elmer T. Luzon, General Manager of
San Francisco Water District (SFWD), all public officers with salary grades below 27,
committing the offense in relation to their official duties and taking advantage of their
official positions, conspiring and confederating with each other [sic], thru evident bad
faith, did there and then, willfully, unlawfully and criminally, cause undue injury to the
government, by passing Sangguniang Bayan Resolution No. 95-27 which transferred
without cost one (1) unit of Tamaraw FX vehicle and six (6) units of KE Kawasaki
motorcycles purchased for the Municipality of Bunawan out of the Countryside
Development Fund of Congressman Ceferino Paredes, Jr. and municipal counterpart fund
and which were newly purchased and in perfect running condition, to the San Francisco
Water District in violation of Section 381 of R.A. 7160, and despite the subsequent
nullification of SB Resolution No. 95-27 by the Sangguniang Panlalawigan of Agusan del
Sur and the repeated demands by the municipal government of Bunawan, accused Elmer
T. Luzon and the San Francisco Water District refused to surrender the afore-enumerated
motor vehicle and motorcycles to the Municipality of Bunawan, thereby depriving it of the
possession, ownership and use thereof, to the damage and prejudice of said local
government unit.
CONTRARY TO LAW.[11]
All the accused posted their respective bail for their provisional liberty, with the exception of Orot who died
on June 28, 1998.[12]
On April 16, 1999, Bustillo, Billedo, Tortor and Sumilhig entered pleas of Not Guilty.[13]
During pre-trial conference[14] held on June 7, 1999, the following facts were admitted by both the
prosecution and the defense:
1) At the time material to this case all the accused are public officers namely,
Anuncio C. Bustillo as Municipal Mayor and Agustin Billedo, Jr., as Vice Mayor, Teogenes
Tortor and Emilio Sumilhig, Jr., as members of the Sangguniang Bayan all of the
Municipality of Bunawan, Agusan del Sur;
2) That during the local election held on May 8, 1995, accused Anuncio C. Bustillo
was not re-elected as Mayor of the Municipality of Bunawan, Agusan del Sur;
3) That on May 17, 1995, the Sangguniang Bayan of Bunawan, Agusan del Sur,
during its 17th regular session passed Resolution No. 95-27 transferring without any
consideration and cost to the San Francisco Water District the following properties: one
(1) unit of Tamaraw Toyota FX and six (6) units of Kawasaki Motorcycles; Accused Agustin
Billedo, Jr., Teogenes Tortor and Emilio Sumilhig, Jr., were among the members of the
said council who voted to approve said Resolution;
4) That on June 19, 1995, accused Anuncio C. Bustillo in behalf of
the Municipality of Bunawan, Agusan del Sur executed a Deed of Transfer relative to the
above mentioned vehicles in favor of San Francisco Water District represented by Elmer
T. Luzon, General Manager;
5) That on July 27, 1995, the Sangguniang Panlalawigan of Agusan del Sur in its
3 regular session passed Resolution No. 183, series of 1995 disapproving Sangguniang
rd
Bayan Resolution No. 95-27 of the Municipality of Bunawan;
6) That on August 17, 1995, the Sangguniang Panlalawigan of Agusan del Sur
passed Resolution No. 246, series of 1995, canceling and declaring the aforementioned
Deed of Transfer executed by and between the Municipality of Bunawan and San
Francisco Water District as null and void;
7) That, in a letter dated July 11, 1995, of Leonardo Barrios, Municipal Mayor of
Bunawan, Agusan del Sur addressed to the Director of San Francisco Water District, it
was requested that the subject Tamaraw FX and Kawasaki Motorcycles owned by the
Municipality of Bunawan, Agusan del Sur be returned to the Municipality of Bunawan;
8) That in response to said letter dated July 11, 1995, of Municipal Mayor
Leonardo Barrios, Antonio Tao-Tao, Acting Board Secretary of San Francisco Water
District on his letter dated July 16, 1995, refused to return the subject vehicles;
9) That the subject vehicles are all newly purchased and serviceable and in good
running condition at the time of the transfer in question;
The other set of facts agreed upon were:
a) That the purchase price or value of the Toyota Tamaraw FX was P400,000.00
and the six (6) units Kawasaki Motorcycles P305,100.00, or a total purchase price or value
of P705,100.00 Pesos;
b) That Resolution No. 95-27 was unanimously approved by the members of the
Sangguniang Bayan of Bunawan, Agusan del Sur and was not judicially declared null and
void.
On June 15, 1999, the SFWD executed a Deed of Donation[15] effecting the transfer of the aforesaid
vehicles in favor of the Municipality of Bunawan because according to SFWD, the water projects funded
by the CDF of Congressman Paredes were already completed.
Thereafter, Luzon and Amador also entered pleas of Not Guilty.
On December 9, 1999, the Sandiganbayan was informed of the death of Tortor.[16]
During trial, the prosecution presented three witnesses, namely: 1) Florencia Ilorde, 2) Lilia J. Nacorda,
and 3) Leonardo Barrios. After the testimonies of the witnesses and the admission of its exhibits, the
prosecution rested its case.[17]
On December 6, 1999, herein petitioners filed a Demurrer to Evidence[18] but it was denied[19] for lack of
merit. Luzons Demurrer to Evidence[20] was likewise denied on February 4, 2000.[21] Thus, the defense
presented its evidence. Four witnesses, namely: 1) Luzon, 2) Benigno G. Asis, 3) Sumilhig, and 4) Ceferino
S. Paredes, were presented along with other exhibits.
Ruling of the Sandiganbayan
On July 31, 2003, the Sandiganbayan rendered its Decision[22] finding petitioners guilty beyond reasonable
doubt of violation of Section 3(e) of RA 3019. Luzon and Amador were acquitted for failure of the
prosecution to prove their guilt beyond reasonable doubt. The case against Tortor and Orot was dismissed
on account of their demise.
Petitioners filed a Motion for Reconsideration[23] which was denied in a Resolution dated November 6,
2003.[24]
Issue
Hence this Petition for Review on Certiorari faulting the Sandiganbayan for finding petitioners
guilty of violation of Section 3(e) of RA 3019.
Our Ruling
The Sandiganbayan based its conviction of (Mayor) Bustillo, (Vice-Mayor) Billedo and (Councilor) Sumilhig
on the finding that they conspired to effect the transfer of the vehicles to the prejudice of
the Municipality of Bunawan in violation of the provision of Section 3(e) of RA 3019.
Section 3(e) of RA 3019 provides:
Section 3. Corrupt practices of public officers. In addition to acts or omissions of

public officers already penalized by existing law, the following shall constitute corrupt
practices of any public officer and are hereby declared to be unlawful:
xxxx
(e) Causing any undue injury to any party, including the Government, or giving
any private party any unwarranted benefits, advantage or preference in the discharge of
his official, administrative or judicial functions through manifest partiality, evident bad faith
or gross inexcusable negligence. This provision shall apply to officers and employees of
offices or government corporations charged with the grant of licenses or permits or other
concessions.
The elements of the offense are as follows: (1) that the accused are public officers or private
persons charged in conspiracy with them; (2) that said public officers commit the prohibited acts during
the performance of their official duties or in relation to their public positions; (3) that they caused undue
injury to any party, whether the Government or a private party; (4) that such injury is caused by giving
unwarranted benefits, advantage or preference to such parties; and (5) that the public officers have acted
with manifest partiality, evident bad faith or gross inexcusable negligence.[25]
In this case, only the first element was proven. At the time material to this case, all the petitioners are
public officers, namely, Bustillo as Municipal Mayor, Billedo as Vice Mayor, and Sumilhig as member of
the Sangguniang Bayan.
All the other elements were not present. It cannot be denied that the transfer of the vehicles to SFWD
was made in furtherance of the purpose for which the funds were released which is to help in the planning,
monitoring and coordination of the implementation of the waterworks projects located throughout
the Province of Agusan del Sur. The Deed of Donation expressly provided that the subject vehicles shall
be used for the same purpose for which they were purchased.
Moreover, the transfer was made to ensure the success of the implementation of the CDF-funded
waterworks projects of the province of Agusan del Sur. In the Memorandum of Agreement
dated February 10, 1993, SFWD was designated to implement, control or supervise all the CDF-funded
waterworks projects. Clearly, the vehicles were donated to SFWD not because it was given any preference,
unwarranted benefits or undue advantage, but in recognition of its technical expertise.
We find no evidence on record which would show that petitioners were motivated by bad faith when they
transferred the vehicles to SFWD. Bustillo, as Mayor, is authorized by law to enter into contracts for and
in behalf of the local government unit. Billedo, as Vice Mayor, acted as the Presiding Officer of
the Sangguniang Bayan and did not even vote for the passage of Resolution No. 95-27. Said Resolution
was unanimously passed by the Sangguniang Bayan and Sumilhig was only one of those who voted for
its passage.
In sum, the petitioners have in their favor the presumption of regularity in the performance of official
duties which the records failed to rebut. The presumption of regularity of official acts may be rebutted by
affirmative evidence of irregularity or failure to perform a duty. The presumption, however, prevails until
it is overcome by no less than clear and convincing evidence to the contrary. Thus, unless the presumption
in rebutted, it becomes conclusive. Every reasonable intendment will be made in support of the
presumption and in case of doubt as to an officers act being lawful or unlawful, construction should be in
favor of its lawfulness.[26]
WHEREFORE, the July 31, 2003 Decision of the Sandiganbayan in Criminal Case No. 24741 and
its November 6, 2003 Resolution are REVERSED and SET ASIDE. Petitioners Anuncio C. Bustillo,
Agustin Billedo, Jr. and Emilio Sumilhig, Jr., are hereby ACQUITTED for failure to prove their guilt beyond
reasonable doubt.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 9-41.
[2]
Records, Vol. II, pp. 808-835; penned by Associate Justice Godofredo L. Legaspi and concurred
in by Associate Justices Edilberto G. Sandoval and Norberto Y. Geraldez.
[3]
Id. at 978-979.
[4]
Id. Vol. I, pp. 251-252.
[5]
Id. at 253-254.
[6]
Id. at 255-257.
[7]
Section 381. Transfer Without Cost. Property which has become unserviceable or is no longer
needed may be transferred without cost to another office, agency, subdivision or
instrumentality of the national government or another local government unit at an appraised
valuation determined by the local Committee on Awards. Such transfer shall be subject to the
approval of the sanggunian concerned making the transfer and by the head of the office,
agency, subdivision, instrumentality or local government unit receiving the property.
[8]
Records, Vol. I, pp. 258-259.
[9]
Id. at 8-9.
[10]
Id. at 6.
[11]
Id. at 1-2.

Supreme Court
Manila
SECOND DIVISION
COMMISSIONER OF INTERNAL G.R. No. 178087

REVENUE,
Petitioner, Present:

BRION,
- versus - DEL CASTILLO,
ABAD, and
PEREZ, JJ.
KUDOS METAL CORPORATION, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:

The prescriptive period on when to assess taxes benefits both the government and the
taxpayer.[1] Exceptions extending the period to assess must, therefore, be strictly construed.
This Petition for Review on Certiorari seeks to set aside the Decision[2] dated March 30, 2007 of
the Court of Tax Appeals (CTA) affirming the cancellation of the assessment notices for having been issued
beyond the prescriptive period and the Resolution[3] dated May 18, 2007 denying the motion for
reconsideration.
Factual Antecedents
On April 15, 1999, respondent Kudos Metal Corporation filed its Annual Income Tax Return (ITR)
for the taxable year 1998.
Pursuant to a Letter of Authority dated September 7, 1999, the Bureau of Internal Revenue (BIR)
served upon respondent three Notices of Presentation of Records. Respondent failed to comply with these
notices, hence, the BIR issued a Subpeona Duces Tecum dated September 21, 2006, receipt of which
was acknowledged by respondents President, Mr. Chan Ching Bio, in a letter dated October 20, 2000.
A review and audit of respondents records then ensued.
On December 10, 2001, Nelia Pasco (Pasco), respondents accountant, executed a Waiver of the
Defense of Prescription,[4] which was notarized on January 22, 2002, received by the BIR Enforcement
Service on January 31, 2002 and by the BIR Tax Fraud Division on February 4, 2002, and accepted by
the Assistant Commissioner of the Enforcement Service, Percival T. Salazar (Salazar).
This was followed by a second Waiver of Defense of Prescription[5] executed by Pasco on February
18, 2003, notarized on February 19, 2003, received by the BIR Tax Fraud Division on February 28,
2003 and accepted by Assistant Commissioner Salazar.
On August 25, 2003, the BIR issued a Preliminary Assessment Notice for the taxable year 1998
against the respondent. This was followed by a Formal Letter of Demand with Assessment Notices for
taxable year 1998, dated September 26, 2003 which was received by respondent on November 12, 2003.
Respondent challenged the assessments by filing its Protest on Various Tax Assessments on
December 3, 2003 and its Legal Arguments and Documents in Support of Protests against Various
Assessments on February 2, 2004.
On June 22, 2004, the BIR rendered a final Decision[6] on the matter, requesting the immediate
payment of the following tax liabilities:
Kind of Tax Amount
Income Tax P 9,693,897.85
VAT 13,962,460.90
EWT 1,712,336.76
Withholding Tax-Compensation 247,353.24
Penalties 8,000.00
Total P25,624,048.76
Ruling of the Court of Tax Appeals, Second Division
Believing that the governments right to assess taxes had prescribed, respondent filed on August
27, 2004 a Petition for Review[7] with the CTA. Petitioner in turn filed his Answer.[8]
On April 11, 2005, respondent filed an Urgent Motion for Preferential Resolution of the Issue on
Prescription.[9]
On October 4, 2005, the CTA Second Division issued a Resolution[10] canceling the assessment
notices issued against respondent for having been issued beyond the prescriptive period. It found the first
Waiver of the Statute of Limitations incomplete and defective for failure to comply with the provisions of
Revenue Memorandum Order (RMO) No. 20-90. Thus:
First, the Assistant Commissioner is not the revenue official authorized to sign the
waiver, as the tax case involves more than P1,000,000.00. In this regard, only the
Commissioner is authorized to enter into agreement with the petitioner in extending the
period of assessment;
Secondly, the waiver failed to indicate the date of acceptance. Such date of
acceptance is necessary to determine whether the acceptance was made within the
prescriptive period;
Third, the fact of receipt by the taxpayer of his file copy was not indicated on the
original copy. The requirement to furnish the taxpayer with a copy of the waiver is not
only to give notice of the existence of the document but also of the acceptance by the
BIR and the perfection of the agreement.
The subject waiver is therefore incomplete and defective. As such, the three-year
prescriptive period was not tolled or extended and continued to run. x x x[11]
Petitioner moved for reconsideration but the CTA Second Division denied the motion in a
Resolution[12] dated April 18, 2006.
Ruling of the Court of Tax Appeals, En Banc
On appeal, the CTA En Banc affirmed the cancellation of the assessment notices. Although it ruled that
the Assistant Commissioner was authorized to sign the waiver pursuant to Revenue Delegation Authority
Order (RDAO) No. 05-01, it found that the first waiver was still invalid based on the second and third
grounds stated by the CTA Second Division. Pertinent portions of the Decision read as follows:
While the Court En Banc agrees with the second and third grounds for invalidating
the first waiver, it finds that the Assistant Commissioner of the Enforcement Service is
authorized to sign the waiver pursuant to RDAO No. 05-01, which provides in part as
follows:
A. For National Office cases
Designated Revenue Official
1. Assistant Commissioner (ACIR), For tax fraud and policy

Enforcement Service cases
2. ACIR, Large Taxpayers Service For large taxpayers cases

other than those cases falling under
Subsection B hereof
3. ACIR, Legal Service For cases pending

verification and awaiting
resolution of certain legal issues prior to
prescription and for
issuance/compliance of Subpoena
Duces Tecum
4. ACIR, Assessment Service (AS) For cases which are

pending in or subject to
review or approval by the ACIR,
AS
Based on the foregoing, the Assistant Commissioner, Enforcement Service is

authorized to sign waivers in tax fraud cases. A perusal of the records reveals that the
investigation of the subject deficiency taxes in this case was conducted by the National
Investigation Division of the BIR, which was formerly named the Tax Fraud Division. Thus,
the subject assessment is a tax fraud case.
Nevertheless, the first waiver is still invalid based on the second and third grounds
stated by the Court in Division. Hence, it did not extend the prescriptive period to assess.
Moreover, assuming arguendo that the first waiver is valid, the second waiver is
invalid for violating Section 222(b) of the 1997 Tax Code which mandates that the period
agreed upon in a waiver of the statute can still be extended by subsequent written
agreement, provided that it is executed prior to the expiration of the first period agreed
upon. As previously discussed, the exceptions to the law on prescription must be strictly
construed.
In the case at bar, the period agreed upon in the subject first waiver expired
on December 31, 2002. The second waiver in the instant case which was supposed to
extend the period to assess to December 31, 2003 was executed on February 18,
2003 and was notarized on February 19, 2003. Clearly, the second waiver was executed
after the expiration of the first period agreed upon. Consequently, the same could not
have tolled the 3-year prescriptive period to assess.[13]
Petitioner sought reconsideration but the same was unavailing.
Issue
Hence, the present recourse where petitioner interposes that:
THE COURT OF TAX APPEALS EN BANC ERRED IN RULING THAT THE GOVERNMENTS
RIGHT TO ASSESS UNPAID TAXES OF RESPONDENT PRESCRIBED.[14]
Petitioner argues that the governments right to assess taxes is not barred by prescription as the
two waivers executed by respondent, through its accountant, effectively tolled or extended the period
within which the assessment can be made. In disputing the conclusion of the CTA that the waivers are
invalid, petitioner claims that respondent is estopped from adopting a position contrary to what it has
previously taken. Petitioner insists that by acquiescing to the audit during the period specified in the
waivers, respondent led the government to believe that the delay in the process would not be utilized
against it. Thus, respondent may no longer repudiate the validity of the waivers and raise the issue of
prescription.
Respondent maintains that prescription had set in due to the invalidity of the waivers executed by Pasco,
who executed the same without any written authority from it, in clear violation of RDAO No. 5-01. As to
the doctrine of estoppel by acquiescence relied upon by petitioner, respondent counters that the principle
of equity comes into play only when the law is doubtful, which is not present in the instant case.
Our Ruling
The petition is bereft of merit.
Section 203[15] of the National Internal Revenue Code of 1997 (NIRC) mandates the government
to assess internal revenue taxes within three years from the last day prescribed by law for the filing of the
tax return or the actual date of filing of such return, whichever comes later. Hence, an assessment notice
issued after the three-year prescriptive period is no longer valid and effective. Exceptions however are
provided under Section 222[16] of the NIRC.
The waivers executed by respondents accountant

did not extend the period within which the
assessment can be made
Petitioner does not deny that the assessment notices were issued beyond the three-year
prescriptive period, but claims that the period was extended by the two waivers executed by respondents
accountant.
We do not agree.
Section 222 (b) of the NIRC provides that the period to assess and collect taxes may only be
extended upon a written agreement between the CIR and the taxpayer executed before the expiration of
the three-year period. RMO 20-90[17] issued on April 4, 1990 and RDAO 05-01[18] issued on August 2,
2001 lay down the procedure for the proper execution of the waiver, to wit:
1. The waiver must be in the proper form prescribed by RMO 20-90. The phrase but not
after ______ 19 ___, which indicates the expiry date of the period agreed upon to
assess/collect the tax after the regular three-year period of prescription, should be
filled up.
2. The waiver must be signed by the taxpayer himself or his duly authorized
representative. In the case of a corporation, the waiver must be signed by any of its
responsible officials. In case the authority is delegated by the taxpayer to a
representative, such delegation should be in writing and duly notarized.
3. The waiver should be duly notarized.
4. The CIR or the revenue official authorized by him must sign the waiver indicating that
the BIR has accepted and agreed to the waiver. The date of such acceptance by the
BIR should be indicated. However, before signing the waiver, the CIR or the revenue
official authorized by him must make sure that the waiver is in the prescribed form,
duly notarized, and executed by the taxpayer or his duly authorized representative.
5. Both the date of execution by the taxpayer and date of acceptance by the Bureau
should be before the expiration of the period of prescription or before the lapse of the
period agreed upon in case a subsequent agreement is executed.
6. The waiver must be executed in three copies, the original copy to be attached to the
docket of the case, the second copy for the taxpayer and the third copy for the Office
accepting the waiver. The fact of receipt by the taxpayer of his/her file copy must be
indicated in the original copy to show that the taxpayer was notified of the acceptance
of the BIR and the perfection of the agreement.[19]
A perusal of the waivers executed by respondents accountant reveals the following infirmities:
1. The waivers were executed without the notarized written authority of Pasco to
sign the waiver in behalf of respondent.
2. The waivers failed to indicate the date of acceptance.
3. The fact of receipt by the respondent of its file copy was not indicated in the
original copies of the waivers.
Due to the defects in the waivers, the period to assess or collect taxes was not
extended. Consequently, the assessments were issued by the BIR beyond the three-year period and are
void.
Estoppel does not apply in this case
We find no merit in petitioners claim that respondent is now estopped from claiming prescription
since by executing the waivers, it was the one which asked for additional time to submit the required
documents.
In Collector of Internal Revenue v. Suyoc Consolidated Mining Company,[20] the doctrine of
estoppel prevented the taxpayer from raising the defense of prescription against the efforts of the
government to collect the assessed tax. However, it must be stressed that in the said case, estoppel was
applied as an exception to the statute of limitations on collection of taxes and not on the assessment of
taxes, as the BIR was able to make an assessment within the prescribed period. More important, there
was a finding that the taxpayer made several requests or positive acts to convince the government to
postpone the collection of taxes, viz:
It appears that the first assessment made against respondent based on its second
final return filed on November 28, 1946 was made on February 11, 1947. Upon receipt of
this assessment respondent requested for at least one year within which to pay the
amount assessed although it reserved its right to question the correctness of the
assessment before actual payment. Petitioner granted an extension of only three months.
When it failed to pay the tax within the period extended, petitioner sent respondent a
letter on November 28, 1950 demanding payment of the tax as assessed, and upon
receipt of the letter respondent asked for a reinvestigation and reconsideration of the
assessment. When this request was denied, respondent again requested for a
reconsideration on April 25, 1952, which was denied on May 6, 1953, which denial was
appealed to the Conference Staff. The appeal was heard by the Conference Staff
from September 2, 1953 to July 16, 1955, and as a result of these various negotiations,
the assessment was finally reduced on July 26, 1955. This is the ruling which is now being
questioned after a protracted negotiation on the ground that the collection of the tax has
already prescribed.
It is obvious from the foregoing that petitioner refrained from collecting the tax
by distraint or levy or by proceeding in court within the 5-year period from the filing of
the second amended final return due to the several requests of respondent for extension
to which petitioner yielded to give it every opportunity to prove its claim regarding the
correctness of the assessment. Because of such requests, several reinvestigations were
made and a hearing was even held by the Conference Staff organized in the collection
office to consider claims of such nature which, as the record shows, lasted for several
months. After inducing petitioner to delay collection as he in fact did, it is most unfair for
respondent to now take advantage of such desistance to elude his deficiency income tax
liability to the prejudice of the Government invoking the technical ground of prescription.
While we may agree with the Court of Tax Appeals that a mere request for
reexamination or reinvestigation may not have the effect of suspending the running of
the period of limitation for in such case there is need of a written agreement to extend
the period between the Collector and the taxpayer, there are cases however where a
taxpayer may be prevented from setting up the defense of prescription even if he has not
previously waived it in writing as when by his repeated requests or positive acts the
Government has been, for good reasons, persuaded to postpone collection to make him
feel that the demand was not unreasonable or that no harassment or injustice is meant
by the Government. And when such situation comes to pass there are authorities that
hold, based on weighty reasons, that such an attitude or behavior should not be
countenanced if only to protect the interest of the Government.
This case has no precedent in this jurisdiction for it is the first time that such has
risen, but there are several precedents that may be invoked in American jurisprudence.
As Mr. Justice Cardozo has said: The applicable principle is fundamental and
unquestioned. He who prevents a thing from being done may not avail himself of the
nonperformance which he has himself occasioned, for the law says to him in effect this is
your own act, and therefore you are not damnified. (R. H. Stearns Co. vs. U.S., 78 L. ed.,
647). Or, as was aptly said, The tax could have been collected, but the government
withheld action at the specific request of the plaintiff. The plaintiff is now estopped and
should not be permitted to raise the defense of the Statute of Limitations. [Newport Co.
vs. U.S., (DC-WIS), 34 F. Supp. 588].[21]
Conversely, in this case, the assessments were issued beyond the prescribed period. Also, there
is no showing that respondent made any request to persuade the BIR to postpone the issuance of the
assessments.
The doctrine of estoppel cannot be applied in this case as an exception to the statute of limitations
on the assessment of taxes considering that there is a detailed procedure for the proper execution of the
waiver, which the BIR must strictly follow. As we have often said, the doctrine of estoppel is predicated
on, and has its origin in, equity which, broadly defined, is justice according to natural law and right.[22] As
such, the doctrine of estoppel cannot give validity to an act that is prohibited by law or one that is against
public policy.[23] It should be resorted to solely as a means of preventing injustice and should not be
permitted to defeat the administration of the law, or to accomplish a wrong or secure an undue advantage,
or to extend beyond them requirements of the transactions in which they originate.[24] Simply put, the
doctrine of estoppel must be sparingly applied.
Moreover, the BIR cannot hide behind the doctrine of estoppel to cover its failure to comply with
RMO 20-90 and RDAO 05-01, which the BIR itself issued. As stated earlier, the BIR failed to verify whether
a notarized written authority was given by the respondent to its accountant, and to indicate the date of
acceptance and the receipt by the respondent of the waivers. Having caused the defects in the waivers,
the BIR must bear the consequence. It cannot shift the blame to the taxpayer. To stress, a waiver of the
statute of limitations, being a derogation of the taxpayers right to security against prolonged and
unscrupulous investigations, must be carefully and strictly construed.[25]
As to the alleged delay of the respondent to furnish the BIR of the required documents, this cannot
be taken against respondent. Neither can the BIR use this as an excuse for issuing the assessments
beyond the three-year period because with or without the required documents, the CIR has the power to
make assessments based on the best evidence obtainable.[26]
WHEREFORE, the petition is DENIED. The assailed Decision dated March 30, 2007 and
Resolution dated May 18, 2007 of the Court of Tax Appeals are hereby AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ
Supreme Court
Manila
SECOND DIVISION
HEIRS OF MARIO PACRES, namely: G.R. No. 174719
VALENTINA Vda. DE PACRES, JOSERINO,
ELENA, LEOVIGILDO, LELISA, and
LOURDES all surnamed PACRES, and
VEARANDA Vda. DE ABABA,
Present:
Petitioners,
BRION,
ABAD, and
PEREZ, JJ.
HEIRS of CECILIA YGOA, namely

BAUDILLO YGOA YAP, MARIA YAP
DETUYA, JOSEFINA YAP, EGYPTIANA YAP
BANZON, and VICENTE YAP[1] and
HILARIO RAMIREZ,
Promulgated:
Respondents. May 5, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:

While contracts are generally obligatory in whatever form they may have been entered into, it remains
imperative for a party that seeks the performance thereof to prove the existence and the terms of the
contract by a preponderance of evidence. Bare assertions are not the quantum of proof contemplated by
law.
This Petition for Review[2] assails the Decision[3] dated October 28, 2005 of the Court of Appeals (CA), as
well as its Resolution[4] dated August 31, 2006. The dispositive portion of the assailed Decision reads:
WHEREFORE, with the foregoing, the Decision of the Regional Trial Court, 7th Judicial
Region, Branch 13, Cebu City dated March 15, 2000 in Civil Case No. 18819 for Specific
Performance, Damages and Attorneys Fees is hereby SET ASIDE and a new one entered
DISMISSING said case for failure to establish the causes of action with the required
quantum of proof.
No pronouncement as to cost.
SO ORDERED.[5]
Factual Antecedents
Lot No. 9 is a 1,007 square meter parcel of land located at Kinasang-an, Pardo, Cebu City and fronting
the Cebu provincial highway. The lot originally belonged to Pastor Pacres (Pastor) who left it intestate to
his heirs[6] Margarita, Simplicia, Rodrigo, Francisco, Mario (petitioners predecessor-in-interest) and
Vearanda (herein petitioner). Petitioners admitted that at the time of Pastors death in 1962, his heirs were
already occupying definite portions of Lot No. 9. The front portion along the provincial highway was
occupied by the co-owned Pacres ancestral home,[7]and beside it stood Rodrigos hut (also fronting the
provincial highway). Marios house stood at the back of the ancestral house.[8] This is how the property
stood in 1968, as confirmed by petitioner Valentinas testimony.
On the same year, the heirs leased[9] the ground floor of the [ancestral home] together with a lot
area of 300 square meters including the area occupied by the house to respondent Hilario Ramirez
(Ramirez), who immediately took possession thereof. Subsequently in 1974, four of the Pacres
siblings[10] (namely, Rodrigo, Francisco, Simplicia and Margarita) sold their shares in the ancestral home
and the lot on which it stood to Ramirez. The deeds of sale described the subjects thereof as part and
portion of the 300 square meters actually in possession and enjoyment by vendee and her spouse, Hilario
Ramirez, by virtue of a contract of lease in their favor.[11] The Deed of Sale of Right in a House executed
by Rodrigo and Francisco was more detailed, to wit:
x x x do hereby sell, cede, transfer and convey, forever and in absolute manner, our
shares interests and participation in a house of mixed materials under roof of nipa which
is constructed inside Lot No. 5506[12] of the Cadastral Survey of Cebu, the lot on which
the house is constructed has already been sold to and bought by the herein vendee from
our brothers and sisters; that this sale pertains only to our rights and interests and
participation in the house which we inherited from our late father Pastor Pacres.[13]
With the sale, respondent Ramirezs possession as lessee turned into a co-ownership with petitioners Mario
and Vearanda, who did not sell their shares in the house and lot.
On various dates in 1971, Rodrigo,[14] Francisco,[15] and Simplicia[16] sold their remaining shares in Lot No.
9 to respondent Cecilia Ygoa (Ygoa). In 1983, Margarita[17] also sold her share to Ygoa. The total area
sold to Ygoa was 493 square meters.
In 1984, Ygoa filed a petition to survey and segregate[18] the portions she bought from Lot No. 9. Mario
objected on the ground that he wanted to exercise his right as co-owner to redeem his siblings
shares. Vendee Rodrigo also opposed on the ground that he wanted to annul the sale for failure of
consideration. On the other hand, Margarita and the widow of Francisco both manifested their assent to
Ygoas petition. By virtue of such manifestation, the court issued a writ of possession[19] respecting
Margaritas and Franciscos shares in favor of Ygoa. It is by authority of this writ that Ygoa built her house
on a portion of Lot No. 9. Considering, however, the objections of the two other Pacres siblings, the trial
court subsequently dismissed the petition so that the two issues could be threshed out in the proper
proceeding. Mario filed the intended action while Rodrigo no longer pursued his objection.
The complaint for legal redemption,[20] filed by Mario and Vearanda, was dismissed on the ground of
improper exercise of the right. The decision was affirmed by the appellate court[21] and attained finality in
the Supreme Court[22] on December 28, 1992. The CA held that the complaint was filed beyond the 30-
day period provided in Article 1623 of the New Civil Code and failed to comply with the requirement of
consignation. It was further held that Ygoa built her house on Lot No. 9 in good faith and it would be
unjust to require her to remove her house thereon.
On June 18, 1993, the Republic of the Philippines, through the Department of Public Works and Highways
(DPWH), expropriated the front portion of Lot No. 9 for the expansion of the Cebusouth road. The petition
for expropriation was filed in Branch 9 of the Regional Trial Court of Cebu City and docketed as Civil Case
No. CEB-14150.[23] As occupant of the expropriated portion, Ygoa moved to withdraw her corresponding
share in the expropriation payment. Petitioners opposed the said motion.[24] The parties did not supply the
Court with the pleadings in the expropriation case; hence, we are unaware of the parties involved and the
issues presented therein. However, from all indications, the said motion of Ygoa remains unresolved.
On July 20, 1993, the Pacres siblings (Margarita and Francisco were already deceased at that time and
were only represented by their heirs) executed a Confirmation of Oral Partition/Settlement of Estate[25] of
Pastor Pacres. The relevant statements in the affidavit read:
1. That our father the late Pastor Pacres died instestate at Kinasang-an,
Pardo, Cebu City on January 2, 1962;
2. That he left some real properties, one of which is a parcel of land (Lot No. 9,
PCS 07-01-000006, Cebu Cad., located at Kinasang-an, Pardo, Cebu City);
3. That after the death of Pastor Pacres, the above-named children declared
themselves extra-judicially as heirs of Pastor Pacres and they likewise adjudicated
unto themselves the above described lot and forthwith MADE AN ORAL PARTITION;
4. That in that ORAL PARTITION, the shares or portion to be allotted to Mario

Pacres and Vearanda Pacres Vda. de Ababa shall be fronting the national highway,
while the shares of the rest shall be located at the rear;
5. That recently, the said heirs had the said lot surveyed to determine specifically
their respective locations in accordance with the oral partition made after the death
of Pastor Pacres;
6. That a sketch of the subdivision plan is hereto attached, duly labeled,

indicating the respective locations of the shares of each and every heir.
On September 30, 1994, Mario, petitioners predecessor-in-interest, filed an ejectment suit against Ramirez
successor-in-interest Vicentuan. Mario claimed sole ownership of the lot occupied by Ramirez/Vicentuan
by virtue of the oral partition. He argued that Ramirez/Vicentuan should pay rentals to him for occupying
the front lot and should transfer to the rear of Lot No. 9 where the lots of Ramirezs vendors are located.
The court dismissed Marios assertion that his siblings sold the rear lots to Ramirez. It held that
the deeds of sale in favor of Ramirez clearly described the object of the sale as the ancestral house and
lot.[26] Thus, Ramirez has a right to continue occupying the property he bought. The court further held
that since Mario did not sell his pro-indiviso shares in the house and lot, at the very least, the parties are
co-owners thereof. Co-owners are entitled to occupy the co-owned property.[27]
The Complaint for Specific Performance
On June 3, 1996, Vearanda and the heirs of Mario filed the instant complaint for specific
performance[28] against Ygoa and Ramirez. Contrary to Marios allegations of co-ownership over Lot No. 9
in the legal redemption case, Marios heirs insist in the action for specific performance that the heirs agreed
on a partition prior to the sale. They seek compliance with such agreement from their siblings vendees,
Ygoa and Ramirez, on the basis that the two were privy to these agreements, hence bound to comply
therewith. In compliance with such partition, Ygoa and Ramirez should desist from claiming any portion
of the expropriation payment for the front lots.
Their other cause of action is directed solely at Ygoa, whom they insist agreed to additional, albeit
unwritten, obligations other than the payment of the purchase price of the shares in Lot No. 9. Vearanda
and Marios heirs insist that Ygoa contracted with her vendors to assume all obligations regarding the
payment of past and present estate taxes, survey Lot No. 9 in accordance with the oral partition, and
obtain separate titles for each portion. While these obligations were not written into the deeds of sale,
petitioners insist it is not subject to the Statute of Frauds since these obligations were allegedly partly
complied with by Ygoa. They cite as evidence of Ygoas compliance the survey of her purchased lots and
payment of realty taxes.
Respondents denied privity with the heirs oral partition. They further maintained that no such partition
took place and that the portions sold to and occupied by them were located in front of Lot No. 9; hence
they are the ones entitled to the expropriation payment.[29] They sought damages from the unfounded
suit leveled against them. To discredit petitioners assertion of an oral partition, respondents presented
Exhibit No. 1, which petitioner Valentina herself executed during her testimony. Exhibit No. 1
demonstrated Valentinas recollection of the actual occupation of the Pacres siblings, their heirs and
vendees. The sketch undermined petitioners allegation that the heirs partitioned the
property and immediately took possession of their allotted lots/shares.Ygoa also denied ever agreeing to
the additional obligations being imputed against her.
The trial court ruled in favor of respondents.[30] It held that petitioners failed to prove partition of the lot
in accordance with petitioners version. Instead, the trial court held that the parties actual occupation of
their portions in Lot No. 9, as evidenced by petitioner Valentinas sketch, is the real agreement to which
the parties are bound. Apparently unsatisfied with the parties state of affairs, the trial court further ordered
that a survey of the lot according to the parties actual occupation thereof be conducted.
Petitioners motion for reconsideration was denied.[31] Unsatisfied with the adverse decision, petitioners
appealed to the CA questioning the factual findings of the trial court and its reliance on Exhibit 1. They
maintained that Valentina was incompetent and barely literate; hence, her sketch should not be given
weight.
The appellate court sustained the ruling of the trial court insofar as it dismissed petitioners complaint for
lack of evidence. It held that the oral partition was not valid because the heirs did not ratify it by taking
possession of their shares in accordance with their oral agreement. Moreover, the CA ruled that Ygoas
sole undertaking under the deeds of sale was the payment of the purchase price. Since petitioners did not
question the validity of the deeds and did not assail its terms as failing to express the true intent of the
parties, the written document stands superior over the allegations of an oral agreement.
It, however, reversed the trial court on the latters order to survey the lot in accordance with Valentinas
sketch. The appellate court explained that while it was conclusive that Ygoa and Ramirez bought portions
of the property from some of the Pacres siblings, the issue of the actual area and location of the portions
sold to them remains unresolved. The CA narrated all the unresolved matters that prevented a finding
that definitively settles the partition of Lot No. 9. The CA emphasized that the question regarding
ownership of the front lots and the expropriation payment should be threshed out in the proper
proceeding.
The CA likewise found no basis for the award of damages to either party.
Petitioners Motion for Reconsideration[32] was denied,[33] hence this petition.
Issues
Petitioners formulated the following issues:[34]
1. Whether or not this complaint for specific performance, damages and

attorneys fee [sic] with a prayer for the issuance of a restraining order and later on
issuance of a writ of permanent injunction is tenable.
2. Whether or not the area purchased and owned by respondents in Lot No. 9 is
located along or fronting the national highway.
3. Whether or not the lower court committed grave abuse of discretion by

rendering a decision not in accord with laws and applicable decisions of the Supreme
Court, resulting to the unrest of this case.
4. Whether or not it is lawful for the respondents to claim ownership of

the P220,000.00 which the government set aside for the payment of the expropriated
area in Lot No. 9, fronting the highway, covered by the road widening.
Consolidated and simplified, the issues to be resolved are:

I
Whether petitioners were able to prove the existence of the alleged oral agreements such
as the partition and the additional obligations of surveying and titling
II
Whether the issue of ownership regarding the front portion of Lot No. 9 and entitlement
to the expropriation payment may be resolved in this action
Our Ruling
Whether petitioners were able to prove the existence of
the alleged oral agreements such as the partition and the
additional obligations of surveying and titling
Both the trial and appellate courts dismissed petitioners complaint on the ground that they had
failed to prove the existence of an oral partition. Petitioners now insist that the two courts overlooked facts
and circumstances that are allegedly of much weight and will alter the decision if properly considered.[35]
Petitioners would have the Court review the evidence presented by the parties, despite the CAs
finding that the trial court committed no error in appreciating the evidence presented during the trial. This
goes against the rule that this Court is not a trier of facts. Such questions as whether certain items of
evidence should be accorded probative value or weight, or rejected as feeble or spurious, or whether or
not the proofs on one side or the other are clear and convincing and adequate to establish a proposition
in issue, are without doubt questions of fact.[36]Questions like these are not reviewable by this Court which,
as a rule, confines its review of cases decided by the CA only to questions of law, which may be resolved
without having to re-examine the probative value of the evidence presented.[37]
We find no compelling reason to deviate from the foregoing rule and disturb the trial and appellate
courts factual finding that the existence of an oral partition was not proven. Our examination of the records
indicates that, contrary to petitioners contention, the lower courts conclusion was justified.
Petitioners only piece of evidence to prove the alleged oral partition was the joint affidavit
(entitled Confirmation of Oral Partition/Settlement of Estate) supposedly executed by some of the Pacres
siblings and their heirs in 1993, to the effect that such an oral partition had previously been agreed
upon. Petitioners did not adequately explain why the affidavit was executed only in 1993, several years
after respondents Ygoa and Ramirez took possession of the front portions of Lot No. 9.[38] If there had
been an oral partition allotting the front portions to petitioners since Pastors death in 1962, they should
have immediately objected to respondents occupation. Instead, they only asserted their ownership over
the front lots beginning in 1993 (with the execution of their joint affidavit) when expropriation became
imminent and was later filed in court.
Petitioners assertion of partition of Lot No. 9 is further belied by their predecessor-in-interests

previous assertion of co-ownership over the same lot in the legal redemption case filed 10 years
before.[39] The allegations therein, sworn to as truth by Mario and Vearanda, described Lot No. 9 as a
parcel of land that is co-owned by the Pacres siblings pro indiviso. It was further alleged that Ygoa bought
the undivided shares of Rodrigo, Francisco, Margarita, and Simplicia.
The statements in the legal redemption case are extrajudicial admissions,[40] which were not
disputed by petitioners. These admissions may be given in evidence against them.[41] At the very least,
the polarity of their previous admissions and their present theory makes the latter highly suspect.
Moreover, petitioners failed to show that the Pacres siblings took possession of their allotted shares
after they had supposedly agreed on the oral partition. Actual possession and exercise of dominion over
definite portions of the property in accordance with the alleged partition would have been strong proof of
an oral partition.[42] In this case, however, petitioners failed to present any evidence that the petitioners
took actual possession of their respective allotted shares according to the supposed partition. In fact, the
evidence of the parties point to the contrary.Petitioner Valentina herself drew a sketch[43] showing the
location of the actual occupants of Lot No. 9, but the actual occupation shown in her sketch is not in
accordance with the terms of the alleged oral partition.[44] According to the terms of the alleged oral
partition, the front portions of Lot No. 9 were supposed to have been occupied by petitioners, but
Valentinas sketch indicates that the actual occupants of the said portions are respondents.
In fine, we rule that the records contain ample support for the trial and appellate courts factual
findings that petitioners failed to prove their allegation of oral partition. While petitioners claim that the
trial and appellate courts did not appreciate their evidence regarding the existence of the alleged oral
partition, the reality is that their evidence is utterly unconvincing.
With respect to the alleged additional obligations which petitioners seek to be enforced against
respondent Ygoa, we likewise find that the trial and appellate courts did not err in rejecting
them. Petitioners allege that when Ygoa bought portions of Lot No. 9 from petitioners four siblings, aside
from paying the purchase price, she also bound herself to survey Lot No. 9 including the shares of the
petitioners (the non-selling siblings); to deliver to petitioners, free of cost, the titles corresponding to their
definite shares in Lot No. 9; and to pay for all their past and present estate and realty taxes.[45] According
to petitioners, Ygoa agreed to these undertakings as additional consideration for the sale, even though
they were not written in the Deeds of Sale.
Like the trial and appellate courts, we find that these assertions by petitioners have not been sufficiently
established.
In the first place, under Article 1311 of the Civil Code, contracts take effect only between the
parties, their assigns and heirs (subject to exceptions not applicable here). Thus, only a party to the
contract can maintain an action to enforce the obligations arising under said contract.[46] Consequently,
petitioners, not being parties to the contracts of sale between Ygoa and the petitioners siblings, cannot
sue for the enforcement of the supposed obligations arising from said contracts.
It is true that third parties may seek enforcement of a contract under the second paragraph of
Article 1311, which provides that if a contract should contain some stipulation in favor of a third person,
he may demand its fulfillment. This refers to stipulations pour autrui, or stipulations for the benefit of third
parties. However, the written contracts of sale in this case contain no such stipulation in favor of the
petitioners. While petitioners claim that there was an oral stipulation, it cannot be proven under the Parol
Evidence Rule. Under this Rule, [w]hen 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.[47] While the Rule admits of exception, no such exception was pleaded, much less proved, by
petitioners.
The Parol Evidence Rule applies to the parties and their successors in interest. Conversely, it has
no application to a stranger to a contract. For purposes of the Parol Evidence Rule, a person who claims
to be the beneficiary of an alleged stipulation pour autrui in a contract (such as petitioners) may be
considered a party to that contract. It has been held that a third party who avails himself of a
stipulation pour autrui under a contract becomes a party to that contract.[48] This is why under Article
1311, a beneficiary of a stipulation pour autrui is required to communicate his acceptance to the obligor
before its revocation.
Moreover, to preclude the application of Parol Evidence Rule, it must be shown that 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.[49] A beneficiary of a stipulation pour autrui obviously bases his claim on the contract. He
therefore cannot claim to be a stranger to the contract and resist the application of the Parol Evidence
Rule.
Thus, even assuming that the alleged oral undertakings invoked by petitioners may be deemed
stipulations pour autrui, still petitioners claim cannot prosper, because they are barred from proving them
by oral evidence under the Parol Evidence Rule.
Whether the issue of ownership regarding the front

portion of Lot No. 9 and entitlement to the expropriation
payment may be resolved in this action
Petitioners characterize respondents claim over the expropriation payment as unlawful on the ground that
the expropriated portion belongs to petitioners per the alleged oral partition. They also maintain that Ygoa
is barred by laches from claiming the front portion because she waited 13 years from the time of the sale
to claim her share via petition for subdivision and survey.
On the other hand, respondents charge petitioners with forum-shopping on the ground that the issue of
ownership had already been submitted to the expropriation court. The trial court affirmed this argument
stating that petitioners resorted to forum-shopping, while the appellate court ruled that it could not
determine the existence of forum-shopping considering that it was not provided with the pleadings in the
expropriation case.
We agree with the CA on this score. The parties did not provide the Court with the pleadings filed in the
expropriation case, which makes it impossible to know the extent of the issues already submitted by the
parties in the expropriation case and thereby assess whether there was forum-shopping.
Nonetheless, while we cannot rule on the existence of forum-shopping for insufficiency of evidence, it is
correct that the issue of ownership should be litigated in the expropriation court.[50]The court hearing the
expropriation case is empowered to entertain the conflicting claims of ownership of the condemned
property and adjudge the rightful owner thereof, in the same expropriation case.[51] This is due to the
intimate relationship of the issue of ownership with the claim for the expropriation payment. Petitioners
objection regarding respondents claim over the expropriation payment should have been brought up in
the expropriation court as opposition to respondents motion. While we do not know if such objection was
already made,[52] the point is that the proper venue for such issue is the expropriation court, and not here
where a different cause of action (specific performance) is being litigated.
We also cannot agree with the trial courts order to partition the lot in accordance with Exhibit No. 1 or the
sketch prepared by petitioner Valentina. To do so would resolve the issue of ownership over portions of
Lot No. 9 and effectively preempt the expropriation court, based solely on actual occupation (which was
the only thing which Exhibit No. 1 could have possibly proved). It will be remembered that Exhibit No. 1
is simply a sketch demonstrating the portions of Lot No. 9 actually occupied by the parties. It was offered
simply to impeach petitioners assertion of actual occupation in accordance with the terms of the alleged
oral partition.
Let it be made clear that our ruling, just like those of the trial court and the appellate court, is
limited to resolving petitioners action for specific performance. Given the finding that petitioners failed to
prove the existence of the alleged oral partition and the alleged additional consideration for the sale, they
cannot compel respondents to comply with these inexistent obligations. In this connection, there is no
basis for petitioners claim that the CA Decision was incomplete by not definitively ruling on the ownership
over the front lots. The CA decision is complete. It ruled that petitioners failed to prove the alleged
obligations and are therefore not entitled to specific performance thereof.
WHEREFORE, the petition is DENIED. The assailed October 28, 2005 Decision of the Court of Appeals
in CA-G.R. No. 174719, as well as its August 31, 2006 Resolution, are AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's attestation, it is
REYNATO S. PUNO
Chief Justice
[1]
Per Order dated October 15, 1996 of Judge Meinrado P. Paredes.
[2]
Rollo, pp. 11-19.
[3]
Id. at 21-29; penned by Associate Justice Pampio A. Abarintos and concurred in by Associate
Justices Mercedes Gozo-Dadole and Enrico A. Lanzanas.
[4]
[5]
Rollo, p. 28.
[6]
Lot No. 9 is registered under Transfer Certificate of Title No. 61114 in the name of the Heirs
of Pastor Pacres.
[7]
TSN (Valentina Vda. De Pacres), September 17, 1997, pp. 6-9.
[8]
Id. at 6; id., September 23, 1997, pp. 4-5.
[9]
Exhibit C dated October 26, 1968. A portion reads:
The lessors hereby lease unto the lessee the ground floor of the House No. 1277, together with
a lot area of 300 square meters including the area occupied by the house, of which the lessors
are the co-owners, owning undivided interest over the house and lot.
[10]
Namely Simplicia, Margarita, Francisco, and Rodrigo Pacres.
[11]
Exhibit 5, Deed of Sale executed by Simplicia Pacres. Exhibit 6, which is the Deed of Sale
executed by Margarita Pacres in favor of Ramirez, describes the object of the sale as forming
part and portion of the 300 square meters under the occupancy of the vendee and her
husband, Mr. Hilario Ramirez, by virtue of a Lease Contract in their favor.
[12]
Lot No. 9 consists of two consolidated lots, Lot Nos. 5504 and 5506, as confirmed by the
description in TCT No. 61114 (Exhibit 37).
[13]
Exhibit 7 dated December 31, 1974.
[14]
Exhibit 3 dated August 5, 1971.
[15]
Exhibit 3 dated August 5, 1971. Rodrigo and Franciscos Deed of Sale described the property
sold as the portion of 300 square meters which is the subject matter of this sale, shall be
taken along the provincial road where the house of Rodrigo Pacres is built.
[16]
Exhibit 23 dated August 1971. The deed of sale described its object as the portion sold shall
be taken along the provincial highway. Exhibit 24 dated December 1971. Simplicia sold an
additional 50 square meters to Ygoa with the proviso x x x that my sister Margarita Pacres is
giving me an equivalent area of 50 square meters, in exchange of the portion sold to
hereunder Cecilia Ygoa, the vendee.
[17]
Exhibit 25 dated March 1, 1983.
[18]
Exhibit 27 dated February 8, 1984.
[19]
Exhibit 26. It stated that Lot No. 9-A was awarded to Ygoa and it ordered the dispossession
of Margarita and Franciscos shares.
[20]
Exhibit 26 dated October 25, 1985. It contained the following allegations:
xxxx
II Plaintiffs are among the co-owners of a pro-indiviso parcel of land which they and the herein
defendants brothers and sisters, inherited from their father x x x
III Recently, plaintiffs were verily informed and therefore allege that herein defendants PACRES
on one hand and defendant Cecilia Ygoa on the other, connived, confederated and
mutually helped one another in having the formers undivided shares, consisting of 492
square meters sold clandestinely in favor of the latter (Cecilia Ygoa), a stranger, without
giving written notice to the other pro-indiviso co-owners, in violation of Article 1623, New
Revised Civil Code of the Philippines;
xxxx
V Proper demands were made upon the defendants, for plaintiffs desire to redeem the undivided
portions purchased clandestinely by defendant Cecilia Ygoa, but the latter refused and
ignored and still continue to refuse and ignore the said plaintiffs plea;
xxxx
VII Plaintiffs are likewise verily informed and so allege that the price or consideration stated in
the deeds of sale have been jacked up, for obvious reasons, hence the consideration
stated in the said deeds of sale are not reasonable, and therefore it should be fixed or
determined first so that the correct and reasonable redemption price could be consignated
and/or paid accordingly, pursuant to law x x x
[21]
CA-G.R. CV No. 14654. Exhibit 33.
[22]
Entry of Judgment in G.R. No. 97185. Exhibit 35.
[23]
Rollo, p. 67.
[24]
Id. at 57.
[25]
Exhibit N.
[26]
Civil Case No. R-32715, RTC Decision, p. 5.

Supreme Court
Manila
SECOND DIVISION

Appellee,
Present:

- versus - CARPIO MORALES,*
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
JOSEPH AMPER y REPASO, Promulgated:

Appellant. May 5, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In this case, appellant Joseph Amper y Repaso not only robbed his victim of her material possessions; he
also robbed her of her virginity.
On appeal is the Decision[1] dated August 18, 2005 of the Court of Appeals (CA), in CA-G.R. CR-H.C. No.
00716, which affirmed with modification the Decision[2] dated January 30, 2003 of the Regional Trial Court
(RTC) of Gumaca, Quezon, Branch 61, in Criminal Case No. 5195-G, convicting appellant of the crime of
robbery with rape. Also assailed is the Resolution[3]dated December 5, 2005 denying the motion for
reconsideration.
Version of the Prosecution
On August 17, 1995, at approximately 7:30 in the evening, AAA[4] was walking along Mateo Manila
Street near Leon Guinto Memorial College located at Brgy. Zone II, Poblacion, Atimonan, Quezon to buy
peanuts for her father.[5] While approaching the place of a certain Noni Magisa, appellant suddenly put his
hand on AAAs shoulder, poked a pointed instrument at the left side of her body and ordered her not to
make any move.[6] The appellant then directed her to walk casually towards the direction of the
church. [7] When they reached the back of the church, appellant ordered AAA to sit on the cemented floor
and to remove all the pieces of jewelry she was wearing, particularly her wrist watch, bracelet and pair of
earrings.[8]
After ordering AAA to lie down on the floor,[9] appellant removed AAAs shorts and underwear[10] then also
lowered his own pants and briefs[11] and forcibly inserted his penis into her vagina and made push and
pull movements.[12] All this time, appellant poked a weapon at the left side of AAAs neck which prevented
her from shouting for help.[13] After satisfying his lust, appellant told AAA not to leave until he was gone.[14]
After about two minutes, AAA put on her garments and hurried home
where she narrated the incident to her father.[15] Both proceeded to the place where the incident
happened[16] but appellant could no longer be found.[17] AAA and her father proceeded to the police station
and reported the matter.[18] Thereafter, Dr. Lourdes Taguinod (Dr. Taguinod)
of Doa Martha Hospital examined her. [19]
On August 22, 1995, appellant was arrested for robbery and attempted rape committed against another
individual.[20] On the following day,[21] AAA went to the police station and identified appellant as the person
who robbed and raped her.[22]
Subsequently, an Information was filed against appellant charging him with the crime of robbery with
rape,[23] viz:
That on or about the 17th day of August 1995, at Barangay Zone II, Municipality
of Atimonan, Province of Quezon, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused, armed with a pointed instrument, with intent to gain
and to rob, and by means of force, violence against and intimidation of person, taking
advantage of nighttime and his superior strength to better facilitate his purpose, did then
and there willfully, unlawfully and feloniously take from AAA the following:
One (1) ring ......... P 400.00

Bracelet ......... 314.00
Wrist Watch ......... 300.00
Pair of Earring ......... 220.00
________________
Total P 1,234.00
with a total value of ONE THOUSAND TWO HUNDRED THIRTY FOUR PESOS (P1,234.00)
Philippine currency, belonging to said AAA, to her damage and prejudice in the said
amount; and that by reason thereof and on the same occasion, the above-named
accused, with lewd design, by means of force, threats, violence and intimidation, did, then
and there willfully, unlawfully and feloniously have carnal knowledge of the aforesaid AAA,
a minor, 14 years of age, against her will.
Contrary to law.
Upon arraignment,[24] appellant pleaded not guilty to the charge. Trial thereafter ensued.
Version of the Defense
Appellant denied liability and insisted that he only saw AAA for the first time in the police station. He
claimed that on August 17, 1995, he left his place of work at Hopewell Power Plant at around 6:30 in the
evening[25] and arrived at the Atimonan town proper at past 9:00 oclock in the evening. [26] Thus he could
not have robbed or raped AAA. In support of his claim, appellant submitted Cepa Slip Form Power System
Ltd. showing that he was at the power plant project site between 6:16 in the morning up to 5:21 in the
afternoon of August 17, 1995[27]and a letter addressed to all jeepney operators stating the time when they
should depart from the site.[28]
On cross-examination, however, appellant admitted that he could take a passenger jeepney from
the gate of Hopewell Power Plant going to the junction of Maharlika highway[29]which would take around
45 to 50 minutes. From the junction, he could reach Atimonan town proper in 30 minutes by taking a
passenger bus.[30]
On January 30, 2003, the RTC rendered its Decision convicting appellant of the crime of robbery with
rape, and sentencing him to suffer the penalty of reclusion perpetua. The RTC did not give credence to
appellants alibi since he failed to prove that it was impossible for him to be at the situs of the crime at the
time it took place. The trial court also found AAAs testimony to be clear and convincing; hence there was
no reason to disbelieve her.
The dispositive portion of the RTC Decision reads:
WHEREFORE, premises considered, the Court finds accused JOSEPH AMPER

guilty beyond reasonable doubt of the crime of Robbery with Rape under Article 294 of
the Revised Penal Code, as amended by R.A. 7659 and he is therefore sentenced to suffer
the penalty of RECLUSION PERPETUA and to pay the amount of P75,000.00 as indemnity
to the victim and the amount of P50,000.00 as moral damages and to pay the amount
of P1,340.00 in restitution of the value of jewelries taken from AAA.
SO ORDERED.[31]
The appellate court affirmed with modification the Decision of the trial court. It held that the prosecution
satisfactorily proved all the elements of the complex crime of robbery with rape, to wit: a) the taking of
personal property is committed with violence or intimidation against persons; b) the property taken
belongs to another; c) the taking is done with animo lucrandi, and d) the robbery is accompanied by rape.
The dispositive portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the appealed decision is hereby

AFFIRMED in all aspects with the MODIFICATION that the civil indemnity is reduced
from P75,000.00 to P50,000.00.
SO ORDERED.[32]
Hence, this appeal.
Our Ruling
The appeal lacks merit.
We have consistently ruled that an accused is estopped from assailing the legality of his arrest if he fails
to raise this issue, or to move for the quashal of the information against him on this ground, which should
be made before arraignment.[33] In this case, appellant only raised for the first time the alleged irregularity
of his arrest in his appeal before the CA. This is not allowed considering that he was already properly
arraigned and even actively participated in the proceedings. He is, therefore, deemed to have waived such
alleged defect when he submitted himself to the jurisdiction of the court.
We likewise cannot sustain appellants contention that his identification was marked by
suggestiveness. Appellant claims that he was arrested after the incident based on the suggestion of the
police officer and not on the identification made by AAA. It must be stressed that what is crucial is for the
witness to positively declare during trial that the persons charged were the malefactors.[34] In this case,
AAA positively and categorically identified appellant during trial as her molester. She could not have been
mistaken because she had a fairly good look at appellants face even before the commission of the
crime.[35] The place where she first saw the appellant was well-lighted.[36] Moreover, AAA never faltered in
her identification of the appellant.
That the crime was committed at the back of the church and that there are several establishments in the
area would not make the commission of the same highly improbable. It is settled jurisprudence that rape
can be committed even in a public place, in places where people congregate, in parks, along the roadside,
within school premises, inside a house or where there are other occupants, and even in the same room
where there are other members of the family who are sleeping.[37]
Both the trial court and the appellate court correctly found appellant guilty of the complex crime of robbery
with rape, the elements of which are as follows: (1) the taking of personal property is committed with
violence against or intimidation of persons; (2) the property taken belongs to another; (3) the taking is
characterized by intent to gain or animus lucrandi; and (4) the robbery is accompanied by rape.
The first three elements were proven by AAA who testified that appellant brought her at knife point to the
back of the church and divested her of her belongings. Appellant also threatened her with bodily harm if
she refused.[38] From the foregoing, it is clear that the crime of robbery was committed.
As to the attendant rape, we find the testimony of AAA worthy of full faith and credence. The records
show that AAA was only 15 years old at the time she testified. Her credibility was also strengthened by
the fact that she immediately reported the incident to her father, who in turn reported the same to the
police authorities. The results of the medical examination likewise corroborated her testimony that she
was indeed raped as the presence of spermatozoa was even found in her vagina.[39] AAAs declaration of
her sexual ordeal, which was given in a straightforward, convincing, credible and satisfactory manner,
shows no other intention than to obtain justice for the wrong committed by the appellant against her.
The trial court and the appellate court properly disregarded appellants defense of alibi. Aside from the fact
that the same cannot prevail over the positive identification made by AAA of the appellant as the
perpetrator of the crime, appellant also failed to prove that it was physically impossible for him to be at
the scene of the crime at the time of its commission. Here, appellant claimed that he was at his workplace
at the time the crime was committed and that he left work at around 6:00 oclock in the evening and
reached his home at around 9:00 oclock in the evening. However, on cross examination, he admitted that
it is possible to reach Maharlika Highway junction from his place of work in 45 to 50 minutes and from
there reach Atimonan town proper in 30 minutes.[40] It will be recalled that the incident happened at
about 7:30 in the evening; thus, it is not impossible for the appellant to be at the crime scene at the time
it was committed.
Article 294 of the Revised Penal Code provides for the penalty of reclusion perpetua to death, when the
robbery was accompanied by rape. Thus, both the trial court and the appellate court correctly imposed
upon the appellant the penalty of reclusion perpetua and to pay the amounts of P50,000.00 as civil
indemnity, P50,000.00 as moral damages, and P1,340.00 in restitution of the value of the jewelries taken
from AAA.
WHEREFORE, premises considered, the Decision of the Court of Appeals dated August 18, 2005 in CA-
G.R. CR-H.C. No. 00716, which affirmed with modification the Decision dated January 30, 2003 of the
Regional Trial Court of Gumaca, Quezon, Branch 61, in Criminal Case No. 5195-G, convicting appellant of
the crime of robbery with rape, and the Resolution dated December 5, 2005 denying the motion for
reconsideration, are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
CONCHITA CARPIO MORALES ROBERTO A. ABAD

JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
In lieu of Justice Arturo D. Brion, per Raffle dated December 21, 2009.
[1]
CA rollo, pp. 153-169; penned by Associate Justice Eliezer R. De los Santos and concurred in
by Associate Justices Eugenio S. Labitoria and Arturo D. Brion.
[2]
Records, pp. 392-428; penned by Judge Aurora V. Maqueda-Roman.
[3]
CA rollo, p. 192.
[4]
Pursuant to Section 44 of Republic Act (RA) No. 9262, otherwise known as the Anti-Violence
Against Women and Their Children Act of 2004, and Section 63, Rule XI of the Rules and
Regulations Implementing RA 9262, the real name of the child-victim is withheld to protect
his/her privacy. Fictitious initials are used instead to represent him/her. Likewise, the personal
circumstances or any other information tending to establish or compromise his/her identity,
as well as those of his/her immediate family or household members shall not be disclosed.
[5]
TSN, September 10, 1996, pp. 8-9.
[6]
Id. at 10.
[7]
Id.
[8]
Id. at 12.
[9]
Id. at 13.
[10]
Id.
[11]
Id. at 14-15.
[12]
Id. at 18-20.
[13]
Id. at 20.
[14]
Id. at 20-21.
[15]
Id. at 21.
[16]
Id.
[17]
TSN, May 28, 2001, pp. 8-9.
[18]
TSN, September 10, 1996, p. 22.
[19]
Id. at 25.
[20]
TSN, May 28, 2001, p. 11
[21]
Id. at 12.
[22]
TSN, February 12, 2001, p. 6.
[23]
Records, pp. 2-3.
[24]
Id. at 19.
[25]
TSN, May 7, 2002, p. 9.
[26]
Id. at 9.
[27]
Id. at 11.
[28]
Id. at 11-12.
[29]
[30]
Id. at 9.
[31]
[32]
CA rollo, p. 169.
[33]
People v. Alunday, G.R. No. 181546, September 3, 2008, 564 SCRA 135, 149.
[34]
People v. Martin, G.R. No. 177571, September 29, 2008, 567 SCRA 42, 49.
[35]
[36]
Id. at 24.
[37]
People v. Mendoza, 440 Phil. 755, 772 (2002).
[38]
[39]
[40]
Id. at 7-9.

Supreme Court
Manila
SECOND DIVISION
TEOFILO EVANGELISTA, G.R. No. 163267

Petitioner,
Present:

- versus- BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
THE PEOPLE OF THE PHILIPPINES, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
To be guilty of the crime of illegal possession of firearms and ammunition, one does not have to
be in actual physical possession thereof. The law does not punish physical possession alone but possession
in general, which includes constructive possession or the subjection of the thing to the owners control.[1]
This Petition for Review on Certiorari[2] assails the October 15, 2003 Decision[3] of the Court of
Appeals (CA) in CA-G.R. CR No. 21805 which affirmed the January 23, 1998 Decision[4] of the Regional
Trial Court (RTC) of Pasay City, Branch 109 convicting petitioner Teofilo Evangelista for violation of Section
1, Presidential Decree (PD) No. 1866,[5] as amended, as well as the April 16, 2004 Resolution which denied
petitioners Motion for Reconsideration.
Factual Antecedents
In an Information[6] dated January 31, 1996, petitioner was charged with violation of Section 1 of PD 1866
allegedly committed as follows:
That on or about the 30th day of January 1996, at the Ninoy Aquino International Airport,
Pasay City, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, did, then and there, wilfully, unlawfully and feloniously have in his
possession, custody and control the following items:
1. One (1) Unit 9mm Jericho Pistol, Israel with SN F-36283 with one (1)
magazine;
2. One (1) Unit Mini-Uzi 9mm Israel Submachine gun with SN 931864 with two
(2) magazines;
3. Nineteen (19) 9mm bullets.
without the corresponding permit or license from competent authority.
CONTRARY TO LAW.
After posting his bail, petitioner filed on February 14, 1996 an Urgent Motion for (a) Suspension of
Proceedings and (b) the Holding of A Preliminary Investigation.[7] The RTC granted the motion and,
accordingly, the State Prosecutor conducted the preliminary investigation.
In a Resolution[8] dated March 6, 1996, the State Prosecutor found no probable cause to indict petitioner
and thus recommended the reversal of the resolution finding probable cause and the dismissal of the
complaint. Thereafter, a Motion to Withdraw Information[9] was filed but it was denied by the trial court
in an Order[10] dated March 26, 1996, viz:
Acting on the Motion to Withdraw Information filed by State Prosecutor Aida Macapagal
on the ground that [there exists] no probable cause to indict the accused, the Information
having been already filed in Court, the matter should be left to the discretion of the Court
to assess the evidence, hence, for lack of merit, the same is hereby denied. Let the
arraignment of the accused proceed.
When arraigned on March 26, 1996, petitioner pleaded not guilty to the charge. Thereafter, trial ensued.
In the morning of January 30, 1996, Maximo Acierto, Jr. (Acierto), a Customs Police assigned at the Ninoy
Aquino International Airport (NAIA) District Command, was informed by his superior that a certain
passenger of Philippine Airlines (PAL) Flight No. 657 would be arriving from Dubai bringing with him
firearms and ammunitions. Shortly after lunch, Acierto, together with Agents Cuymo and Fuentabella,
proceeded to the tube area where they were met by a crewmember who introduced to them herein
petitioner. Acierto asked petitioner if he brought firearms with him and the latter answered in the
affirmative adding that the same were bought in Angola. Thereupon, Acierto was summoned to the
cockpit by the pilot, Capt. Edwin Nadurata (Capt. Nadurata), where the firearms and ammunitions were
turned over to him. Petitioner was then escorted to the arrival area to get his luggage and thereafter
proceeded to the examination room where the luggage was examined and petitioner was investigated. In
open court, Acierto identified the firearms and ammunitions.
During the investigation, petitioner admitted before Special Agent Apolonio Bustos (Bustos) that he bought
the subject items in Angola but the same were confiscated by the Dubai authorities, which turned over
the same to a PAL personnel in Dubai. Upon inquiry, the Firearms and Explosive Office (FEO)
in Camp Crame certified that petitioner is neither registered with said office[11] nor licensed holder of
aforesaid firearms and ammunitions. Bustos likewise verified from the Bureau of Customs, but his effort
yielded no record to show that the firearms were legally purchased. Among the documents Bustos had
gathered during his investigation were the Arrival Endorsement Form[12] and Customs Declaration
Form.[13] A referral letter[14] was prepared endorsing the matter to the Department of Justice. Bustos
admitted that petitioner was not assisted by counsel when the latter admitted that he bought the firearms
in Angola.
SPO4 Federico Bondoc, Jr. (SPO4 Bondoc), a member of the Philippine National Police (PNP) and
representative of the FEO, upon verification, found that petitioner is not a licensed/registered firearm
holder. His office issued a certification[15] to that effect which he identified in court as Exhibit A.
After the prosecution rested its case, petitioner, with leave of court, filed his Demurrer to Evidence,[16] the
resolution of which was deferred pending submission of petitioners evidence.[17]
The defense presented Capt. Nadurata whose brief but candid and straightforward narration of the event
was synthesized by the CA as follows:
x x x On January 30, 1996, he was approached by the PAL Station Manager in Dubai,
who informed him that a Filipino contract worker from Angola who is listed as a passenger
of PAL flight from Dubai to Manila, was being detained as he was found in possession of
firearms; that if said passenger will not be able to board the airplane, he would be
imprisoned in Dubai; and that the Arabs will only release the passenger if the Captain of
PAL would accept custody of the passenger [herein petitioner] and the firearms. Capt.
Nadurata agreed to take custody of the firearms and the passenger, herein appellant, so
that the latter could leave Dubai. The firearms were deposited by the Arabs in the cockpit
of the airplane and allowed the appellant to board the airplane. Upon arrival in Manila,
Capt. Nadurata surrendered the firearms to the airport authorities.
Meanwhile, in view of the unavailability of the defenses intended witness, Nilo Umayaw (Umayaw), the
PAL Station Manager in Dubai, the prosecution and the defense agreed and stipulated on the following
points:
1. That PAL Station Manager Mr. Nilo Umayaw was told by a Dubai Police that
firearms and ammunitions were found in the luggage of a Filipino passenger coming
from Angola going to the Philippines;
2. That he was the one who turned over the subject firearms to Captain Edwin
Nadurata, the Pilot in command of PAL Flight 657;
3. That the subject firearms [were] turned over at Dubai;
4. That the said firearms and ammunitions were confiscated from the accused
Teofilo Evangelista and the same [were] given to the PAL Station Manager who in
turn submitted [them] to the PAL Pilot, Capt. Edwin Nadurata who has already
testified;
5. That [these are] the same firearms involved in this case.[18]
On February 4, 1997, the RTC rendered its Decision, the dispositive portion of which reads:
In view of all the foregoing, the Court finds accused TEOFILO E. EVANGELISTA
guilty beyond reasonable doubt for violation of Sec. 1, P.D. 1866 as amended (Illegal
Possession of Firearms and Ammunitions: (One (1) Unit Mini-Uzi 9mm Israel submachine
gun with SN-931864 with two (2) magazines and nineteen (19) 9mm bullets) and hereby
sentences him to imprisonment of Seventeen (17) Years and Four (4) Months to Twenty
(20) Years.
The above-mentioned firearms are hereby ordered forfeited in favor of the

government and is ordered transmitted to the National Bureau of Investigation, Manila for
proper disposition.
SO ORDERED.[19]
On April 4, 1997, petitioner filed a Motion for New Trial[20] which the RTC granted.[21] Forthwith,
petitioner took the witness stand narrating his own version of the incident as follows:
On January 28, 1996, he was at Dubai International Airport waiting for his flight to
the Philippines. He came from Luwanda, Angola where he was employed as a seaman at Oil International
Limited. While at the airport in Dubai, Arab policemen suddenly accosted him and brought him to their
headquarters where he saw guns on top of a table. The Arabs maltreated him and forced him to admit
ownership of the guns. At this point, PAL Station Manager Umayaw came and talked to the policemen in
Arabian dialect. Umayaw told him that he will only be released if he admits ownership of the guns. When
he denied ownership of the same, Umayaw reiterated that he (petitioner) will be released only if he will
bring the guns with him to the Philippines. He declined and insisted that the guns are not his. Upon the
request of Umayaw, petitioner was brought to the Duty Free area for his flight going to the Philippines.
When he was inside the plane, he saw the Arab policemen handing the guns to the pilot. Upon arrival at
the NAIA, he was arrested by the Customs police and brought to the arrival area where his passport was
stamped and he was made to sign a Customs Declaration Form without reading its contents. Thereafter,
he was brought to a room at the ground floor of the NAIA where he was investigated. During the
investigation, he was not represented by counsel and was forced to accept ownership of the guns. He
denied ownership of the guns and the fact that he admitted having bought the same in Angola.
After new trial, the RTC still found petitioner liable for the offense charged but modified the penalty of
imprisonment. The dispositive portion of the Decision dated January 23, 1998 reads:
In view of all the foregoing, the Court finds accused TEOFILO E. EVANGELISTA guilty
beyond reasonable doubt for violation of Sec. 1, P.D. 1866 as amended (Illegal Possession
of Firearms and Ammunitions: One (1) Unit 9mm Jerico Pistol, Israel with SN F-36283
with one (1) magazine; One (1) Unit Mini-Uzi 9mm Israel submachine gun with SN-
931864 with two (2) magazines and nineteen (19) 9mm bullets and hereby sentences
him to imprisonment of Six (6) Years and One (1) Day to Eight (8) Years and a fine
of P30,000.00.
The above-mentioned firearms are hereby ordered forfeited in favor of the government
and [are] ordered transmitted to the National Bureau of Investigation, Manila for proper
disposition.
SO ORDERED.[22]

On appeal, the CA affirmed the findings of the trial court in its Decision dated October 15, 2003. It
ruled that the stipulations during the trial are binding on petitioner. As regards possession of subject
firearms, the appellate court ruled that Capt. Naduratas custody during the flight
from Dubai to Manila was for and on behalf of petitioner. Thus, there was constructive possession.
Petitioner moved for reconsideration[23] but it was denied by the appellate court in its April 16,
2004 Resolution.
Hence, this petition.
Issues
Petitioner assigns the following errors:
a. The Court of Appeals gravely erred in not acquitting Evangelista from the charge of
Presidential Decree No. 1866, Illegal Possession of Firearms.
b. The Court of Appeals gravely erred in not holding that Evangelista was never in
possession of any firearm or ammunition within Philippine jurisdiction and he
therefore could not have committed the crime charged against him.
c. The Court of Appeals gravely erred in holding that Evangelista committed a continuing
crime.
d. The Court of Appeals gravely erred in disregarding the results of the preliminary
investigation.[24]
We find the appeal devoid of merit.
At the outset, we emphasize that under Rule 45 of the Rules of Court, a petition for review
on certiorari shall only raise questions of law considering that the findings of fact of the CA are, as a
general rule, conclusive upon and binding on the Supreme Court.[25] In this recourse, petitioner indulges
us to calibrate once again the evidence adduced by the parties and to re-evaluate the credibility of their
witnesses. On this ground alone, the instant petition deserves to be denied outright. However, as the
liberty of petitioner is at stake and following the principle that an appeal in a criminal case throws the
whole case wide open for review, we are inclined to delve into the merits of the present petition.
In his bid for acquittal, petitioner argues that he could not have committed the crime imputed against him
for he was never in custody and possession of any firearm or ammunition when he arrived in
the Philippines. Thus, the conclusion of the appellate court that he was in constructive possession of the
subject firearms and ammunitions is erroneous.
We are not persuaded. As correctly found by the CA:
Appellants argument that he was never found in possession of the subject firearms and
ammunitions within Philippine jurisdiction is specious. It is worthy to note that at the
hearing of the case before the court a quo on October 8, 1996, the defense counsel
stipulated that the subject firearms and ammunitions were confiscated from appellant and
the same were given to PAL Station Manager Nilo Umayaw who, in turn, turned over the
same to Capt. Edwin Nadurata. Such stipulation of fact is binding on appellant, for the
acts of a lawyer in the defense of a case are the acts of his client. Granting that Nilo
Umayaw was merely told by the Dubai authorities that the firearms and ammunitions
were found in the luggage of appellant and that Umayaw had no personal knowledge
thereof, however, appellants signature on the Customs Declaration Form, which contains
the entry 2 PISTOL guns SENT SURRENDER TO PHILIPPINE AIRLINE, proves that he was
the one who brought the guns to Manila. While appellant claims that he signed the
Customs Declaration Form without reading it because of his excitement, however, he
does not claim that he was coerced or persuaded in affixing his signature thereon. The
preparation of the Customs Declaration Form is a requirement for all arriving passengers
in an international flight. Moreover, it cannot be said that appellant had already been
arrested when he signed the Customs Declaration Form. He was merely escorted by
Special Agent Acierto to the arrival area of the NAIA. In fact, appellant admitted that it
was only after he signed the Customs Declaration Form that he was brought to the ground
floor of NAIA for investigation. Consequently, appellant was in constructive possession of
the subject firearms. As held in People v. Dela Rosa, the kind of possession punishable
under PD 1866 is one where the accused possessed a firearm either physically or
constructively with animus possidendi or intention to possess the same. Animus
possidendi is a state of mind. As such, what goes on into the mind of the accused, as his
real intent, could be determined solely based on his prior and coetaneous acts and the
surrounding circumstances explaining how the subject firearm came to his possession.
Appellants witness, Capt. Nadurata, the PAL pilot of Flight No. PR 657
from Dubai to Manila on January 30, 1996, testified that he accepted custody of the
firearms and of appellant in order that the latter, who was being detained in Dubai for
having been found in possession of firearms, would be released from custody. In other
words, Capt. Naduratas possession of the firearm during the flight
from Dubai to Manilawas for and on behalf of appellant.[26]
We find no cogent reason to deviate from the above findings, especially considering petitioners admission
during the clarificatory questioning by the trial court:
Court: So, it is clear now in the mind of the Court, that the firearms and ammunitions will
also be with you on your flight to Manila, is that correct?
A: Yes, your honor.
Court: [You] made mention of that condition, that the Dubai police agreed to release you
provided that you will bring the guns and ammunitions with you? Is that the
condition of the Dubai Police?
A: Yes, your honor.
Court: The condition of his release was that he will have to bring the guns and
ammunitions to the Philippines and this arrangement was made by the PAL
Supervisor at Dubai and it was Mr. Umayaw the PAL Supervisor, who interceded
in his behalf with the Dubai Police for his flight in the Philippines.[27]
To us, this constitutes judicial admission of his possession of the subject firearms and ammunitions. This
admission, the veracity of which requires no further proof, may be controverted only upon a clear showing
that it was made through palpable mistake or that no admission was made.[28] No such controversion is
extant on record.
Moreover, we cannot ignore the Customs Declaration Form wherein it appeared that petitioner brought
the firearms with him upon his arrival in the Philippines. While there was no showing that he was forced
to sign the form, petitioner can only come up with the excuse that he was excited. Hardly can we accept
such pretension.
We are likewise not swayed by petitioners contention that the lower court erroneously relied on the
Customs Declaration Form since it is not admissible in evidence because it was accomplished without the
benefit of counsel while he was under police custody.
The accomplishment of the Customs Declaration Form was not elicited through custodial investigation. It
is a customs requirement which petitioner had a clear obligation to comply. As correctly observed by the
CA, the preparation of the Customs Declaration Form is a requirement for all arriving passengers in an
international flight. Petitioner was among those passengers.Compliance with the constitutional procedure
on custodial investigation is, therefore, not applicable in this case. Moreover, it is improbable that the
customs police were the ones who filled out the declaration form. As will be noted, it provides details that
only petitioner could have possibly known or supplied. Even assuming that there was prior
accomplishment of the form which contains incriminating details, petitioner could have easily taken
precautionary measures by not affixing his signature thereto. Or he could have registered his objection
thereto especially when no life threatening acts were being employed against him upon his arrival in the
country.
Obviously, it was not only the Customs Declaration Form from which the courts below based their
conclusion that petitioner was in constructive possession of subject firearms and ammunitions. Emphasis
was also given on the stipulations and admissions made during the trial. These pieces of evidence are
enough to show that he was the owner and possessor of these items.
Petitioner contends that the trial court has no jurisdiction over the case filed against him. He claims that
his alleged possession of the subject firearms transpired while he was at the DubaiAirport and his
possession thereof has ceased when he left for the Philippines. He insists that since Dubai is outside the
territorial jurisdiction of the Philippines and his situation is not one of the exceptions provided in Article 2
of the Revised Penal Code, our criminal laws are not applicable. In short, he had not committed a crime
within the Philippines.
Indeed it is fundamental that the place where the crime was committed determines not only the venue
of the action but is an essential element of jurisdiction.[29] In order for the courts to acquire jurisdiction in
criminal cases, the offense should have been committed or any one of its essential ingredients should
have taken place within the territorial jurisdiction of the court. If the evidence adduced during the trial
shows that the offense was committed somewhere else, the court should dismiss the action for want of
jurisdiction.[30]
Contrary to the arguments put forward by petitioner, we entertain no doubt that the crime of illegal
possession of firearms and ammunition for which he was charged was committed in the Philippines. The
accomplishment by petitioner of the Customs Declaration Form upon his arrival at the NAIA is very clear
evidence that he was already in possession of the subject firearms in the Philippines.
And more than mere possession, the prosecution was able to ascertain that he has no license or authority
to possess said firearms. It bears to stress that the essence of the crime penalized under PD 1866, as
amended, is primarily the accuseds lack of license to possess the firearm. The fact of lack or absence of
license constitutes an essential ingredient of the offense of illegal possession of firearm. Since it has been
shown that petitioner was already in the Philippines when he was found in possession of the subject
firearms and determined to be without any authority to possess them, an essential ingredient of the
offense, it is beyond reasonable doubt that the crime was perpetrated and completed in no other place
except the Philippines.
Moreover, the jurisdiction of a court over the criminal case is determined by the allegations in the complaint
or information. In this case, the information specifically and categorically alleged that on or about January
30, 1996 petitioner was in possession, custody and control of the subject firearms at
the Ninoy Aquino International Airport, Pasay City, Philippines, certainly a territory within the jurisdiction
of the trial court.
In contrast, petitioner failed to establish by sufficient and competent evidence that the present charge
happened in Dubai. It may be well to recall that while in Dubai, petitioner, even in a situation between life
and death, firmly denied possession and ownership of the firearms. Furthermore, there is no record of
any criminal case having been filed against petitioner in Dubai in connection with the discovered
firearms. Since there is no pending criminal case when he left Dubai, it stands to reason that there was
no crime committed in Dubai. The age-old but familiar rule that he who alleges must prove his allegation
applies.[31]
Petitioner finally laments the trial courts denial of the Motion to Withdraw Information filed by the
investigating prosecutor due to the latters finding of lack of probable cause to indict him. He argues that
such denial effectively deprived him of his substantive right to a preliminary investigation.
Still, petitioners argument fails to persuade. There is nothing procedurally improper on the part of the trial
court in disregarding the result of the preliminary investigation it itself ordered.Judicial action on the motion
rests in the sound exercise of judicial discretion. In denying the motion, the trial court just followed the
jurisprudential rule laid down in Crespo v. Judge Mogul[32] that once a complaint or information is filed in
court, any disposition of the case as to its dismissal or the conviction or acquittal of the accused rests on
the sound discretion of the court. The court is not dutifully bound by such finding of the investigating
prosecutor. In Solar Team Entertainment, Inc v. Judge How[33] we held:
It bears stressing that the court is however not bound to adopt the resolution of the
Secretary of Justice since the court is mandated to independently evaluate or assess the
merits of the case, and may either agree or disagree with the recommendation of the
Secretary of Justice. Reliance alone on the resolution of the Secretary of Justice would be
an abdication of the trial courts duty and jurisdiction to determine prima facie case.
Consequently, petitioner has no valid basis to insist on the trial court to respect the result of the preliminary
investigation it ordered to be conducted.
In fine, we find no reason not to uphold petitioners conviction. The records substantiate the RTC and CAs
finding that petitioner possessed, albeit constructively, the subject firearms and ammunition when he
arrived in the Philippines on January 30, 1996. Moreover, no significant facts and circumstances were
shown to have been overlooked or disregarded which if considered would have altered the outcome of
the case.
In the prosecution for the crime of illegal possession of firearm and ammunition, the Court has reiterated
the essential elements in People v. Eling[34] to wit: (1) the existence of subject firearm; and, (2) the fact
that the accused who possessed or owned the same does not have the corresponding license for it.
In the instant case, the prosecution proved beyond reasonable doubt the elements of the crime. The
existence of the subject firearms and the ammunition were established through the testimony of
Acierto. Their existence was likewise admitted by petitioner when he entered into stipulation and through
his subsequent judicial admission. Concerning petitioners lack of authority to possess the firearms, SPO4
Bondoc, Jr. testified that upon verification, it was ascertained that the name of petitioner does not appear
in the list of registered firearm holders or a registered owner thereof. As proof, he submitted a certification
to that effect and identified the same in court. The testimony of SPO4 Bondoc, Jr. or the certification from
the FEO would suffice to prove beyond reasonable doubt the second element.[35]
A final point. Republic Act (RA) No. 8294[36] took effect on June 6, 1997 or after the commission of the
crime on January 30, 1996. However, since it is advantageous to the petitioner, it should be given
retrospective application insofar as the penalty is concerned.
Section 1 of PD 1866, as amended by RA 8294 provides:
Section 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of Firearms

or Ammunition or Instruments Used or Intended to be Used in the Manufacture of
Firearms or Ammunition. x x x
The penalty of prision mayor in its minimum period and a fine of Thirty thousand pesos
(P30,000.00) shall be imposed if the firearm is classified as high powered firearm which
includes those with bores bigger in diameter than .38 caliber and 9 millimeter such as
caliber .40, .41, .44, .45 and also lesser calibered firearms but considered powerful such
as caliber .357 and caliber .22 center-fire magnum and other firearms with firing capability
of full automatic and by burst of two or three: Provided, however, That no other crime
was committed by the person arrested.
Prision mayor in its minimum period ranges from six years and one day to eight years. Hence, the penalty
imposed by the RTC as affirmed by the CA is proper.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA-G.R. CR No.
21805 affirming the January 23, 1998 Decision of the Regional Trial Court of Pasay City, Branch 109 dated
January 23, 1998, convicting petitioner Teofilo Evangelista of violation of Section 1 of Presidential Decree
No. 1866, as amended, and sentencing him to suffer the penalty of imprisonment of six years and one
day to eight years and to pay a fine of P30,000.00 is AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
People v. Fajardo, 123 Phil. 1348, 1351 (1966).
[2]
Rollo, pp. 3-37.
[3]
CA rollo, pp. 181-194; penned by Associate Justice Marina L. Buzon and concurred in by
Associate Justices Sergio L. Pestao and Jose Catral Mendoza (now a member of this Court).
[4]
Records, Vol. II, pp. 133-141; penned by Judge Lilia C. Lopez.
[5]
Decree Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In Acquisition
or Disposition of Firearms, Ammunition or Explosives.
[6]
[7]
Id. at 54-59.
[8]
Id. at 75-79.
[9]
Id. at 73-74.
[10]
Id. at 86.
[11]
Exhibit G, records, p. 174.
[12]
Exhibit I, id. at 177.
[13]
Exhibit J, id. at 178.
[14]
Exhibit H, id. at 175-176.
[15]
Id. at 171.
[16]
Id. at 187-199.
[17]
Id. at 212.
[18]
Id. at 293-294.
[19]
Id. at 303-304.
[20]
[21]
Id. at 25.
[22]
Id. at 133-141.
[23]
CA rollo, 198-206.
[24]
Rollo, p. 16.
[25]
Dacut v. Court of Appeals, G.R. No. 169434, March 28, 2008, 550 SCRA 260, 267.
[26]
CA rollo, pp. 191-192. Citations Omitted
[27]
TSN, June 30, 1997, pp. 22-23.
[28]
RULES OF COURT, Rule129, Section 4.
Sec. 4 - Judicial admissions. An admission verbal or written made by a party in the course of the
proceedings in the same case does not require proof. The admission may be contradicted
only by showing that it was made through palpable mistake or that no such admission was
made.
[29]
People v. Macasaet, 492 Phil. 355, 370 (2005).
[30]
Uy v. Court of Appeals, 342 Phil. 329, 337 (1997).
[31]
Samson v. Daway, 478 Phil. 784, 795 (2004).
[32]
235 Phl. 465, 476 (1987).
[33]
393 Phil. 172, 181 (2000).
[34]
G.R. No. 178546, April 30, 2008, 553 SCRA 724, 738.
[35]
Valeroso v. People, G.R. No. 164815, February 22, 2008, 546 SCRA 450, 468-469.
[36]
An Act Amending the Provisions of Presidential Decree No. 1866.

Supreme Court
Manila
EN BANC
ISABELITA C. VINUYA, VICTORIA G.R. No. 162230

C. DELA PEA, HERMINIHILDA
MANIMBO, LEONOR H. SUMAWANG,
CANDELARIA L. SOLIMAN, MARIA
L. QUILANTANG, MARIA L. MAGISA,
NATALIA M. ALONZO, LOURDES M.
NAVARO, FRANCISCA M. ATENCIO,
ERLINDA MANALASTAS, TARCILA
M. SAMPANG, ESTER M. PALACIO,
MAXIMA R. DELA CRUZ, BELEN A.
SAGUM, FELICIDAD TURLA,
FLORENCIA M. DELA PEA, Present:
EUGENIA M. LALU, JULIANA G.
MAGAT, CECILIA SANGUYO, ANA PUNO, C. J.,
ALONZO, RUFINA P. MALLARI, CARPIO,
ROSARIO M. ALARCON, RUFINA C. CORONA,
GULAPA, ZOILA B. MANALUS, CARPIO MORALES,
CORAZON C. CALMA, MARTA A. VELASCO, JR.,
GULAPA, TEODORA M. HERNANDEZ, NACHURA,
FERMIN B. DELA PEA, MARIA DELA LEONARDO-DE CASTRO,
PAZ B. CULALA, ESPERANZA BRION,
MANAPOL, JUANITA M. BRIONES, PERALTA,
VERGINIA M. GUEVARRA, MAXIMA BERSAMIN,
ANGULO, EMILIA SANGIL, TEOFILA DEL CASTILLO,
R. PUNZALAN, JANUARIA G. GARCIA, ABAD,
PERLA B. BALINGIT, BELEN A. VILLARAMA, JR.,
CULALA, PILAR Q. GALANG, PEREZ, and
ROSARIO C. BUCO, GAUDENCIA C. MENDOZA, JJ.
DELA PEA, RUFINA Q. CATACUTAN,
FRANCIA A. BUCO, PASTORA C.
GUEVARRA, VICTORIA M. DELA
CRUZ, PETRONILA O. DELA CRUZ,
ZENAIDA P. DELA CRUZ, CORAZON
M. SUBA, EMERINCIANA A. VINUYA,
LYDIA A. SANCHEZ, ROSALINA M.
BUCO, PATRICIA A. BERNARDO,
LUCILA H. PAYAWAL, MAGDALENA
LIWAG, ESTER C. BALINGIT, JOVITA
A. DAVID, EMILIA C. MANGILIT,
VERGINIA M. BANGIT, GUILLERMA
S. BALINGIT, TERECITA PANGILINAN,
MAMERTA C. PUNO, CRISENCIANA
C. GULAPA, SEFERINA S. TURLA, Promulgated:
MAXIMA B. TURLA, LEONICIA G. April 28, 2010
GUEVARRA, ROSALINA M. CULALA,
CATALINA Y. MANIO, MAMERTA T.
SAGUM, CARIDAD L. TURLA, et al.
In their capacity and as members of the
Malaya Lolas Organization,
Petitioners,
- versus -
THE HONORABLE EXECUTIVE

SECRETARY ALBERTO G.
ROMULO, THE HONORABLE
SECRETARY OF FOREIGN
AFFAIRS DELIA DOMINGO-
ALBERT, THE HONORABLE
SECRETARY OF JUSTICE
MERCEDITAS N. GUTIERREZ,
and THE HONORABLE SOLICITOR
GENERAL ALFREDO L. BENIPAYO,
Respondents.
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The Treaty of Peace with Japan, insofar as it barred future claims such as those asserted
by plaintiffs in these actions, exchanged full compensation of plaintiffs for a future peace.
History has vindicated the wisdom of that bargain. And while full compensation for
plaintiffs' hardships, in the purely economic sense, has been denied these former prisoners
and countless other survivors of the war, the immeasurable bounty of life for themselves
and their posterity in a free society and in a more peaceful world services the debt.[1]
There is a broad range of vitally important areas that must be regularly decided by the Executive
Department without either challenge or interference by the Judiciary. One such area involves the delicate
arena of foreign relations. It would be strange indeed if the courts and the executive spoke with different
voices in the realm of foreign policy. Precisely because of the nature of the questions presented, and the
lapse of more than 60 years since the conduct complained of, we make no attempt to lay down general
guidelines covering other situations not involved here, and confine the opinion only to the very questions
necessary to reach a decision on this matter.
Factual Antecedents
This is an original Petition for Certiorari under Rule 65 of the Rules of Court with an application for
the issuance of a writ of preliminary mandatory injunction against the Office of the Executive Secretary,
the Secretary of the Department of Foreign Affairs (DFA), the Secretary of the Department of Justice
(DOJ), and the Office of the Solicitor General (OSG).
Petitioners are all members of the MALAYA LOLAS, a non-stock, non-profit organization
registered with the Securities and Exchange Commission, established for the purpose of providing
aid to the victims of rape by Japanese military forces in the Philippines during the Second World
War.
Petitioners narrate that during the Second World War, the Japanese army attacked villages and
systematically raped the women as part of the destruction of the village. Their communities were bombed,
houses were looted and burned, and civilians were publicly tortured, mutilated, and slaughtered. Japanese
soldiers forcibly seized the women and held them in houses or cells, where they were repeatedly raped,
beaten, and abused by Japanese soldiers. As a result of the actions of their Japanese tormentors, the
petitioners have spent their lives in misery, having endured physical injuries, pain and disability, and mental
and emotional suffering.[2]
Petitioners claim that since 1998, they have approached the Executive Department through the
DOJ, DFA, and OSG, requesting assistance in filing a claim against the Japanese officials and military
officers who ordered the establishment of the comfort women stations in the Philippines. However,
officials of the Executive Department declined to assist the petitioners, and took the position that the
individual claims of the comfort women for compensation had already been fully satisfied by Japans
compliance with the Peace Treaty between the Philippines and Japan.
Issues
Hence, this petition where petitioners pray for this court to (a) declare that respondents committed
grave abuse of discretion amounting to lack or excess of discretion in refusing to espouse their claims for
the crimes against humanity and war crimes committed against them; and (b) compel the respondents
to espouse their claims for official apology and other forms of reparations against Japan before the
International Court of Justice (ICJ) and other international tribunals.
Petitioners arguments
Petitioners argue that the general waiver of claims made by the Philippine government in the
Treaty of Peace with Japan is void. They claim that the comfort women system established by Japan, and
the brutal rape and enslavement of petitioners constituted a crime against humanity,[3] sexual
slavery,[4] and torture.[5] They allege that the prohibition against these international crimes is jus
cogens norms from which no derogation is possible; as such, in waiving the claims of Filipina comfort
women and failing to espouse their complaints against Japan, the Philippine government is in breach of
its legal obligation not to afford impunity for crimes against humanity. Finally, petitioners assert that the
Philippine governments acceptance of the apologies made by Japan as well as funds from the Asian
Womens Fund (AWF) were contrary to international law.
Respondents maintain that all claims of the Philippines and its nationals relative to the war were dealt with
in the San Francisco Peace Treaty of 1951 and the bilateral Reparations Agreement of 1956.[6]
Article 14 of the Treaty of Peace[7] provides:
Article 14. Claims and Property
a) It is recognized that Japan should pay reparations to the Allied Powers for the damage
and suffering caused by it during the war. Nevertheless it is also recognized
that the resources of Japan are not presently sufficient, if it is to maintain a
viable economy, to make complete reparation for all such damage and
suffering and at the present time meet its other obligations.
b) Except as otherwise provided in the present Treaty, the Allied Powers

waive all reparations claims of the Allied Powers, other claims of the Allied
Powers and their nationals arising out of any actions taken by Japan and its
nationals in the course of the prosecution of the war, and claims of the Allied
Powers for direct military costs of occupation.
In addition, respondents argue that the apologies made by Japan[8] have been satisfactory, and
that Japan had addressed the individual claims of the women through the atonement money paid by the
Asian Womens Fund.
Historical Background
The comfort women system was the tragic legacy of the Rape of Nanking. In December 1937,
Japanese military forces captured the city of Nanking in China and began a barbaric campaign of terror
known as the Rape of Nanking, which included the rapes and murders of an estimated 20,000 to 80,000
Chinese women, including young girls, pregnant mothers, and elderly women.[9]
In reaction to international outcry over the incident, the Japanese government sought ways to
end international condemnation[10] by establishing the comfort women system. Under this system, the
military could simultaneously appease soldiers' sexual appetites and contain soldiers' activities within a
regulated environment.[11] Comfort stations would also prevent the spread of venereal disease among
soldiers and discourage soldiers from raping inhabitants of occupied territories.[12]
Daily life as a comfort woman was unmitigated misery.[13] The military forced victims into barracks-
style stations divided into tiny cubicles where they were forced to live, sleep, and have sex with as many
30 soldiers per day.[14] The 30 minutes allotted for sexual relations with each soldier were 30-minute
increments of unimaginable horror for the women.[15] Disease was rampant.[16] Military doctors regularly
examined the women, but these checks were carried out to prevent the spread of venereal diseases; little
notice was taken of the frequent cigarette burns, bruises, bayonet stabs and even broken bones inflicted
on the women by soldiers.
Fewer than 30% of the women survived the war.[17] Their agony continued in having to suffer with the
residual physical, psychological, and emotional scars from their former lives. Some returned home and
were ostracized by their families. Some committed suicide. Others, out of shame, never returned home.[18]
Efforts to Secure Reparation
The most prominent attempts to compel the Japanese government to accept legal responsibility
and pay compensatory damages for the comfort women system were through a series of lawsuits,
discussion at the United Nations (UN), resolutions by various nations, and the Womens International
Criminal Tribunal. The Japanese government, in turn, responded through a series of public apologies and
the creation of the AWF.[19]
Lawsuits
In December 1991, Kim Hak-Sun and two other survivors filed the first lawsuit in Japan by former
comfort women against the Japanese government. The Tokyo District Court however dismissed their
case.[20] Other suits followed,[21] but the Japanese government has, thus far, successfully caused the
dismissal of every case.[22]
Undoubtedly frustrated by the failure of litigation before Japanese courts, victims of the comfort
women system brought their claims before the United States (US). On September 18, 2000, 15 comfort
women filed a class action lawsuit in the US District Court for the District of Columbia[23] "seeking money
damages for [allegedly] having been subjected to sexual slavery and torture before and during World War
II," in violation of "both positive and customary international law." The case was filed pursuant to the Alien
Tort Claims Act (ATCA),[24] which allowed the plaintiffs to sue the Japanese government in a US federal
district court.[25] On October 4, 2001, the district court dismissed the lawsuit due to lack of jurisdiction over
Japan, stating that [t]here is no question that this court is not the appropriate forum in which plaintiffs
may seek to reopen x x x discussions nearly half a century later x x x [E]ven if Japan did not enjoy
sovereign immunity, plaintiffs' claims are non-justiciable and must be dismissed.
The District of Columbia Court of Appeals affirmed the lower court's dismissal of the case.[26] On
appeal, the US Supreme Court granted the womens petition for writ of certiorari, vacated the judgment
of the District of Columbia Court of Appeals, and remanded the case.[27] On remand, the Court of Appeals
affirmed its prior decision, noting that much as we may feel for the plight of the appellants, the courts of
the US simply are not authorized to hear their case.[28] The women again brought their case to the US
Supreme Court which denied their petition for writ of certiorari on February 21, 2006.
Efforts at the United Nations

In 1992, the Korean Council for the Women Drafted for Military Sexual Slavery by Japan (KCWS),
submitted a petition to the UN Human Rights Commission (UNHRC), asking for assistance in investigating
crimes committed by Japan against Korean women and seeking reparations for former comfort
women.[29] The UNHRC placed the issue on its agenda and appointed Radhika Coomaraswamy as the
issue's special investigator. In 1996, Coomaraswamy issued a Report reaffirming Japan's responsibility in
forcing Korean women to act as sex slaves for the imperial army, and made the
following recommendations:
A. At the national level

137. The Government of Japan should:
(a) Acknowledge that the system of comfort stations set up by the Japanese Imperial
Army during the Second World War was a violation of its obligations under
international law and accept legal responsibility for that violation;
(b) Pay compensation to individual victims of Japanese military sexual slavery according
to principles outlined by the Special Rapporteur of the Sub-Commission on
Prevention of Discrimination and Protection of Minorities on the right to restitution,
compensation and rehabilitation for victims of grave violations of human rights
and fundamental freedoms. A special administrative tribunal for this purpose
should be set up with a limited time-frame since many of the victims are of a very
advanced age;
(c) Make a full disclosure of documents and materials in its possession with regard to
comfort stations and other related activities of the Japanese Imperial Army during
the Second World War;
(d) Make a public apology in writing to individual women who have come forward and
can be substantiated as women victims of Japanese military sexual slavery;
(e) Raise awareness of these issues by amending educational curricula to reflect historical
realities;
(f) Identify and punish, as far as possible, perpetrators involved in the recruitment and
institutionalization of comfort stations during the Second World War.
Gay J. McDougal, the Special Rapporteur for the UN Sub-Commission on Prevention of Discrimination and
Protection of Minorities, also presented a report to the Sub-Committee on June 22,
1998 entitled Contemporary Forms of Slavery: Systematic Rape, Sexual Slavery and Slavery-like Practices
During Armed Conflict. The report included an appendix entitled An Analysis of the Legal Liability of the
Government of Japan for 'Comfort Women Stations' established during the Second World War,[30] which
contained the following findings:
68. The present report concludes that the Japanese Government remains liable for grave
violations of human rights and humanitarian law, violations that amount in their totality
to crimes against humanity. The Japanese Governments arguments to the contrary,
including arguments that seek to attack the underlying humanitarian law prohibition of
enslavement and rape, remain as unpersuasive today as they were when they were first
raised before the Nuremberg war crimes tribunal more than 50 years ago. In addition,
the Japanese Governments argument that Japan has already settled all claims from the
Second World War through peace treaties and reparations agreements following the war
remains equally unpersuasive. This is due, in large part, to the failure until very recently
of the Japanese Government to admit the extent of the Japanese militarys direct
involvement in the establishment and maintenance of these rape centres. The Japanese
Governments silence on this point during the period in which peace and reparations
agreements between Japan and other Asian Governments were being negotiated
following the end of the war must, as a matter of law and justice, preclude Japan from
relying today on these peace treaties to extinguish liability in these cases.
69. The failure to settle these claims more than half a century after the cessation of
hostilities is a testament to the degree to which the lives of women continue to be
undervalued. Sadly, this failure to address crimes of a sexual nature committed on a
massive scale during the Second World War has added to the level of impunity with which
similar crimes are committed today. The Government of Japan has taken some steps to
apologize and atone for the rape and enslavement of over 200,000 women and girls who
were brutalized in comfort stations during the Second World War. However, anything less
than full and unqualified acceptance by the Government of Japan of legal liability and the
consequences that flow from such liability is wholly inadequate. It must now fall to the
Government of Japan to take the necessary final steps to provide adequate redress.
The UN, since then, has not taken any official action directing Japan to provide the reparations sought.
Women's International War Crimes
Tribunal
The Women's International War Crimes Tribunal (WIWCT) was a people's tribunal established by a
number of Asian women and human rights organizations, supported by an international coalition of non-
governmental organizations.[31] First proposed in 1998, the WIWCT convened in Tokyo in 2000 in order
to adjudicate Japan's military sexual violence, in particular the enslavement of comfort women, to bring
those responsible for it to justice, and to end the ongoing cycle of impunity for wartime sexual violence
against women.
After examining the evidence for more than a year, the tribunal issued its verdict on December 4,
2001, finding the former Emperor Hirohito and the State of Japan guilty of crimes against humanity for
the rape and sexual slavery of women.[32] It bears stressing, however, that although the tribunal included
prosecutors, witnesses, and judges, its judgment was not legally binding since the tribunal itself was
organized by private citizens.
Action by Individual Governments
On January 31, 2007, US Representative Michael Honda of California, along with six co-sponsor
representatives, introduced House Resolution 121 which called for Japanese action in light of the ongoing
struggle for closure by former comfort women. The Resolution was formally passed on July 30,
2007,[33] and made four distinct demands:
[I]t is the sense of the House of Representatives that the Government of Japan (1) should
formally acknowledge, apologize, and accept historical responsibility in a clear and
unequivocal manner for its Imperial Armed Forces' coercion of young women into sexual
slavery, known to the world as comfort women, during its colonial and wartime occupation
of Asia and the Pacific Islands from the 1930s through the duration of World War II; (2)
would help to resolve recurring questions about the sincerity and status of prior
statements if the Prime Minister of Japan were to make such an apology as a public
statement in his official capacity; (3) should clearly and publicly refute any claims that the
sexual enslavement and trafficking of the comfort women for the Japanese Imperial Army
never occurred; and (4) should educate current and future generations about this horrible
crime while following the recommendations of the international community with respect
to the comfort women.[34]
In December 2007, the European Parliament, the governing body of the European Union, drafted
a resolution similar to House Resolution 121.[35] Entitled, Justice for Comfort Women, the resolution
demanded: (1) a formal acknowledgment of responsibility by the Japanese government; (2) a removal of
the legal obstacles preventing compensation; and (3) unabridged education of the past. The resolution
also stressed the urgency with which Japan should act on these issues, stating: the right of individuals to
claim reparations against the government should be expressly recognized in national law, and cases for
reparations for the survivors of sexual slavery, as a crime under international law, should be prioritized,
taking into account the age of the survivors.
The Canadian and Dutch parliaments have each followed suit in drafting resolutions
against Japan. Canada's resolution demands the Japanese government to issue a formal apology, to admit
that its Imperial Military coerced or forced hundreds of thousands of women into sexual slavery, and to
restore references in Japanese textbooks to its war crimes.[36] The Dutch parliament's resolution calls for
the Japanese government to uphold the 1993 declaration of remorse made by Chief Cabinet Secretary
Yohei Kono.
The Foreign Affairs Committee of the United Kingdoms Parliament also produced a report in
November, 2008 entitled, "Global Security: Japan and Korea" which concluded that Japan should
acknowledge the pain caused by the issue of comfort women in order to ensure cooperation
between Japan and Korea.
Statements of Remorse made by representatives

of the Japanese government
Various officials of the Government of Japan have issued the following public statements
concerning the comfort system:
a) Statement by the Chief Cabinet Secretary Yohei Kono in 1993:
The Government of Japan has been conducting a study on the issue of wartime "comfort
women" since December 1991. I wish to announce the findings as a result of that study.
As a result of the study which indicates that comfort stations were operated in extensive
areas for long periods, it is apparent that there existed a great number of comfort women.
Comfort stations were operated in response to the request of the military authorities of
the day. The then Japanese military was, directly or indirectly, involved in the
establishment and management of the comfort stations and the transfer of comfort
women. The recruitment of the comfort women was conducted mainly by private
recruiters who acted in response to the request of the military. The Government study
has revealed that in many cases they were recruited against their own will, through
coaxing coercion, etc., and that, at times, administrative/military personnel directly took
part in the recruitments. They lived in misery at comfort stations under a coercive
atmosphere.
As to the origin of those comfort women who were transferred to the war areas, excluding
those from Japan, those from the Korean Peninsula accounted for a large part.
The Korean Peninsula was under Japanese rule in those days, and their recruitment,
transfer, control, etc., were conducted generally against their will, through coaxing,
coercion, etc.
Undeniably, this was an act, with the involvement of the military authorities of the day,
that severely injured the honor and dignity of many women. The Government of Japan
would like to take this opportunity once again to extend its sincere apologies and remorse
to all those, irrespective of place of origin, who suffered immeasurable pain and incurable
physical and psychological wounds as comfort women.
It is incumbent upon us, the Government of Japan, to continue to consider seriously,

while listening to the views of learned circles, how best we can express this sentiment.
We shall face squarely the historical facts as described above instead of evading them,
and take them to heart as lessons of history. We hereby reiterated our firm determination
never to repeat the same mistake by forever engraving such issues in our memories
through the study and teaching of history.
As actions have been brought to court in Japan and interests have been shown in this
issue outside Japan, the Government of Japan shall continue to pay full attention to this
matter, including private researched related thereto.
b) Prime Minister Tomiichi Murayamas Statement in 1994
On the issue of wartime comfort women, which seriously stained the honor and dignity
of many women, I would like to take this opportunity once again to express my profound
and sincere remorse and apologies
c) Letters from the Prime Minister of Japan to Individual Comfort Women

The issue of comfort women, with the involvement of the Japanese military authorities at
that time, was a grave affront to the honor and dignity of a large number of women.
As Prime Minister of Japan, I thus extend anew my most sincere apologies and remorse
to all the women who endured immeasurable and painful experiences and suffered
incurable physical and psychological wounds as comfort women.
I believe that our country, painfully aware of its moral responsibilities, with feelings of
apology and remorse, should face up squarely to its past history and accurately convey it
to future generations.
d) The Diet (Japanese Parliament) passed resolutions in 1995 and 2005
Solemnly reflecting upon the many instances of colonial rule and acts of aggression that
occurred in modern world history, and recognizing that Japan carried out such acts in the
past and inflicted suffering on the people of other countries, especially in Asia, the
Members of this House hereby express deep remorse. (Resolution of the House of
Representatives adopted on June 9, 1995)
e) Various Public Statements by Japanese Prime Minister Shinzo Abe

I have talked about this matter in the Diet sessions last year, and recently as well, and
to the press. I have been consistent. I will stand by the Kono Statement. This is our
consistent position. Further, we have been apologizing sincerely to those who suffered
immeasurable pain and incurable psychological wounds as comfort women. Former Prime
Ministers, including Prime Ministers Koizumi and Hashimoto, have issued letters to the
comfort women. I would like to be clear that I carry the same feeling. This has not
changed even slightly. (Excerpt from Remarks by Prime Minister Abe at an Interview by
NHK, March 11, 2007).
I am apologizing here and now. I am apologizing as the Prime Minister and it is as stated
in the statement by the Chief Cabinet Secretary Kono. (Excerpt from Remarks by Prime
Minister Abe at the Budget Committee, the House of Councilors, the Diet of Japan, March
26, 2007).
I am deeply sympathetic to the former comfort women who suffered hardships, and I
have expressed my apologies for the extremely agonizing circumstances into which they
were placed. (Excerpt from Telephone Conference by Prime Minister Abe to President
George W. Bush, April 3, 2007).
I have to express sympathy from the bottom of my heart to those people who were taken
as wartime comfort women. As a human being, I would like to express my sympathies,
and also as prime minister of Japan I need to apologize to them. My administration has
been saying all along that we continue to stand by the Kono Statement. We feel
responsible for having forced these women to go through that hardship and pain as
comfort women under the circumstances at the time. (Excerpt from an interview article
"A Conversation with Shinzo Abe" by the Washington Post, April 22, 2007).
x x x both personally and as Prime Minister of Japan, my heart goes out in sympathy to
all those who suffered extreme hardships as comfort women; and I expressed my
apologies for the fact that they were forced to endure such extreme and harsh conditions.
Human rights are violated in many parts of the world during the 20th Century; therefore
we must work to make the 21st Century a wonderful century in which no human rights
are violated. And the Government of Japan and I wish to make significant contributions
to that end. (Excerpt from Prime Minister Abe's remarks at the Joint Press Availability after
the summit meeting at Camp David between Prime Minister Abe and President Bush, April
27, 2007).
The Asian Women's Fund
Established by the Japanese government in 1995, the AWF represented the government's
concrete attempt to address its moral responsibility by offering monetary compensation to victims of the
comfort women system.[37] The purpose of the AWF was to show atonement of the Japanese people
through expressions of apology and remorse to the former wartime comfort women, to restore their
honor, and to demonstrate Japans strong respect for women.[38]
The AWF announced three programs for former comfort women who applied for assistance: (1) an
atonement fund paying 2 million (approximately $20,000) to each woman; (2) medical and welfare
support programs, paying 2.5-3 million ($25,000-$30,000) for each woman; and (3) a letter of apology
from the Japanese Prime Minister to each woman. Funding for the program came from the Japanese
government and private donations from the Japanese people. As of March 2006, the AWF provided 700
million (approximately $7 million) for these programs in South Korea, Taiwan, and the Philippines; 380
million (approximately $3.8 million) in Indonesia; and 242 million (approximately $2.4 million) in
the Netherlands.
On January 15, 1997, the AWF and the Philippine government signed a Memorandum of Understanding
for medical and welfare support programs for former comfort women. Over the next five years, these
were implemented by the Department of Social Welfare and Development.
Our Ruling
Stripped down to its essentials, the issue in this case is whether the Executive Department
committed grave abuse of discretion in not espousing petitioners claims for official apology and other
forms of reparations against Japan.
From a Domestic Law Perspective, the Executive

Department has the exclusive prerogative to
determine whether to espouse petitioners claims
against Japan.
Baker v. Carr[39] remains the starting point for analysis under the political question doctrine. There
the US Supreme Court explained that:
x x x Prominent on the surface of any case held to involve a political question is found a
textually demonstrable constitutional commitment of the issue to a coordinate political
department or a lack of judicially discoverable and manageable standards for resolving it,
or the impossibility of deciding without an initial policy determination of a kind clearly for
non-judicial discretion; or the impossibility of a court's undertaking independent resolution
without expressing lack of the respect due coordinate branches of government; or an
unusual need for unquestioning adherence to a political decision already made; or the
potentiality of embarrassment from multifarious pronouncements by various departments
on question.
In Taada v. Cuenco,[40] we held that political questions refer "to those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full
discretionary authority has been delegated to the legislative or executive branch of the government. It is
concerned with issues dependent upon the wisdom, not legality of a particular measure."
Certain types of cases often have been found to present political questions.[41] One such category involves
questions of foreign relations. It is well-established that "[t]he conduct of the foreign relations of our
government is committed by the Constitution to the executive and legislative--'the political'--departments
of the government, and the propriety of what may be done in the exercise of this political power is not
subject to judicial inquiry or decision."[42] The US Supreme Court has further cautioned that decisions
relating to foreign policy
are delicate, complex, and involve large elements of prophecy. They are and should be
undertaken only by those directly responsible to the people whose welfare they advance
or imperil. They are decisions of a kind for which the Judiciary has neither aptitude,
facilities nor responsibility.[43]
To be sure, not all cases implicating foreign relations present political questions, and courts certainly
possess the authority to construe or invalidate treaties and executive agreements.[44]However, the
question whether the Philippine government should espouse claims of its nationals against a foreign
government is a foreign relations matter, the authority for which is demonstrably committed by our
Constitution not to the courts but to the political branches. In this case, the Executive Department has
already decided that it is to the best interest of the country to waive all claims of its nationals for reparations
against Japan in the Treaty of Peace of 1951. The wisdom of such decision is not for the courts to
question. Neither could petitioners herein assail the said determination by the Executive
Department via the instant petition for certiorari.
In the seminal case of US v. Curtiss-Wright Export Corp.,[45] the US Supreme Court held that [t]he
President is the sole organ of the nation in its external relations, and its sole representative with foreign
relations.
It is quite apparent that if, in the maintenance of our international relations,

embarrassment -- perhaps serious embarrassment -- is to be avoided and success for our
aims achieved, congressional legislation which is to be made effective through negotiation
and inquiry within the international field must often accord to the President a degree of
discretion and freedom from statutory restriction which would not be admissible where
domestic affairs alone involved. Moreover, he, not Congress, has the better opportunity
of knowing the conditions which prevail in foreign countries, and especially is this true in
time of war. He has his confidential sources of information. He has his agents in the form
of diplomatic, consular and other officials. x x x
This ruling has been incorporated in our jurisprudence through Bayan v.
Executive Secretary[46] and Pimentel v. Executive Secretary;[47] its overreaching principle was, perhaps,
best articulated in (now Chief) Justice Punos dissent in Secretary of Justice v. Lantion:[48]
x x x The conduct of foreign relations is full of complexities and consequences, sometimes

with life and death significance to the nation especially in times of war. It can only be
entrusted to that department of government which can act on the basis of the best
available information and can decide with decisiveness. x x x It is also the President who
possesses the most comprehensive and the most confidential information about foreign
countries for our diplomatic and consular officials regularly brief him on meaningful events
all over the world. He has also unlimited access to ultra-sensitive military intelligence
data.In fine, the presidential role in foreign affairs is dominant and the President is
traditionally accorded a wider degree of discretion in the conduct of foreign affairs. The
regularity, nay, validity of his actions are adjudged under less stringent standards, lest
their judicial repudiation lead to breach of an international obligation, rupture of state
relations, forfeiture of confidence, national embarrassment and a plethora of other
problems with equally undesirable consequences.
The Executive Department has determined that taking up petitioners cause would be inimical to our
countrys foreign policy interests, and could disrupt our relations with Japan, thereby creating serious
implications for stability in this region. For us to overturn the Executive Departments determination would
mean an assessment of the foreign policy judgments by a coordinate political branch to which authority
to make that judgment has been constitutionally committed.
In any event, it cannot reasonably be maintained that the Philippine government was without authority
to negotiate the Treaty of Peace with Japan. And it is equally true that, since time immemorial, when
negotiating peace accords and settling international claims:
x x x [g]overnments have dealt with x x x private claims as their own, treating them as
national assets, and as counters, `chips', in international bargaining. Settlement
agreements have lumped, or linked, claims deriving from private debts with others that
were intergovernmental in origin, and concessions in regard to one category of claims
might be set off against concessions in the other, or against larger political considerations
unrelated to debts.[49]
Indeed, except as an agreement might otherwise provide, international settlements generally wipe out
the underlying private claims, thereby terminating any recourse under domestic law. In Ware v.
Hylton,[50] a case brought by a British subject to recover a debt confiscated by
the Commonwealth of Virginia during the war, Justice Chase wrote:
I apprehend that the treaty of peace abolishes the subject of the war, and that after peace
is concluded, neither the matter in dispute, nor the conduct of either party, during the
war, can ever be revived, or brought into contest again. All violences, injuries, or damages
sustained by the government, or people of either, during the war, are buried in oblivion;
and all those things are implied by the very treaty of peace; and therefore not necessary
to be expressed. Hence it follows, that the restitution of, or compensation for, British
property confiscated, or extinguished, during the war, by any of the United States, could
only be provided for by the treaty of peace; and if there had been no provision, respecting
these subjects, in the treaty, they could not be agitated after the treaty, by the British
government, much less by her subjects in courts of justice. (Emphasis supplied).
This practice of settling claims by means of a peace treaty is certainly

nothing new. For instance, in Dames & Moore v. Regan,[51] the US Supreme Court held:
Not infrequently in affairs between nations, outstanding claims by nationals of one country
against the government of another country are sources of friction between the two
sovereigns. United States v. Pink, 315 U.S. 203, 225, 62 S.Ct. 552, 563, 86 L.Ed. 796
(1942). To resolve these difficulties, nations have often entered into agreements settling
the claims of their respective nationals. As one treatise writer puts it, international
agreements settling claims by nationals of one state against the government of another
are established international practice reflecting traditional international theory. L. Henkin,
Foreign Affairs and the Constitution 262 (1972). Consistent with that principle, the United
States has repeatedly exercised its sovereign authority to settle the claims of its nationals
against foreign countries. x x x Under such agreements, the President has agreed to
renounce or extinguish claims of United States nationals against foreign governments in
return for lump-sum payments or the establishment of arbitration procedures. To be sure,
many of these settlements were encouraged by the United States claimants themselves,
since a claimant's only hope of obtaining any payment at all might lie in having his
Government negotiate a diplomatic settlement on his behalf. But it is also undisputed that
the United States has sometimes disposed of the claims of its citizens without their
consent, or even without consultation with them, usually without exclusive regard for their
interests, as distinguished from those of the nation as a whole. Henkin, supra, at 262-
263. Accord, Restatement (Second) of Foreign Relations Law of the United States 213
(1965) (President may waive or settle a claim against a foreign state x x x [even] without
the consent of the [injured] national). It is clear that the practice of settling claims
continues today.
Respondents explain that the Allied Powers concluded the Peace Treaty with Japan not necessarily for the
complete atonement of the suffering caused by Japanese aggression during the war, not for the payment
of adequate reparations, but for security purposes. The treaty sought to prevent the spread of
communism in Japan, which occupied a strategic position in the Far East. Thus, the Peace Treaty
compromised individual claims in the collective interest of the free world.
This was also the finding in a similar case involving American victims of Japanese slave labor during the
war.[52] In a consolidated case in the Northern District of California,[53] the court dismissed the lawsuits
filed, relying on the 1951 peace treaty with Japan,[54] because of the following policy considerations:
The official record of treaty negotiations establishes that a fundamental goal of the
agreement was to settle the reparations issue once and for all. As the statement of the
chief United States negotiator, John Foster Dulles, makes clear, it was well understood
that leaving open the possibility of future claims would be an unacceptable
impediment to a lasting peace:
Reparation is usually the most controversial aspect of peacemaking. The

present peace is no exception.
On the one hand, there are claims both vast and just. Japan's aggression
caused tremendous cost, losses and suffering.
On the other hand, to meet these claims, there stands a Japan presently
reduced to four home islands which are unable to produce the food its
people need to live, or the raw materials they need to work. x x x
The policy of the United States that Japanese liability for reparations should be sharply
limited was informed by the experience of six years of United States-led occupation
of Japan. During the occupation the Supreme Commander of the Allied Powers (SCAP)
for the region, General Douglas MacArthur, confiscated Japanese assets in conjunction
with the task of managing the economic affairs of the vanquished nation and with a view
to reparations payments. It soon became clear that Japan's financial condition
would render any aggressive reparations plan an exercise in futility.
Meanwhile, the importance of a stable, democratic Japan as a bulwark to
communism in the region increased. At the end of 1948, MacArthur expressed the
view that [t]he use of reparations as a weapon to retard the reconstruction of a viable
economy in Japan should be combated with all possible means and recommended that
the reparations issue be settled finally and without delay.
That this policy was embodied in the treaty is clear not only from the negotiations history
but also from the Senate Foreign Relations Committee report recommending approval of
the treaty by the Senate. The committee noted, for example:
Obviously insistence upon the payment of reparations in any proportion

commensurate with the claims of the injured countries and their nationals
would wreck Japan's economy, dissipate any credit that it may possess
at present, destroy the initiative of its people, and create misery and
chaos in which the seeds of discontent and communism would flourish.
In short, [it] would be contrary to the basic purposes and policy of x x
x the United States x x x.
We thus hold that, from a municipal law perspective, that certiorari will not lie. As a general principle and
particularly here, where such an extraordinary length of time has lapsed between the treatys conclusion
and our consideration the Executive must be given ample discretion to assess the foreign policy
considerations of espousing a claim against Japan, from the standpoint of both the interests of the
petitioners and those of the Republic, and decide on that basis if apologies are sufficient, and whether
further steps are appropriate or necessary.
The Philippines is not under any international

obligation to espouse petitioners claims.
In the international sphere, traditionally, the only means available for individuals to bring a claim within
the international legal system has been when the individual is able to persuade a government to bring a
claim on the individuals behalf.[55] Even then, it is not the individuals rights that are being asserted, but
rather, the states own rights. Nowhere is this position more clearly reflected than in the dictum of the
Permanent Court of International Justice (PCIJ) in the 1924 Mavrommatis Palestine Concessions Case:
By taking up the case of one of its subjects and by resorting to diplomatic action or
international judicial proceedings on his behalf, a State is in reality asserting its own
right to ensure, in the person of its subjects, respect for the rules of international law. The
question, therefore, whether the present dispute originates in an injury to a private
interest, which in point of fact is the case in many international disputes, is irrelevant from
this standpoint. Once a State has taken up a case on behalf of one of its subjects before
an international tribunal, in the eyes of the latter the State is sole claimant.[56]
Since the exercise of diplomatic protection is the right of the State, reliance on the right is within
the absolute discretion of states, and the decision whether to exercise the discretion may invariably be
influenced by political considerations other than the legal merits of the particular claim.[57] As clearly stated
by the ICJ in
Barcelona Traction:
The Court would here observe that, within the limits prescribed by international law, a
State may exercise diplomatic protection by whatever means and to whatever
extent it thinks fit, for it is its own right that the State is asserting. Should the
natural or legal person on whose behalf it is acting consider that their rights
are not adequately protected, they have no remedy in international law. All
they can do is resort to national law, if means are available, with a view to furthering their
cause or obtaining redress. The municipal legislator may lay upon the State an obligation
to protect its citizens abroad, and may also confer upon the national a right to demand
the performance of that obligation, and clothe the right with corresponding sanctions.
However, all these questions remain within the province of municipal law and do not affect
the position internationally.[58] (Emphasis supplied)
The State, therefore, is the sole judge to decide whether its protection will be granted, to what
extent it is granted, and when will it cease. It retains, in this respect, a discretionary power the exercise
of which may be determined by considerations of a political or other nature, unrelated to the particular
case.
The International Law Commissions (ILCs) Draft Articles on Diplomatic Protection fully support
this traditional view. They (i) state that "the right of diplomatic protection belongs to or vests in the
State,[59] (ii) affirm its discretionary nature by clarifying that diplomatic protection is a "sovereign
prerogative" of the State;[60] and (iii) stress that the state "has the right to exercise diplomatic protection
on behalf of a national. It is under no duty or obligation to do so."[61]
It has been argued, as petitioners argue now, that the State has a duty to protect its nationals
and act on his/her behalf when rights are injured.[62] However, at present, there is no sufficient evidence
to establish a general international obligation for States to exercise diplomatic protection of their own
nationals abroad.[63] Though, perhaps desirable, neither state practice nor opinio juris has evolved in such
a direction. If it is a duty internationally, it is only a moral and not a legal duty, and there is no means of
enforcing its fulfillment.[64]
We fully agree that rape, sexual slavery, torture, and sexual violence are morally reprehensible as well as
legally prohibited under contemporary international law.[65] However, petitioners take quite a theoretical
leap in claiming that these proscriptions automatically imply that that the Philippines is under a non-
derogable obligation to prosecute international crimes, particularly since petitioners do not demand the
imputation of individual criminal liability, but seek to recover monetary reparations from the state of Japan.
Absent the consent of states, an applicable treaty regime, or a directive by the Security Council, there is
no non-derogable duty to institute proceedings against Japan. Indeed, precisely because of states
reluctance to directly prosecute claims against another state, recent developments support the
modern trend to empower individuals to directly participate in suits against perpetrators of
international crimes.[66]Nonetheless, notwithstanding an array of General Assembly resolutions calling
for the prosecution of crimes against humanity and the strong policy arguments warranting such a rule,
the practice of states does not yet support the present existence of an obligation to prosecute international
crimes.[67] Of course a customary duty of prosecution is ideal, but we cannot find enough evidence to
reasonably assert its existence. To the extent that any state practice in this area is widespread, it is in the
practice of granting amnesties, immunity, selective prosecution, or de facto impunity to those who commit
crimes against humanity.[68]
Even the invocation of jus cogens norms and erga omnes obligations will not alter this analysis. Even if
we sidestep the question of whether jus cogens norms existed in 1951, petitioners have not deigned to
show that the crimes committed by the Japanese army violated jus cogens prohibitions at the time the
Treaty of Peace was signed, or that the duty to prosecute perpetrators of international crimes is an erga
omnes obligation or has attained the status of jus cogens.
The term erga omnes (Latin: in relation to everyone) in international law has been used as a legal term
describing obligations owed by States towards the community of states as a whole. The concept was
recognized by the ICJ in Barcelona Traction:
x x x an essential distinction should be drawn between the obligations of a State towards

the international community as a whole, and those arising vis--vis another State in the
field of diplomatic protection. By their very nature, the former are the concern of all States.
In view of the importance of the rights involved, all States can be held to have a legal
interest in their protection; they are obligations erga omnes.
Such obligations derive, for example, in contemporary international law, from the
outlawing of acts of aggression, and of genocide, as also from the principles and rules
concerning the basic rights of the human person, including protection from slavery and
racial discrimination. Some of the corresponding rights of protection have entered into the
body of general international law others are conferred by international instruments of a
universal or quasi-universal character.
The Latin phrase, erga omnes, has since become one of the rallying cries of those sharing a belief in the
emergence of a value-based international public order. However, as is so often the case, the reality is
neither so clear nor so bright. Whatever the relevance of obligations erga omnes as a legal concept, its
full potential remains to be realized in practice.[69]
The term is closely connected with the international law concept of jus cogens. In international law, the
term jus cogens (literally, compelling law) refers to norms that command peremptory authority,
superseding conflicting treaties and custom. Jus cogens norms are considered peremptory in the sense
that they are mandatory, do not admit derogation, and can be modified only by general international
norms of equivalent authority.[70]
Early strains of the jus cogens doctrine have existed since the 1700s,[71] but peremptory norms began to
attract greater scholarly attention with the publication of Alfred von Verdross's influential 1937 article,
Forbidden Treaties in International Law.[72] The recognition of jus cogens gained even more force in the
1950s and 1960s with the ILCs preparation of the Vienna Convention on the Law of Treaties
(VCLT).[73] Though there was a consensus that certain international norms had attained the status of jus
cogens,[74] the ILC was unable to reach a consensus on the proper criteria for identifying peremptory
norms.
After an extended debate over these and other theories of jus cogens, the ILC concluded ruefully in 1963
that there is not as yet any generally accepted criterion by which to identify a general rule of international
law as having the character of jus cogens.[75] In a commentary accompanying the draft convention, the
ILC indicated that the prudent course seems to be to x x x leave the full content of this rule to be worked
out in State practice and in the jurisprudence of international tribunals.[76] Thus, while the existence of jus
cogens in international law is undisputed, no consensus exists on its substance,[77] beyond a tiny core of
principles and rules.[78]
Of course, we greatly sympathize with the cause of petitioners, and we cannot begin to
comprehend the unimaginable horror they underwent at the hands of the Japanese soldiers. We are also
deeply concerned that, in apparent contravention of fundamental principles of law, the petitioners appear
to be without a remedy to challenge those that have offended them before appropriate fora. Needless to
say, our government should take the lead in protecting its citizens against violation of their fundamental
human rights. Regrettably, it is not within our power to order the Executive Department to take up the
petitioners cause. Ours is only the power to urge and exhort the Executive Department to take up
petitioners cause.
WHEREFORE, the Petition is hereby DISMISSED.

SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
ANTONIO T. CARPIO RENATO C. CORONA

CONCHITA CARPIO MORALES PRESBITERO J. VELASCO, JR.
ANTONIO EDUARDO B. NACHURA TERESITA J. LEONARDO-DE CASTRO

ARTURO D. BRION DIOSDADO M. PERALTA

LUCAS P. BERSAMIN ROBERTO A. ABAD

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

JOSE CATRAL MENDOZA

Associate Justice
CERTIFICATION
of the Court.
REYNATO S. PUNO
Chief Justice
[1]
In Re World War II Era Japanese Forced Labor Litigation, 114 F. Supp. 2d 939 (N.D. Cal.
2000).
[2]
U.N. Doc. E/CN.4/1996/53/Add.1 (January 4, 1996), Report of the Special Rapporteur on
violence against women, its causes and consequences, Ms. Radhika Coomaraswamy, in
accordance with Commission on Human Rights resolution 1994/45.
[3]
Treaty and customary law both provide that when rape is committed as part of a widespread
or systematic attack directed at any civilian population, regardless of its international or
internal character, then it constitutes one of the gravest crimes against humanity. This
principle is codified under Article 6(c) of the 1945 Nuremberg Charter as well as Article 5(c)
of the Tokyo Charter, which enumerated murder, extermination, enslavement, deportation,
and other inhumane acts committed against any civilian populations, before or during the war
as crimes against humanity, and extended in scope to include imprisonment, torture and rape
by Control Council Law No. 10.
[4]
Article 1 of the Slavery Convention provides:
For the purpose of the present Convention, the following definitions are agreed upon:
(1) Slavery is the status or condition of a person over whom any or all of the powers attaching
to the right of ownership are exercised.
(2) The slave trade includes all acts involved in the capture, acquisition or disposal of a person
with intent to reduce him to slavery; all acts involved in the acquisition of a slave with a
view to selling or exchanging him; all acts of disposal by sale or exchange of a slave
acquired with a view to being sold or exchanged, and, in general, every act of trade or
transport in slaves.
Slavery, Servitude, Forced Labour and Similar Institutions and Practices Convention of 1926
(Slavery Convention of 1926), 60 L.N.T.S. 253, entered into force March 9, 1927.
[5]
Torture is defined as any act by which severe pain or suffering, whether physical or mental, is
intentionally inflicted on a person for such purposes as obtaining from him or a third person,
information or a confession, punishing him for an act he or a third person has committed or
is suspected of having committed, or intimidating or coercing him or a third person, or for
any reason based on discrimination of any kind, when such pain or suffering is inflicted by or
at the instigation of or with the consent or acquiescence of a public official or other person
acting in an official capacity. It does not include pain or suffering arising only from, inherent
in or incidental to lawful sanctions. (Convention Against Torture, Article 1.1)
[6]
Signed at San Francisco, September 8, 1951; Initial entry into force: April 28, 1952. The treaty
was signed
by Argentina, Australia, Belgium, Bolivia, Brazil, Cambodia, Canada, Chile, Colombia, Costa
Rica, Cuba, Czechoslovakia, Dominican Republic, Ecuador, Egypt, El
Salvador, Ethiopia, France, Greece, Guatemala, Haiti, Honduras, Indonesia, Iran, Iraq, Japa
n, Laos, Lebanon, Liberia, Luxembourg, Mexico, the Netherlands, New
Zealand, Nicaragua, Norway, Pakistan, Panama,Paraguay, Peru, The
Philippines, Poland, Saudi Arabia, the Soviet Union, Sri Lanka, South Africa,Syria, Turkey,
the United Kingdom, the United States, Uruguay, Venezuela, Vietnam. The signatories for the
Republic of the Philippines were Carlos P. Romulo, J.M. Elizalde, Vicente Francisco, Diosdado
Macapagal, Emiliano Tirona, and V.G. Sinco.
[7]
Signed in San Francisco, September 8, 1951, ratified by the Philippine Senate on July 16, 1956.
Signed by the Philippine President on July 18, 1956. Entered into force on July 23, 1956.
[8]
On September 21, 1992, the Japanese Embassy formally confirmed to the Philippine
government the involvement of the Japanese Imperial Army in the establishment of comfort
women stations.
In May 1993, Japan approved textbooks featuring an account of how comfort women were
forced to work as prostitutes for the Japanese Imperial Army.
On August 4, 1993, Japanese Prime Minister Miyazawa, before resigning, formally apologized
to women all over the world who were forced to serve as comfort women:
The Japanese government regrets and sincerely apologizes for the unbearable pain
that these women regardless of their nationalities, suffered while being forced to
work as so-called comfort women.
The Japanese government expresses its heartfelt sentiments of reflection and
apology to all the women for their many sufferings and the injuries to mind and
body that cannot be healed.
The Philippine government, under the administration of then President Fidel V. Ramos,
accepted the formal apology given the Japanese Government. Though the formal apology
came late, it is a most welcome gesture from the government of Japan, which has been very
supportive of our economic development.
[9]
Richard J. Galvin, The Case for a Japanese Truth Commission Covering World War II Era
Japanese War Crimes, 11 TUL. J. INT'L & COMP. L. 59, 64 (2003).
[10]
See Argibay, Ad Litem Judge, International Criminal Tribunal for the Former Yugoslavia,
Speech at the Stefan A. Riesenfeld Symposium: Sexual Slavery and the Comfort Women of
World War II, in 21 BERKELEY J. INT'L L. 375, 376 (2003).
[11]
Id.
[12]
Nearey, Seeking Reparations in the New Milleunium: Will Japan Compensate the Comfort
Women of World War II?, 15 TEMP. INT'L & COMP. L.J. 121, 134 (2001).
[13]
USTINIA DOLGOPOL & SNEHAL PARANJAPE, COMFORT WOMEN: AN UNFINISHED
ORDEAL 15 (1994).
[14]
Id. at 48.
[15]
See Johnson, Comment, Justice for Comfort Women: Will the Alien Tort Claims Act Bring Them
the Remedies They Seek?, 20 PENN ST. INT'L L. REV. 253, 260 (2001).
[16]
Id. at 261. Soldiers disregarded rules mandating the use of condoms, and thus many women
became pregnant or infected with sexually transmitted diseases.
[17]
Boling, Mass Rape, Enforced Prostitution, and the Japanese Imperial Army: Japan Eschews
International Legal Responsibility? 3 OCCASIONAL PAPERS/REPRINT SERIES
CONTEMPORARY ASIAN STUDIES 8 (1995).
[18]
Id.
[19]
YAMAMOTO ET AL., RACE, RIGHTS AND REPARATION 435-38 (2001).
[20]
Meade, From Shanghai to Globocourt: An Analysis of the Comfort Women's Defeat in Hwang
v. Japan, 35 VAND. J. TRANSNAT'L L. 211, 233 (2002).
[21]
Numerous lawsuits immediately followed, including lawsuits filed by the Korean Council for
Women Drafted for Sexual Slavery, and a suit by a Dutch former comfort woman;
Fisher, Japan's Postwar Compensation Litigation, 22 WHITTIER L. REV. 35, 44 (2000).
[22]
The lower court ruling in Ha v. Japan has been the lone courtroom victory for comfort women.
On December 25, 1992, ten Korean women filed the lawsuit with the Yamaguchi Prefectural
Court, seeking an official apology and compensation from the Japanese government. The
plaintiffs claimed that Japan had a moral duty to atone for its wartime crimes and a legal
obligation to compensate them under international and domestic laws. More than five years
later, on April 27, 1998, the court found the Japanese government guilty of negligence and
ordered it to pay 300,000, or $2,270, to each of the three plaintiffs. However, the court denied
plaintiffs demands that the government issue an official apology. Both parties appealed,
but Japan's High Court later overturned the ruling. See Park, Broken Silence: Redressing the
Mass Rape and Sexual Enslavement of Asian Women by the Japanese Government in an
Appropriate Forum, 3 ASIAN-PAC. L. & POL'Y J. 40 (2002); Kim & Kim, Delayed Justice: The
Case of the Japanese Imperial Military Sex Slaves, 16 UCLA PAC. BASIN L.J. 263
(1998). Park, Comfort Women During WW II: Are U.S. Courts a Final Resort for Justice?,
17 AM. U. INT'L L. REV. 403, 408 (2002).
[23]
Hwang Geum Joo v. Japan (Hwang I), 172 F. Supp. 2d 52 (D.D.C. 2001), affirmed, 332 F.3d
679 (D.C. Cir. 2003), vacated, 542 U.S. 901 (2004), remanded to 413 F.3d 45 (D.C. Cir. 2005),
cert. denied, 126 S. Ct. 1418 (2006).
[24]
Alien Tort Claims Act, 28 U.S.C. 1350 (2000). The ATCA gives US federal district courts original
jurisdiction to adjudicate civil cases and award tort damages for violations of the law of nations
or United States treaties. See Ahmed, The Shame of Hwang v. Japan: How the
International Community Has Failed Asia's Comfort Women, 14 TEX. J. WOMEN & L. 121,
141-42 (2004).
[25]
Under the ATCA, when a cause of action is brought against a sovereign nation, the only basis
for obtaining personal jurisdiction over the defendant is through an exception to the Foreign
Sovereign Immunities Act (FSIA). See Jeffords, Will Japan Face Its Past? The Struggle for
Justice for Former Comfort Women, 2 REGENT J. INT'L L. 145, 158 (2003/2004). The FSIA
(28 U.S.C. 1604 (1994 & Supp. 1999).) grants foreign states immunity from being sued in US
district courts unless the state waives its immunity or the claims fall within certain enumerated
exceptions. The Japanese government successfully argued that it is entitled to sovereign
immunity under the FSIA. The government additionally argued that post-war treaties had
resolved the issue of reparations, which were non-justiciable political questions.
[26]
See Hwang Geum Joo v. Japan (Hwang II), 332 F.3d 679, 680-81 (D.C. Cir. 2003),
vacated, 542 U.S. 901 (2004), remanded to 413 F.3d 45 (D.C. Cir. 2005), cert. denied, 126
S. Ct. 1418 (2006).
[27]
See Hwang Geum Joo v. Japan (Hwang III), 542 U.S. 901 (2004) (memorandum), remanded
to 413 F.3d 45 (D.C. Cir. 2005), cert. denied, 126 S. Ct. 1418 (2006).
[28]
Id.
[29]
SOH, THE COMFORT WOMEN PROJECT, SAN FRANCISCO STATE UNIVERSITY (1997-
2001), http://online.sfsu.edu/~soh/comfortwomen.html, at 1234-35.
[30]
An Analysis Of The Legal Liability Of The Government Of Japan For Comfort Women Stations
Established During The Second World War (Appendix); REPORT ON CONTEMPORARY FORMS
OF SLAVERY: SYSTEMATIC RAPE, SEXUAL SLAVERY AND SLAVERY-LIKE PRACTICES DURING
ARMED CONFLICT, Final report submitted by Ms. Gay J. McDougall, Special Rapporteur, Sub-
Commission on Prevention of Discrimination and Protection of Minorities, Commission on
Human Rights (Fiftieth Session) E/CN.4/Sub.2/1998/13 (June 22, 1998).
[31]
Chinkin, Women's International Tribunal on Japanese Sexual Slavery, 95 AM. J. INT'L. L. 335
(2001).
[32]
A large amount of evidence was presented to the tribunal for examination. Sixty-four former
comfort women from Korea and other surrounding territories in the Asia-Pacific region
testified before the court. Testimony was also presented by historical scholars, international
law scholars, and two former Japanese soldiers. Additional evidence was submitted by the
prosecution teams of ten different countries, including: North and South Korea, China, Japan,
the Philippines, Indonesia, Taiwan, Malaysia, East Timor, and the Netherlands. Id. at 336.
[33]
Press Release, Congressman Mike Honda, Rep. Honda Calls on Japan to Apologize for World
War II Exploitation of Comfort Women (January 31, 2007).
[34]
H.R. Res. 121, 110th Cong. (2007) (enacted).
[35]
European Parliament, Human rights: Chad, Women's Rights in Saudi Arabia, Japan's Wartime
Sex Slaves, Dec. 17, 2007, http://
www.europarl.europa.eu/sides/getDoc.do?language=EN&type=IM-
PRESS&reference=20071210BRI14639&secondRef=ITEM-008-EN.
[36]
The Comfort Women--A History of Trauma,
http:// taiwan.yam.org.tw/womenweb/conf_women/index_e.html.
[37]
YAMAMOTO ET AL., supra note 19 at 437. The government appointed Bunbei Hara, former
Speaker of the Upper House of the Diet, as the first President of the Asian Women's Fund
(1995-1999). Former Prime Minister Tomiichi Murayama succeeded Hara as the second
president of the program (1999-present). See Jeffords, supra note 25 at 158.
[38]
The Asian Women's Fund, http://www.awf.or.jp/english/project_ atonement.html, at 55.
[39]
369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962).
[40]
103 Phil 1051, 1068 (1957).
[41]
See Baker v. Carr, 369 U.S. at 211-222.
[42]
Oetjen v. Central Leather Co., 246 U.S. 297, 302 (1918).
[43]
Chicago & S. Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 111 (1948).
[44]
CONSTITUTION, Art. VIII, Sec. 5(2)(a).
[45]
299 US 304, 57 S. Ct. 216, 81 L. Ed, 255 (1936).
[46]
396 Phil 623, 663 (2000). We held:
By constitutional fiat and by the intrinsic nature of his office, the President, as head
of State, is the sole organ and authority in the external affairs of the country. In
many ways, the President is the chief architect of the nation's foreign policy; his
"dominance in the field of foreign relations is (then) conceded." Wielding vast
powers and influence, his conduct in the external affairs of the nation,
as Jefferson describes, is "executive altogether".
[47]
501 Phil. 304, 313 (2005). We stated:
In our system of government, the President, being the head of state, is regarded
as the sole organ and authority in external relations and is the country's sole
representative with foreign nations. As the chief architect of foreign policy, the
President acts as the country's mouthpiece with respect to international affairs.
Hence, the President is vested with the authority to deal with foreign states and
governments, extend or withhold recognition, maintain diplomatic relations, enter
into treaties, and otherwise transact the business of foreign relations. In the realm
of treaty-making, the President has the sole authority to negotiate with other
states.
[48]
379 Phil. 165, 233-234 (2004).
[49]
HENKIN, FOREIGN AFFAIRS AND THE CONSTITUTION 300 (2d 1996); see Dames and Moore
v. Regan, 453 U.S. 654, 688, 101 S.Ct. 2972, 69 L.Ed.2d 918 (1981) (upholding the President's
authority to settle claims of citizens as "a necessary incident to the resolution of a major
foreign policy dispute between our country and another [at least] where ... Congress
acquiesced in the President's action"); Am. Ins. Ass'n v. Garamendi, 539 U.S. 396, 424, 123
S.Ct. 2374, 156 L.Ed.2d 376 (2003) (acknowledging "President's authority to provide for
settling claims in winding up international hostilities"). See also Akbayan Citizens Action Party
(AKBAYAN) v. Aquino, G.R. No. 170516, July 16, 2008, 558 SCRA 468, 517 where we held
that:
x x x While, on first impression, it appears wise to deter Philippine representatives
from entering into compromises, it bears noting that treaty negotiations, or any
negotiation for that matter, normally involve a process of quid pro quo, and
oftentimes negotiators have to be willing to grant concessions in an area of lesser
importance in order to obtain more favorable terms in an area of greater national
interest.
[50]
3 U.S. (3 Dall.) 199, 230, 1 L.Ed. 568 (1796).
[51]
453 U.S. 654, 101 S.Ct. 2972 (1981) (re the establishment of the Iran-United States Claims
Tribunal following the seizure of American personnel as hostages at the American Embassy
in Tehran).
[52]
Bazyler, The Holocaust Restitution Movement in Comparative Perspective, 20 BERKELEY J.
INTL. L. 11, 25-32 (2002).
[53]
In Re World War II Era Japanese Forced Labor Litigation, supra note 1.
[54]
Treaty of Peace with Japan 1951, 136 UNTS 45.
[55]
The conceptual understanding that individuals have rights and responsibilities in the
international arena does not automatically mean that they have the ability to bring
international claims to assert their rights. Thus, the Permanent Court of International Justice
declared that it is scarcely necessary to point out that the capacity to possess civil rights does
not necessarily imply the capacity to exercise those rights oneself. Appeal from a Judgment
of the Hungaro/Czeochoslovak Mixed Arbitral Tribunal, Judgment, 1933, PCIJ, Ser. A/B No.
61, p. 208 at 231.
[56]
PCIJ, Ser. A, No. 2, p. 11, at 16. This traditional view was repeated by the PCIJ in
the Panevezys-Saldutiskis Railway Case, the Case Concerning the Payment of Various Serbian
Loans issued in France, Judgment of July 12, 1929, PCIJ Reports, Series A No. 20; and in
the Case Concerning the Factory at Chorzow, Judgment of September 13, 1928, Merits, PCIJ
Reports, Series A No. 17. The ICJ has adopted it in the Reparation for injuries suffered in the
service of the United Nations Advisory Opinion: ICJ Reports 1949, p. 174; the Nottebohm
Case (second phase) Judgment of April 6, 1955: ICJ Reports 1955, p. 4 at p. 24;
the Interhandel Case (Judgment of March 21st, 1959: ICJ Reports 1959, p. 6 at p. 27) and
the Barcelona Traction, Light and Power Company, Limited case, (Belg. v. Spain), 1970 I.C.J.
3, 32 (Feb. 5).
[57]
See BORCHARD, E., DIPLOMATIC PROTECTION OF CITIZENS ABROAD AT VI (1915). Under
this view, the considerations underlying the decision to exercise or not diplomatic protection
may vary depending on each case and may rely entirely on policy considerations regardless
of the interests of the directly-injured individual, and the State is not required to provide
justification for its decision.
[58]
Barcelona Traction, Light and Power Company, Limited, case, supra note 56, at p. 44 par. 78.
[59]
ILC First Reading Draft Articles on Diplomatic Protection, U.N. Doc. A/CN.4/484, ILC
Report, A/53/10 (F), par. 60, Commentary to Draft Article 2, par. (1); see also, Commentary
to Draft Article 1, par. (3), and text of Draft Article 2.
[60]
Report of the International Law Commission on the work of its 50th session, supra note 60,
par. 77.
[61]
ILC First Reading Draft Articles on Diplomatic Protection, supra note 60, commentary to Draft
Article 2, par. (2).
[62]
For instance, Special Rapporteur Dugard proposed that the ILC adopt in its Draft Articles a
provision under which States would be internationally obliged to exercise diplomatic
protection in favor of their nationals injured abroad by grave breaches to jus cogens norms,
if the national so requested and if he/she was not afforded direct access to an international
tribunal. The proposed article reads as follows:
Article [4]1. Unless the injured person is able to bring a claim for such injury before
a competent international court or tribunal, the State of his/her nationality has a
legal duty to exercise diplomatic protection on behalf of the injured person upon
request, if the injury results from a grave breach of a jus cogens norm attributable
to another State. 2. The state of nationality is relieved of this obligation if: (a) The
exercise of diplomatic protection would seriously endanger the overriding interests
of the State and/or its people; (b) Another State exercises diplomatic protection
on behalf of the injured person; (c) The injured person does not have the effective
and dominant nationality of the State. States are obliged to provide in their
municipal law for the enforcement of this right before a competent domestic court
or other independent national authority". Special Rapporteur John Dugard,
appointed in 1999, First Report on Diplomatic Protection, par. 74 (UN Doc.
A/CN.4/506 (March 7, 2000) and Corr. 1 (June 7, 2000) and Add. 1 (April 20,
2000).
However, the proposal was not accepted by the ILC, as "the question was still not ripe for
treatment" because "the State practice and their opinio juris still had not evolved in such
direction". Official Records of the General Assembly: 55th session, Supplement No. 10,
Doc. A/55/10 (2000), Report of the ILC on the work of its 52nd session, p. 131. Instead, Draft
Article 19, entitled Recommended Practice, suggests that states should be encouraged to
exercise diplomatic protection especially when significant injury occurred to the national.
Drafted in soft language, the Article does not purport to create any binding obligations on the
state.
In addition, some States have incorporated in their municipal law a duty to exercise
diplomatic protection in favor of their nationals. (Dugard identifies this "obligation" to exist in
the Constitutions of Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Cambodia, China,
Croatia, Estonia, Georgia, Guyana, Hungary, Italy, Kazakhstan, Lao Peoples Democratic
Republic, Latvia, Lithuania, Poland, Portugal, Republic of Korea, Romania, Russian Federation,
Spain, the former Yugoslav Republic of Macedonia, Turkey, Ukraine, Viet Nam and Yugoslavia,
albeit with different reaches. J. Dugard, First Report on diplomatic protection, supra note 13,
par. 80), but their enforceability is also, to say the least, questionable (in many cases there
are not even courts competent to review the decision). Moreover, their existence in no way
implies that international law imposes such an obligation, simply suggesting "that certain
States consider diplomatic protection for their nationals abroad to be desirable" (ILC First
Reading Draft Articles on Diplomatic Protection, supra note 60, Commentary to Draft Article
2, par (2)).
[63]
Even decisions of national courts support the thesis that general international law as it stands
does not mandate an enforceable legal duty of diplomatic protection.
The traditional view has been challenged in the UK in a case arising from the unlawful detention
by the US of prisoners in Guantanamo Bay. In Abbasi v. Secretary of State for Foreign and
Commonwealth Affairs ([2002] EWCA Civ 1316, 19 September 2002), the applicant (a British
national) sought judicial review of the adequacy of the diplomatic actions of the British
government with the US government. The UK Court of Appeals came to the conclusion that
diplomatic protection did not as such give rise to an enforceable duty under English Law. It
found that on no view would it be appropriate to order the Secretary of State to make any
specific representations to the United States, even in the face of what appears to be a clear
breach of a fundamental human right, as it is obvious that this would have an impact on the
conduct of foreign policy.
Courts in the UK have also repeatedly held that the decisions taken by the executive in its
dealings with foreign states regarding the protection of British nationals abroad are non-
justiciable.
(1) R. v. Secretary of State for Foreign and Commonwealth Affairs, ex parte Pirbhai (107
ILR 462 (1985):
"x x x in the context of a situation with serious implications for the conduct of
international relations, the courts should act with a high degree of circumspection
in the interests of all concerned. It can rarely, if ever, be for judges to intervene
where diplomats fear to tread." (p.479, per Sir John Donaldson MR)
(2) R. v. Secretary of State for Foreign and Commonwealth Affairs, ex parte Ferhut
Butt (116 ILR 607 (1999):
"The general rule is well established that the courts should not interfere in the
conduct of foreign relations by the Executive, most particularly where such
interference is likely to have foreign policy repercussions (see R. v. Secretary of
State for Foreign and Commonwealth Affairs, ex parte Everett [1989] 1 QB 811 at
820). This extends to decisions whether or not to seek to persuade a foreign
government of any international obligation (e.g. to respect human rights) which it
has assumed. What if any approach should be made to the Yemeni authorities in
regard to the conduct of the trial of these terrorist charges must be a matter for
delicate diplomacy and the considered and informed judgment of the FCO. In such
matters the courts have no supervisory role." (p. 615, per Lightman J).
"Whether and when to seek to interfere or to put pressure on in relation to the
legal process, if ever it is a sensible and a right thing to do, must be a matter for
the Executive and no one else, with their access to information and to local
knowledge. It is clearly not a matter for the courts. It is clearly a high policy
decision of a government in relation to its foreign relations and is not justiciable
by way of judicial review." (p.622, per Henry LJ).
(3) R. (Suresh and Manickavasagam) v. Secretary of State for the Home
Department [2001] EWHC Admin 1028 (unreported, 16 November 2001):
"... there is, in my judgment, no duty upon the Secretary of State to ensure that
other nations comply with their human rights obligations. There may be cases
where the United Kingdom Government has, for example by diplomatic means,
chosen to seek to persuade another State to take a certain course in its treatment
of British nationals; but there is no duty to do so." (paragraph 19, per Sir Richard
Tucker).
The South African Constitutional Court in Kaunda and others v. President of the Republic of South
Africa and others (Case CCCT23/04) recognized the constitutional basis of the right of
diplomatic protection as enshrined in the South African Constitution, but went on to hold that
the nature and extent of this obligation was an aspect of foreign policy within the discretion
of the executive.
[64]
BORCHARD, E., DIPLOMATIC PROTECTION OF CITIZENS ABROAD, 29 (1915).
[65]
The concept of rape as an international crime is relatively new. This is not to say that rape
has never been historically prohibited, particularly in war. But modern-day sensitivity to the
crime of rape did not emerge until after World War II. In the Nuremberg Charter, the word
rape was not mentioned. The article on crimes against humanity explicitly set forth prohibited
acts, but rape was not mentioned by name. (For example, the Treaty of Amity and Commerce
between Prussia and theUnited States provides that in time of war all women and children
shall not be molested in their persons. The Treaty of Amity and Commerce, Between his
Majesty the King of Prussia and the United States of America, art. 23, Sept. 10, 1785, U.S.-
Pruss., 8 TREATIES & OTHER INT'L AGREEMENTS OF THE U.S. 78, 85. The 1863 Lieber
Instructions classified rape as a crime of troop discipline. (Mitchell, The Prohibition of Rape in
International Humanitarian Law as a Norm of Jus cogens: Clarifying the Doctrine, 15 DUKE J.
COMP. INTL. L. 219, 224). It specified rape as a capital crime punishable by the death penalty
(Id. at 236). The 1907 Hague Convention protected women by requiring the protection of
their honour. (Family honour and rights, the lives of persons, and private property, as well as
religious convictions and practice, must be respected. Convention (IV) Respecting the Laws
& Customs of War on Land, art. 46, Oct. 18, 1907. General Assembly resolution 95 (I) of
December 11, 1946 entitled, Affirmation of the Principles of International Law recognized by
the Charter of the Nrnberg Tribunal; General Assembly document A/64/Add.1 of
1946; See Agreement for the Prosecution and Punishment of the Major War Criminals of the
European Axis, Aug. 8, 1945, 59 Stat. 1544, 82 U.N.T.S. 279. Article 6(c) of the Charter
established crimes against humanity as the following:
CRIMES AGAINST HUMANITY: namely, murder, extermination, enslavement,
deportation, and other inhumane acts committed against any civilian population,
before or during the war, or persecutions on political, racial or religious grounds
in execution of or in connection with any crime within the Jurisdiction of the
Tribunal, whether or not in violation of the domestic law of the country where
perpetrated.
The Nuremberg Judgment did not make any reference to rape and rape was not
prosecuted. (Judge Gabrielle Kirk McDonald, The International Criminal Tribunals Crime and
Punishment in the International Arena,7 ILSA J. INTL. COMP. L. 667, 676.) However,
International Military Tribunal for the Far East prosecuted rape crimes, even though its Statute
did not explicitly criminalize rape. The Far East Tribunal held General Iwane Matsui,
Commander Shunroku Hata and Foreign Minister Hirota criminally responsible for a series of
crimes, including rape, committed by persons under their authority. (THE TOKYO JUDGMENT:
JUDGMENT OF THE INTERNATIONAL MILITARY TRIBUNAL FOR THE FAR EAST445-54
(1977).
The first mention of rape as a specific crime came in December 1945 when Control
Council Law No. 10 included the term rape in the definition of crimes against humanity. Law
No. 10, adopted by the four occupying powers in Germany, was devised to establish a uniform
basis for prosecuting war criminals in German courts. (Control Council for Germany, Law No.
10: Punishment of Persons Guilty of War Crimes, Crimes Against Peace and Against Humanity,
Dec. 20, 1945, 3 Official Gazette Control Council for Germany 50, 53 (1946))
The 1949 Geneva Convention Relative to the Treatment of Prisoners of War was the first
modern-day international instrument to establish protections against rape for women. Geneva
Convention Relative to the Protection of Civilian Persons in Time of War, Aug. 12, 1949, art.
27, 6 U.S.T. 3316, 75 U.N.T.S. 287 (entry into force Oct. 20, 1950) [hereinafter Fourth Geneva
Convention].Furthermore, the ICC, the ICTY, and the International Criminal Tribunal for
Rwanda (ICTR) have significantly advanced the crime of rape by enabling it to be prosecuted
as genocide, a war crime, and a crime against humanity.
Rape is clearly emerging as a core crime within humanitarian law. (APPLEMAN, MILITARY
TRIBUNALS AND INTERNATIONAL CRIMES 299 (1954); MERON, HUMAN RIGHTS AND
HUMANITARIAN NORMS AS CUSTOMARY LAW 47 (1989). A major step in this legal
development came in 1949, when rape and sexual assault were included in the Geneva
Conventions. Rape is included in the following acts committed against persons protected by
the 1949 Geneva Conventions: willful killing, torture or inhuman treatment, including biological
experiments; willfully causing great suffering or serious injury to body or health. Rape as a
violation of the laws or customs of war generally consists of violations of Article 3 of the 1949
Geneva Conventions, which, in part, prohibits violence to life and person, in particular
mutilation, cruel treatment and torture; outrages upon personal dignity, in particular
humiliating and degrading treatment. (See Geneva Convention for the Amelioration of the
Condition of the Wounded and Sick in Armed Forces in the Field, art. 3(1)(c), 75 U.N.T.S. 31;
Geneva Convention for the Amelioration of the Condition of Wounded, Sick and Shipwrecked
Members of Armed Forces at Sea, art. 3(1)(c), 75 U.N.T.S. 85; Geneva Convention Relative
to the Treatment of Prisoners of War, art. 3(1)(c), 75 U.N.T.S. 973; Fourth Geneva
Convention, supra note 23, art. 3(1)(c).
Article 27 of the Fourth Geneva Convention, directed at protecting civilians during time of war,
states that women shall be especially protected against any attack on their honour, in
particular against rape, enforced prostitution, or any form of indecent assault.
Protocol I of the Geneva Conventions continues to expand the protected rights by providing
that women shall be the object of special respect and shall be protected in particular against
rape, forced prostitution and any form of indecent assault. (Protocol Additional to the Geneva
Conventions of August 12, 1949, and Relating to the Protection of Victims of International
Armed Conflicts (Protocol I), Article 76(1), 1125 U.N.T.S. 4).
[66]
For instance, the International Criminal Court was established to deal with the most serious
crimes of concern to the international community, with jurisdiction over genocide, crimes
against humanity, and war crimes, as defined in the Rome Statute. The ICC Prosecutor can
investigate allegations of crimes not only upon referral from the Security Council and state
parties, but also on information from victims, non-governmental organizations or any other
reliable source (Article 15). See also the Statute of the International Tribunal for the
Prosecution of Persons Responsible for Serious Violations of International Humanitarian Law
Committed in the Territory of the Former Yugoslavia since 1991, U.N. Doc. S/25704 at 36,
annex (1993) and S/25704/Add.1 (1993), adopted by Security Council on 25 May 1993, U.N.
Doc. S/RES/827 (1993).
[67]
Scharf, The Letter of the Law: The Scope of the International Legal Obligation To Prosecute
Human Rights Crimes, 59(4) LAW & CONTEMP. PROBS. 41, 59 (1996). Dugard, Dealing with
Crimes of a Past Regime: Is Amnesty Still an Option?, 12 LEIDEN J. INT'L L. 1001, 1003
(1999). Gavron, Amnesties in Light of Developments in International Law and the
Establishment of the International Criminal Court, 51 INT'L & COMP. L.Q. 91, 106 (2002).
[68]
O'SHEA, AMNESTY FOR CRIME IN INTERNATIONAL LAW AND PRACTICE 35 (2002).
[69]
Bruno Simmas much-quoted observation encapsulates this feeling of disappointment:Viewed
realistically, the world of obligations erga omnes is still the world of the ought rather than of
the isTHE CHARTER OF THE UNITED NATIONS: A COMMENTARY 125 (Simma, ed.
1995). See Tams, Enforcing Obligations Erga omnes in International Law (2005). In all cases
where this principle has been cited, even the ICJ has found a way to avoid giving force to the
claims based on the erga omnes character of the obligation, despite having recognized them
in principle. In the South West Africa Case, the ICJ declared that an action popularis was
incompatible with existing international law. In the Nicaragua case, it evaded the
consequences of a violation of erga omnes obligations by treating human rights conventions
as self-contained regimes. Nicaragua v. US, Merits, ICJ Reports 1986, 14 et seq. (134, par.
267): However, where human rights are protected by international conventions, that
protection takes the form of such arrangements for monitoring or ensuring respect for human
rights as are provided for in the conventions themselves. In the East Timor Case, it denied
jurisdiction on the ground that Indonesia was an indispensable third party to the proceedings
which had not accepted jurisdiction. (Portugal v. Australia, ICJ Reports 1995, 90 (102, par
29) Portugals assertion that the right of peoples to self-determination has an erga
omnescharacter, is irreproachable.
[70]
See Vienna Convention on the Law of Treaties art. 53, opened for signature May 23, 1969,
1155 U.N.T.S. 331, 8 I.L.M. 679 [hereinafter VCLT].
[71]
Classical publicists such as Hugo Grotius, Emer de Vattel, and Christian Wolff drew upon the
Roman law distinction between jus dispositivum (voluntary law) and jus scriptum (obligatory
law) to differentiate consensual agreements between states from the necessary principles of
international law that bind all states as a point of conscience regardless of consent. (See
Hugonis Grotii, De Jure Belli et Pacis [On the Law of War and Peace] (William Whewell ed. &
trans., John W. Parker, London 2009) (1625); Emer de Vattel, Le Droit des Gens ou Principes
de la Loi Naturelle [The Law of Nations or Principles of Natural Law] 9, 27 (1758)
(distinguishing le Droit des Gens Naturel, ou Ncessaire from le Droit Volontaire); Christian
Wolff, Jus Gentium Methodo Scientifica Pertractorum [A Scientific Method for Understanding
the Law of Nations] 5 (James Brown Scott ed., Joseph H. Drake trans., Clarendon Press 1934)
(1764)). Early twentieth-century publicists such as Lassa Oppenheim and William Hall
asserted that states could not abrogate certain universally recognized principles by mutual
agreement. (William Hall, A Treatise on International Law 382-83 (8th ed. 1924) (asserting
that fundamental principles of international law may invalidate [], or at least render voidable,
conflicting international agreements); 1 Lassa Oppenheim, International Law 528 (1905).)
Judges on the Permanent Court of International Justice affirmed the existence of peremptory
norms in international law by referencing treaties contra bonos mores (contrary to public
policy) in a series of individual concurring and dissenting opinions. (For example, in the 1934
Oscar Chinn Case, Judge Schcking's influential dissent stated that neither an international
court nor an arbitral tribunal should apply a treaty provision in contradiction to bonos mores.
Oscar Chinn Case, 1934 P.C.I.J. (ser. A/B) No. 63, at 149-50 (Dec. 12) (Schcking, J.,
dissenting).
[72]
Verdross argued that certain discrete rules of international custom had come to be recognized
as having a compulsory character notwithstanding contrary state agreements. At first,
Verdross's vision of international jus cogens encountered skepticism within the legal academy.
These voices of resistance soon found themselves in the minority, however, as the jus
cogens concept gained enhanced recognition and credibility following the Second World
War. (See Lauri Hannikainen, Peremptory Norms (Jus cogens) in International Law: Historical
Development, Criteria, Present Status 150 (1988) (surveying legal scholarship during the
period 1945-69 and reporting that about eighty per cent [of scholars] held the opinion that
there are peremptory norms existing in international law).
[73]
In March 1953, the ILC's Special Rapporteur, Sir Hersch Lauterpacht, submitted for the ILC's
consideration a partial draft convention on treaties which stated that [a] treaty, or any of its
provisions, is void if its performance involves an act which is illegal under international law
and if it is declared so to be by the International Court of Justice. Hersch Lauterpacht, Law of
Treaties: Report by Special Rapporteur, [1953] 2 Y.B. Int'l L. Comm'n 90, 93, U.N. Doc.
A/CN.4/63.
[74]
See Summary Records of the 877th Meeting, [1966] 1 Y.B. Int'l L. Comm'n 227, 230-231, U.N.
Doc. A/CN.4/188 (noting that the emergence of a rule of jus cogens banning aggressive war
as an international crime was evidence that international law contains minimum
requirement[s] for safeguarding the existence of the international community).
[75]
Second Report on the Law of Treaties, [1963] 2 Y.B. Int'l L. Comm'n 1, 52, U.N. Doc.
A/CN.4/156.
[76]
Id. at 53.
[77]
While the ICJ recently endorsed the jus cogens concept for the first time in its 2006 Judgment
on Preliminary Objections in Armed Activities on the Territory of the Congo (Congo v.
Rwanda), it declined to clarify jus cogens's legal status or to specify any criteria for identifying
peremptory norms. (Armed Activities on the Territory of the Congo, Jurisdiction of the Court
and Admissibility of the Application (Dem. Rep. Congo v. Rwanda) (Judgment of February 3,
2006), at 31-32, available at http://www.icj-cij.org/docket/files/126/10435.pdf.
In some municipal cases, courts have declined to recognize international norms as
peremptory while expressing doubt about the proper criteria for identifying jus cogens. (See,
e.g., Sampson v. Federal Republic of Germany, 250 F.3d 1145, 1149 (7th Cir.
2001) (expressing concern that jus cogens should be invoked [o]nly as a last resort)).
In other cases, national courts have accepted international norms as peremptory, but
have hesitated to enforce these norms for fear that they might thereby compromise state
sovereignty. (See, e.g., Bouzari v. Iran, [2004] 71 O.R.3d 675 (Can.) (holding that the
prohibition against torture does not entail a right to a civil remedy enforceable in a foreign
court)).
In Congo v. Rwanda, for example, Judge ad hoc John Dugard observed that the ICJ had
refrained from invoking the jus cogens concept in several previous cases where peremptory
norms manifestly clashed with other principles of general international law. (See Armed
Activities on the Territory of the Congo (Dem. Rep. Congo v. Rwanda) (Judgment of February
3, 2006), at 2 (Dissenting Opinion of Judge Dugard))
Similarly, the European Court of Human Rights has addressed jus cogens only once, in Al-
Adsani v. United Kingdom, when it famously rejected the argument that jus cogens violations
would deprive a state of sovereign immunity. Al-Adsani v. United Kingdom, 2001-XI Eur.
Ct. H.R. 79, 61).
[78]
SZTUCKI, JUS COGENS AND THE VIENNA CONVENTION ON THE LAW OF TREATIES 119-123
(1974).

Supreme Court
Baguio City
SECOND DIVISION
TRINIDAD GO, joined by her G.R. No. 182341

husband, GONZALO GO, SR.,
Petitioners,
- versus - Present:
VICENTE VELEZ CHAVES,* CARPIO, J., Chairperson,

Respondent, BRION,
DEL CASTILLO,
ALICE CHAVES, ABAD, and
Respondent-Intervenor, PEREZ, JJ.
MEGA-INTEGRATED AGRO Promulgated:

LIVESTOCK FARMS, INC.,
Respondent-Intervenor, April 23, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Equity regards substance rather than form, it abhors forfeiture.
On purely technical grounds, the Court of Appeals (CA) dismissed petitioners appeal and denied
their plea for reconsideration. Hence, petitioners come to this Court via this Petition for Review
on Certiorari to assail the Resolutions dated October 10, 2007[1] and March 11, 2008[2] of the appellate
court in CA-G.R. CV No. 00257.
Factual Antecedents
On January 29, 1997, Vicente Chaves (Vicente) filed a Complaint[3] against spouses Trinidad Go
and Gonzalo Go (Go spouses, herein petitioners) before the Regional Trial Court (RTC) of Cagayan de Oro
City for the removal of clouds on his transfer certificates of title. The case was docketed as Civil Case No.
97-065 and was raffled to Branch 38 (later re-raffled to Branch 24) of said court. Vicente alleged that in
April 1996 Paquito Francisco Yap and Evelyn Nellie Chaves-Yap (the Yap spouses), his son-in-law and
daughter respectively, obtained a loan in the amount of P23.2 million from Trinidad Go (Trinidad), using
his and his wifes real properties as collaterals. The Yap spouses were able to do this by presenting a forged
Special Power of Attorney (SPA)[4] purporting to authorize the Yap spouses to obtain a loan using Transfer
Certificates of Title (TCT) Nos. T-60898 and T-60899 registered in the names of Vicente and his wife Alice
Chaves (Alice) as collaterals.[5]
Because some portions of said lots were disposed of, Vicente consolidated and subdivided the
remaining lots (which included the mortgaged properties to Trinidad), bringing about three derivative titles
still under the names of the Chaves spouses: TCT Nos. T-114415,[6] T-114416,[7] and T-114417.[8] The Go
spouses considered this move a machination in order to prevent them from annotating their right on the
collaterals. Hence, to protect their right, they got hold of the derivative titles and caused the annotation
of the SPA and their mortgage rights on each certificates of title.[9]
Vicente prayed that the SPA and mortgage to petitioners be invalidated, and that the Go spouses
be directed to surrender the owners duplicate certificates of title over the subject properties.
Subsequently, the trial court allowed two parties to intervene in the case: a) Alice, who alleged
that her rights to the share of the conjugal partnership are being trampled upon and who, like her
husband, averred that she had never authorized the Yap spouses to mortgage the conjugal
properties[10] and; b) Mega Integrated Agro-Livestock Farms, Inc. (Mega), which claimed that it had
purchased from Vicente in December 1996 a portion of the property covered by TCT No. T-114415, and
that it could not effect the transfer of said title in its name because the Go spouses are in possession of
the owners copy of TCT No. T-114415.[11]

After due hearing, the RTC rendered a Decision[12] dated March 19, 2004, the dispositive portion
of which stated:
WHEREFORE, premises considered, judgment is hereby rendered:
1. DECLARING, as between plaintiff, intervenor Alice C. Chaves and defendants,

the Special Power of Attorney (Exh. 1-Go and Exh. A) allegedly executed by plaintiff and
intervenor Alice C. Chaves as well as the second mortgage (Exh. 2-Go) as INEFFECTIVE,
INVALID, AND UNENFORCEABLE as against plaintiff and intervenor ALICE CHAVES as
they did not sign said special power of attorney and second mortgage. Consequently, the
adverse claim, notice of lis pendens and the annotation of the second mortgage on TCT
No. T-114415, TCT No. T-114416 and TCT No. T-114417 must be cancelled and or
removed they being clouds to said titles. For said purpose, the Register of Deeds of the
City of Cagayan de Oro is hereby ordered to cancel them;
2. DECLARING plaintiff and intervenor Alice C. Chaves as not bound by the effects
of the second mortgage they having not signed the Special Power of Attorney and said
second mortgage. What defendants should do is to demand the amount mentioned in
the second mortgage from Paquito S. Yap and Evelyn Nellie Chaves Yap;
3. ORDERING defendant TRINIDAD GO to surrender to MEGA INTERGRATED
AGRO-LIVESTOCK INDUSTRIAL FARMS, INC. the owners copy of TCT No. T-114415 and
to intervenor ALICE C. CHAVES the owners copy of TCT No. T-114416 and T-114417;
4. Ordering MEGA INTEGRATED AGRO-LIVESTOCK INDUSTRIAL FARMS, INC.

thru [sic] See Hong to pay intervenor Alice C. Chaves the balance of P15,074,000.00 as
her share in the conjugal partnership but only after the land sold consisting of Lot Nos. 1
and 2 covered by TCT No. 114414 and TCT No. 114415 shall have been cleared of
squatters by intervenor Alice Chaves.
5. DENYING the prayer for attorneys fees and moral damages there being no
proof shown that in annotating the second mortgage on TCT No. T-114415, TCT No. T-
114416, and TCT No. T-114417, all of the Registry of Deeds of Cagayan de Oro City,
defendants were motivated by evident bad faith;
6. DENYING defendants counterclaim for lack of merit it not being shown that in
filing the case, plaintiff was motivated by malice and evident bad faith.[13]
The Procedural Blunders that Prodded the CA to Dismiss

Petitioners Appeal
The Go spouses appealed to the CA Cagayan de Oro. They filed their brief and furnished Vicente
with a copy thereof before the June 12, 2007 deadline. However, all the other adverse parties moved
before the CA to have the appeal dismissed:
a) Mega argued in its Motion to Dismiss[14] that Go spouses failed to file their brief on time. It
appears that Go spouses failed to furnish Mega with a copy of their brief. Their counsel, Atty. Kathryn
Dela Serna, claimed inadvertence for the mistake.[15] Nonetheless, when Go spouses received Megas
Motion to Dismiss on June 14, 2007, they personally served Mega a copy of the brief that same day;[16]
b) Vicente (now substituted by his children in view of his death) on the other hand, complained
about the form of the appellants brief he received, pointing to want of the following requirements
under Rule 44 of the Rules of Court: 1) subject index, page references, and legal citations as required
under Section 13; and 2) certified true copy of the assailed RTC Decision as required in Section 13(f)
[should be (h)]. Petitioners counsel again professed inadvertence and good faith, reasoning that the
errors cannot be considered fatal, for the body/contents of the appellants brief have substantially
complied with the provisions of Rule 44. Nevertheless, she submitted the subject index/table of
contents of the brief;[17]
c) More than two months after the filing of the appellants brief, Alice still had not received a copy
of said brief. She thus joined Mega in asking the appellate court for the dismissal of Go spouses
appeal.[18] Upon learning that Alice was likewise not provided with the appellants brief, petitioners then
furnished her with a copy thereof on August 30, 2007.[19] In their Comment,[20] petitioners counsel,
Atty. Emmy Lou Lomboy (working for Atty. Dela Sernas law firm), justified the oversight by explaining
that she only inherited the case from the former counsel of record, and that she merely relied on the
list of parties indicated on the CA Resolutions/Notices[21] who must be furnished with copies of the
appellants brief. It appears, however, that Atty. Erlington Pimentel, is not included therein.
Acceding to all the appellees objections and opining that an utter and flagrant disregard of the
rules of procedure is inexcusable, the CA dismissed the appeal of the Go spouses on the following
grounds: First, that Go spouses failed to serve a copy of their appellants brief upon the intervenors on
time,[22] and, second, that their appellants brief does not contain a subject index and that no copy of the
assailed Decision was appended thereto, in violation of Section 44, Section 13 (a) and (h) in relation to
Rule 50, Section 1(f).[23]
It reasoned:
In the case at bench, appellants [Go spouses] even admitted that they failed to
serve a copy of their brief to Mega Farms as well as to Alice Chaves on the same day they
filed the brief with this Court.Belated compliance with this requirement does not
suffice. Proper procedure dictates that a copy of the pleading be first furnished the
opposing party so that proof of such service may be duly indicated on the original of the
pleading to be filed shortly afterward in court, such indication being either a handwritten
acknowledgment by the adverse party or the registry receipt of the copy mailed to the
adverse party.Service precedes filing; both within the time allowed by the Rules.
Second. It is a matter of fact that the appellants brief does not contain a subject
index nor does it have as an appendix the copy of the assailed decision. x x x
The first requirement of an appellants brief is a subject index. The index is

intended to facilitate the review of appeals by providing ready reference, functioning much
like a table of contents. This jurisdiction prescribes no limit on the length of appeal briefs
or appeal memoranda filed before appellate courts. The downside of this liberal rule is, of
course, the very real possibility that the reviewing tribunal will be swamped with
voluminous documents. This occurs even though the rules consistently urge the parties
to be brief or concise in the drafting of pleadings, briefs, and other papers to be filed in
court. Herein lies the reason and the need for a subject index. The subject index makes
readily available at ones fingertips the subject of the contents of the brief so that the need
to thumb through the brief page after page to locate a partys arguments, or a particular
citation, or whatever else needs to be found and considered, is obviated.
xxxx
Although appellants may have subsequently rectified those deficiencies, the

belated compliance, however, is not by itself sufficient to warrant suspension of the strict
requirements of the rules, absent any showing that the initial non-compliance was not in
any way attributable to negligence, or that there are highly justifying equitable reasons
for this Court to make an extraordinary disposition in the interest of justice.
It has long been recognized that strict compliance with the rules is indispensable
for the prevention of needless delays and for the orderly and expeditious dispatch of
judicial business. Utter disregard of the rules cannot just be rationalized by harking on the
policy of liberal construction. While courts should, in all cases, endeavor to do substantial
justice without undue subservience to technicalities, the mere invocation by the parties of
liberality and substantial justice does not automatically do away with the rules laid down
for the orderly administration of justice.[24]
Issue
Stated simply, the lone issue for our consideration is whether the appellate court erred in
dismissing the appeal.
Our Ruling
Facing up to all these objections and admitting the mistakes committed, the Gos beseech liberality in the
application of the rules. Even if clearly their counsel committed a number of palpable mistakes which, as
a general rule should bind the client, we shall grant the petition in the interest of justice.[25]
Our rules of procedure are designed to facilitate the orderly disposition of cases and permit the
prompt disposition of unmeritorious cases which clog the court dockets and do little more than waste the
courts time.[26] These technical and procedural rules, however, are intended to ensure, rather than
suppress, substantial justice.[27] A deviation from their rigid enforcement may thus be allowed, as
petitioners should be given the fullest opportunity to establish the merits of their case, rather than lose
their property on mere technicalities.[28] We held in Ong Lim Sing, Jr. v. FEB Leasing and Finance
Corporation[29] that:
Courts have the prerogative to relax procedural rules of even the most mandatory
character, mindful of the duty to reconcile both the need to speedily put an end to litigation
and the parties' right to due process. In numerous cases, this Court has allowed liberal
construction of the rules when to do so would serve the demands of substantial justice
and equity.
We agree that the CA had the discretion to dismiss petitioners appeal. The discretion, however,
must be a sound one, to be exercised in accordance with the tenets of justice and fair play, having in mind
the circumstances obtaining in each case.[30]
Here, we find that the failure to serve a copy of the appellants brief to two of the adverse parties
was a mere oversight, constituting excusable neglect.[31] A litigant's failure to furnish his opponent with a
copy of his appeal brief does not suffice to warrant dismissal of that appeal. In such an instance, all that
is needed is for the court to order the litigant to furnish his opponent with a copy of his brief.[32] Anent the
failure to append a copy of the assailed judgment, instead of dismissing the appeal on that basis, it is
more in keeping with equity to simply require the appellants to immediately submit a copy of the Decision
of the lower court rather than punish litigants for the reckless inattention of their lawyers.
The purpose of a subject index in an appellants/appellees brief obviates the court to thumb
through a possibly lengthy brief page after page to locate whatever else needs to be found and considered,
such as arguments and citations.[33] In the case at bar, notably, the appeal brief submitted to the CA
consists only of 17 pages which the appellate court may easily peruse to apprise it of what the case is all
about and of the relief sought. Thus, the belated submission of the subject index may be considered
excusable. Our discussion in Philippine Coconut Authority v. Corona International, Inc.[34] is apropos:
x x x the purpose of the brief is to present the court in coherent and concise form the
point and questions in controversy, and by fair argument on the facts and law of the case,
to assist the court in arriving at a just and proper conclusion. A haphazard and pellmell
presentation will not do for the brief should be so prepared as to minimize the labor of
the court in examination of the record upon which the appeal is heard and determined.
It is certainly, 'the vehicle of counsel to convey to the court the essential facts of his client's
case, a statement of the questions of law involved, the law he should have applied, and
the application he desires of it by the court'. There should be an honest compliance with
the requirements regarding contents of appellant's brief, and among which is that it should
contain "a subject index of the matter in the brief with a digest of the argument and page
references."
We do not disagree with the appellate court's above exposition. The requirements laid
down in Section 13, Rule 43 are intended to aid the appellate court in arriving at a just
and proper conclusion of the case. However, we are of the opinion that despite its
deficiencies petitioner's appellant's brief is sufficient in form and substance as to apprise
the appellate court of the essential facts and nature of the case as well as the issues raised
and the laws necessary for the disposition of the same.
This case involves voluminous records meriting a review on the merits by the CA. Otherwise, the
efforts of the petitioners to protect their collateral in their judicial battle will lead to naught once they lose
their remedy of an appeal just because of procedural niceties. Adherence to legal technicalities allows
individual error to be suffered in order that justice in the maximum may be preserved. Nonetheless, "we
should indeed welcome," as Judge Learned Hand once wrote, "any efforts that help disentangle us from
the archaisms that still impede our pursuit of truth".[35] Our ruling in Aguam v. Court of Appeals[36] also
bears recalling:
Every party litigant must be afforded the amplest opportunity for the proper and just
determination of his cause, free from the unacceptable plea of technicalities. Thus,
dismissal of appeals purely on technical grounds is frowned upon where the policy of the
court is to encourage hearings of appeals on their merits and the rules of procedure ought
not to be applied in a very rigid, technical sense; rules of procedure are used only to help
secure, not override substantial justice. It is a far better and more prudent course of action
for the court to excuse a technical lapse and afford the parties a review of the case on
appeal to attain the ends of justice rather than dispose of the case on technicality and
cause a grave injustice to the parties, giving a false impression of speedy disposal of cases
while actually resulting in more delay, if not a miscarriage of justice.
WHEREFORE, the petition is GRANTED. The Resolutions dated October 10, 2007 and March
11, 2008 of the Court of Appeals in CA-G.R. CV No. 00257 are SET ASIDE; petitioners appeal
is REINSTATED; and the instant case is REMANDED to the Court of Appeals for further proceedings.
SO ORDERED.
MARIANO DEL CASTILLO

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
Substituted by Ronaldo Chaves, Lino Chaves, Carlos Chaves and Tessie C. Aldana, per Order
dated January 18, 2000 of the Regional Trial Court of Cagayan de Oro City, Branch 24,
records, p. 563.
[1]
Rollo, pp. 204-209, penned by Associate Justice Edgardo A. Camello and concurred in by
Associate Justices Jane Aurora C. Lantion and Elihu A. Ybaez.
[2]
Id. at 226-228.
[3]
Id. at 62-75.
[4]
Id. at 112.
[5]
Id. at 113-114. The mortgage to Trinidad Go is a 2nd mortgage by the Yaps over the subject
properties, the first one being with Metrobank, which was subsequently released. Vicente is
only assailing this mortgage with Trinidad Go.
[6]
Id. at 115-116.
[7]
Id. at 117-118.
[8]
Id. at 119-120.
[9]
Id. at 116, 118 and 120.
[10]
Id. at 296-298.
[11]
Id. at 100-105.
[12]
Id. at 129-143; penned by Presiding Judge Leonardo N. Demecillo.
[13]
Id. at 142-143.
[14]
Id. at 164-167.
[15]
Id. at 168-171.
[16]
Id. at 172.
[17]
Id. at 178-188.
[18]
[19]
Id. at 118.
[20]
Id. at 114-117.
[21]
Id. at 119-122; dated February 28, 2006, June 20, 2006, March 7, 2007, and March 16, 2007.
[22]
Rule 44, Sec. 7. Appellants brief. It shall be the duty of the appellant to file with the court,
within forty-five (45) days from receipt of the notice of the clerk that all the evidence, oral
and documentary, are attached to the record, seven (7) copies of his legibly typewritten,
mimeographed or printed brief, with proof of service of two (2) copies thereof upon the
appellee.
[23]
Rule 44, Sec. 13. Contents of appellants brief. The appellants brief shall contain, in the order
herein indicated, the following:
(a) A subject index of the matter in the brief with a digest of the arguments and page
references, and a table of cases alphabetically arranged, textbooks and statutes cited with
references to the pages where they are cited;
xxxx
(h) In cases not brought up by record on appeal, the appellants brief shall contain, as an
appendix, a copy of the judgment or final order appealed from.
Rule 50, Sec. 1. Grounds for dismissal of appeal. An appeal may be dismissed by the Court of
Appeals, on its own motion or on that of the appellee, on the following grounds:
xxxx
(f) Absence of specific assignment of errors in the appellants brief, or of page references to
the record as required in section 13, paragraphs (a), (c), (d) and (f) of Rule 44;
[24]
[25]
Friend v. Unionbank, G.R. No. 165767, November 29, 2005, 476 SCRA 453, 457-458.
[26]
Sps. Del Rosario v. Court of Appeals, 311 Phil. 630, 636 (1995).
[27]
Bigornia v. Court of Appeals, G.R. No. 173017, March 17, 2009.
[28]
Sangalang v. Barangay Maguihan, G.R. No. 159792, December 23, 2009; Acme Shoe, Rubber
& Plastic Corp. v. Court of Appeals, 329 Phi. 531, 538 (1996).
[29]
G.R. No. 168115, June 8, 2007, 524 SCRA 333, 343.
[30]
Aguam v. Court of Appeals, 388 Phil. 587, 593 (2000).
[31]
Sunrise Manning Agency, Inc. v. National Labor Relations Commission, 485 Phil. 426, 430-431
(2004); Carnation Philippines Employees Labor Union-FFW v. National Labor Relations
Commission, 210 Phil. 30, 31 (1983).
[32]
Perez v. Court of Appeals, 374 Phil. 388, 408 (1999), citing Precision Electronics Corporation
v. National Labor Relations Commission, G.R. No. 86657, October 23, 1989, 178 SCRA 667,
670.
[33]
De Liano v. Court of Appeals, 421 Phil. 1033, 1042 (2001).
[34]
395 Phil. 742, 750 (2000). Citations omitted.
[35]
United States v. Allied Stevedoring Corp., 241 F.2d 925, 934 (2 Cir.), cert. denied, 353 U.S.
984, 77 S.Ct. 1282, 1 L.Ed.2d 1143 (1957).
[36]
388 Phil. 587, 594 (2000). See also American Express International, Inc. v. Intermediate
Appellate Court, G.R. No. L-70766, November 9, 1988, 167 SCRA 209, 221; Tan Boon Bee &
Co., Inc. v. Judge Jarencio, G.R. No. L-413337, June 30, 1988, 163 SCRA 205, 213; De las
Alas v. Court of Appeals, 172 Phil. 559, 575 (1978); Nerves v. Civil Service Commission, 342
Phil. 578, 585 (1997).

Supreme Court
Baguio City
SECOND DIVISION
ASSOCIATED ANGLO-AMERICAN G.R. No. 167237

TOBACCO CORPORATION and FLORANTE
DY,
Petitioners,
Present:

BRION,
DEL CASTILLO,
HON. COURT OF APPEALS, ABAD, and
HON. CRISPIN C. LARON, in his capacity as PEREZ, JJ.
PRESIDING JUDGE, REGIONAL TRIAL
COURT, REGION 1, BRANCH 44, DAGUPAN
CITY, SHERIFF VIRGILIO F. VILLAR,
OFFICE OF THE EX-OFFICIO SHERIFF OF
PASAY CITY, REGISTER OF DEEDS OF
LINGAYEN, PANGASINAN and SPOUSES
PAUL PELAEZ, JR. and ROCELI MAMISAY
PELAEZ,
Promulgated:
Respondents. April 23, 2010

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The appeal of a final order substantially amending only some matters in a previously rendered
Decision is also an appeal of the other intimately interwoven matters passed upon in the original decision.
In the present Petition for Certiorari and Prohibition, petitioners assail the May 31,
2004 Decision[1] and the January 17, 2005[2] Resolution of the Court of Appeals (CA) in CA-G.R. SP. No.
75347. The CA dismissed the Petition for Certiorari filed before it assailing the Decision and several Orders
of the Regional Trial Court (RTC) of Dagupan City, Branch 44 in Civil Case No. D-8732.
Factual Antecedents
Spouses Paul Pelaez, Jr. (Paul) and Roceli Mamisay Pelaez (Roceli) were employees of petitioner
Associated Anglo-American Tobacco Corporation (the Corporation). Paul worked as Sales Supervisor and
later as Senior Salesman while Roceli worked as secretary.
As salesman, Paul was required, on April 17, 1986, by the Corporation to post a bond to answer for any
amount which he might fail to turnover to the Corporation. He complied by executing a mortgage bond
over his family's house and lot in favor of the Corporation. The mortgaged real estate was covered by
Transfer Certificate of Title (TCT) No. 155994 of the Registry of Deeds of Pangasinan.
Upon its determination that Paul had defaulted in remitting the sales proceeds, the Corporation initiated
the extrajudicial foreclosure of the mortgage bond.
To stop the extrajudicial sale, Paul and Roceli filed on August 21, 1987, a Complaint against the
Corporation, Dy and the Sheriff Virgilio S. Villar (Sheriff) before the RTC.

The RTC issued a restraining order and, subsequently, a writ of preliminary injunction to stop the
extrajudicial sale. Then, on September 14, 2000, after due hearing, Judge Crispin C. Laron, issued a
Decision in favor of the spouses Pelaez, the fallo of which reads:
WHEREFORE, judgment is rendered in favor of the plaintiffs and against the defendants,
as follows:
1. The defendants Associated Anglo-American Tobacco Corporation and Florante C. Dy

are ordered to jointly and severally pay plaintiffs the amount of P23,820.16 representing
the overage and the account of Plaintiff Paul Pelaez, Jr. and to release the mortgage on
the parcel of land covered by, and release to plaintiffs, Transfer Certificate of Title No.
155994;
2. The defendants Associated Anglo-American Tobacco Corporation and Florante C. Dy

are ordered to pay the plaintiffs moral, exemplary damages, attorney's fees and litigation
expenses in the amount of P50,000.00;
3. The injunction is made permanent.
With costs against defendants.
SO ORDERED.[3]
Upon motion of the spouses Pelaez, the RTC amended its Decision in its February 7, 2001 Order, to wit:
WHEREFORE, the Motion for Partial Reconsideration is granted and the dispositive
portion of the Decision dated September 14, 2000 is hereby modified as follows:
The defendants Associated Anglo-American Tobacco Corp. and Florante C. Dy are ordered
to jointly and severally pay plaintiffs the amount of P843,383.11 representing the overage
and the amount of award of moral and exemplary damages and attorney's fees is
increased from P50,000.00 to P2,000,000.00.
Furnish copies of this Order to Atty. Efren Moncupa and Atty. Da Vinci Crisostomo.
SO ORDERED.[4]
On February 20, 2001, petitioners received their copy of the February 7, 2001 Order and on March 6,
2001, they filed a Notice of Appeal of the September 14, 2000 Decision and the February 7, 2001 Order
of the RTC. The spouses Pelaez, on the other hand, filed a Motion to Dismiss the Appeal and Motion for
Partial Execution dated August 22, 2001.
Ruling on the motion, the RTC in its May 9, 2002 Order, found that the petitioners Notice of Appeal was
filed timely "only insofar as the Order of the Court dated February 7, 2001 is concerned." Hence, it
disposed as follows:
WHEREFORE, the appeal insofar as to all matters not raised in the plaintiffs' Motion for
Partial Reconsideration is DISMISSED.
Let a writ of execution issue for the release of the mortgage on the parcel of land covered
by, and release to plaintiffs Transfer Certificate of Title No. 155994 and that the injunction
is made permanent.
Furnish copies of this Order to Atty. Rafael Declaro, Jr., Atty. Da Vinci Crisostomo and Mr.
Sancho Esquillo.
SO ORDERED.[5]
On June 7, 2002, a Writ of Execution in favor of the spouses Pelaez was issued and on December 12,
2002, the RTC issued two Orders, one denying petitioners motion for reconsideration of the May 9, 2002
Order; and the other mandating the release of the mortgage under TCT No. 155994 and causing the
issuance of a new title in the name of spouses Pelaez free from any liens or encumbrances.
Petitioners then filed a Petition for Certiorari with the CA. The CA found that the September 14, 2000
Decision of the RTC had become final and executory. It found no cogent reason to disturb the RTC's
Decision and its subsequent amendment as embodied in the February 7, 2001 Order. The dispositive
portion of the CA Decision states:
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit.
SO ORDERED.[6]
After the denial by the CA of their motion for reconsideration, petitioners filed the present Petition
for Certiorari and Prohibition.
Issues

Whether or not the Court of Appeals committed grave abuse of discretion
tantamount to lack of jurisdiction in holding the trial court's decision to be final and
executory notwithstanding that said decision had been modified, superseded and
substituted by a subsequent order upon which petitioner had duly perfected an appeal?
Whether or not the Court of Appeals gravely abused its discretion in holding that
the petition for certiorari is not the right judicial remedy but ordinary appeal
notwithstanding the latter course of action had already been availed of to no avail?
Whether or not the Court of Appeals committed grave abuse of discretion when
in dismissing the petition for certiorari it validated in effect the trial court's order to release
the mortgage and declaring the injunction permanent notwithstanding the loss of
jurisdiction due to the perfection of an appeal?[7]
Petitioners contend that their petition for certiorari is the proper remedy and that it was filed on time within
60 days from their receipt of the CA's assailed Resolution.
They contend that the CA gravely abused its discretion when it regarded the September 14, 2000 Decision
of the trial court as final and executory even if said Decision was already modified, superseded, vacated
and substituted by the subsequent February 7, 2001 Order.
They also contend that it is grossly erroneous for the CA to conclude that the Petition for Certiorari and
Prohibition is not the right judicial remedy but ordinary appeal, when the latter action had already been
taken and perfected by petitioners but the trial court simply refused to elevate the records to the CA.
Respondents on the other hand contend that petitioners failed to demonstrate patent and gross abuse of
discretion on the part of the CA and since all they say is that the CA erred in dismissing their petition, the
CA Resolution can only be assailed by means of a petition for review, not an original petition
for certiorari. They also contend that the availability of the remedy of filing a petition for review foreclosed
the filing of this original petition for certiorari and justifies its dismissal.
Respondents also submit that the February 7, 2001 RTC Order granting the spouses Pelaez' Partial Motion
for Reconsideration by increasing the monetary awards only, did not amend the RTC Decision but merely
supplemented it. Thus, they contend that the finality of the Decision was therefore not affected.
Our Ruling
The petition has merit.
Mode of Appeal
Petitioners are questioning a final decision of the CA by resorting to Rule 65, when their remedy should
be based on Rule 45. This case would normally have been dismissed outright for failure of the petitioners
to adopt the proper remedy. While ordinarily, certiorari is unavailing where the appeal period has lapsed,
there are exceptions. Among them are (a) when public welfare and the advancement of public policy
dictates; (b) when the broader interest of justice so requires; (c) when the writs issued are null and void;
or (d) when the questioned order amounts to an oppressive exercise of judicial authority.[8] In the present
case, the CA's act of dismissing petitioners' petition for certiorari and in finding the RTC's Decision already
final and executory in its entirety, despite the filing by the petitioners of a Notice of Appeal within 15 days
from their receipt of the February 7, 2001 RTC Order amending the said RTC Decision is an oppressive
exercise of judicial authority. Hence, in the interest of substantial justice, we deem it wise to overlook the
procedural technicalities.
Trial Court's Decision and Its Modification
Both parties agree that the February 7, 2001 Order increased the monetary awards in the Decision,
specifically, the amount of overage from P23,820.16 to P843,383.11 and the award of moral and
exemplary damages and attorney's fees from P50,000.00 to P2,000,000.00. They however, differ on
whether these changes constituted an amendment of the Decision or merely provided a supplement to
the Decision. Petitioners argue that the change constituted a substantial amendment, which therefore
makes the entire case reviewable on appeal, while respondents argue that the Order merely supplements
the Decision which therefore makes only the changes reviewable on appeal. They both cite Esquivel v.
Alegre[9] which states:
There is a difference between an amended judgment and a supplemental judgment. In

an amended and clarified judgment, the lower court makes a thorough study of the
original judgment and renders the amended and clarified judgment only after considering
all the factual and legal issues. The amended and clarified decision is an entirely new
decision which supersedes the original decision. Following the court's differentiation of a
supplemental pleading from an amending pleading, it can be said that a supplemental
decision does not take the place or extinguish the existence of the original. As its very
name denotes, it only serves to bolster or adds something to the primary decision. A
supplement exists side by side with the original. It does not replace that which it
supplements.
In the present case, the dispositive portion of the February 7, 2001 Order was crafted in such a way that
it initially evades a categorical classification into either of the situations as described in the above-cited
case.
Hence, we further take into consideration that what plaintiffs filed was merely a Partial Motion for
Reconsideration. It is clear they were seeking a partial change in the original Decision. It follows that there
were some parts of the Decision that they sought to remain unchanged. The RTC, thus made a study of
only a portion of its original Decision and then amended the pertinent portion. The RTC Decision was
indeed, only partially amended. The February 7, 2001 Order cannot be considered as a supplemental
Decision because it cannot exist side by side with the original pertinent portion on overage, damages and
attorney's fees. The former replaced and superceded the latter.
Now what is the effect of this partial amendment? Is the subject RTC Decision divisible, such that a portion
may be considered already final and unappealable while another portion may be considered as not
yet final and unappealable? To answer this question we draw some light from some provisions of the
Rules of Court that permit divisions, to wit:
Rule 37, Sec. 7. Partial new trial or reconsideration.- If the grounds for a motion
under this Rule appear to the court to affect the issues as to only a part, or less than all
of the matter in controversy, or only one, or less than all, of the parties to it, the court
may order a new trial or grant reconsideration as to such issues if severable without
interfering with the judgment or final order upon the rest. (Italics and emphasis supplied)
Rule 36, Sec. 5. Separate judgments.-When more than one claim for relief is
presented in an action, the court, at any stage, upon a determination of the issues
material to a particular claim and all counterclaims arising out of the
transaction or occurrence which is the subject matter of the claim, may render
a separate judgment disposing of such claim. The judgment shall terminate the action
with respect to the claim so disposed of and the action shall proceed as to the remaining
claims.
It can be seen that when matters, issues or claims can properly and conveniently be separately resolved,
then division is permitted, otherwise it is not. We see no hindrance in applying this thesis to the current
situation.
In the present case, the matter of the release of the mortgaged property is material and
intertwined with the issue of the amount of overage as well as the issue on the amount of damages.[10] It
is difficult to separate these matters because a determination of the correct amount of overage would
require the examination and computation of the entire account of deliveries and payments. Necessarily,
upon re-examination of the subject account during an appeal, the possibility of finding a shortage instead
of an overage is present. And dependent on the result of the re-examination of the entire account is the
determination of the correctness of either the foreclosure or release of the mortgaged property. It follows
that the ruling on the amount of damages and attorney's fees, if any, may also be affected by a re-
examination of the entire account.
As the disposition of some inter-related issues in the original RTC Decision were materially amended by
the February 7, 2001 RTC Order, these two issuances must be taken in conjunction with each
other. Together, these two issuances form one integrated amended decision.[11] Hence, an appeal from
the February 7, 2001 RTC Order must be deemed to be an appeal from the whole integrated amended
Decision.
Appeal and Partial Execution
Petitioners received their copy of the February 7, 2001 Order on February 20, 2001. They timely filed a
notice of appeal on March 6, 2001, or after 14 days. The appeal was duly perfected.
When an appeal had been duly perfected, execution of the judgment, whether wholly or partially,[12] was
not a matter of right, but of discretion provided good reasons therefor existed. The compelling grounds
for the issuance of the writ must be stated in a special order after due hearing. Aside from the existence
of good reasons, the rules also require that the motion for partial execution should have been filed while
the trial court still had jurisdiction over the case.[13]
In the present case, the RTC's May 9, 2002 Order granting the issuance of the writ of execution
failed to state good reasons for the issuance of the writ. The RTC mistakenly deemed that the execution
should issue as a matter of right because it had held that part of its September 14, 2001 Decision had
become final and executory. As previously discussed, the said proposition is erroneous because the
Decision in the present case is not properly severable.
Furthermore, the motion for partial execution was filed only on August 22, 2001, more than four
months after the appeal was perfected. In appeals by notice of appeal, the court loses jurisdiction over
the case upon the perfection of the appeals filed in due time and the expiration of the time to appeal of
the other parties."[14] Each party only has at most 15 days from their receipt of the final order to appeal
it. Thus, when respondents filed their motion for partial execution the RTC no longer had jurisdiction over
the case and it no longer had jurisdiction to act on the said motion for partial execution.
Aside from the fact that the appeal was filed on time and should thus not have been dismissed in the
assailed May 9, 2002 Order, the said Order, which also resolved the motion for partial execution, fell short
of the requirements of Section 2, Rule 39, as previously discussed. Where the order of execution is not in
conformity with the rules, the same is null and void.[15]Therefore, the CA erred in not nullifying the May 9,
2002 Order.
Finally, we address the December 12, 2002 RTC Orders. These Orders proceeded from, and
implemented, the May 9, 2002 Order that was null and void. These Orders were also issued more than a
year after the RTC had already lost jurisdiction over the case. Clearly, like the May 9, 2002 Order,
the December 12, 2002 Orders were also null and void. Thus the CA should have also nullified these
Orders instead of dismissing the petition for certiorari questioning these Orders before it.
WHEREFORE, the petition is GRANTED. The assailed May 31, 2004 Decision and January 17,
2005 Resolution of the Court of Appeals in CA-G.R. SP. No. 75347
are REVERSED and SET ASIDE. The May 9, 2002 and both December 12, 2002 Orders of the Regional
Trial Court in Civil Case No. D-8732
are DECLARED NULL and VOID. The Regional Trial Court of Dagupan City, Branch 44
is ORDERED to TRANSMIT forthwith the records of Civil Case No. D-8732 to the Court of Appeals for
the appeal.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
CA rollo, pp. 334-340; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by
Presiding Justice Cancio C. Garcia and Associate Justice Lucas P. Bersamin.
[2]
Id. at 376; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate
Justices Rodrigo V. Cosico and Lucas P. Bersamin
[3]
Rollo, pp. 136-137.
[4]
Id. at 147.
[5]
[6]
Rollo, p. 229.
[7]
Id. at 295-296.
[8]
Martillano v. Court of Appeals, G.R. No. 148277, June 29, 2004, 433 SCRA 195, 201; Sps. Go
v. Tong, 462 Phil. 256, 266 (2003); Uy Chua v. Court of Appeals, 398 Phil. 17, 30 (2000).
[9]
254 Phil. 316, 325-326 (1989).
[10]
Cf. De Leon v. Court of Appeals, 432 Phil 775, 786-787 (2002); Bangkok Bank Public Company
Limited v. Lee, G.R. No. 159806, January 20, 2006, 479 SCRA 267, 273.
[11]
Cf. De Leon v. Court of Appeals, id.
[12]
RULES OF COURT, Rule 39, Section 2(b).
[13]
RULES OF COURT, Rule 39, Section 2 provides:
Sec. 2. Discretionary execution. (a) Execution of a judgment or a final order pending appeal.- On
motion of the prevailing party with notice to the adverse party filed in the trial court while it
has jurisdiction over the case and is in possession of either the original record or the record
on appeal, as the case may be, at the time of the filing of such motion, said court may, in its
discretion, order execution of a judgment or final order even before the expiration of the
period to appeal.
After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in
the appellate court.
Discretionary execution may only issue upon good reasons to be stated in a special order after
due hearing.
(b) Execution of several, separate or partial judgments. - A several, separate or partial judgment
may be executed under the same terms and conditions as execution of a judgment or final
order pending appeal.
[14]
RULES OF COURT, Rule 41, Section 9: [P]rior to the transmittal of the original record or the
record on appeal, the court may issue orders for the protection and preservation of the rights
of the parties which do not involve any matter litigated by the appeal, approve compromises,
permit appeals of indigent litigants, order execution pending appeal in accordance with section
2 of Rule 39, and allow withdrawal of the appeal.
[15]
Bangkok Bank Public Company Limited v. Lee, supra note 10 at 274.
Supreme Court
Baguio City
SECOND DIVISION
ATTY. PEDRO M. FERRER, G.R. No. 165300
Petitioner,
Present:
- versus -
BRION,
SPOUSES ALFREDO DIAZ ABAD,
and IMELDA DIAZ, DEL CASTILLO, and
REINA COMANDANTE and PEREZ, JJ.
SPOUSES BIENVENIDO
PANGAN and ELIZABETH
PANGAN, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The basic questions to be resolved in this case are: Is a waiver of hereditary rights in favor of
another executed by a future heir while the parents are still living valid? Is an adverse claim annotated on
the title of a property on the basis of such waiver likewise valid and effective as to bind the subsequent
owners and hold them liable to the claimant?
This Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court assails the December
12, 2003 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 70888.[3]Said Decision modified
the June 14, 2001 Summary Judgment[4] of the Regional Trial Court (RTC) of Quezon City in Civil Case
No. Q-99-38876 by holding respondents Spouses Bienvenido and Elizabeth Pangan (the Pangans) not
solidarily liable with the other respondents, Spouses Alfredo and Imelda Diaz (the Diazes) and Reina
Comandante (Comandante), to petitioner Atty. Pedro M. Ferrer (Atty. Ferrer). Likewise assailed is the CA
Resolution[5] dated September 10, 2004 which denied petitioners as well as respondents Spouses Diaz
and Comandantes respective motions for reconsideration.
The parties respective versions of the factual antecedents are as follows:
Version of the Petitioner
Petitioner Atty. Ferrer claimed in his original Complaint[6] that on May 7, 1999, the Diazes, as
represented by their daughter Comandante, through a Special Power of Attorney (SPA),[7] obtained from
him a loan of P1,118,228.00. The loan was secured by a Real Estate Mortgage Contract[8] by way of
second mortgage over Transfer Certificate of Title (TCT) No. RT-6604[9] and a Promissory Note[10] payable
within six months or up to November 7, 1999. Comandante also issued to petitioner postdated checks to
secure payment of said loan.
Petitioner further claimed that prior to this or on May 29, 1998, Comandante, for a valuable
consideration of P600,000.00, which amount formed part of the abovementioned secured loan, executed
in his favor an instrument entitled Waiver of Hereditary Rights and Interests Over a Real Property (Still
Undivided),[11] the pertinent portions of which read:
I, REINA D. COMANDANTE, of legal age, Filipino, married, with residence and
postal address at No. 6, Road 20, Project 8, Quezon City, Metro Manila, Philippines, for a
valuable consideration of SIX HUNDRED THOUSAND PESOS (P600,000.00) which
constitutes my legal obligation/loan to Pedro M. Ferrer, likewise of legal age, Filipino,
married to Erlinda B. Ferrer, with residence and postal address at No. 9, Lot 4, Puerto Rico
Street, Loyola Grand Villas, Quezon City, Metro Manila, Philippines, by virtue of these
presents, do hereby WAIVE, and/or REPUDIATE all my hereditary rights and interests as
a legitimate heir/daughter of Sps. Alfredo T. Diaz and Imelda G. Diaz in favor of said Pedro
M. Ferrer, his heirs and assigns over a certain parcel of land together with all the
improvements found thereon and which property is more particularly described as follows:
TRANSFER CERTIFICATE OF TITLE

NO. RT-6604 (82020) PR-18887
xxxx
and which property is titled and registered in the name of my parents Alfredo T. Diaz and
Imelda G. Diaz, as evidenced by Transfer Certificate of Title No. RT 6604 (82020) PR-
18887.
(sgd.)
REINA D. COMANDANTE
Affiant
On the basis of said waiver, petitioner executed an Affidavit of Adverse Claim[12] which he caused
to be annotated at the back of TCT No. RT-6604 on May 26, 1999.
The Diazes, however, reneged on their obligation as the checks issued by Comandante were
dishonored upon presentment. Despite repeated demands, said respondents still failed and refused to
settle the loan. Thus, petitioner filed on September 29, 1999 a Complaint[13] for Collection of Sum of
Money Secured by Real Estate Mortgage Contract against the Diazes and Comandante docketed as Civil
Case No. Q-99-38876 and raffled to Branch 224 of RTC, Quezon City.
Petitioner twice amended his complaint. First, by including as an alternative relief the Judicial
Foreclosure of Mortgage[14] and, second, by impleading as additional defendants the Pangans as the
mortgaged property covered by TCT No. RT-6604 was already transferred under their names in TCT No.
N-209049. Petitioner prayed in his second amended complaint that all the respondents be ordered to
jointly and solidarily pay him the sum of P1,118,228.00, exclusive of interests, and/or for the judicial
foreclosure of the property pursuant to the Real Estate Mortgage Contract.
Version of the Respondents
In her Answer[15] to petitioners original complaint, Comandante alleged that petitioner and his wife
were her fellow members in the Couples for Christ Movement. Sometime in 1998, she sought the help of
petitioner with regard to the mortgage with a bank of her parents lot located at No. 6, Rd. 20, Project
8, Quezon City and covered by TCT No. RT-6604. She also sought financial accommodations from the
couple on several occasions which totaled P500,000.00. Comandante, however, claimed that these loans
were secured by chattel mortgages over her taxi units in addition to several postdated checks she issued
in favor of petitioner.
As she could not practically comply with her obligation, petitioner and his wife, presented to
Comandante sometime in May 1998 a document denominated as Waiver of Hereditary Rights and
Interests Over a Real Property (Still Undivided) pertaining to a waiver of her hereditary share over her
parents abovementioned property. Purportedly, the execution of said waiver was to secure Comandantes
loan with the couple which at that time had already ballooned to P600,000.00 due to interests.
A year later, the couple again required Comandante to sign the following documents: (1) a Real
Estate Mortgage Contract over her parents property; and, (2) an undated Promissory Note, both
corresponding to the amount of P1,118,228.00, which petitioner claimed to be the total amount of
Comandantes monetary obligation to him exclusive of charges and interests. Comandante alleged that
she reminded petitioner that she was not the registered owner of the subject property and that although
her parents granted her SPA, same only pertains to her authority to mortgage the property to banks and
other financial institutions and not to individuals. Petitioner nonetheless assured Comandante that the SPA
was also applicable to their transaction. As Comandante was still hesitant, petitioner and his wife
threatened to foreclose the formers taxi units and present the postdated checks she issued to the bank
for payment. For fear of losing her taxi units which were the only source of her livelihood, Comandante
was thus constrained to sign the mortgage agreement as well as the promissory note. Petitioner, however,
did not furnish her with copies of said documents on the pretext that they still have to be notarized, but,
as can be gleaned from the records, the documents were never notarized. Moreover, Comandante claimed
that the SPA alluded to by petitioner in his complaint was not the same SPA under which she thought she
derived the authority to execute the mortgage contract.
Comandante likewise alleged that on September 29, 1999 at 10:00 o clock in the morning, she
executed an Affidavit of Repudiation/Revocation of Waiver of Hereditary Rights and Interests Over A (Still
Undivided) Real Property,[16] which she caused to be annotated on the title of the subject property with
the Registry of Deeds of Quezon City on the same day. Interestingly, petitioner filed his complaint later
that day too.
By way of special and affirmative defenses, Comandante asserted in her Answer to the amended
complaint[17] that said complaint states no cause of action against her because the Real Estate Mortgage
Contract and the waiver referred to by petitioner in his complaint were not duly, knowingly and validly
executed by her; that the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided)
is a useless document as its execution is prohibited by Article 1347 of the Civil Code,[18] hence, it cannot
be the source of any right or obligation in petitioners favor; that the Real Estate Mortgage was of doubtful
validity as she executed the same without valid authority from her parents; and, that the prayer for
collection and/or judicial foreclosure was irregular as petitioner cannot seek said remedies at the same
time.
Apart from executing the affidavit of repudiation, Comandante also filed on October 4, 1999 a
Petition for Cancellation of Adverse Claim (P.E. 2468) Under The Memorandum of Encumbrances of TCT
No. RT-6604 (82020) PR-18887[19] docketed as LRC Case No. Q-12009 (99) and raffled to Branch 220 of
RTC, Quezon City. Petitioner who was impleaded as respondent therein moved for the consolidation of
said case[20] with Civil Case No. Q-99-38876. On June 24, 2000, Branch 220 of RTC, Quezon City ordered
the consolidation of LRC Case No. Q-12009 (99) with Civil Case No. Q-99-38876. Accordingly, the records
of the former case was forwarded to Branch 224.
For their part, the Diazes asserted that petitioner has no cause of action against them. They
claimed that they do not even know petitioner and that they did not execute any SPA in favor of
Comandante authorizing her to mortgage for the second time the subject property. They also contested
the due execution of the SPA as it was neither authenticated before the Philippine Consulate in the United
States nor notarized before a notary public in the State of New York where the Diazes have been residing
for 16 years. They claimed that they do not owe petitioner anything. The Diazes also pointed out that the
complaint merely refers to Comandantes personal obligation to petitioner with which they had nothing to
do. They thus prayed that the complaint against them be dismissed.[21]
At the Pangans end, they alleged that they acquired the subject property by purchase in good
faith and for a consideration of P3,000,000.00 on November 11, 1999 from the Diazes through the latters
daughter Comandante who was clothed with SPA acknowledged before the Consul of New York. The
Pangans immediately took actual possession of the property without anyone complaining or
protesting. Soon thereafter, they were issued TCT No. N-209049 in lieu of TCT No. RT-6604 which was
cancelled. [22]
However, on December 21, 1999, they were surprised upon being informed by petitioner that the
subject land had been mortgaged to him by the Diazes. Upon inquiry from Comandante, the latter readily
admitted that she has a personal loan with petitioner for which the mortgage of the property in petitioners
favor was executed. She admitted, though, that her parents were not aware of such mortgage and that
they did not authorize her to enter into such contract. Comandante also informed the Pangans that the
signatures of her parents appearing on the SPA are fictitious and that it was petitioner who prepared such
document.
As affirmative defense, the Pangans asserted that the annotation of petitioners adverse claim on
TCT No. RT-6604 cannot impair their rights as new owners of the subject property. They claimed that the
Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) upon which petitioners
adverse claim is anchored cannot be the source of any right or interest over the property considering that
it is null and void under paragraph 2 of Article 1347 of the Civil Code.
Moreover, the Pangans asserted that the Real Estate Mortgage Contract cannot bind them nor in
any way impair their ownership of subject property because it was not registered before the Register of
Deeds.[23]
All the respondents interposed their respective counterclaims and prayed for moral and exemplary
damages and attorneys fees in varying amounts.
After the parties have submitted their respective pre-trial briefs, the Diazes filed on March 29,
2001 a Motion for Summary Judgment[24] alleging that: first, since the documents alluded to by petitioner
in his complaint were defective, he was not entitled to any legal right or relief; and, second, it was clear
from the pleadings that it is Comandante who has an outstanding obligation with petitioner which the
latter never denied. With these, the Diazes believed that there is no genuine issue as to any material fact
against them and, hence, they were entitled to summary judgment.
On May 7, 2001, petitioner also filed a Motion for Summary Judgment,[25] claiming that his suit
against the respondents is meritorious and well-founded and that same is documented and supported by
law and jurisprudence. He averred that his adverse claim annotated at the back of TCT No. RT-6604,
which was carried over in TCT No. 209049 under the names of the Pangans, is not merely anchored on
the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) executed by
Comandante, but also on the Real Estate Mortgage likewise executed by her in representation of her
parents and in favor of petitioner. Petitioner insisted that said adverse claim is not frivolous and invalid
and is registrable under Section 70 of Presidential Decree (PD) No. 1529. In fact, the Registrar of Deeds
of Quezon City had already determined the sufficiency and/or validity of such registration by annotating
said claim, and this, respondents failed to question. Petitioner further averred that even before the sale
and transfer to the Pangans of the subject property, the latter were already aware of the existence of his
adverse claim. In view of these, petitioner prayed that his Motion for Summary Judgment be granted.
After the filing of the parties respective Oppositions to the said motions for summary judgment,
the trial court, in an Order dated May 31, 2001,[26] deemed both motions for summary judgment submitted
for resolution. Quoting substantially petitioners allegations in his Motion for Summary Judgment, it
thereafter rendered on June 14, 2001 a Summary Judgment[27] in favor of petitioner, the dispositive
portion of which reads:
WHEREFORE, premises considered, summary judgment is hereby rendered in

favor of plaintiff and against defendants by:
a) ORDERING all defendants jointly and solidarily to pay plaintiff the sum
of ONE MILLION ONE HUNDRED EIGHTEEN THOUSAND TWO HUNDRED TWENTY
EIGHT PESOS (P1,118,228.00) which is blood money of plaintiff;
b) ORDERING the Honorable Registrar of Deeds of Quezon City that the

rights and interest of the plaintiff over subject property be annotated at the back of T.C.T.
No. N-209049;
c) SENTENCING all defendants to pay plaintiffs expenses of TEN

THOUSAND PESOS (P10,000.00) and to pay the costs of suit.
IT IS SO ORDERED.[28]
The Pangans, the Diazes, and Comandante appealed to the CA.[29] The Pangans faulted the trial court in
holding them jointly and severally liable with the Diazes and Comandante for the satisfaction of the latters
personal obligation to petitioner in the total amount of P1,118,228.00. The Diazes and Comandante, on
the other hand, imputed error upon the trial court in rendering summary judgment in favor of
petitioner. They averred that assuming the summary judgment was proper, the trial court should not have
considered the Real Estate Mortgage Contract and the Promissory Note as they were defective, as well as
petitioners frivolous and non-registrable adverse claim.
In its Decision[30] dated December 12, 2003, the CA declared Comandantes waiver of hereditary rights null
and void. However, it found the Real Estate Mortgage executed by Comandante on behalf of her parents
as binding between the parties thereto.
As regards the Pangans, the CA ruled that the mortgage contract was not binding upon them as they
were purchasers in good faith and for value. The property was free from the mortgage encumbrance of
petitioner when they acquired it as they only came to know of the adverse claim through petitioners phone
call which came right after the formers acquisition of the property.The CA further ruled that as
Comandantes waiver of hereditary rights and interests upon which petitioners adverse claim was based is
a nullity, it could not be a source of any right in his favor.Hence, the Pangans were not bound to take
notice of such claim and are thus not liable to petitioner.
Noticeably, the appellate court did not rule on the propriety of the issuance of the Summary Judgment as
raised by the Diazes and Comandante. In the ultimate, the CA merely modified the assailed Summary
Judgment of the trial court by excluding the Pangans among those solidarily liable to petitioner, in effect
affirming in all other respects the assailed summary judgment, viz:
WHEREFORE, foregoing premises considered, the Decision of the Regional Trial Court of
Quezon City, Branch 224 in Civil Case No. Q-99-38876 is hereby MODIFIED, as follows:
1. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and severally

pay plaintiff the sum of Php 1,118, 228.00; and
2. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and severally

pay plaintiff the amount of Php10,000.00 plus cost of suit.
SO ORDERED.[31]
Petitioners Motion for Reconsideration[32] having been denied by the CA in its

Resolution[33] dated September 10, 2004, he now comes to us through this petition for review
on certiorari insisting that the Pangans should, together with the other respondents, be held solidarily
liable to him for the amount of P1,118,228.00.
Our Ruling
Petitioner merely reiterates his contentions in the Motion for Summary Judgment he filed before
the trial court. He insists that his Adverse Claim annotated at the back of TCT No. RT-6604 is not merely
anchored on Comandantes Waiver of Hereditary Rights and Interests Over A Real Property (Still
Undivided) but also on her being the attorney-in-fact of the Diazes when she executed the mortgage
contract in favor of petitioner. He avers that his adverse claim is not frivolous or invalid and is registrable
as the Registrar of Deeds of Quezon City even allowed its annotation. He also claims that even prior to
the sale of subject property to the Pangans, the latter already knew of his valid and existing adverse claim
thereon and are, therefore, not purchasers in good faith. Thus, petitioner maintains that the Pangans
should be held, together with the Diazes and Comandante, jointly and severally liable to him in the total
amount of P1,118,228.00.
Petitioners contentions are untenable.

The Affidavit of Adverse Claim executed by petitioner reads in part:
xxxx
1. That I am the Recipient/Benefactor of compulsory heirs share over

an undivided certain parcel of land together with all the improvements found
therein x x x as evidenced by Waiver of Hereditary Rights and Interests Over
A Real Property, executed by REINA D. COMANDANTE (a
compulsory/legitimate heir of Sps. Alfredo T. Diaz and Imelda G. Diaz), x x x.
2. That in order to protect my interest over said property as a

Recipient/Benefactor, for the registered owners/parents might dispose (of) and/or
encumber the same in a fraudulent manner without my knowledge and consent, for the
owners duplicate title was not surrendered to me, it is petitioned that this Affidavit of
Adverse Claim be ANNOTATED at the back of the said title particularly on the original copy
of Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with the
Register of Deeds of Quezon City.
3. That I am executing this Affidavit in order to attest (to) the truth of the
foregoing facts and to petition the Honorable Registrar of Deeds, Quezon City, to annotate
this Affidavit of Adverse Claim at the back of the said title particularly the original copy of
Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with the said
office, so that my interest as Recipient/Benefactor of the said property will be
protected especially the registered owner/parents, in a fraudulent manner might dispose
(of) and/or encumber the same without my knowledge and consent. (Emphasis ours)
Clearly, petitioners Affidavit of Adverse Claim was based solely on the waiver of hereditary interest
executed by Comandante. This fact cannot be any clearer especially so when the inscription of his adverse
claim at the back of TCT No. RT-6604 reads as follows:
P.E. 2468/T-(82020)RT-6604 - - AFFIDAVIT OF ADVERSE CLAIM - - Executed

under oath by PEDRO M. FERRER, married to Erlinda B. Ferrer, claiming among others
that they have a claim, the interest over said property as
Recipient/Benefactor, by virtue of a waiver of Hereditary Rights and Interest
over a real property x x x[34] (Emphasis ours)
Therefore, there is no basis for petitioners assertion that the adverse claim was also anchored on the
mortgage contract allegedly executed by Comandante on behalf of her parents.
The questions next to be resolved are: Is Comandantes waiver of hereditary rights valid? Is
petitioners adverse claim based on such waiver likewise valid and effective?
We note at the outset that the validity of petitioners adverse claim should have been determined
by the trial court after the petition for cancellation of petitioners adverse claim filed by Comandante was
consolidated with Civil Case No. Q-99-38876.[35] This is in consonance with Section 70 of PD 1529 which
provides:
Section 70. Adverse Claim. Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original registration,
may, if no other provision is made in this Decree for registering the same, make a
statement in writing setting forth fully his alleged right or interest, and how or under
whom acquired, a reference to the number of the certificate of title of the registered
owner, the name of the registered owner, and a description of the land in which the right
or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and a place at which all notices may be served upon him. This statement shall
be entitled to registration as an adverse claim on the certificate of title. The adverse claim
shall be effective for a period of thirty days from the date of registration. After the lapse
of said period, the annotation of adverse claim may be cancelled upon filing of
a verified petition therefor by the party in interest: Provided, however, That after
cancellation, no second adverse claim based on the same ground shall be registered by
the same claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a
petition in the Court of First Instance where the land is situated for the
cancellation of the adverse claim, and the court shall grant a speedy hearing
upon the question of validity of such adverse claim, and shall render judgment
as may be just and equitable. If the adverse claim is adjudged to be invalid,
the registration thereof shall be ordered cancelled. If, in any case, the court, after
notice and hearing, shall find that the adverse claim thus registered was frivolous, it may
fine the claimant in an amount not less than one thousand pesos nor more than five
thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may
withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that
effect. (Emphasis ours)
Pursuant to the third paragraph of the afore-quoted provision, it has been held that the validity or
efficaciousness of an adverse claim may only be determined by the Court upon petition by an interested
party, in which event, the Court shall order the immediate hearing thereof and make the proper
adjudication as justice and equity may warrant. And, it is only when such claim is found unmeritorious
that the registration of the adverse claim may be cancelled.[36]
As correctly pointed out by respondents, the records is bereft of any showing that the trial court
conducted any hearing on the matter. Instead, what the trial court did was to include this material issue
among those for which it has rendered its summary judgment as shown by the following portion of the
judgment:
x x x it will be NOTED that subject Adverse Claim annotated at the back of Transfer
Certificate of Title No. RT-6604 (82020) PR-18887, and carried over to defendants-Sps.
Pangans Title No. N-20909, is not merely anchored on defendant Reina Comandantes
Waiver of Hereditary Rights and Interest Over a Real Property but also on her being the
Attorney-In-Fact of the previous registered owners/parents/defendants Sps. Alfredo and
Imelda Diaz about the Real Estate Mortgage Contract for a loan of P1,118,228.00 which
is a blood money of the plaintiff. Moreover, subject Adverse Claim in LRC Case No.
Q-12009 (99) is NOT frivolous and invalid and consequently, REGISTRABLE
by virtue of Section 110 of the Land Registration Act (now Section 70 of
Presidential Decree No. 1529). [37](Emphasis ours)
It does not escape our attention that the trial court merely echoed the claim of petitioner that his adverse
claim subject of LRC Case No. Q-12009 (99) is not frivolous, invalid and is consequently registrable. We
likewise lament the apparent lack of effort on the part of said court to make even a short ratiocination as
to how it came up with said conclusion. In fact, what followed the above-quoted portion of the summary
judgment are mere recitals of the arguments raised by petitioner in his motion for summary
judgment. And in the dispositive portion, the trial court merely casually ordered that petitioners adverse
claim be inscribed at the back of the title of the Pangans. What is worse is that despite this glaring defect,
the CA manifestly overlooked the matter even if respondents vigorously raised the same before it.
Be that as it may, respondents efforts of pointing out this flaw, which we find significant, have not
gone to naught as will be hereinafter discussed.
All the respondents contend that the Waiver of Hereditary Rights and Interest Over a Real Property (Still
Undivided) executed by Comandante is null and void for being violative of Article 1347 of the Civil Code,
hence, petitioners adverse claim which was based upon such waiver is likewise void and cannot confer
upon the latter any right or interest over the property.
We agree with the respondents.
Pursuant to the second paragraph of Article 1347 of the Civil Code, no contract may be entered into upon
a future inheritance except in cases expressly authorized by law. For the inheritance to be considered
future, the succession must not have been opened at the time of the contract. A contract may be classified
as a contract upon future inheritance, prohibited under the second paragraph of Article 1347, where the
following requisites concur:
(1) That the succession has not yet been opened.
(2) That the object of the contract forms part of the inheritance; and,
(3) That the promissor has, with respect to the object, an expectancy of a right
which is purely hereditary in nature.[38]
In this case, there is no question that at the time of execution of Comandantes Waiver of
Hereditary Rights and Interest Over a Real Property (Still Undivided), succession to either of her parents
properties has not yet been opened since both of them are still living. With respect to the other two
requisites, both are likewise present considering that the property subject matter of Comandantes waiver
concededly forms part of the properties that she expect to inherit from her parents upon their death and,
such expectancy of a right, as shown by the facts, is undoubtedly purely hereditary in nature.
From the foregoing, it is clear that Comandante and petitioner entered into a contract involving
the formers future inheritance as embodied in the Waiver of Hereditary Rights and Interest Over a Real
Property (Still Undivided) executed by her in petitioners favor.
In Taedo v. Court of Appeals,[39] we invalidated the contract of sale between Lazaro Taedo and
therein private respondents since the subject matter thereof was a one hectare of whatever share the
former shall have over Lot 191 of the cadastral survey of Gerona, Province of Tarlac and covered by Title
T-13829 of the Register of Deeds of Tarlac. It constitutes a part of Taedos future inheritance from his
parents, which cannot be the source of any right nor the creator of any obligation between the parties.
Guided by the above discussions, we similarly declare in this case that the Waiver of Hereditary
Rights and Interest Over a Real Property (Still Undivided) executed by Comandante in favor of petitioner
as not valid and that same cannot be the source of any right or create any obligation between them for
being violative of the second paragraph of Article 1347 of the Civil Code.
Anent the validity and effectivity of petitioners adverse claim, it is provided in Section 70 of PD
1529, that it is necessary that the claimant has a right or interest in the registered land adverse to the
registered owner and that it must arise subsequent to registration. Here, as no right or interest on the
subject property flows from Comandantes invalid waiver of hereditary rights upon petitioner, the latter is
thus not entitled to the registration of his adverse claim. Therefore, petitioners adverse claim is without
any basis and must consequently be adjudged invalid and ineffective and perforce be cancelled.
Albeit we have already resolved the issues raised by petitioner, we shall not stop here as the Diazes and
Comandante in their Comment[40] call our attention to the failure of the CA to pass upon the issue of the
propriety of the issuance by the trial court of the Summary Judgment in favor of petitioner despite the
fact that they have raised this issue before the appellate court. They argue that summary judgment is
proper only when there is clearly no genuine issue as to any material fact in the action. Thus, where the
defendant presented defenses tendering factual issue which call for presentation of evidence, as when he
specifically denies the material allegations in the complaint, summary judgment cannot be rendered.
The Diazes and Comandante then enumerate the genuine issues in the case which they claim
should have precluded the trial court from issuing a summary judgment in petitioners favor.First, the
execution of the SPA in favor of Comandante referred to by petitioner in his complaint was never admitted
by the Diazes. They assert that as such fact is disputed, trial should have been conducted to determine
the truth of the matter, same being a genuine issue. Despite this, the trial court merely took the word of
the plaintiff and assumed that said document was indeed executed by them. Second, although
Comandante acknowledges that she has a personal obligation with petitioner, she nevertheless, did not
admit that it was in the amount of P1,118,228.00.Instead, she claims only the amount of P500,000.00
or P600,000.00 (if inclusive of interest) as her obligation. Moreover, the Diazes deny borrowing any money
from petitioner and neither did the Pangans owe him a single centavo. Thus, the true amount of the
obligation due the petitioner and how each of the respondents are responsible for such amount are
genuine issues which need formal presentation of evidence. Lastly, they aver that the trial court ignored
factual and material issues such as the lack of probative value of Comandantes waiver of hereditary rights
as well as of the SPA; the fact that Comandante signed the mortgage contract and promissory note in her
personal capacity; and, that all such documents were prepared by petitioner who acted as a lawyer and
the creditor of Comandante at the same time.
Rule 35 of the Rules of Court provides for summary judgment, the pertinent provisions of which
are the following:
Section 1. Summary Judgment for claimant. A party seeking to recover upon a
claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after
the pleading in answer thereto has been served, move with supporting affidavits,
depositions or admissions for a summary judgment in his favor upon all or any part
thereof.
Section 2. Summary Judgment for the defending party. A party against whom a
claim, counterclaim or cross-claim is asserted or a declaratory relief is sought may, at any
time, move with supporting affidavits, depositions or admissions for a summary judgment
in his favor as to all or any part thereof.
Section 3. Motion and proceedings thereon. The motion shall be served at least ten (10)
days before the time specified for the hearing. The adverse party may serve opposing
affidavits, depositions, or admissions at least three (3) days before the hearing. After the
hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting
affidavits, depositions and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.
As can be deduced from the above provisions, summary judgment is a procedural devise resorted
to in order to avoid long drawn out litigations and useless delays. When the pleadings on file show that
there are no genuine issues of facts to be tried, the Rules of Court allows a party to obtain immediate
relief by way of summary judgment. That is, when the facts are not in dispute, the court is allowed to
decide the case summarily by applying the law to the material facts. Conversely, where the pleadings
tender a genuine issue, summary judgment is not proper. A genuine issue is such fact which requires the
presentation of evidence as distinguished from a sham, fictitious, contrived or false claim.[41]
Here, we find the existence of genuine issues which removes the case from the coverage of
summary judgment. The variance in the allegations of the parties in their pleadings is evident.
Petitioner anchors his complaint for sum of money and/or judicial foreclosure on the alleged real
estate mortgage over the subject property allegedly entered into by Comandante in behalf of her parents
to secure payment of a loan amounting to P1,118,228.00. To support this claim, petitioner attached to his
complaint (1) the SPA alleged to have been executed by the Diazes; (2) the Real Estate Mortgage Contract
pertaining to the amount of P1,118,228.00; and, (3) a Promissory Note.
Comandante, in her Answer to petitioners Amended Complaint, assailed the validity and due
execution of the abovementioned documents. She asserted that the same were not duly, knowingly and
validly executed by her and that it was petitioner who prepared all of them. Also, although she admitted
owing petitioner, same was not an absolute admission as she limited herself to an obligation amounting
only to P600,000.00 inclusive of charges and interests. She likewise claimed that such obligation is her
personal obligation and not of her parents.
The Diazes, for their part, also denied that they executed the SPA authorizing their daughter to
mortgage their property to petitioner as well as having any obligation to the latter.
Clearly, there are genuine issues in this case which require the presentation of evidence. For one,
it is necessary to ascertain in a full blown trial the validity and due execution of the SPA, the Real Estate
Mortgage and the Promissory Notes because the determination of the following equally significant
questions depends on them, to wit: (1) Are the Diazes obligated to petitioner or is the obligation a purely
personal obligation of Comandante? and, (2) Is the sum of P1,118,228.00 as shown in the Real Estate
Mortgage and the Promissory Note, the amount which is really due the petitioner?
To stress, trial courts have limited authority to render summary judgments and may do so only when
there is clearly no genuine issue as to any material fact. When the facts as pleaded by the parties are
disputed or contested, proceedings for summary judgment cannot take the place of trial.[42] From the
foregoing, it is apparent that the trial court should have refrained from issuing the summary judgment but
instead proceeded to conduct a full blown trial of the case. In view of this, the present case should be
remanded to the trial court for further proceedings and proper disposition according to the rudiments of
a regular trial on the merits and not through an abbreviated termination of the case by summary
judgment.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated December
12, 2003 insofar as it excluded the respondents Spouses Bienvenido Pangan and Elizabeth Pangan from
among those solidarily liable to petitioner Atty. Pedro M. Ferrer, is AFFIRMED. The inscription of the
adverse claim of petitioner Atty. Pedro M. Ferrer on T.C.T. No. N-209049 is hereby
ordered CANCELLED. Insofar as its other aspects are concerned, the assailed Decision is SET ASIDE
and VACATED. The case is REMANDED to the Regional Trial Court of Quezon City, Branch 224 for
further proceedings in accordance with this Decision.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 13-14.
[2]
CA rollo, pp. 140-149; penned by Associate Justice Arsenio J. Magpale and concurred in by
Associate Justices Conrado M. Vasquez, Jr. and Bienvenido L. Reyes.
[3]
Entitled Atty. Pedro M. Ferrer, plaintiff-appellee, vs. Spouses Alfredo Diaz and Imelda Diaz,
Reina Commandante and Spouses Bienvenido Pangan and Elizabeth Pangan.
[4]
Records, pp. 287-291; penned by Judge Emilio L. Leachon, Jr.
[5]
CA rollo, p. 91.
[6]
Records, pp. 3-6.
[7]
Id. at 7.
[8]
Id. at 14-17.
[9]
Id. at 92-95.
[10]
Id. at 18.
[11]
Id. at 19-20.
[12]
Id. at 21.
[13]
Id. at 3-6.
[14]
Id. at 48-51 and 69-72.
[15]
Id. at 29-33.
[16]
Id. at 38.
[17]
Id. at 208-219.
[18]
ART. 1347. All things which are not outside the commerce of men, including future things,
may be the object of a contract. All rights which are not intransmissible may also be the object
of contracts.
No contract may be entered into upon future inheritance except in cases expressly authorized by
law.
All services which are not contrary to law, morals, good customs, public order or public policy
may likewise be the object of a contract.
[19]
Records, p. 1.
[20]
Id. at 93.
[21]
See Answer with Compulsory Counter-Claim of the Diazes, id. at 231-237.
[22]
See Answer with Compulsory Counter-Claim of the Pangans, id. at 172-183.
[23]
Id.
[24]
Id. at 246-257.
[25]
Id. at 262-268.
[26]
Id. at 286.
[27]
Id. at 287-291.
[28]
Id. at 290-291.
[29]
Id. at 295 and 301.
[30]
[31]
Id. at 148.
[32]
Id. 166-170.
[33]
Id. at 191.
[34]
Dorsal side of p. 13 of the Records.
[35]
Records, p. 66.
[36]
Sajonas v. Court of Apeals, 327 Phil. 689, 712 (1996).
[37]
Records, p. 290.
[38]
J.L.T. Agro Inc. v. Balansag, 493 Phil. 365, 378-379 (2005).
[39]
322 Phil 84 (1996).
[40]
Rollo, pp. 192-210.
[41]
D.M. Consunji, Inc. v. Duvas Corporation, G.R. No. 155174, August 4, 2009.
[42]
Id.

Supreme Court
Baguio City
SECOND DIVISION
DANNIE M. PANTOJA, G.R. No. 163554

Petitioner,
Present:

ABAD,
PEREZ, and
MENDOZA,* JJ.
SCA HYGIENE PRODUCTS
CORPORATION, Promulgated:
Respondent. April 23, 2010
x-------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Once again, we uphold the employers exercise of its management prerogative because it was done for
the advancement of its interest and not for the purpose of defeating the lawful rights of an employee.
This petition for review on certiorari[1] assails the Decision[2] dated January 30, 2004 and
Resolution[3] dated May 13, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 73076, which affirmed
the May 30, 2002 Decision[4] of the National Labor Relations Commission (NLRC) and reinstated the Labor
Arbiters dismissal of the illegal dismissal complaint filed by petitioner Dannie M. Pantoja against respondent
SCA Hygiene Products Corporation.
Factual Antecedents
Respondent, a corporation engaged in the manufacture, sale and distribution of industrial paper and tissue
products, employed petitioner as a utility man on March 15, 1987. Petitioner was eventually assigned at
respondents Paper Mill No. 4, the section which manufactures the companys industrial paper products, as
a back tender in charge of the proper operation of the sections machineries.
In a Notice of Transfer dated March 27, 1999,[5] respondent informed petitioner of its reorganization plan
and offered him a position at Paper Mill No. 5 under the same terms and conditions of employment in
anticipation of the eventual closure and permanent shutdown of Paper Mill No. 4 effective May 5,
1999. The closure and concomitant reorganization is in line with respondents decision to streamline and
phase out the companys industrial paper manufacturing operations due to financial difficulties brought
about by the low volume of sales and orders for industrial paper products.
However, petitioner rejected respondents offer for his transfer. Thus, a notice of termination[6] of
employment effective May 5, 1999 was sent to petitioner as his position was declared redundant by the
closure of Paper Mill No. 4. He then received his separation pay equivalent to two months pay for every
year of service in the amount of P356,335.20 and thereafter executed a release and quitclaim[7] in favor
of respondent. On April 5, 1999, respondent informed the Department of Labor and Employment (DOLE)
of its reorganization and partial closure by submitting with the said office an Establishment Termination
Report[8] together with the list[9] of 31 terminated employees.
On June 20, 2000, petitioner filed a complaint for illegal dismissal against respondent assailing his
termination as without any valid cause. He averred that the alleged redundancy never occurred as there
was no permanent shutdown of Paper Mill No. 4 due to its continuous operation since his termination. A
co-employee, Nestor Agtang, confirmed this fact and further attested that several contractual workers
were employed to operate Paper Mill No. 4.[10] Petitioner also presented in evidence documents pertaining
to the actual and continuous operation of Paper Mill No. 4 such as the Paper Mill Personnel Schedule
for July 2-8, 2000[11] and 23-29, 2000[12] and Paper Machine No. 4 Production Report and Operating Data
dated April 28, 2000[13]and May 18, 2000.[14]
In its defense, respondent refuted petitioners claim of illegal dismissal. It argued that petitioner has
voluntarily separated himself from service by opting to avail of the separation benefits of the company
instead of accepting reassignment/transfer to another position of equal rank and pay. According to
respondent, petitioners discussion on the alleged resumption of operation of Paper Mill No. 4 is rendered
moot by the fact of petitioners voluntary separation.
On March 23, 2001, the Labor Arbiter rendered a Decision[15]

dismissing petitioners complaint for lack of merit. The Labor Arbiter ruled that inasmuch as petitioner
rejected the position offered to him, opted to receive separation pay and executed a release and quitclaim
releasing the company from any claim or demand in connection with his employment, petitioners claim
that he was illegally dismissed must perforce fail.
Ruling of the National Labor Relations Commission
Upon appeal by petitioner, the NLRC reversed the Labor Arbiters Decision by finding petitioners separation
from employment illegal. The NLRC gave credence to petitioners evidence of Paper Mill No. 4s continuous
operation and consequently opined that the feigned shutdown of operations renders respondents
redundancy program legally infirm. According to the NLRC, petitioners refusal to be transferred to an equal
post in Paper Mill No. 5 is of no consequence since he would not have had the need to make a choice
where the situation, in the first place, never called for it. The NLRC further disregarded the validity of the
quitclaim because its execution cannot be considered as having been done voluntarily by petitioner there
being fraud and misrepresentation on the part of respondent. The dispositive portion of the NLRC Decision
reads:
WHEREFORE, premises considered, the decision under review is hereby REVERSED and
SET ASIDE, and another entered, declaring complainants dismissal from employment as
ILLEGAL.
Accordingly, respondent is ordered to REINSTATE the complainant to his former position
without loss of seniority rights and pay him FULL BACKWAGES in the amount
corresponding to the period when he was actually dismissed until actual reinstatement,
less the sum of THREE HUNDRED FIFTY SIX THOUSAND THREE HUNDRED THIRTY FIVE
& 20/100 Pesos (P356,335.20) representing his separation pay.
Respondent is further ordered to pay the complainant, by way of attorneys fees, ten
percent (10%) of the total net amount due as backwages.
SO ORDERED.[16]
Respondent sought reconsideration of the NLRCs ruling. It denied the fact that Paper Mill No. 4 continued
to be fully operational in 1999. Respondent asseverated that when Paper Mill No. 4 was shut down in
1999 due to its low production output as certified in an affidavit[17] executed by SCAs VP-Tissue
Manufacturing Director, there was a necessity to occasionally run from time to time the machines in Paper
Mill No. 4 only for the purpose of maintaining and preserving the same and does not mean that Paper Mill
No. 4 continued to be operational. It was only in 2000 that Paper Mill No. 4 was subsequently reopened
due to a more favorable business climate, which decision is recognized as a rightful exercise of
management prerogative. Moreover, respondent maintained that this is a case of voluntary separation
and not illegal dismissal.
In a Resolution[18] dated August 22, 2002, respondents motion was denied.
Aggrieved, respondent filed a petition for certiorari with the CA. On January 30, 2004, the CA reversed
the NLRCs Decision and reinstated the Labor Arbiters Decision dismissing the compliant. It ruled that there
was no illegal dismissal as the act of petitioner in rejecting the transfer and accepting the separation pay
constitutes a valid basis for the separation from employment. Respondents Motion to Annul the NLRCs
Entry of Judgment was granted by the CA.
Petitioner filed a motion for reconsideration but it was denied.

Issue
The lone issue in this petition for review on certiorari is whether or not respondent is guilty of illegal
dismissal.
Petitioner contends that respondents streamlining of operations which resulted in the reduction of
personnel was a mere scheme to get rid of regular employees whose security of tenure is protected by
law. As there was evident bad faith in the implementation of a flawed retrenchment program, petitioner
argued that his separation from employment due to his decision to accept separation pay is illegal since
respondent has no valid basis to give him an option either to be transferred or be separated. Further,
neither can the quitclaim he executed stamp legality to his precipitate separation.
Our Ruling
Respondents right of management prerogative was exercised in

good faith.
Respondent presented evidence of the low volume of sales and orders for the production of industrial
paper in 1999 which inevitably resulted to the companys decision to streamline its operations. This fact
was corroborated by respondents VP-Tissue Manufacturing Director and was not disputed by petitioner.
Exercising its management prerogative and sound business judgment, respondent decided to cut down
on operational costs by shutting down one of its paper mill. As held in International Harvester Macleod,
Inc. v. Intermediate Appellate Court,[19]the determination of the need to phase out a particular department
and consequent reduction of personnel and reorganization as a labor and cost saving device is a
recognized management prerogative which the courts will not generally interfere with.
In this case, the abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at
in the face of the low demand for the production of industrial paper at the time. Despite an apparent
reason to implement a retrenchment program as a cost-cutting measure, respondent, however, did not
outrightly dismiss the workers affected by the closure of Paper Mill No. 4 but gave them an option to be
transferred to posts of equal rank and pay. As can be seen, retrenchment was utilized by respondent only
as an available option in case the affected employee would not want to be transferred. Respondent did
not proceed directly to retrench. This, to our mind, is an indication of good faith on respondents part as it
exhausted other possible measures other than retrenchment. Besides, the employers prerogative to bring
down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic
means have been tried and found wanting. Giving the workers an option to be transferred without any
diminution in rank and pay specifically belie petitioners allegation that the alleged streamlining scheme
was implemented as a ploy to ease out employees, thus, the absence of bad faith. Apparently, respondent
implemented its streamlining or reorganization plan with good faith, not in an arbitrary manner and
without prejudicing the tenurial rights of its employees.
Petitioner harps on the fact that there was no actual shutdown of Paper Mill No. 4 but that it
continued to be operational. No evidence, however, was presented to prove that there was continuous
operation after the shutdown in the year 1999. What the records reveal is that Paper Mill No. 4 resumed
its operation in 2000 due to a more favorable business climate. The resumption of its industrial paper
manufacturing operations does not, however, make respondents streamlining/reorganization plan illegal
because, again, the abolishment of Paper Mill No. 4 in 1999 was a business judgment arrived at to prevent
a possible financial drain at that time. As long as no arbitrary or malicious action on the part of an employer
is shown, the wisdom of a business judgment to implement a cost saving device is beyond this courts
determination. After all, the free will of management to conduct its own business affairs to achieve its
purpose cannot be denied.[20]
Petitioners voluntary separation from employment renders his
claim of illegal dismissal unfounded and baseless.
Petitioner claims that he had no choice but to resign on the belief that Paper Mill No. 4 will be
permanently closed as misrepresented by respondent and thus can invalidate the release and quitclaim
executed by him.
We find this contention untenable.
We held that work reassignment of an employee as a genuine business necessity is a valid

management prerogative.[21] After being given an option to be transferred, petitioner rejected the offer
for reassignment to Paper Mill No. 5 even though such transfer would not involve any diminution of rank
and pay. Instead, he opted and preferred to be separated by executing a release and quitclaim in
consideration of which he received separation pay in the amount of P356,335.20 equal to two months
pay for every year of service plus other accrued benefits. Clearly, petitioner freely and voluntarily
consented to the execution of the release and quitclaim. Having done so apart from the fact that the
consideration for the quitclaim is credible and reasonable, the waiver represents a valid and binding
undertaking.[22] As aptly concluded by the CA, the quitclaim was not executed under force or duress and
that petitioner was given a separation pay more than what the law requires from respondent.
WHEREFORE, the petition is DENIED. The assailed January 30, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 73076 dismissing petitioner Dannie M. Pantojas complaint for illegal
dismissal and the May 13, 2004 Resolution denying the Motion for Reconsideration are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ROBERTO A. ABAD JOSE PORTUGAL PEREZ

JOSE CATRAL MENDOZA

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
In lieu of Justice Arturo D. Brion, per raffle dated April 19, 2010.
[1]
Rollo, pp.10-23.
[2]
Id. at 73-79; penned by Associate Justice Eloy R. Bello, Jr. and concurred in by Associate
Justices Amelita G. Tolentino and Arturo D. Brion.
[3]
Id. at 91.
[4]
Id. at 63-69; penned by Presiding Commissioner Raul T. Aquino and concurred in by
Commissioners Victoriano R. Calaycay and Angelita A. Gacutan.
[5]
Annex 1, CA rollo, p. 72.
[6]
Annex 2, id. at 73; Annex A of petitioners position paper, id. at 88.
[7]
Annex 6, id. at 77.
[8]
Annex 4, id. at 75.
[9]
Annex 5, id. at 76.
[10]
Agtangs Affidavit, Annex B, id. at 89-90.
[11]
Annex C, id. at 91.
[12]
Annex D, id. at 92.
[13]
Annex E, id. at 93.
[14]
Annex F, id. at 94.
[15]
Rollo, pp. 46-51.
[16]
Id. at 68-69.
[17]
Annex 1 of respondents motion for reconsideration to the NLRC Decision dated May 30, 2002,
[18]
Rollo, pp. 70-71.
[19]
233 Phil. 655, 665-666 (1987).
[20]
Maya Farms Employees Organization v. National Labor Relations Commission, G.R. No.
106256, December 28, 1994, 239 SCRA 508, 514.
[21]
Merck Sharp and Dohme (PHIL.) v. Robles, G.R. No. 176506, November 25, 2009.
[22]
San Miguel Corp. v. Teodosio, G.R. No. 163033, October 2, 2009.

Supreme Court
Baguio City
SECOND DIVISION
Appellee,
Present:

-versus- BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
ROGELIO ASIS y LACSON, Promulgated:

Appellant. April 19, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Once again, we are confronted with the repulsive situation where a father raped his minor daughter. In
this case, AAA[1] was sexually molested not once but twice. Unfortunately, until this stage, her father did
not manifest any feeling of remorse or sought forgiveness; instead, he insists on his innocence
notwithstanding overwhelming evidence against him.
This is an appeal from the June 29, 2007 Decision[2] of the Court of Appeals (CA) in CA-G.R. CR.-H.C. No.
00961 which affirmed with modification the January 25, 2005 Decision[3] of the Regional Trial Court (RTC),
Branch 64, Camarines Norte finding appellant Rogelio Asis y Lacson guilty beyond reasonable doubt of
two counts of rape and sentencing him to suffer the penalty of reclusion perpetua.
Factual Antecedents
On November 8, 1996, two Informations were filed charging appellant with two counts of rape
committed against his own daughter, AAA. The accusatory portions of the two Informations read as
follows:
Crim. Case No. 96-0125:
That on or about January 8, 1994, and subsequently thereafter, at x x x,

Camarines Norte, and within the jurisdiction of this Honorable Court, the above-named
accused, taking advantage of the moral ascendancy he exercises over the private
complainant and by means of force and intimidation, did then and there, willfully,
unlawfully, and feloniously succeed in having sexual intercourse with his own daughter
AAA, a minor who at the time of the incident is below 12 years old, against the latters will,
to her damage and prejudice.
Contrary to law.[4]
Crim. Case No. 96-0126:
That on or about 3:00 oclock in the afternoon of August 15, 1996, at x x x,

Camarines Norte, and within the jurisdiction of this Honorable Court, the above-named
accused, taking advantage of the moral ascendancy he exercises over the private
complainant and by means of force and intimidation, did then and there, willfully,
unlawfully, and feloniously succeed in having sexual intercourse with his own daughter
AAA, a minor barely 14 years old, against the latters will, to her damage and prejudice.
Contrary to law.[5]
During the arraignment on December 4, 1996, the appellant pleaded not guilty. Trial on the merits
ensued thereafter.
The prosecution presented the offended party AAA as its first witness. She testified that
on January 8, 1994, while her brother was out with their neighbors and while her mother was doing
laundry, she was left alone in their house with her father, herein appellant.[6] The appellant then ordered
her to undress. At first, AAA tried to resist but she subsequently succumbed to appellants orders when
the latter threatened to kill her if she refused.[7] The appellant then removed his shorts and briefs and
ordered AAA to lie down on the floor. Appellant thereafter went on top of AAA, separated her legs and
forcibly inserted his penis into his daughters vagina and succeeded in having carnal knowledge of her.
After satisfying himself, appellant threatened to kill AAA if she would disclose the incident to anyone.
AAA further testified that appellant again raped her on August 15, 1996. Appellant pulled her to a
grassy portion near their house and ordered her to remove her clothes. She followed his orders because
he threatened to kill her if she refused.[8] After telling her to lie down on the ground, appellant took two
pieces of stones, separated her legs, and placed them on top of the stones. He then inserted his penis
into her vagina. It was so painful for AAA that she asked her father why he was doing this to her. Appellant
answered that before anybody will benefit from her, he will be the one to do it first.[9]
The prosecution presented BBB, the brother of AAA, as its second witness. BBB testified that
on January 8, 1994, he saw his father, the appellant, undressing AAA.[10] Appellant was already fully naked
when he ordered AAA to lie down on the ground. BBB claimed that he saw his father rape his sister but
he did not reveal to anyone what he saw because he was scared of his father who was always carrying a
bolo.[11]
On cross-examination, BBB testified that he witnessed his father rape his sister AAA on two
occasions.[12] However, he did not report the incidents to anyone for fear of what his father might do to
him.
The prosecution next presented Dr. Marcelito B. Abas. He testified that he conducted a genital
examination on AAA and found several hymenal lacerations in the following positions: 3, 5, 6, and 12
oclock positions.[13] He then concluded that the hymenal lacerations were caused by sexual intercourse
and that AAA is no longer a virgin.
The defense presented the appellant as its lone witness. Appellant denied the charges against
him and claimed that on January 8, 1994, he was in Quezon City working as a carpenter at Josefa
Corporation.[14] According to the appellant, he worked in the said corporation for six months or up to June
1994, although he returned home on January 17, 1994 to get his marriage license and to secure his NBI
clearance.[15] Thus, he claimed that he could not have raped his daughter AAA on January 8, 1994.
Appellant also denied raping AAA on August 15, 1996. He claimed that on said date, he was at
his house celebrating the birthday of his mother-in-law.[16] He claimed that during the party, his daughter
AAA was in the house of her aunt which was located within the same neighborhood as appellants house.[17]
Appellant also claimed that AAA harbored ill-feelings against him hence, she filed the rape
charges. He alleged that he scolded AAA and did not allow her to work in Manila as a helper.[18] When
AAA insisted on working in Manila, he whipped her with a broom causing her legs to bleed.
The trial court found the appellant guilty beyond reasonable doubt of two counts of rape and sentenced
him to suffer the penalty of death.
The trial court rejected appellants alibi for being self-serving and for lack of any evidence
supporting said claim.[19] It held that appellants denial and alibi deserve no credence at all considering the
testimony of AAA positively identifying the appellant as the perpetrator of the crime. It also noted that
AAA was not ill-motivated when she filed the charges against her own father.[20]
The dispositive portion of the Decision of the trial court reads:
WHEREFORE, judgment is hereby rendered finding accused ROGELIO ASIS Y LACSON

GUILTY beyond reasonable doubt of the crime of rape for two (2) counts as charged and
defined and penalized under Article 335 of the Revised Penal Code as amended in relation
to Section 11 of Republic Act No. 7659 (Death Penalty Law) and accordingly, sentencing
him to suffer the capital punishment of death in each two (2) separate crimes of rape
committed on January 8, 1994 and August 15, 1996 respectively. To pay the victim the
amount of P75,000.00 each for [the] separate crime of rape or for a total of P150,000.00
as civil indemnity; P100,000.00 as moral damages for two (2) counts; P50,000.00 as
exemplary damages for two (2) counts and to pay the costs.
SO ORDERED.[21]
On appeal, the appellate court affirmed with modification the Decision of
the trial court. It held that the victims testimony clearly showed that the appellant had sexual intercourse
with her on January 8, 1994, and on August 15, 1996. The CA held that the evidence presented by the
prosecution specially that of AAA was clear, steadfast, and convincing.
Regarding the appellants argument that the prosecution failed to prove the age of AAA, the appellate
court ruled that:
x x x Latest jurisprudence, however, also pronounced that the presentation of the

birth certificate or any other official document is no longer necessary to prove minority.
Thus, in this case, where the age of the victim was never put in doubt, except on appeal,
and was in fact sufficiently established, there is no corresponding obligation on the part
of the prosecution to present other evidence since the testimony of the victim, who is
competent to testify, is sufficient to prove her age. The presentation of the birth certificate
would merely be corroborative. x x x[22]
Our Ruling
We AFFIRM with MODIFICATIONS the Decision of the CA.

Findings of the trial court on the credibility of
witnesses and their testimonies are accorded
great weight and respect.
The trial court found the testimony of AAA to be clear, steadfast, and credible. Thus:
After a careful scrutiny of the evidence adduced by both the prosecution and the defense
and the testimonies of their respective witnesses, this Court finds more for the prosecution
convincing and worthy of belief.
From the detailed testimony of the private complainant AAA (who was only 12 and 14
years old at the time of the incident) the Court is inclined to believe that the incident of
rape actually [transpired] x x x. AAA has also no reason to concoct false stories just to
implicate this serious offense to [her] own father x x x.[23]
The CA affirmed the said findings, holding thus:
x x x After a perusal of the records of the case, we are convinced that the trial court did
not err in giving credence to the testimonies of the victim and the other prosecution
witnesses. The testimony of the victim, detailing how she was abused by the accused-
appellant, on two separate occasions, was clear, steadfast, and convincing. x x x[24]
We find no reason to deviate from the said findings. In rape cases, the evaluation of the credibility of
witnesses is addressed to the sound discretion of the trial judge whose conclusion thereon deserves much
weight and respect, because the judge has the opportunity to observe them on the stand and ascertain
whether they are telling the truth or not.[25] We have long adhered to the rule that findings of the trial
court on the credibility of witnesses and their testimonies are accorded great respect unless it overlooked
substantial facts and circumstances, which if considered, would materially affect the result of the case.[26]
An accused could justifiably be convicted based solely on the credible testimony of the victim. At any rate,
we perused the records of the case and we find nothing which would indicate that the trial court and the
CA overlooked or failed to appreciate some facts which if considered would change the outcome of the
case. Thus, we find the testimony of AAA sufficient to hold appellant guilty of two counts of rape.
The testimony of AAA clearly established that on January 8, 1994, she was ravished by her own
father. She succumbed to his lustful desires because appellant threatened to kill her if she refused. AAA
thus testified in her direct examination, viz:
Prosecutor Pante:
Q: While you and your father was in your house sometime on January 8, 1994 do you
remember any extra ordinary thing that happened to you?
A: There was, sir.
Q: What was that incident all about?

A: Sometime on January 8, 1994, I was sexually molested by my father x x x
xxxx
Q: How did your father sexually abuse you that noon of January 8, 1994?
A: At noontime, he tried to lay me down but I resisted, sir.
Q: What happened [when you tried to resist]?

A: He told me that I will be killed x x x, sir.
xxxx
Q: After[your father removed his short and briefs] and while he was on top of you what
did he do to you?
A: He was kissing me sir, and was placing his organ into my organ, sir.
xxxx
Q: Now, why did you not report [the incident] to your mother or [to] any [of your]
relative?
A: [He] threatened to [kill me,] sir.[27]
As regards the rape incident on August 15 1996, AAA testified thus:
Prosecutor Pante:
Q: Sometime on August 15, 1996 at about 3:00 in the afternoon while you were in your
house in x x x, Camarines Norte is there anything that happened to you?
A: There was, sir.
Q: What was the incident all about?

A: I was raped by my father x x x, sir.
xxxx
Q: After you were totally naked what happened next?

A: He went on top of me and put his organ [in my vagina], sir.
xxxx
Q: Will you kindly tell the court how [his] penis [was] able to penetrate your vagina?
A: He just placed it inside, sir.[28]
Appellants denial and alibi deserve no
consideration at all.
Appellants defense of alibi deserves no credence at all. He claimed that on January 8, 1994, he was
working as a carpenter in Quezon City and only returned to Camarines Norte on January 17, 1994 to get
his marriage license and to secure his NBI clearance. However, other than this self-serving allegation, the
defense presented no other evidence to corroborate said claim. When asked to present any documentary
proof to substantiate his claim, he claimed that he lost his identification card.
As regards the August 15, 1996 rape incident, appellant claimed that he attended the birthday party of
his mother-in-law which was held in his house in Camarines Norte. He denied having raped his daughter
and claimed that it was impossible for him to have raped AAA on said date considering that a number of
people were in attendance during the party.
We are not persuaded. We have held that denial, if unsubstantiated by clear and convincing evidence, is
negative and self-serving evidence, which deserves no weight in law and cannot be given greater
evidentiary value over the testimonies of credible witnesses who testify on affirmative matters.[29] In this
case, appellants denial does not deserve any consideration given AAAs positive identification of appellant
as her lecherous attacker.
We are likewise not swayed by appellants assertion that AAA filed the rape charges against him because
he disallowed her to work in Manila. This claim is not only unsubstantiated, but likewise unworthy of
belief. As aptly held by the trial court, it strains credulity that the victim would concoct a tale of rape against
her own father, allow an examination of her private parts and subject herself to a public trial simply
because she was not allowed to work in Manila. We have consistently held that when a woman, more so
if she is a minor, says that she has been raped, she says in effect all that is necessary to show that rape
was committed.[30]
The minority of the victim was satisfactorily

established.
The Informations specifically alleged that AAA was a minor, i.e., below 12 years old on January 8, 1994,
and barely 14 years old on August 15, 1996, when she was raped by her own father. While the evidence
of the prosecution consisted mainly of the victims testimony, we find that the express admission by the
accused as regards the age of the victim sufficient to establish her minority.
We quote the testimony of appellant, viz:
Prosecutor Velarde:
Q: You will admit that on January 8, 1994, your daughter AAA, who is the complainant in
this case was only 11 years old going to 12, isnt it?
A: Yes.
Q: In fact she was in grade 6, isnt it?

A: Yes.[31]
At this juncture, we deem it proper to reiterate the guidelines set forth in People v. Pruna[32] in appreciating
the age, either as an element of the crime or as a qualifying circumstance, viz:
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. (Emphasis supplied)
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.
The rape incidents in this case were committed on January 8, 1994 and August 15, 1996. As such, the
applicable provision is Article 335 of the Revised Penal Code, as amended by Republic Act No. 7659 or the
Death Penalty Law.[33] Article 335 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:
1. By using force or intimidation;
2. When the woman is deprived of reason or otherwise unconscious; and
3. When the woman in under twelve years of age or is demented.
The crime of rape shall be punished by reclusion perpetua.
xxxx
The death penalty shall also be imposed if the crime of rape is committed with any of the
following 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 within the third civil
degree, or the common-law spouse of the parent of the victim.
xxxx
The prosecution satisfactorily proved the concurrence of minority and relationship. Thus, the proper
imposable penalty would have been death. However, with the passage of Republic Act No. 9346 (An act
Prohibiting the Imposition of Death Penalty), the appellate court correctly reduced the penalty to reclusion
perpetua.
As regards the damages, we find that the appellate court correctly awarded the amounts of P75,000.00
as civil indemnity and another P75,000.00 as moral damages for each count of rape, pursuant to prevailing
jurisprudence.[34] However, the award of exemplary damages must be increased from P25,000.00
to P30,000.00.[35]
Finally, appellant is not eligible for parole pursuant to Section 3 of Republic Act No. 9346.
WHEREFORE, the June 29, 2007 Decision of the Court of Appeals in CA-G.R. CR.-H.C. No. 00961 finding
appellant Rogelio Asis y Lacson guilty beyond reasonable doubt of two counts of rape and sentencing him
to suffer the penalty of reclusion perpetua and to pay AAA the amounts P75,000.00 as civil indemnity and
another P75,000.00 as moral damages, for each count, is AFFIRMED with MODIFICATIONS that the
award of exemplary damages is increased to P30,000.00, for each count of rape. Appellant is likewise held
not eligible for parole.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Pursuant to Section 44 of Republic Act (RA) No. 9262, otherwise known as the Anti-Violence
Against Women and Their Children Act of 2004, and Section 63, Rule XI of the Rules and
Regulations Implementing RA 9262, the real name of the child-victim is withheld to protect
his/her privacy. Fictitious initials are used instead to represent him/her. Likewise, the personal
circumstances or any other information tending to establish or compromise his/her identity,
as well as those of his/her immediate family or household members shall not be disclosed.
[2]
CA rollo, pp. 87-100; penned by Associate Justice Apolinario D. Bruselas, Jr., and concurred in
by Associate Justices Bienvenido L. Reyes and Aurora Santiago-Lagman.
[3]
Id. at 2140-223; penned by Judge Franco T. Falcon.
[4]
Records, p. 2.
[5]
Id. at 9.
[6]
Id. at 10
[7]
Id.
[8]
Id.
[9]
Id.
[10]
Id. at 11.
[11]
Id.
[12]
Id.
[13]
Id. at 199.
[14]
Id. at 148-149.
[15]
Id. at 149.
[16]
Id. at 152-153.
[17]
Id. at 151.
[18]
Id. at 153.
[19]
CA rollo, p. 16.
[20]
Id. at 17.
[21]
Id. at 17-18.
[22]
Id. at 98.
[23]
[24]
CA rollo, p. 91.
[25]
People v. Manalili, G.R. No. 184598, June 23, 2009.
[26]
Id.
[27]
TSN, April, 14, 1997, pp. 11-17.
[28]
Id. at 18-21.
[29]
Id.
[30]
People v. Ruales, 457 Phil. 160, 172 (2003).
[31]
[32]
439 Phil. 440, 470 (2002).
[33]
See People v. Manalili, supra note 25.
[34]
People v. Sarcia, G.R. No. 169641, September 10, 2009.
[35]
Id.

Supreme Court
Baguio City
SECOND DIVISION
ROMEO BASAY, JULIAN G.R. No. 175532

LITERAL and JULIAN ABUEVA,
Petitioners,
- versus - Present:
HACIENDA CONSOLACION, CARPIO, J., Chairperson,

and/or BRUNO BOUFFARD III, BRION,
JOSE RAMON BOUFFARD, DEL CASTILLO,
MALOT BOUFFARD, ABAD, and
SPOUSES CARMEN and PEREZ, JJ.
STEVE BUMANLAG,
BERNIE BOUFFARD,
ANALYN BOUFFARD, and
DONA BOUFFARD, as Owners, Promulgated:
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - x
DECISION
DEL CASTILLO, J.:

Fair evidentiary rule dictates that before employers are burdened to prove that they did not commit illegal
dismissal, it is incumbent upon the employee to first establish the fact of his or her dismissal.
This Petition for Review on Certiorari[1] assails the Decision[2] dated June 7, 2006 of the Court of Appeals
(CA) in CA-G.R. SP No. 00313, which affirmed the March 22, 2004 Decision[3]of the National Labor
Relations Commission (NLRC), dismissing the illegal dismissal case filed by petitioners against respondents.
Factual Antecedents
Respondents hired petitioners Romeo Basay (Basay) in 1967 and Julian Literal (Literal) in 1984, as tractor
operators, and petitioner Julian Abueva (Abueva) in 1989, as laborer, in the hacienda devoted for sugar
cane plantation.
On August 29, 2001, petitioners filed a complaint[4] for illegal dismissal with monetary claims
against respondents. They alleged that sometime in July 2001, respondents verbally informed them to
stop working. Thereafter, they were not given work assignments despite their status as regular
employees. They alleged that their termination was done in violation of their right to substantive and
procedural due process. Petitioners also claimed violation of Minimum Wage Law and non-payment of
overtime pay, premium pay for holiday and rest day, five days service incentive leave pay, separation pay
and 13th month pay. They also prayed for damages and attorneys fees.
Respondents denied petitioners allegations. As regards Abueva, respondents averred that he is not an
employee but a mere contractor in the hacienda. According to respondents, Abueva hired other men to
perform weeding jobs and even entered into contract with neighboring haciendas for similar jobs.
Respondents alleged that Abuevas name does not appear in the payroll, thus indicating that he is not an
employee. As such, there can be no dismissal to speak of, much less an illegal dismissal.
With regard to petitioners Literal and Basay, respondents admitted that both are regular employees, each
receiving P130.00 per days work as evidenced by a Master Voucher.[5] However, respondents denied
having illegally dismissed them and asserted that they abandoned their jobs.
Respondents alleged that Literal was facing charges of misconduct, insubordination, damaging
and taking advantage of hacienda property, and unauthorized cultivation of a portion of the
hacienda. Literal was ordered to explain; instead of complying, Literal did not anymore report for
work. Instead, he filed a complaint for illegal dismissal.
Respondents asserted that they sent a representative to convince petitioners to return but to no
avail. Respondents maintained that they have been religiously giving 13th month pay to their employees
as evidenced by a voucher[6] corresponding to year 2000.
On December 19, 2001, the Labor Arbiter rendered a Decision[7] exonerating respondents from the charge
of illegal dismissal as petitioners were the ones who did not report for work despite respondents call. The
Labor Arbiter, however, awarded petitioners claim of 13th month pay and salary differentials. The
dispositive portion of the Labor Arbiters Decision reads:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered
declaring the Respondent not guilty of Illegal Dismissal but is however directed to pay the
complainants their 13thMonth Pay covering the years 1998 and 1999, and their Salary
Differentials for 2 years at 6 months per year of service. The computation of the foregoing
monetary awards are as follows:
I - 13th Month Pay: (For Each Complainant)

1998 & 1999 = 2 years or 12 months @ 6 months per year of service
P145.00/day x 26 days = P3,770.00/mo.

P3,770.00/mo. x 12 mos. = P45,240.00= P7,540.00
6
II Salary Differential:
(a) Romeo Basay:

Basic Pay = P145.00/day
Salary Received = P122.00/day
Salary Differential = P 23.00/day
1998 & 1999 = 2 years or 312 days
P23.00/day x 312 days = P7,176.00
(b) Julian Literal:

Salary Received = P 91.00/day
1998 & 1999 = 2 years or 312 days
P54.00/day x 312 days = P16,848.00
(c) Julian Abueva:

1998 & 1999 = 2 years or 312 days
P53.50/day x 312 days = P16, 692.00
SUMMARY
1. ROMEO BASAY:
a) 13th Month Pay = P7,540.00
b) Salary Differential = P7,176.00
Total P14,716.00
2. JULIAN LITERAL
a) 13th Month Pay = P 7,540.00
Total P24,388.00
3. JULIAN ABUEVA
a) 13 Month Pay = P 7,540.00
th

Total P24,232.00
GRAND TOTAL. . . . . . . . . . . . . . . . . . . . P63,336.00
Ten Percent (10%) Attorneys Fees is also adjudicated from the total monetary
award.
SO ORDERED.[8]
Both parties sought recourse to the NLRC. Petitioners filed a Partial Appeal[9] to the Decision declaring
respondents not guilty of illegal dismissal. They argued that there was no proof of clear and deliberate
intent to abandon their work. On the contrary, their filing of an illegal dismissal case negates the intention
to abandon. Petitioners likewise alleged that respondents failed to observe procedural due process.
Respondents, for their part, filed a Memorandum on Appeal[10] with respect to the award of salary
differentials and 13th month pay to petitioners. Respondents averred that the Labor Arbiter erred in finding
that petitioners are entitled to receive a minimum wage of P145.00/day instead of P130.00/day which is
the minimum wage rate for sugarcane workers in Negros Oriental per Wage Order No. ROVII-
07.[11] Respondents likewise presented vouchers[12] to prove payment of 13th month pay for the years 1998
and 1999.
The NLRC, in its Decision[13] dated March 22, 2004, found merit in respondents appeal. It ruled that
respondents have satisfactorily proven payment of the correct amount of wages and 13thmonth pay for
the years 1998, 1999 and 2000, as shown in the Master Voucher indicating the workers payroll and the
various vouchers for 13th month pay. The NLRC further ruled that Abueva is not an employee of the
hacienda but a mere contractor; thus, he is not entitled to any of his claims. The NLRC thus affirmed with
modification the Decision of the Labor Arbiter, viz:
WHEREFORE, finding complainants not illegally dismissed, judgment is hereby
rendered AFFIRMING the Decision of the Labor Arbiter dated December 13, 2001, with
the MODIFICATION that complainants Julian Literal and Romeo Basay are not entitled
to their claims for salary differentials and 13th month pay for lack of legal basis. However,
respondents are ordered to pay complainants Julian Literal and Romeo Basay
proportionate 13th month pay computed from January 1, 2001 to August 29, 2001.
All other claims are dismissed for lack of merit.
SO ORDERED.[14]
Petitioners filed a Motion for Reconsideration[15] which was denied by the NLRC in a
Resolution[16] dated September 3, 2004.
Aggrieved, petitioners filed with the CA a petition for certiorari. On June 7, 2006, however, the CA
dismissed the petition and affirmed the findings of the NLRC. It opined that respondents have manifested
their willingness to retain petitioners but the latter intentionally abandoned their work. The CA also struck
down petitioners contention that abandonment is inconsistent with the filing of a complaint for illegal
dismissal as this rule applies only when a complainant seeks reinstatement and not when separation pay
is instead prayed for, as in the case of petitioners. As to the issue posed by petitioners assailing the
admissibility of the Master Voucher due to lack of petitioners authentic signatures, the CA refrained from
resolving the matter since the issue was only raised for the first time on appeal.
Petitioners moved for reconsideration, but to no avail.
Issue
Hence, this petition raising the issue of whether petitioners were illegally dismissed and are entitled to
their money claims.
Petitioners contend that the CA erred in affirming the findings of the labor tribunals that they deliberately
abandoned their work on the basis of respondents self-serving allegation that they sent emissaries to
persuade them to return to work. They maintain that in the absence of competent evidence to show clear
intention to sever the employment relationship and compliance with the two-notice rule, no abandonment
can exist. Moreover, the theory that abandonment of work is inconsistent with the filing of a complaint for
illegal dismissal is applicable in the present case since what was prayed for in the complaint was
reinstatement, contrary to the CAs finding that they were asking for separation pay. Petitioners likewise
insist that the CA gravely erred in holding that they assailed the admissibility of the Master Voucher for
the first time only during appeal. They claim that such issue was raised in their motion for reconsideration
of the NLRC Decision. Finally, petitioners allege that the fact that they were staying inside the premises of
the hacienda and had been working therein for more than a year is an indication that they are regular
employees entitled to their monetary claims, as correctly found by the Labor Arbiter.
Our Ruling
There was no illegal dismissal.
We are not unmindful of the rule in labor cases that the employer has the burden of proving that the
termination was for a valid or authorized cause; however, it is likewise incumbent upon the employees
that they should first establish by competent evidence the fact of their dismissal from employment.[17] The
one who alleges a fact has the burden of proving it and the proof should be clear, positive and
convincing.[18] In this case, aside from mere allegations, no evidence was proffered by the petitioners that
they were dismissed from employment. The records are bereft of any indication that petitioners were
prevented from returning to work or otherwise deprived of any work assignment by respondents.
The CA, in sustaining the Labor Arbiter and NLRCs finding that there was no illegal dismissal, ruled that
respondents have manifested their willingness to retain petitioners in their employ. Petitioners, however,
complained that this finding is anchored on mere allegations of respondents.
We do not agree. Respondents presented a declaration[19] made under oath by Leopoldo Utlang, Jr.,
assistant supervisor of the hacienda, attesting that petitioners were asked to return to do some work for
the hacienda but refused to do so upon the advice of their lawyer. Interestingly too, as late as November
of 2001 or even after almost three months from the filing of the illegal dismissal case, the names of Literal
and Basay were still listed and included in respondents payroll as can be gleaned in the Master Voucher
covering the employees payroll of November 12 to 16, 2001. While a voucher does not necessarily prove
payment, it is an acceptable documentary record of a business transaction.[20] As such, entries made
therein, being entered in the ordinary or regular course of business, enjoy the presumption of
regularity.[21] Hence, on the basis of this material proof evincing respondents intention to retain petitioners
as employees, we are not convinced that petitioners were told to stop working or were prevented from
working in the hacienda. This may well be an indication of respondents lack of intention to dismiss
petitioners from employment since they were still considered employees as of that time. Records are
likewise bereft of any showing that to date, respondents had already terminated petitioners from
employment.
We are not persuaded by petitioners contention that nothing was presented to establish their intention of
abandoning their work, or that the fact that they filed a complaint for illegal dismissal negates the theory
of abandonment.
It bears emphasizing that this case does not involve termination of employment on the ground of
abandonment. As earlier discussed, there is no evidence showing that petitioners were actually dismissed.
Petitioners filing of a complaint for illegal dismissal, irrespective of whether reinstatement or separation
pay was prayed for, could not by itself be the sole consideration in determining whether they have been
illegally dismissed. All circumstances surrounding the alleged termination should also be taken into
account.
In Abad v. Roselle Cinema,[22] we ruled that the substantial evidence proffered by the employer
that it had not terminated the employee should not be ignored on the pretext that the employee would
not have filed the complaint for illegal dismissal if he had not really been dismissed. We held that such non
sequitur reasoning cannot take the place of the evidence of both the employer and the employee.
Given that there was no dismissal to speak of, there can be no question as to the legality or illegality
thereof.
Basay and Literal are entitled to salary differentials for two years
and proportionate 13th month pay from January 1-29, 2001.
Abueva is not an employee, thus not entitled to his claims.
We agree with the petitioners that the issue on the admissibility of the Master Voucher, which does not
show that they actually received the amount of salary indicated therein, was raised in their motion for
reconsideration of the NLRC Decision dated March 22, 2004 where the labor tribunal ruled that petitioners
were duly compensated for their work on the basis of such voucher. At any rate, even if its admission as
evidence is not put into issue, still, the Master Voucher did not prove that petitioners were indeed paid the
correct amount of wages.
A perusal of the Master Voucher shows that it covers the employees payroll for the period
of November 12-16, 2001 only. Clearly, the Master Voucher cannot constitute as proof that petitioners
were duly paid for other periods not covered by such voucher. No other pertinent vouchers, payrolls,
records or other similar documents have been presented as proof of payment of the correct amount of
salaries paid, particularly, for the years 1998 and 1999. As a general rule, one who pleads payment has
the burden of proving it.[23] Consequently, respondents failed to discharge the burden of proving payment
thereby making them liable for petitioners claim for salary differentials. We thus reinstate the Labor
Arbiters award of salary differentials for 1998 and 1999, computed at 6 months per year of service.
However, the Labor Arbiters computation must be modified pursuant to Wage Order No. ROVII-07. Under
this wage order, the minimum wage rate of sugarcane plantation workers is at P130.00/day. The correct
computation for the salary differentials due to Basay and Literal, who claimed to have received
only P122.00 and P91.00 per day, respectively, should be as follows:
For ROMEO BASAY:

Salary Received = P122.00/day
P8.00/day x 312 days (for 1998 & 1999) = P2,496.00
For JULIAN LITERAL:

P39.00/day x 312 days (for 1998 & 1999) = P12,168.00
As regards the 13th month pay, respondents were able to adduce evidence that the benefit was
given to the employees for the years 1998, 1999, and 2000. However, for an employee who has been
separated from service before the time for payment of the 13th month pay, he is entitled to this monetary
benefit in proportion to the length of time he worked during the year, reckoned from the time he started
working during the calendar year up to the time of his separation.[24] The NLRCs award of proportionate
13th month pay computed from January 1, 2001 to August 29, 2001 in favor of Basay and Literal, is
therefore proper.
As for petitioner Abueva, he is not entitled to his claims. The NLRC excluded Abueva in its
judgment award, ruling that he is not an employee but a mere contractor. The existence of an employer-
employee relationship is ultimately a question of fact.[25] Settled is the rule that only errors of law are
generally reviewed by this Court.[26] Factual findings of administrative and quasi-judicial agencies
specializing in their respective fields, especially when affirmed by the CA, must be accorded high respect,
if not finality.[27]
The elements to determine the existence of an employment relationship are: (1) selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
employers power to control the employees conduct.[28] In filing a complaint for illegal dismissal, it is
incumbent upon Abueva to prove the relationship by substantial evidence.
In this regard, petitioners claim that Abueva has worked with respondents for more than a year already
and was allowed to stay inside the hacienda. As such, he is a regular employee entitled to monetary
claims. However, petitioners have not presented competent proof that respondents engaged the services
of Abueva; that respondents paid his wages or that respondents could dictate what his conduct should be
while at work. In other words, Abuevas allegations did not establish that his relationship with respondents
has the attributes of employer-employee on the basis of the above-mentioned four-fold test. Therefore,
Abueva was not able to discharge the burden of proving the existence of an employer-employee
relationship. Moreover, Abueva was not able to refute respondents assertions that he hires other men to
perform weeding job in the hacienda and that he is not exclusively working for respondents.
WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
No. 00313 dated June 7, 2006, finding petitioners Romeo Basay, Julian Literal and Julian Abueva not
illegally dismissed and awarding petitioners Romeo Basay and Julian Literal their proportionate 13th month
pay computed from January 1, 2001 to August 29, 2001, is AFFIRMED with MODIFICATION that the
petitioners Romeo Basay and Julian Literal are entitled to receive the amounts of P2,496.00
and P12,168.00 as salary differentials, respectively.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
SECOND DIVISION
ROO SEGURITAN y JARA, G.R. No. 172896

Petitioner,
Present:

BRION,
-versus- DEL CASTILLO,
ABAD, and
PEREZ, JJ.

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In a criminal case, factual findings of the trial court are generally accorded great weight and respect on
appeal, especially when such findings are supported by substantial evidence on record.[1] It is only in
exceptional circumstances, such as when the trial court overlooked material and relevant matters, that
this Court will re-calibrate and evaluate the factual findings of the court below. In this case, we hold that
the trial court did not overlook such factual matters; consequently, we find no necessity to review, much
less, overturn its factual findings.
This petition for review on certiorari assails the Decision[2] of the Court of Appeals (CA) dated February 24,
2006 in CA-G.R. CR No. 25069 which affirmed with modification the Judgment[3] of the Regional Trial
Court (RTC) of Aparri, Cagayan, Branch 06 in Criminal Case No. VI-892 finding petitioner Roo
Seguritan y Jara guilty beyond reasonable doubt of the crime of homicide. Likewise impugned is the
Resolution[4] dated May 23, 2006 which denied the Motion for Reconsideration.[5]
Factual Antecedents
On October 1, 1996, petitioner was charged with Homicide in an Information, [6] the accusatory portion of
which reads as follows:
That on or about November 25,1995, in the municipality of Gonzaga, province of

Cagayan, and within the jurisdiction of this Honorable Court, the above-named accused,
ROO SEGURITAN y JARA alias Ranio, with intent to kill, did then and there willfully,
unlawfully and feloniously assault, attack and box one Lucrecio Seguritan, inflicting upon
the latter head injuries which caused his death.
Contrary to law.
During the arraignment, petitioner entered a plea of not guilty. Thereafter, trial ensued.
The Version of the Prosecution
In the afternoon of November 25, 1995, petitioner was having a drinking session with his uncles Lucrecio
Seguritan (Lucrecio), Melchor Panis (Melchor) and Baltazar Panis (Baltazar), in the house of Manuel dela
Cruz in Barangay Paradise, Gonzaga, Cagayan. Petitioner, who was seated beside Lucrecio, claimed that
Lucrecios carabao entered his farm and destroyed his crops. A heated discussion thereafter ensued, during
which petitioner punched Lucrecio twice as the latter was about to stand up. Petitioners punches landed
on Lucrecios right and left temple, causing him to fall face-up to the ground and hit a hollow block which
was being used as an improvised stove.
Lucrecio lost consciousness but was revived with the assistance of Baltazar. Thereafter, Lucrecio rode a
tricycle and proceeded to his house in the neighboring barangay of Calayan, Cagayan.Upon his arrival, his
wife noticed blood on his forehead. Lucrecio explained that he was stoned, then went directly to his room
and slept.
At around 9 oclock in the evening, Lucrecios wife and daughter noticed that his complexion has darkened
and foamy substance was coming out of his mouth. Attempts were made to revive Lucrecio but to no
avail. He died that same night.
After the burial of Lucrecio on December 4, 1995, his wife learned of petitioners involvement in
her husbands death. Thus, she sought the assistance of the National Bureau of Investigation (NBI). NBI
Medico-Legal Officer Dr. Antonio Vertido (Dr. Vertido) exhumed Lucrecios body and performed the
autopsy. Dr. Vertido found hematomas in the scalp located in the right parietal and left occipital areas, a
linear fracture in the right middle fossa, and a subdural hemorrhage in the right and left cerebral
hemisphere. Dr. Vertido concluded that Lucrecios cause of death was traumatic head injury.[7]
On May 21, 1996, Melchor executed a sworn statement before the Gonzaga Police Station recounting the
events on that fateful day, including the punching of Lucrecio by petitioner.
At the time of Lucrecios death, he was 51 years old and earned an annual income of P14,000.00 as a
farmer.
Petitioner denied hitting Lucrecio and alleged that the latter died of cardiac arrest. Petitioner claimed that
he suddenly stood up during their heated argument with the intent to punch Lucrecio.However, since the
latter was seated at the opposite end of the bench, Lucrecio lost his balance and fell before he could be
hit. Lucrecios head hit the improvised stove as a result of which he lost consciousness.
Petitioner presented Joel Cabebe, the Assistant Registration Officer of Gonzaga, Cagayan, and Dr. Corazon
Flor, the Municipal Health Officer of Sta. Teresita, Cagayan, to prove that Lucrecio died of a heart
attack. These witnesses identified the Certificate of Death of Lucrecio and the entry therein which reads:
Antecedent cause: T/C cardiovascular disease.[8]
On February 5, 2001, the trial court rendered a Decision convicting petitioner of homicide. The dispositive
portion of the Decision reads:
WHEREFORE, the Court finds the accused GUILTY beyond reasonable doubt of the
crime of homicide and sentences the accused to an indeterminate sentence of 6
years and 1 day of prision mayor as minimum to 17 years and 4 months
of reclusion temporal as maximum. The accused is ordered to pay the heirs of the
late Lucrecio Seguritan the amount of P30,000.00 as actual damages and the
amount of P135,331.00 as loss of earning capacity and to pay the costs.
SO ORDERED.[9]
The Decision of the Court of Appeals
On appeal, the CA affirmed with modification the Judgment of the RTC.

Thus:
WHEREFORE, the judgment appealed from is partly AFFIRMED, WITH

MODIFICATION, to read as follows: The Court finds the accused GUILTY beyond
reasonable doubt of the crime of homicide and sentences the accused to an indeterminate
penalty of SIX (6) YEARS AND ONE (1) DAY of prision mayor, as minimum, to TWELVE
(12) YEARS AND ONE (1) DAY of reclusion temporal, as maximum. The accused Roo
Seguritan is ordered to pay the heirs of the late Lucrecio Seguritan the amount
of P 30,000.00 as actual damages, the amount of P135,331.00 as loss of earning
capacity, P50,000.00 as moral damages and to pay the costs.
SO ORDERED.[10]
Petitioner filed a Motion for Reconsideration but it was denied by the CA in its Resolution
dated May 23, 2006.
Issues
Thus, this petition for review raising the following issues:
I
The Court of Appeals erred in affirming the trial courts judgment of conviction.
II
The Court of Appeals erred in convicting the accused of the crime of homicide.[11]
Our Ruling
The petition is denied.
Petitioner disputes the conclusion that the fracture on the right middle fossa of the skull, beneath the area
where a hematoma developed was due to the blow he delivered because according to the testimony of
Dr. Vertido, the fracture may also be caused by one falling from a height. Petitioner also maintains that
the punches he threw at Lucrecio had nothing to do with the fatal head injuries the latter
suffered. According to him, Lucrecio sustained the head injuries when he accidentally hit the hollow block
that was used as an improvised stove, after falling from the opposite end of the bench. Petitioner insists
that Lucrecio died due to a fatal heart attack.
In fine, petitioner contends that the appellate court, in affirming the judgment of the trial court, overlooked
material and relevant factual matters which, if considered, would change the outcome of the case.
We are not persuaded.
It is on record that Lucrecio suffered two external injuries and one internal injury in his head. The
autopsy report showed that Lucrecio died of internal hemorrhage caused by injuries located at the upper
right portion of the head, left side of the center of his head, and a fracture, linear, right middle fossa,
hemorrhage, subdural, right and left cerebral hemisphere.
We find no reason to doubt the findings of the trial court, as affirmed by the appellate court, that petitioner
punched Lucrecio twice causing him to fall to the ground. Melchor categorically testified that petitioner
punched Lucrecio twice and as a result, Lucrecio fell to the ground and lost consciousness. Melchor would
not have testified falsely against petitioner, who was his nephew. He even hesitated to testify as shown
by his execution of a sworn statement just after the autopsy of Lucrecio which revealed that the cause of
death was traumatic head injury attributed to petitioner.
Melchors eyewitness account of the fist blows delivered by petitioner to Lucrecio and the manner by which
the latter fell from the bench and hit his head on the improvised stove is consistent with the autopsy
findings prepared and testified to by Dr. Vertido. Thus:
xxxx
Court:
Q: What is the right parietal area?
A: This is the right parietal area, sir.
(Witness pointing to the upper right portion of the head).
: And then the left occipital area, this is left occipital area with a hematoma again
measuring 5.0 x 4.0 centimeters, sir.
(Witness pointing to the back left part, middle back portion)[12]
xxxx
Fiscal Feril:
Q: What about this which reads Fracture, linear, right middle fossa, where is this injury
located?
xxxx
Court:
Q: Will you point that from your head?
A: x x x [A]t the base of the brain of the skull, sir.
If you look at the head at the cut portion, the fracture is located on the base of the brain,
particularly on the right mid-cranial fossa, sir.[13]
xxxx
Fiscal Feril:
Q: Could it be possible that the victim suffered the injuries specifically the fracture while
he was falling to the ground, hitting solid objects in the process?
A: Well, with regard to the hematomas there is a possibility [that it could be caused by]
falling from a height x x x although it produces hematoma, sir.
Court:
Q: Falling from a height?
A: Yes, sir.
Fiscal Feril:
Q: If an external force is administered to such victim, such as x x x fist blow[s] would it
accelerate this force and cause these injuries?
A: Definitely it could accelerate, sir.[14]
We find no merit in petitioners argument that he could not be held liable for the head fracture
suffered by Lucrecio. The height from which he stood to deliver the fist blows to Lucrecios head is sufficient
to cause the fracture.
The testimony of Dr. Vertido also ruled out petitioners contention that Lucrecio died of a heart
attack. The fact that Lucrecios cause of death is internal hemorrhage resulting from the head injuries
suffered during his encounter with the petitioner and the certainty that he had no heart problem are
evident in the following portion of Dr. Vertidos testimony:
Atty. Antonio:
Q: Did you notice anything unusual in the heart of Lucrecio Seguritan?
A: Well, with regard to our examination of the heart Your Honor I limit only the
examination on the atomic portion, gross findings, when we say gross
findings that can be seen by the eyes and so if for example other that the
findings on the brain, if I have not seen my injury from the brain then my
next examination to contemplate would be to bring a portion of each
particular organ to Manila and have it subjected to a hispathologic
examination over the microscope. But then we found out that there is an
injury to the brain so why should I now perform a hispathologic
examination on the heart, when in fact there is already a gross finding on
the brain, meaning that the cause of death now is of course, this
traumatic injury, sir.
Court:
Q: Supposed the victim had a heart attack first and then fell down later, can you
determine then x x x the cause of death?
A: Well, your Honor as I said a while ago I opened up the heart, I examined the heart
grossly and there was no findings that would find to a heart attach on its
function, the heart was okay and coronaries were not thickened so I said
well grossly there was no heart attack.[15]
xxxx
Court:
Q: Since you were conducting just a cursory examination of the heart, my question again
is that, could you have determined by further examination whether the
victim suffered a heart attack before the injuries on the head were
inflicted?
A: That is why sir, I said, I examined the heart and I found out that there was noting
wrong with the heart, and why should I insist on further examining the
heart.[16]
The notation in the Certificate of Death of Lucrecio that he died of a heart attack has no weight
in evidence. Dr. Corazon Flor, who signed said document testified that she did not examine the cadaver
of Lucrecio. She stated that a circular governing her profession did not require her to conduct an
examination of Lucrecios corpse, as long as the informant tells her that it is not a medico-legal
case. Renato Sidantes (Renato), the brother-in-law of Lucrecio who applied for the latters death certificate,
had no knowledge of the real cause of his death. Thus, Dr. Flor was mistakenly informed by Renato that
the cause of Lucrecios death was heart attack.
The petitioner belatedly contends that the delay in the autopsy of Lucrecios body and its
embalming compromised the results thereof. To substantiate his claim, he quotes the book entitled Legal
Medicine authored by Dr. Pedro Solis, viz:
a dead body must not be embalmed before the autopsy. The embalming fluid
may render the tissue and blood unfit for toxilogical analyses. The embalming may alter
the gross appearance of the tissues or may result to a wide variety of artifacts that tend
to destroy or obscure evidence.
the body must be autopsied in the same condition when found at the crime
scene. A delay in the performance may fail or modify the possible findings thereby not
serving the interest of justice.[17]
Petitioners reliance on this citation is misplaced. Petitioner failed to adduce evidence that the one
month delay in the autopsy indeed modified the possible findings. He also failed to substantiate his claim
that the embalming fluid rendered the tissue and blood of Lucrecio unfit for toxilogical analysis.
Further, it is settled that courts will only consider as evidence that which has been formally
offered.[18] The allegation that the results of the autopsy are unworthy of credence was based on a book
that was neither marked for identification nor formally offered in evidence during the hearing of the
case. Thus, the trial court as well as the appellate court correctly disregarded them. The prosecution was
not even given the opportunity to object as the book or a portion thereof was never offered in evidence.[19]
A formal offer is necessary since judges are required to base their findings of fact and judgment
only and strictly upon the evidence offered by the parties at the trial. To rule otherwise would deprive the
opposing party of his chance to examine the document and object to its admissibility. The appellate court
will have difficulty reviewing documents not previously scrutinized by the court below.[20] Any evidence
which a party desires to submit to the courts must be offered formally because a judge must base his
findings strictly on the evidence offered by the parties at the trial.[21]
We are not impressed with petitioners argument that he should be held liable only for reckless
imprudence resulting in homicide due to the absence of intent to kill Lucrecio. When death resulted, even
if there was no intent to kill, the crime is homicide, not just physical injuries, since with respect to crimes
of personal violence, the penal law looks particularly to the material results following the unlawful act and
holds the aggressor responsible for all the consequences thereof.[22] Accordingly, Article 4 of the Revised
Penal Code provides:
Art. 4. Criminal liability Criminal liability shall be incurred:
1. By any person committing a felony (delito) although the wrongful act done be
different from that which he intended.
xxxx
Petitioner committed an unlawful act by punching Lucrecio, his uncle who was much older than him, and
even if he did not intend to cause the death of Lucrecio, he must be held guilty beyond reasonable doubt
for killing him pursuant to the above-quoted provision. He who is the cause of the cause is the cause of
the evil caused.[23]
Considering the foregoing discussion, we find that both the trial court and the appellate court correctly
appreciated the evidence presented before them. Both courts did not overlook facts and circumstances
that would warrant a reevaluation of the evidence. Accordingly, there is no reason to digress from the
settled legal principle that the appellate court will generally not disturb the assessment of the trial court
on factual matters considering that the latter as a trier of facts, is in a better position to appreciate the
same.
Further, it is settled that findings of fact of the trial court are accorded greatest respect by the appellate
court absent any abuse of discretion.[24] There being no abuse of discretion in this case, we affirm the
factual findings of the trial court.
Penalty and Damages
The penalty for Homicide under Article 249 of the Revised Penal Code is reclusion temporal the range of
which is from 12 years and one day to 20 years. Applying the Indeterminate Sentence Law, the penalty
next lower in degree is prision mayor the range of which is from six years and one day to 12 years. In this
case, we find that the mitigating circumstance of no intention to commit so grave a wrong as that
committed, attended the commission of the crime. Thus, the appellate court correctly imposed the
indeterminate penalty of six years and one day of prision mayor, as minimum, to 12 years and one day
of reclusion temporal, as maximum.
As regards the amount of damages, civil indemnity must also be awarded to the heirs of Lucrecio without
need of proof other than the fact that a crime was committed resulting in the death of the victim and that
petitioner was responsible therefor.[25] Accordingly, we award the sum of P50,000.00 in line with current
jurisprudence.[26]
The award of P135,331.00 for the loss of earning capacity was also in order.[27] The prosecution
satisfactorily proved that the victim was earning an annual income of P14,000.00 from the harvest of
pineapples. Besides, the defense no longer impugned this award of the trial court.
However, the other awards of damages must be modified. It is error for the trial court and the appellate
court to award actual damages of P30,000.00 for the expenses incurred for the death of the victim. We
perused the records and did not find evidence to support the plea for actual damages. The expenses
incurred in connection with the death, wake and burial of Lucrecio cannot be sustained without any
tangible document to support such claim. While expenses were incurred in connection with the death of
Lucrecio, actual damages cannot be awarded as they are not supported by receipts.[28]
In lieu of actual damages, the heirs of the victim can still be awarded temperate damages. When pecuniary
loss has been suffered but the amount cannot, from the nature of the case, be proven with certainty,
temperate damages may be recovered. Temperate damages may be allowed in cases where from the
nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced
that the aggrieved party suffered some pecuniary loss.[29] In this regard, the amount of P25,000.00 is in
accordance with recent jurisprudence.[30]
Moral damages was correctly awarded to the heirs of the victim without need of proof other than the fact
that a crime was committed resulting in the death of the victim and that the accused was responsible
therefor.[31] The award of P50,000.00 as moral damages conforms to existing jurisprudence.[32]
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CR No. 25069
finding petitioner Roo Seguritan y Jara guilty of homicide and sentencing him to suffer the penalty of six
years and one day of prision mayor as minimum, to 12 years and one day of reclusion temporal as
maximum, and to pay the heirs of Lucrecio Seguritan the amounts of P50,000.00 as moral damages
and P135,331.00 as loss of earning capacity is AFFIRMED with MODIFICATION that petitioner is
further ordered to pay P25,000.00 as temperate damages in lieu of actual damages, and P50,000.00 as
civil indemnity.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
People v. Narca, 341 Phil. 713-714 (1997).
[2]
CA rollo, pp. 155-164; penned by Associate Justice Santiago Javier Ranada and concurred in
by Associate Justices Roberto A. Barrios and Mario L. Guaria III.
[3]
Records, pp. 186-194; penned by Judge Rolando R. Velasco.
[4]
Rollo, p. 33.
[5]
[6]
Records, p. 1.
[7]
Id. at 121.
[8]
Id. at 133.
[9]
Id. at 194.
[10]
CA rollo, p. 163.
[11]
Rollo, p. 15.
[12]
TSN, December 15, 1998, p. 32.
[13]
Id. at 31-32.
[14]
Id. at 37-38.
[15]
TSN, December 15, 1998, pp. 41-42.
[16]
Id. at 44-45
[17]
Rollo, p. 21.
[18]
[19]
Candido v. Court of Appeals, 323 Phil. 95, 99 (1996).
[20]
Id. at 100.
[21]
Id.
[22]
United States v. Gloria, 3 Phil. 333, 335 (1904).
[23]
People v. Ural, 155 Phil. 116, 123 (1974).
[24]
People v. San Gabriel, 323 Phil. 102, 108 (1996).
[25]
People v. Diaz, 443 Phil. 67, 90-91 (2003).
[26]
People v. Satonero, G.R. No. 186233, October 2, 2009.
[27]
See People v. Nullan, 365 Phil. 227, 257-258 (1999).
[28]
People v. San Gabriel, supra note 24.
[29]
Canada v. All Commodities Marketing Corp., G.R. No. 146141, October 17, 2008, 569 SCRA
321, 329.
[30]
People v. Bascugin, G.R. No. 184704, June 30, 2009.
[31]
People v. San Gabriel, supra note 24.
[32]
People v. Satonero, supra note 26.
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 14-37.
[2]
Id. at 164-172; penned by Associate Justice Isaias P. Dicdican and concurred in by Associate
Justices Apolinario D. Bruselas Jr. and Agustin S. Dizon.
[3]
Id. at 137-141; penned by Presiding Commissioner Gerardo C. Nograles and concurred in by
Commissioners Edgardo M. Enerlan and Oscar S. Uy.
[4]
Id. at 214- 216. The complaints were later amended on September 27, 2001, id. at 74-76.
[5]
Voucher covering the payroll for the period November 12-16, 2001, Annex 1 of Respondents
Position Paper, Id. at 96.
[6]
Voucher dated January 4, 2000, Annex 5 of Respondents Position Paper, Id. at 100-102.
[7]
Id. at 105-110.
[8]
Id. at 108-109.
[9]
Id. at 111-114.
[10]
Id. at 115-124.
[11]
Annex 2 of Respondents Memorandum on Appeal, Id. at 131.
[12]
Annex 3 of Respondents Memorandum on Appeal, Id. at 132-135.
[13]
Supra note 3.
[14]
Rollo, p. 141.
[15]
Id. at 142-154.
[16]
Id. at 158.
[17]
Ledesma, Jr. v. National Labor Relations Commission, G.R. No. 174585, October 19, 2007,
537 SCRA 358, 370.
[18]
Leopard Integrated Services, Inc. v. Macalinao, G.R. No. 159808, September 30, 2008, 567
SCRA 192, 200.
[19]
Annex 4 of respondents Position Paper, rollo, p. 99.
[20]
Alonzo v. San Juan, 491 Phil. 232, 244 (2005).
[21]
See RULES OF COURT, Rule 130, Section 43.
[22]
G.R. No. 141371, March 24, 2006, 485 SCRA 262, 272.
[23]
Agabon v. National Labor Relations Commission, 485 Phil. 248, 289 (2004).
[24]
Mantle Trading Services, Inc. v. National Labor Relations Commission, G.R. No. 166705, July
28, 2009.
[25]
Aklan v. San Miguel Corporation, G.R. No. 168537, December 11, 2008, 573 SCRA 675, 685.
[26]
Lopez v. Bodega City, G.R. No. 155731, September 3, 2007, 532 SCRA 56, 64.
[27]
V.V. Aldaba Engineering v. Ministry of Labor and Employment, G.R. No. 76925, September 26,
1994, 237 SCRA 31, 38-39.
[28]
CRC Agricultural Trading v. National Labor Relations Commission, G.R. No. 177664, December
23, 2009.

Supreme Court
Baguio City
SECOND DIVISION
TFS, INCORPORATED, G.R. No. 166829

Petitioner,
Present:

- versus - NACHURA,*
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
COMMISSIONER OF INTERNAL
REVENUE, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:

Only in highly meritorious cases, as in the instant case, may the rules for perfecting an appeal be
brushed aside.
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the
November 18, 2004[1] Resolution of the Court of Tax Appeals (CTA) En Banc in C.T.A. EB No. 29 which
dismissed petitioners Petition for Review for having been filed out of time. Also assailed is the January 24,
2005[2] Resolution denying the motion for reconsideration.
Factual Antecedents
Petitioner TFS, Incorporated is a duly organized domestic corporation engaged in the pawnshop
business. On January 15, 2002, petitioner received a Preliminary Assessment Notice (PAN)[3] for deficiency
value added tax (VAT), expanded withholding tax (EWT), and compromise penalty in the amounts
of P11,764,108.74, P183,898.02 and P25,000.00, respectively, for the taxable year 1998. Insisting that
there was no basis for the issuance of PAN, petitioner through a letter[4] dated January 28, 2002 requested
the Bureau of Internal Revenue (BIR) to withdraw and set aside the assessments.
In a letter-reply[5] dated February 7, 2002, respondent Commissioner of Internal Revenue (CIR)

informed petitioner that a Final Assessment Notice (FAN)[6] was issued on January 25, 2002, and that
petitioner had until February 22, 2002 within which to file a protest letter.
On February 20, 2002, petitioner protested the FAN in a letter[7] dated February 19, 2002.
There being no action taken by the CIR, petitioner filed a Petition for Review[8] with the CTA
on September 11, 2002, docketed as CTA Case No. 6535.
During trial, petitioner offered to compromise and to settle the assessment for deficiency EWT
with the BIR. Hence, on September 24, 2003, it filed a Manifestation and Motion withdrawing its appeal
on the deficiency EWT, leaving only the issue of VAT on pawnshops to be threshed out. Since no
opposition was made by the CIR to the Motion, the same was granted by the CTA on November 4, 2003.
Ruling of the Court of the Tax Appeals

On April 29, 2004, the CTA rendered a Decision[9] upholding the assessment issued against
petitioner in the amount of P11,905,696.32, representing deficiency VAT for the year 1998, inclusive of
25% surcharge and 20% deficiency interest, plus 20% delinquency interest from February 25, 2002 until
full payment, pursuant to Sections 248 and 249(B) of the National Internal Revenue Code of 1997
(NIRC). The CTA ruled that pawnshops are subject to VAT under Section 108(A) of the NIRC as they are
engaged in the sale of services for a fee, remuneration or consideration.[10]
Aggrieved, petitioner moved for reconsideration[11] but the motion was denied by the CTA in its
Resolution dated July 20, 2004,[12] which was received by petitioner on July 30, 2004.
On August 16, 2004, petitioner filed before the Court of Appeals (CA) a Motion for Extension of
Time to File Petition for Review.[13] On August 24, 2004, it filed a Petition for Review[14] but it was dismissed
by the CA in its Resolution[15] dated August 31, 2004, for lack of jurisdiction in view of the enactment
of Republic Act No. 9282 (RA 9282).[16]
Ruling of the Court of Tax Appeals En Banc
Realizing its error, petitioner filed a Petition for Review[17] with the CTA En Banc on September 16,
2004. The petition, however, was dismissed for having been filed out of time per Resolution
dated November 18, 2004. Petitioner filed a Motion for Reconsideration but it was denied in a Resolution
dated January 24, 2005.
Issues
In its Memorandum,[18] petitioner interposes the following issues:
WHETHER THE HONORABLE COURT OF TAX APPEALS EN BANC SHOULD HAVE GIVEN
DUE COURSE TO THE PETITION FOR REVIEW AND NOT STRICTLY APPLIED THE
TECHNICAL RULES OF PROCEDURE TO THE DETRIMENT OF JUSTICE.
WHETHER OR NOT PETITIONER IS SUBJECT TO THE 10% VAT.[19]
Petitioner admits that it failed to timely file its Petition for Review with the proper court
(CTA). However, it attributes the procedural lapse to the inadvertence or honest oversight of its counsel,
who believed that at the time the petition was filed on August 24, 2004, the CA still had jurisdiction since
the rules and regulations to implement the newly enacted RA 9282 had not yet been issued and the
membership of the CTA En Banc was not complete. In view of these circumstances, petitioner implores
us to reverse the dismissal of its petition and consider the timely filing of its petition with the CA, which
previously exercised jurisdiction over appeals from decisions/resolutions of the CTA, as substantial
compliance with the then recently enacted RA 9282.
Petitioner also insists that the substantive merit of its case outweighs the procedural infirmity it
committed. It claims that the deficiency VAT assessment issued by the BIR has no legal basis because
pawnshops are not subject to VAT as they are not included in the enumeration of services under Section
108(A) of the NIRC.
The CIR, on the other hand, maintains that since the petition was filed with the CTA beyond the
reglementary period, the Decision had already attained finality and can no longer be opened for review. As
to the issue of VAT on pawnshops, he opines that petitioners liability is a matter of law; and in the absence
of any provision providing for a tax exemption, petitioners pawnshop business is subject to VAT.
Our Ruling
The petition is meritorious.
Jurisdiction to review decisions or resolutions issued by the Divisions of the CTA is no longer with
the CA but with the CTA En Banc. This rule is embodied in Section 11 of RA 9282, which provides that:
SECTION 11. Section 18 of the same Act is hereby amended as follows:
SEC. 18. Appeal to the Court of Tax Appeals En Banc. No civil proceeding involving
matters arising under the National Internal Revenue Code, the Tariff and Customs Code
or the Local Government Code shall be maintained, except as herein provided, until and
unless an appeal has been previously filed with the CTA and disposed of in accordance
with the provisions of this Act.
A party adversely affected by a resolution of a Division of the CTA on a
motion for reconsideration or new trial, may file a petition for review with the
CTA en banc. (Emphasis supplied)
Procedural rules may be relaxed in the interest of

substantial justice
It is settled that an appeal must be perfected within the reglementary period provided by law;
otherwise, the decision becomes final and executory.[20] However, as in all cases, there are exceptions to
the strict application of the rules for perfecting an appeal.[21]
We are aware of our rulings in Mactan Cebu International Airport Authority v. Mangubat[22] and
in Alfonso v. Sps. Andres,[23] wherein we excused the late filing of the notices of appeal because at the
time the said notices of appeal were filed, the new rules[24] applicable therein had just been recently
issued. We noted that judges and lawyers need time to familiarize themselves with recent rules.
However, in Cuevas v. Bais Steel Corporation[25] we found that the relaxation of rules was
unwarranted because the delay incurred therein was inexcusable. The subject SC Circular 39-98 therein
took effect on September 1, 1998, but the petitioners therein filed their petition for certiorari five months
after the circular took effect.
In the instant case, RA 9282 took effect on April 23, 2004, while petitioner
filed its Petition for Review on Certiorari with the CA on August 24, 2004, or four months after the
effectivity of the law. By then, petitioners counsel should have been aware of and familiar with the changes
introduced by RA 9282. Thus, we find petitioners argument on the newness of RA 9282 a bit of a stretch.
Petitioner likewise cannot validly claim that its erroneous filing of the petition with the CA was
justified by the absence of the CTA rules and regulations and the incomplete membership of the CTA En
Banc as these did not defer the effectivity[26] and implementation of RA 9282. In fact, under Section 2 of
RA 9282,[27] the presence of four justices already constitutes a quorum for En Banc sessions and the
affirmative votes of four members of the CTA En Banc are sufficient to render judgment.[28] Thus, to us,
the petitioners excuse of inadvertence or honest oversight of counsel deserves scant consideration.
However, we will overlook this procedural lapse in the interest of substantial justice. Although a
client is bound by the acts of his counsel, including the latters mistakes and negligence, a departure from
this rule is warranted where such mistake or neglect would result in serious injustice to the
client.[29] Procedural rules may thus be relaxed for persuasive reasons to relieve a litigant of an injustice
not commensurate with his failure to comply with the prescribed procedure.[30] Such is the situation in this
case.
Imposition of VAT on pawnshops for the tax years

1996 to 2002 was deferred
Petitioner disputes the assessment made by the BIR for VAT deficiency in the amount
of P11,905,696.32 for taxable year 1998 on the ground that pawnshops are not included in the coverage
of VAT.
We agree.
In First Planters Pawnshop, Inc. v. Commissioner of Internal Revenue,[31] we ruled that:
x x x Since petitioner is a non-bank financial intermediary, it is subject to 10%

VAT for the tax years 1996 to 2002; however, with the levy, assessment and
collection of VAT from non-bank financial intermediaries being specifically
deferred by law, then petitioner is not liable for VAT during these tax years. But
with the full implementation of the VAT system on non-bank financial intermediaries
starting January 1, 2003, petitioner is liable for 10% VAT for said tax year. And beginning
2004 up to the present, by virtue of R.A. No. 9238, petitioner is no longer liable for VAT
but it is subject to percentage tax on gross receipts from 0% to 5%, as the case may
be. (Emphasis in the original text)
Guided by the foregoing, petitioner is not liable for VAT for the year 1998. Consequently, the VAT
deficiency assessment issued by the BIR against petitioner has no legal basis and must therefore be
cancelled. In the same vein, the imposition of surcharge and interest must be deleted.[32]
In fine, although strict compliance with the rules for perfecting an appeal is indispensable for the
prevention of needless delays and for the orderly and expeditious dispatch of judicial business, strong
compelling reasons such as serving the ends of justice and preventing a grave miscarriage may
nevertheless warrant the suspension of the rules.[33] In the instant case, we are constrained to disregard
procedural rules because we cannot in conscience allow the government to collect deficiency VAT from
petitioner considering that the government has no right at all to collect or to receive the same. Besides,
dismissing this case on a mere technicality would lead to the unjust enrichment of the government at the
expense of petitioner, which we cannot permit.Technicalities should never be used as a shield to
perpetrate or commit an injustice.
WHEREFORE, the Petition is GRANTED. The assailed November 18, 2004 Resolution of the Court of
Tax Appeals En Banc in C.T.A. EB No. 29 which dismissed petitioners Petition for Review for having been
filed out of time, and the January 24, 2005 Resolution which denied the motion for reconsideration, are
hereby REVERSED and SET ASIDE. The assessment for deficiency Value Added Tax for the taxable
year 1998, including surcharges, deficiency interest and delinquency interest, are
hereby CANCELLED and SET ASIDE.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ANTONIO EDUARDO B. NACHURA ROBERTO A. ABAD

JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice

CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
In lieu of Associate Justice Arturo D. Brion, per Raffle dated April 12, 2010.
[1]
Rollo, p. 50.
[2]
Id. at 51-54.
[3]
Id. at 82-83.
[4]
Id. at 84-87.
[5]
Id. at 88.
[6]
Id. at 89-94.
[7]
Id. at 95-98.
[8]
Id. at 72-81.
[9]
Id. at 100-111.
[10]
Id. at 107.
[11]
Id. at 112-125.
[12]
Id. at 126.
[13]
Id. at 128-132.
[14]
Id. at 134-160.
[15]
Id. at 161.
[16]
An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the
Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending
for the Purpose Sections of Republic Act No. 1125, otherwise known as the Law Creating the
Court of Tax Appeals, and for Other Purposes.
[17]
Rollo, pp.162-189.
[18]
Id. at 268-326.
[19]
Id. at 274.
[20]
Nationwide Security and Allied Services, Inc. v. Court of Appeals, G.R. No. 155844, July 14,
2008, 558 SCRA 148, 155-156.
[21]
Monreal v. Court of Appeals, 204 Phil. 395, 401 (1982).
[22]
371 Phil. 393, 398-399 (1999).
[23]
439 Phil. 298, 306-307 (2002).
[24]
On the alternative modes of service of pleading and the Revised Rules of Civil Procedure,
respectively.
[25]
439 Phil. 793, 805-806 (2002).
[26]
SECTION 19. Effectivity Clause. This Act shall take effect after fifteen (15) days following its
publication in at least two newspapers of general circulation.
[27]
Now Amended by RA 9503, An Act Enlarging the Organizational Structure of the Court of Tax
Appeals, Amending for the Purpose Certain Sections of the Law Creating the Court of Tax
Appeals, and For Other Purposes, Approved June 12, 2008.
[28]
Section 2 of the same Act is hereby amended to read as follows:
SEC. 2. Sitting En Banc or Division; Quorum; Proceedings. The CTA may sit en banc or in two (2)
Divisions, each Division consisting of three (3) Justices.
Four (4) Justices shall constitute a quorum for sessions en banc and two (2) Justices for
sessions of a Division: Provided, That when the required quorum cannot be constituted due
to any vacancy, disqualification, inhibition, disability, or any other lawful cause, the Presiding
Justice shall designate any Justice of other Divisions of the Court to sit temporarily therein.
The affirmative votes of four (4) members of the Court en banc or two (2) members of a
Division, as the case may be, shall be necessary for the rendition of a decision or resolution.
[29]
Meneses v. Secretary of Agrarian Reform, G.R. No. 156304, October 23, 2006, 505 SCRA 90,
97-98.
[30]
Spouses Ello v. Court of Appeals, 499 Phil. 398, 411 (2005), citing Sebastian v. Morales, 445
Phil. 595, 605 (2003).
[31]
G.R. No. 174134, July 30, 2008, 560 SCRA 606, 621.
[32]
See Tambunting Pawnshop, Inc. v. Commissioner of Internal Revenue, G.R. No.
179085, January 21, 2010.
[33]
Villanueva v. Court of Appeals, G.R. No. 99357, January 27, 1992, 205 SCRA 537, 545.

Supreme Court
Baguio City
SECOND DIVISION
REGIONAL AGRARIAN REFORM G.R. No. 165155

ADJUDICATION BOARD,
Office of the Regional Adjudicator,
San Fernando, Pampanga,
CECILIA MANIEGO, JOSE
BAUTISTA, ELIZA PACHECO,
JUANITO FAJARDO, MARIO
PACHECO, MARIANO
MANANGHAYA as heir of Antonio
Mananghaya, MARCIANO
NATIVIDAD, ROBERTO
BERNARDO in his personal capacity
and as heir of Pedro Bernardo,
EDILBERTO NATIVIDAD, as heir of Present:
Ismael Natividad, JEFFREY DIAZ as
heir of Jovita R. Diaz, RODOLFO
DIMAAPI, ALBERTO ENRIQUEZ, CARPIO, J., Chairperson,
BENIGNO CABINGAO, MARIO BRION,
GALVEZ, DELFIN SACDALAN, as DEL CASTILLO,
heir of Avelino Santos, ABAD, and
Petitioners,[1] PEREZ, JJ.
- versus -
COURT OF APPEALS,
VERONICA R. GONZALES,
DEOGRACIAS REYES, LEONARDO
REYES, ISABELITA BALATBAT,
MANUELA REYES, WILHELMINA
ALMERO, ARTURO REYES,
EPIFANIO REYES, GLORIA
REYES, MARIO REYES, TERESITA
BALATBAT, LYDIA BALATBAT,
FERNANDO BALATBAT, VICENTE
BALATBAT, GILBERTO REYES,
RENE REYES, EMILIA DUNGO,
BRENDA CANCIO, VICTOR REYES,
and EDGARDO REYES, represented
by VERONICA R. GONZALES, for
herself and as attorney-in-fact, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Rules of procedure are tools to facilitate a fair and orderly conduct of proceedings. Strict adherence thereto
must not get in the way of achieving substantial justice. So long as their purpose is sufficiently met and
no violation of due process and fair play takes place, the rules should be liberally construed, especially in
agrarian cases.
This Petition for Certiorari[2] assails the June 9, 2004 Decision[3] of the Court of Appeals (CA) in CA-
G.R. SP No. 79304 which granted the Petition for Certiorari of respondents and held that petitioners
notices of appeal are mere scrap of paper for failure to specify the ground for the appeal; and for being
forged. Also assailed is the August 31, 2004 Resolution[4] denying petitioners motion for
reconsideration. The assailed Decision disposed as follows:
WHEREFORE, premises considered, the Petition is GRANTED and the Notices of

Appeal filed by the private respondents before the public respondent are hereby decreed
without legal effect.
SO ORDERED.[5]
Factual Antecedents
Respondents are co-owners of several parcels of land primarily devoted to rice production consisting of
58.8448 hectares, located at Sta. Barbara, Baliuag, Bulacan and covered by Transfer Certificate of Title
(TCT) Nos. T-158564, T-215772, T-215776, T-215777, T 215775. Petitioners are in actual possession of
the said land as tillers thereof. According to respondents, petitioners are agricultural lessees with the
obligation to pay annual lease rentals. On the other hand, petitioners aver that they are farmer-
beneficiaries under Presidential Decree 27, who have been granted Certificates of Land Transfer (CLTs)
and (unregistered) emancipation patents (EPs).
On March 6, 2002, respondents filed a complaint for ejectment against petitioners for non-
payment of rentals before the Department of Agrarian Reform Adjudication Board (DARAB), Office of the
Regional Adjudicator, San Fernando, Pampanga. They alleged that petitioners failed to pay and remit the
agreed lease rentals to respondents since 1994, or for a period of eight years. The case was docketed as
DARAB Case No. R-03-02-0213-Bul02.
Among the named defendants were Avelino Santos (Avelino) and Pedro Bernardo (Pedro), who were
already deceased at the time of the filing of the complaint. Per the death certificates presented before the
Regional Adjudicator, Avelino died on December 29, 1997, while Pedro passed away on July 25,
1999. Thus, when the complaint for ejectment was filed in 2002, the actual tillers on the land were already
the successors-in-interest of Avelino and Pedro, namely Delfin Sacdalan (Delfin) and Roberto Bernardo
(Roberto), respectively. Despite such disclosure, no amendment to implead the real parties-in-interest was
made to the complaint. Instead on May 9, 2002, the Regional Adjudicator ordered the respective legal
heirs to substitute the named decedents in the case. For some reason, no formal substitution of party
litigants took place either. However, it is clear from the records, and neither party disputes, that
notwithstanding the non-amendment of the complaint and the absence of a formal substitution, the heirs
of Avelino and Pedro appeared and participated in the proceedings below. The position papers of
respondents[6]as well as petitioners[7] both named Delfin and Roberto as the heirs of the two decedents
and parties to the case.[8] Thus, the records support a conclusion that the respondents acquiesced to the
participation of the said heirs as the real parties-in-interest.
Rulings of the Regional Adjudicator

a) Decision dated January 23, 2003
After the submission of the parties respective position papers, Regional Adjudicator Fe Arche Manalang
(Manalang) issued a Decision[9] dated January 23, 2003 in favor of respondents, the dispositive portion of
which states:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Severing and extinguishing the existing tenancy/agricultural

leasehold relationship existing between the plaintiffs-landowners and the
defendants over the landholdings described in paragraph 2 of the complaint.
2. Directing the defendants and all persons claiming rights under

them to:
a. Vacate the landholdings in question and peacefully surrender

possession thereof to the plaintiffs;
b. Remove at their own expense all structures and other improvements

introduced thereon if any;
c. Continue to pay to the plaintiffs the annual leasehold rentals due

thereon until the latter are fully restored to the premises in question.
3. Directing the said defendants to pay to the plaintiffs, jointly and
severally the amount of P300,000.00 as and by way of liquidated damages;
4. Denying all other claims for lack of basis; and

5. Without pronouncement as to costs.
SO ORDERED.
The Decision explained that with the exemption of the subject properties from the coverage of the
Comprehensive Agrarian Reform Program (CARP), as evidenced by the December 18, 1992 Order issued
by Department of Agrarian Reform (DAR) Regional Director Antonio M. Nuesa (which also directed the
cancellation of the issued CLTs/EPs in the proper forum), petitioners could only retain their status as
agricultural lessees if they complied with their statutory obligations to pay the required leasehold rentals
when they fell due. Since all the petitioners failed to prove that they complied with their rental obligations
to respondents since 1994, the Regional Adjudicator held that they could no longer invoke their right to
security of tenure.
Aggrieved by the adverse Decision, petitioners filed two separate notices of appeal; one was filed on
February 28, 2003[10] by petitioners Marciano Natividad, Alberto Enriquez, Benigno Cabingao, and Rodolfo
Dimaapi (first group); while the other was filed on March 5, 2003 by petitioners Cecilia Maniego, Jose
Bautista, Eliza Pacheco, Roberto Bernardo, Ismael Natividad,[11] Juanito Fajardo, Antonio
Mananghaya, [12]
Jovita R. Diaz, [13]
Mario Pacheco, Emilio Peralta, Mario Galvez, and the two
decedents Pedro and Avelino (second group).[14] Both notices of appeal were similarly worded thus:
DEFENDANTS, unto this Honorable Board, hereby serve notice that they are
appealing the decision rendered in the above-entitled case, which was received
on February 18, 2003 to the DARAB, Central Office at Diliman, Quezon City on the
grounds of question of law and fact.
Unlike their previous pleadings, which were all signed by Atty. Jaime G. Mena (Atty. Mena), petitioners
notices of appeal were not signed by a lawyer.
On March 6, 2003, respondents filed a motion to dismiss the appeal[15] and an ex-parte motion for the
issuance of a writ of execution and/or partial implementation of the decision against non-appealing
defendants.[16] They presented three grounds for the dismissal of the appeal: first, the two notices did not
state the grounds relied upon for the appeal; second, the March 5, 2003 Notice of Appeal was filed beyond
the reglementary period; third, the March 5, 2003 Notice of Appeal contained the forged signatures of the
deceased defendants Avelino and Pedro.
b) May 6, 2003 Order
On May 6, 2003, the Regional Adjudicator issued an Order[17] giving due course to the appeal, except with
respect to the decedents Avelino and Pedro, whose signatures were held to be falsified. Thus, a writ of
execution was issued against the non-appealing defendants and the deceased defendants.
The petitioners received the above Order only on May 8, 2003, together with the writ of
execution,[18] which was promptly implemented on the same day and on May 10, 2003.[19]
Dissatisfied with the May 6, 2003 Order of the Regional Adjudicator, both the respondents and the
petitioners whose appeal was disallowed, moved for reconsideration of the order. Respondents
reiterated[20] that the Regional Adjudicator should not have given due course to the appeal because it did
not adhere strictly with Section 2, Rule XIII of the DARAB Rules of Procedure; and that it was a dilatory
or frivolous appeal that deserved outright dismissal.
On the other hand, the petitioners who were included in the writ of execution, including the heirs
of Avelino and Pedro, now represented by the DAR-Legal Counsel Atty. Dauphine B. Go,[21] argued that
the May 6, 2003 Order was hastily executed, without giving them an opportunity to question its
correctness. They pointed out that Pedros signature was not forged, since what appears thereon is actually
the name of his widow, Pilar Bernardo (Pilar).[22] As for the signature of Avelino, which was executed by
his widow, Jovita Santos (Jovita), the same was an innocent error since she did not know which name to
write, having been unaided by counsel. Jovita maintained that she simply thought that writing her
deceased husbands name on the Notice of Appeal would relay the intention of the heirs to appeal the
adverse decision.[23]
A hearing was conducted on July 3, 2003,[24] where the heirs of Avelino and Pedro personally
appeared to explain the alleged falsification of signatures. Pilar, the widow of Pedro, explained that she
did not sign the Notice of Appeal herself, but that she allowed her son Roberto to sign it for her. Roberto
confirmed his mothers testimony and admitted that he personally signed all documents and pleadings on
behalf of his mother, Pilar. Their testimonies are verified by the records. As for Jovita, widow of Avelino,
she admits signing her deceased husbands name in all pleadings. All of them explained that their only
intention was to sign the pleadings on behalf of their deceased relatives so as to be able to participate in
the proceedings.
c) August 5, 2003 Order

Based on these testimonies, Regional Adjudicator Manalang allowed the appeal of the heirs of the two
decedents and nullified the writ of execution as regards them in an Order dated August 5, 2003.[25] It
resolved the two motions in this wise:
Plaintiffs in their first-cited motion lightly brushed off the defendants Notice of
Appeal as a mere scrap of paper but [do] not elaborate how they arrived at this
conclusion, apart from a general statement that the same [do] not assign any specific
errors in the findings of fact and conclusions of law made in the decision being challenged.
While this may be so, it is not for this Office to pass on the merits of the appeal. All
that it is called upon to do is to determine whether the same was seasonably filed and
perfected by the appellants within the prescribed reglementary period. With an affirmative
finding on this aspect, nothing more remains to be done except to allow the appeal to run
its full course.
xxxx
Evaluating the parties conflicting claims x x x this Office finds for the plaintiffs x x
x. However, with the voluntary confessions of Pilar Bernardo and Jovita Santos x x x who
are the widows of the deceased tenants Pedro Bernardo and Avelino Santos that they
really mean to appeal the adverse decision affecting their late spouses farmholdings, any
perceived legal defect in the manner of affixing their signatures on the questioned Notices
of Appeal must give way to the greater demands of justice and equity. x x x
xxxx
FOREGOING premises considered, Order is hereby issued:
1. Denying the plaintiffs Motion for Reconsideration filed on May 13,

2003;
2. Noting without action the same plaintiffs Motion for Execution Pending
Appeal filed on May 14, 2003;
3. Giving due course to the Motion for Reconsideration (from the Order
of May 6, 2003 and Writ of Execution dated May 8, 2003) filed by the Heirs
of Pedro Bernardo, Heirs of Avelino Santos, and of Ismael Natividad[26] and
thereby allowing their appeal to the exclusion of the other defendants-
movants;
4. Motu proprio quashing the Writ of Execution issued on May 8, 2003

directed against aforenamed defendants and thereby nullifying all
proceedings undertaken in connection therewith.
xxxx
SO ORDERED.
Respondents moved for another reconsideration on August 14, 2003.[27] This was denied in the November
13, 2003 Order,[28] which also ordered the sheriff to restore the farmholdings of the heirs of Avelino and
Pedro in view of the quashal of the writ of execution as to the said individuals. Respondents sought another
reconsideration,[29] which was again denied on January 9, 2004.[30]
Respondents thus filed a petition for certiorari before the CA. They argued that the DARAB no
longer had any jurisdiction to reverse the portion of its Decision, which had already been duly executed
upon the authority of a writ issued on May 6, 2003. They also insisted that both notices of appeal were
infirm for failure to state the grounds for an appeal and for containing forged signatures.
The appellate court found merit in respondents petition.
It held that the Notice of Appeal of the second group bearing the signatures of deceased Avelino
and Pedro was a product of forgery, and thus had no legal effect. The appellate court brushed aside the
heirs explanations that they merely signed the decedents names to show their intention to appeal
the Regional Adjudicators decision. It found their intentions immaterial and irrelevant to the nullity of a
forged instrument.
Further, it found the two Notices of Appeal lodged by the first and second groups to be mere
scraps of paper as they failed to comply with the mandate of Section 2, Rule XIII of the 1997 DARAB New
Rules of Procedure (actually, it should have been the 1994 DARAB New Rules of Procedure[31]). According
to the CA, the Notices of Appeal failed to specifically allege the grounds relied upon for the appeal. The
statement that they are appealing on questions of fact and law was held to be insufficient because an
appeal, being a mere statutory privilege, must be exercised in the manner prescribed by the provisions of
law authorizing it.
Petitioners Motion for Reconsideration[32] was denied. Hence, this petition seeking a review of the Decision
dated June 9, 2004 of the CA.
Issue
The issues raised by both parties are as follows:

(1) Whether the Notices of Appeal dated February 28, 2003 and March 3, 2003 are mere
scraps of paper for failure to state the grounds relied upon for an appeal; and
(2) Whether the Notice of Appeal dated March 3, 2003 is null and void for containing two
falsified signatures.
Petitioners pray that their Notices of Appeal to the DARAB be given due course on the ground that
they have substantially complied with the rules as set forth in Section 2, Rule XIII of the 1994 DARAB New
Rules of Procedure. They posit that their appeal on questions of fact and law should suffice, even if they
omitted the phrase which if not corrected would cause grave irreparable damage and injury to them. They
argue that the stringent application of the rules denied them substantial justice.
Petitioners also argue that the complaint itself was filed against their deceased predecessors-in-
interest. Hence, if technicality is to be followed, the complaint should have been dismissed as to the
deceased defendants. But the case continued and they, as heirs, participated in the proceedings. Thus
when they signed the Notice of Appeal, their intent was not to defraud but only to continue their quest
for justice.
Respondents reiterate that the notices of appeal are mere scraps of paper for failure to state the grounds
relied upon for the appeal and for containing forged signatures. They insist that giving effect to the Notice
of Appeal would countenance an act which is criminal in nature. Respondents maintain that there should
be strict adherence to the technical rules of procedure because the DARAB rules frown upon frivolous and
dilatory appeals.
Our Ruling
The petition is meritorious. The defects found in the two notices of appeal are not of such nature that
would cause a denial of the right to appeal. Placed in their proper factual context, the defects are not only
excusable but also inconsequential.
Alleged failure to specify grounds for appeal

There is nothing sacred about the forms of pleadings or processes, their sole purpose being to facilitate
the application of justice to the rival claims of contending parties. Hence, pleadings as well as
procedural rules should be construed liberally. Dismissal of appeals purely on technical grounds is
frowned upon because rules of procedure should not be applied to override substantial
justice. Courts must proceed with caution so as not to deprive a party of statutory appeal; they
must ensure that all litigants are granted the amplest opportunity for the proper and just
ventilation of their causes, free from technical constraints.[33] If the foregoing tenets are followed
in a civil case, their application is made more imperative in an agrarian case where the rules
themselves provide for liberal construction, thus:
Rule I
GENERAL PROVISIONS
Section 2. Construction. These Rules shall be liberally construed to carry out the
objectives of the agrarian reform program and to promote just, expeditious, and
inexpensive adjudication and settlement of agrarian cases, disputes or controversies.
xxxx
Section 3. Technical Rules Not Applicable. The Board and its Regional and Provincial
Adjudicators shall not be bound by technical rules of procedure and evidence as
prescribed in the Rules of Court, but shall proceed to hear and decide all agrarian
cases, disputes or controversies in a most expeditious manner, employing all
reasonable means to ascertain the facts of every case in accordance with justice and
equity.
xxxx
Rule VIII
PROCEEDINGS BEFORE THE ADJUDICATORS
AND THE BOARD
Section 1. Nature of Proceedings. The proceedings before the Board or its

Adjudicators shall be non-litigious in nature. Subject to the essential requirements of
due process, the technicalities of law and procedure and the rules governing the
admissibility and sufficiency of evidence obtained in the courts of law shall not apply.
x x x[34]
Guided by the foregoing principles, we find that the Notices of Appeal substantially complied with
all that is required under the 1994 DARAB Rules. The following provisions are instructive in making this
conclusion:
Rule XIII
APPEALS
Section 1. Appeal to the Board. a) An appeal may be taken from an order,

resolution or decision of the Adjudicator to the Board by either of the parties or both,
orally or in writing, within a period of fifteen (15) days from the receipt of the order,
resolution or decision appealed from, and serving a copy thereof on the adverse party, if
the appeal is in writing.
b) An oral appeal shall be reduced into writing by the Adjudicator to be signed by

the appellant, and a copy thereof shall be served upon the adverse party within ten (10)
days from the taking of the oral appeal.
Section 2. Grounds. The aggrieved party may appeal to the Board from a final
order, resolution or decision of the Adjudicator on any of the following grounds:
a) That errors in the findings of fact or conclusions of laws were

committed which, if not corrected, would cause grave and irreparable
damage and injury to the appellant;
b) That there is a grave abuse of discretion on the part of the Adjudicator;

or
c) That the order, resolution or decision is obtained through fraud or

coercion.
xxxx
Section 5. Requisites and Perfection of the Appeal. a) The Notice of Appeal shall
be filed within the reglementary period as provided for in Section 1 of this Rule. It shall
state the date when the appellant received the order or judgment appealed from and the
proof of service of the notice to the adverse party; and
b) An appeal fee of Five Hundred Pesos (P500.00) shall be paid by the appellant
within the reglementary period to the DAR Cashier where the Office of the Adjudicators
is situated. x x x
Non-compliance with the above-mentioned requisites shall be a ground for

dismissal of the appeal.
Both Notices of Appeal stated that the petitioners were appealing the decision on the grounds
of questions of fact and of law, which we find sufficient statement of the ground for appeal under Section
2(a), Rule XIII of the DARAB Rules. While the notices omitted to state that the decision would cause grave
and irreparable damage and injury to the appellant, we find such punctilious fidelity to the language of
the DARAB Rules unnecessary. Surely by appealing the Decision of the Regional Adjudicator, the
petitioners were already manifesting that they will be damaged by the assailed decision. Requiring a literal
application of the rules when its purpose has already been served is oppressive superfluity.
It must be stressed that the purpose of the notice of appeal is not to detail ones objections
regarding the appealed decision; that is the purpose of the appellants memorandum.[35] In the context of
a DARAB case, the notice of appeal serves only to inform the tribunal or officer that rendered the appealed
decision (i.e., the Regional Adjudicator) of the timeliness of the appeal and of the general reason for the
appeal, and to prepare the records thereof for transmission to the appellate body (i.e., the
DARAB). Petitioners Notices of Appeal contain everything that is necessary to serve these purposes.
Another important consideration is the fact that petitioners were obviously not assisted by counsel
in the filing of the Notices of Appeal. Only the parties were signatories thereto; Atty. Menas signature was
missing, which gives credence to petitioners assertion that they had already terminated the services of
their counsel at that time. Their new counsel, Atty. Dauphine B. Go, DAR-Legal Counsel, entered her
appearance only on March 13, 2003, or several days after the Notices of Appeal were filed.[36]
The Regional Adjudicator is also correct when she ruled that she has no power to determine if the
appeal is frivolous and intended merely for delay. Such matters are for the appellate body to determine
after it has studied the appellants brief or the appeal memorandum. The body which rendered the
appealed decision should not pass upon the question of whether the appeal was taken manifestly for
delay because such determination belongs to the appellate body.[37] For the lower body to do so would
constitute a review of its own judgment and a mockery of the appellate process. This principle is applicable
to agrarian disputes by virtue of Section 8, Rule XIII of the DARAB Rules which states that the Board (not
the Regional Adjudicator) has the power to impose reasonable penalties, including fine or censure, on
parties who file frivolous or dilatory appeals. The implication is that since the Board is the one which has
the power to punish, it is also the one which has the power to decide if there has been a violation. The
Regional Adjudicator has no such power. She must allow the appeal if it is timely and compliant with the
reglementary requirements. It has been held that when an appeal is filed on time, the approval of a notice
of appeal is a ministerial duty of the court or tribunal which rendered the decision.[38]
Effect of forgery on the March 5, 2003 Notice of Appeal
Respondents claim, and the CA has ruled, that the March 5, 2003 Notice of Appeal (filed by the second
group) was a forgery and thus void, because it bore signatures above the names of the deceased Avelino
and Pedro, which were obviously not written by the decedents themselves.
First of all, we have to point out that the confusion in this case was brought about by respondents
themselves when they included in their complaint two defendants who were already dead. Instead of
impleading the decedents heirs and current occupants of the landholding, respondents filed their
complaint against the decedents, contrary to the following provision of the 1994 DARAB Rules of
Procedure:
RULE V
PARTIES, CAPTION AND SERVICE OF PLEADINGS
SECTION 1. Parties in Interest. Every agrarian case must be initiated and defended in
the name of the real party in interest. x x x
A real party in interest is defined as the party who stands to be benefited or injured by the judgment in
the suit, or the party entitled to the avails of a suit.[39] The real parties in interest, at the time the complaint
was filed, were no longer the decedents Avelino and Pedro, but rather their respective heirs who are
entitled to succeed to their rights (whether as agricultural lessees or as farmers-beneficiaries) under our
agrarian laws.[40] They are the ones who, as heirs of the decedents and actual tillers, stand to be removed
from the landholding and made to pay back rentals to respondents if the complaint is sustained.
Since respondents failed to correct their error (they did not amend the erroneous caption of their
complaint to include the real parties-in-interest), they cannot be insulated from the confusion which it
engendered in the proceedings below. But at any rate, notwithstanding the erroneous caption and the
absence of a formal substitution of parties, jurisdiction was acquired over the heirs of Avelino and Pedro
who voluntarily participated in the proceedings below. This Court has ruled that formal substitution of
parties is not necessary when the heirs themselves voluntarily appeared, participated, and presented
evidence during the proceedings.[41]
Going now to the alleged forgery, it is clear from the records that there was never an instant when
the respondents (and the Regional Adjudicator) were deceived or made to believe that Avelino and Pedro
were still alive and participating in the proceedings below. In fact, respondents were clearly aware that
the two were already deceased such that they even indicated the names of the respective heirs in their
position paper before the Regional Adjudicator:
Plaintiffs are the agricultural lessors of the following tenant-lessees in the subject
landholding primarily devoted to rice production, namely: x x x Pedro Bernardo
(deceased), substituted by Roberto Bernardo, Antonio Mananghaya (deceased)
substituted by Mariano, Faustino, and Tranquilino all surnamed Mananghaya, x x x Avelino
Santos (deceased) substituted by Delfin Sacdalan x x x.[42]
Respondents also never questioned the appearance and participation of the heirs Roberto and Delfin in
the proceedings below. The parties, as well as the Regional Adjudicator, were all aware of the death of
Avelino and Pedro, and of the fact that the complaint (and its corresponding prayer for ejectment) is now
directed against their heirs.
Therefore, it is unquestionable that when the heirs of Avelino and Pedro signed the Notice of Appeal, they
did not intend, and could not have intended, to visit fraud upon the proceedings.Indeed, any intention to
mislead is simply negated by their ready admission and participation in the proceedings as heirs of Avelino
and Pedro. Thus, there can be no deception or prejudice, as there were prior repeated disclosures that
the named defendants were already dead.
Respondents insist that allowing the appeal would condone an act which is criminal in nature. We
do not agree. Article 3 of the Revised Penal Code (RPC) provides that malice or criminal intent (dolo) is an
essential requisite of all crimes and offenses defined therein.[43] The circumstances narrated above do not
indicate the presence of dolo. In this regard, it should be noted that the heirs who signed the Notice of
Appeal are lay persons unfamiliar with the technical requirements of procedure and pleadings. This
unfamiliarity, compounded by the absence of legal counsel, appears to have caused the imperfections in
their signing of the Notice of Appeal. We do not see any criminal intent motivating them.
Moreover, in cases of falsification of public documents, such as documents introduced in judicial

proceedings, the change in the public document must be such as to affect the integrityof the same
or change the effects which it would otherwise produce; for, unless that happens, there could not exist
the essential element of the intent to commit the crime, which is required by Article 3 of the Penal
Code.[44] In the instant case, given the heirs admissions contained in several pleadings that Avelino and
Pedro are already deceased and their submission to the jurisdiction of the Regional Adjudicator as the
successors-in-interest of the decedents, the effect would be the same if the heirs did not sign the
decedents names but their own names on the appeal. As the recognized real parties in interest, the case
actually proceeded against the heirs and the judgment rendered was executed against them. It was thus
unnecessary for the heirs to sign the decedents names when their own names, as the real parties in
interest, would have served the same purpose just as effectively.
Given the foregoing circumstances, we conclude that the unfortunate matter of signing the decedents
names in the Notice of Appeal is an innocent and harmless error on the part of the heirs.
Respondents own procedural errors
At this juncture, we must point out that while respondents bewail petitioners lack of strict adherence to
procedural rules, they also failed to observe some rules. It is evident from the records that respondents
filed two motions for reconsideration after the August 5, 2003 Order of the Regional Adjudicator. This is
prohibited under Section 12, Rule VIII of DARAB Rules, which provides that only one motion for
reconsideration shall be allowed.
Moreover, respondents failed to exhaust administrative remedies[45] when they filed their petition
for certiorari before the CA, instead of the Board.[46] The DARAB Rules state that:
Rule XIV
JUDICIAL REVIEW
Section 1. Certiorari to the Court of Appeals. Any decision, order, resolution, award or
ruling of the Board on any agrarian dispute or on any matter pertaining to the application,
implementation, enforcement, interpretation of agrarian reform laws or rules and
regulations promulgated thereunder, may be brought within fifteen (15) days from receipt
of a copy thereof, to the Court of Appeals by certiorari.
An aggrieved party can only resort to judicial review after it has invoked the authority of the Board. Judicial
review is not provided for orders, rulings, and decisions of adjudicators. It is stated in Section 1, Rule II
that the Board has primary and exclusive, original and appellate jurisdiction over agrarian disputes
involving agrarian laws and their implementing rules and regulations.If respondents were strict adherents
to procedural rules, they should have followed Section 2(b) of Rule XIII which provides for an appeal to
the Board on the ground of grave abuse of discretion on the part of the adjudicator.
These matters, while not raised by the parties, are important considerations in resolving the case where
one party laments that she is prejudiced by the leniency that is afforded to the other party. It should be
made clear that there was no partiality or undue advantage given to petitioners that had not likewise been
enjoyed by respondents.
Allegation that the basis for the Regional Adjudicators

Decision is an utter fabrication
Petitioners also raise for the first time in the entire proceedings of this case that respondents had
presented to the Regional Adjudicator an entirely spurious and fabricated DAR Order exempting
respondents landholdings from the coverage of CARP. It will be recalled that the Regional Adjudicators
decision below is based on the assumption that respondents landholdings are exempt from CARP
coverage, hence the obligation on the part of petitioners to pay lease rentals.
Petitioners maintain that they only discovered the spurious nature of the exemption order during
the pendency of their appeal to this Court. They presented several certificates from various DAR offices
stating that the latter have no record of the said exemption order in favor of respondents. If such
exemption order is indeed fabricated, their possession of CLTs and EPs should be respected, thus they
should be held under no obligation to pay rentals to respondents. Thus, they seek the nullification of the
exemption order on the ground that it is counterfeit.
On the other hand, respondents assert that the validity of the exemption order had already been
settled in the annulment case filed by petitioners against respondents in 1994, docketed as DARAB Case
No. 602-B-94. They likewise maintain that the issue involves factual matters which are not within the
province of the Supreme Court.
DARAB Case No. 602-B 94 is a complaint for annulment of the regional directors order, which granted
respondents petition for the exemption of their landholdings from the coverage of the CARP. In that case,
petitioners assailed the validity of the order on the ground that they were not given an opportunity to
present controverting evidence and that the title of petitioners to the land was not registered within the
period prescribed by law.
Their complaint was dismissed on the ground of lack of jurisdiction. The provincial adjudicator, as later
affirmed by the DARAB[47] and the CA,[48] ruled that only the Agrarian Reform Secretary has appellate
jurisdiction over the exemption orders issued by a regional director.[49] Petitioners filed a petition for review
before this Court but it was not timely filed. Hence, a resolution was issued where the case was deemed
closed and terminated. Entry of judgment was made on September 6, 2002.
Contrary to respondents arguments, there was never any ruling regarding the validity or authenticity of
the exemption order. What was ruled upon, and became final, was that the exemption order
cannot be reviewed by the provincial adjudicator or DARAB since exclusive appellate jurisdiction
rests in the Office of the DAR Secretary. Thus, it appears that petitioners right to question
the authenticity of the exemption order in the proper forum has not yet been foreclosed.
The instant case, however, is not the proper place to bring the issue of authenticity.
Exemption from the comprehensive agrarian reform law is an administrative matter the primary
jurisdiction over which has been lodged with the DAR Secretary.[50] Moreover, the issue of authenticity is
entirely factual.[51] Since this was never raised below, we have no basis on record to rule on the authenticity
of the exemption order.
A final note. After the decision was rendered by the CA, the record shows that several withdrawals of
appeal were allegedly filed with the Office of the Regional Agrarian Reform Adjudicator. This new
development, however, was not raised by the parties in their memoranda before the Court. For this reason
and because of the necessity of verifying the authenticity, voluntariness, and the personalities of the
parties that signed the withdrawals of appeal, the Court deems it prudent to leave the matter for the
Board that would hear the appeal.
WHEREFORE, the instant petition is GRANTED and the assailed June 9, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 79304, which gave no legal effect to petitioners Notices of Appeal, is
hereby ANNULLED and SET ASIDE. The August 5, 2003 Order of the Regional Adjudicator giving due
course to the two Notices of Appeal is REINSTATED. Let the records of the case be transmitted forthwith
to the Adjudication Board which is DIRECTED to proceed to dispose of the appeal with deliberate
dispatch.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE P. PEREZ
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I hereby certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion of
the Courts Division.
REYNATO S. PUNO
Chief Justice
[1]
Only the signatories to the Petition for Certiorari submitted themselves to the jurisdiction of
this Court as petitioners.
[2]
Rollo, pp. 12-28. In the resolution dated August 31, 2005, the instant Petition for Certiorari was
given due course notwithstanding procedural infirmities so as not to deny petitioners of their
last opportunity to ventilate their cause; id. at 263-265.
[3]
Id. at 30-39; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Presiding Justice
Cancio C. Garcia and Associate Justice Lucas P. Bersamin.
[4]
Id. at 49.
[5]
Id. at 39.
[6]
[7]
Id. at 228-227.
[8]
Roberto Bernardo was impleaded as a defendant in his own right. After the order for
substitution of parties, he was also recognized by both parties in their respective position
papers as the representative of the deceased Pedro Bernardo.
[9]
Rollo, pp. 71-79.
[10]
Id. at 80-81.
[11]
Now deceased and substituted by Edilberto Natividad.
[12]
Now deceased and substituted by Mariano Mananghaya.
[13]
Now deceased and substituted by Jeffrey Diaz.
[14]
Rollo, pp. 82-83.
[15]
Id. at 84-86.
[16]
Id. at 89-91.
[17]
Id. at 93-94.
[18]
Implementation Report dated May 12, 2003, DARAB records, pp. 429-427.
[19]
Id. at 439.
[20]
Plaintiffs Motion for Reconsideration dated May 13, 2003, id. at 424-423.
[21]
A motion relieving Atty. Jaime G. Mena of his legal services and the entry of appearance of
DAR-Legal Officer Atty. Dauphine B. Go were filed on March 13, 2003, id. at 367-361.
[22]
Id. at 483 and 480.
[23]
Id. at 482 and 479.
[24]
Id. at 545-543.
[25]
Id. at 624-621.
[26]
The order admitted its error in the May 6, 2003 Decision which included Ismael Natividad
among the deceased parties.
[27]
[28]
Id. at 682-680.
[29]
Id. at 702-700.
[30]
Id. at 730-728.
[31]
There is no 1997 DARAB Rules of Procedure. The only previous and existing versions are the
1989, 1994, 2003 and 2009 DARAB Rules of Procedure. The complaint in the instant case was
filed on March 6, 2002, during the effectivity of the 1994 DARAB Rules of Procedure, thus it
is the latter which is applicable in this case. This is further reinforced by the fact that the 2003
DARAB Rules of Procedure, which became effective when the subject notices of appeal were
filed, expressly provides in Section 1, Rule XXIV (Miscellaneous Provisions) thereof that all
cases pending with the Board and the Adjudicators, prior to the date of effectivity of these
Rules, shall be governed by the DARAB Rules prevailing at the time of their filing.
[32]
Rollo, pp. 40-47.
[33]
See Remulla v. Manlongat, 484 Phil. 832, 841 (2004); Magsaysay Lines Inc. v. Court of
Appeals, 329 Phil. 310, 322-323 (1996); Piglas-Kamao (Sari-Sari Chapter) v. National Labor
Relations Commission, 409 Phil. 735, 744-745 (2001).
[34]
1994 DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD RULES OF PROCEDURE.
[35]
Section 6. Appeal Memorandum. Upon perfection of the appeal, the Adjudicator shall issue an
order requiring the appellant to file an appeal memorandum within ten (10) days from receipt
of such order, furnishing a copy thereof to the appellee and his counsel who may reply thereto
if he so desires, within the same period of time. The parties may also submit a draft decision
desired. After the filing of their respective appeal memoranda or lapse of the period within
which to file them, the entire records of the case shall be elevated on appeal to the Board
within five (5) days therefrom.
x x x (Rule XII, 1994 DARAB Rules of Procedure)
[36]
[37]
See Dasalla v. Hon. Judge Caluag, 118 Phil, 663, 666 (1963); ITT Philippines, Inc, v. Court of
Appeals, 160-A Phil, 582, 588 (1975); Ortigas & Company Limited Partnership v. Velasco, G.R.
No. 109645, July 25, 1994, 234 SCRA 455, 495.
[38]
See Oro v. Judge Diaz, 413 Phil. 419, 426 (2001).
[39]
RULES OF COURT, Rule III, Section 2. The DARAB Rules itself does not define a real party-in-
interest.
[40]
Section 9 of Republic Act No. 3844, as amended (the Code of Agrarian Reform), provides that
in case of the death of the agricultural lessee, the leasehold continues between the lessor and
the deceased lessees heirs in the order specified therein.Similarly, per Presidential Decree No.
27 (Decreeing the Emancipation of Tenants), which is invoked by petitioners, title to land
acquired thereunder is transferable by hereditary succession in accordance with the Code of
Agrarian Reform, among other laws. Even Republic Act No. 6657, as amended
(Comprehensive Agrarian Reform Law), also recognizes the right of the heirs to succeed to
the rights of their predecessor-farmer-beneficiary (Section 27).
[41]
Torres, Jr. v. Court of Appeals, 344 Phil. 348, 366-367 (1997), citing Vda. de Salazar v. Court
of Appeals, 320 Phil. 373, 377-380 (1995).
[42]
Plaintiffs Position Paper, DARAB records, p. 162.
[43]
Except in those cases where the element required is negligence or culpa.
[44]
Beradio v. Court of Appeals, 191 Phil. 153, 168 (1981). See also People v. Pacana, 47 Phil.
48, 55-56 (1924); Lecaroz v. Sandiganbayan, 364 Phil. 890, 904-905 (1999); Luague v. Court
of Appeals, 197 Phil. 784, 788 (1982).
[45]
What could have been a fatal error in its petition for certiorari before the appellate court was
entirely ignored because petitioners herein did not raise it as an issue. It is doctrinal that non-
exhaustion of administrative remedies can be waived (see Rosario v. Court of Appeals, G.R.
No. 89554, July 10, 1992, 211 SCRA 384, 387).
[46]
Department of Agrarian Reform Adjudication Board v. Court of Appeals, 334 Phil. 369, 381-
382 (1997).
[47]
Rollo, pp. 469-475.
[48]
Id. at 476-482.
[49]
Id. at 461-468.
[50]
Section 13 of DAR Administrative Order No. 02, series of 2003 (2003 RULES AND
PROCEDURES GOVERNING LANDOWNER RETENTION RIGHTS) provides for appeals from the
decisions of the Regional Director regarding retention applications to the Secretary. The
procedure for such appeals is provided in DAR Administrative Order No. 3, series of 2003
(2003 RULES OF AGRARIAN LAW IMPLEMENTATION CASES), which also provides in Section
10 thereof that, The Secretary shall exercise appellate jurisdiction over all cases, and may
delegate the resolution of appeals to any Undersecretary.
[51]
See Guevarra v. Court of Appeals, G.R. No. 100894, January 26, 1993, 217 SCRA 550, 553.
Supreme Court
Baguio City
EN BANC
ANG LADLAD LGBT PARTY G.R. No. 190582
represented herein by its Chair,
DANTON REMOTO,
PUNO, C. J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
- versus - BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ, and
MENDOZA, JJ.
COMMISSION ON ELECTIONS, Promulgated:
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
... [F]reedom to differ is not limited to things that do not matter much. That would be a
mere shadow of freedom. The test of its substance is the right to differ as to things that
touch the heart of the existing order.
Justice Robert A. Jackson

West Virginia State Board of Education v. Barnette[1]
One unavoidable consequence of everyone having the freedom to choose is that others may make
different choices choices we would not make for ourselves, choices we may disapprove of, even choices
that may shock or offend or anger us. However, choices are not to be legally prohibited merely because
they are different, and the right to disagree and debate about important questions of public policy is a
core value protected by our Bill of Rights. Indeed, our democracy is built on genuine recognition of, and
respect for, diversity and difference in opinion.
Since ancient times, society has grappled with deep disagreements about the definitions and
demands of morality. In many cases, where moral convictions are concerned, harmony among those
theoretically opposed is an insurmountable goal. Yet herein lies the paradox philosophical justifications
about what is moral are indispensable and yet at the same time powerless to create agreement. This
Court recognizes, however, that practical solutions are preferable to ideological stalemates;
accommodation is better than intransigence; reason more worthy than rhetoric. This will allow persons of
diverse viewpoints to live together, if not harmoniously, then, at least, civilly.
Factual Background
This is a Petition for Certiorari under Rule 65 of the Rules of Court, with an application for a writ
of preliminary mandatory injunction, filed by Ang Ladlad LGBT Party (Ang Ladlad) against the Resolutions
of the Commission on Elections (COMELEC) dated November 11, 2009[2] (the First Assailed Resolution)
and December 16, 2009[3] (the Second Assailed Resolution) in SPP No. 09-228 (PL) (collectively, the
Assailed Resolutions). The case has its roots in the COMELECs refusal to accredit Ang Ladlad as a party-
list organization under Republic Act (RA) No. 7941, otherwise known as the Party-List System Act.[4]
Ang Ladlad is an organization composed of men and women who identify themselves as lesbians,
gays, bisexuals, or trans-gendered individuals (LGBTs). Incorporated in 2003, Ang Ladlad first applied for
registration with the COMELEC in 2006. The application for accreditation was denied on the ground that
the organization had no substantial membership base. On August 17, 2009, Ang Ladlad again filed a
Petition[5] for registration with the COMELEC.
Before the COMELEC, petitioner argued that the LGBT community is a marginalized and under-
represented sector that is particularly disadvantaged because of their sexual orientation and gender
identity; that LGBTs are victims of exclusion, discrimination, and violence; that because of negative societal
attitudes, LGBTs are constrained to hide their sexual orientation; and that Ang Ladlad complied with the
8-point guidelines enunciated by this Court in Ang Bagong Bayani-OFW Labor Party v. Commission on
Elections.[6] Ang Ladlad laid out its national membership base consisting of individual members and
organizational supporters, and outlined its platform of governance.[7]
On November 11, 2009, after admitting the petitioners evidence, the COMELEC (Second Division)
dismissed the Petition on moral grounds, stating that:
x x x This Petition is dismissible on moral grounds. Petitioner defines the Filipino
Lesbian, Gay, Bisexual and Transgender (LGBT) Community, thus:
x x x a marginalized and under-represented sector that is particularly

disadvantaged because of their sexual orientation and gender identity.
and proceeded to define sexual orientation as that which:
x x x refers to a persons capacity for profound emotional, affectional and

sexual attraction to, and intimate and sexual relations with, individuals of
a different gender, of the same gender, or more than one gender.
This definition of the LGBT sector makes it crystal clear that petitioner tolerates immorality
which offends religious beliefs. In Romans 1:26, 27, Paul wrote:
For this cause God gave them up into vile affections, for even their
women did change the natural use into that which is against nature: And
likewise also the men, leaving the natural use of the woman, burned in
their lust one toward another; men with men working that which is
unseemly, and receiving in themselves that recompense of their error
which was meet.
In the Koran, the hereunder verses are pertinent:
For ye practice your lusts on men in preference to women ye are indeed

a people transgressing beyond bounds. (7.81) And we rained down on
them a shower (of brimstone): Then see what was the end of those who
indulged in sin and crime! (7:84) He said: O my Lord! Help Thou me
against people who do mischief (29:30).
As correctly pointed out by the Law Department in its Comment dated October 2, 2008:
The ANG LADLAD apparently advocates sexual immorality as indicated in

the Petitions par. 6F: Consensual partnerships or relationships by gays
and lesbians who are already of age. It is further indicated in par. 24 of
the Petition which waves for the record: In 2007, Men Having Sex with
Men or MSMs in the Philippines were estimated as 670,000 (Genesis 19
is the history of Sodom and Gomorrah).
Laws are deemed incorporated in every contract, permit, license,

relationship, or accreditation. Hence, pertinent provisions of the Civil Code
and the Revised Penal Code are deemed part of the requirement to be
complied with for accreditation.
ANG LADLAD collides with Article 695 of the Civil Code which defines
nuisance as Any act, omission, establishment, business, condition of
property, or anything else which x x x (3) shocks, defies; or
disregards decency or morality x x x
It also collides with Article 1306 of the Civil Code: The contracting parties
may establish such stipulations, clauses, terms and conditions as they
may deem convenient, provided they are not contrary to law, morals,
good customs, public order or public policy. Art 1409 of the Civil Code
provides that Contracts whose cause, object or purpose is contrary to
law, morals, good customs, public order or public policy are inexistent and
void from the beginning.
Finally to safeguard the morality of the Filipino community, the Revised Penal Code, as
amended, penalizes Immoral doctrines, obscene publications and exhibitions and
indecent shows as follows:
Art. 201. Immoral doctrines, obscene publications and exhibitions, and

indecent shows. The penalty of prision mayor or a fine ranging from six
thousand to twelve thousand pesos, or both such imprisonment and fine,
shall be imposed upon:
1. Those who shall publicly expound or proclaim doctrines

openly contrary to public morals;
2. (a) The authors of obscene literature, published with their knowledge

in any form; the editors publishing such literature; and the
owners/operators of the establishment selling the same;
(b) Those who, in theaters, fairs, cinematographs or any other place,

exhibit indecent or immoral plays, scenes, acts or shows, it being
understood that the obscene literature or indecent or immoral plays,
scenes, acts or shows, whether live or in film, which are prescribed by
virtue hereof, shall include those which: (1) glorify criminals or condone
crimes; (2) serve no other purpose but to satisfy the market for
violence, lust or pornography; (3) offend any race or religion; (4) tend to
abet traffic in and use of prohibited drugs; and (5) are contrary to law,
public order, morals, good customs, established policies, lawful orders,
decrees and edicts.
3. Those who shall sell, give away or exhibit films, prints, engravings,
sculpture or literature which are offensive to morals.
Petitioner should likewise be denied accreditation not only for advocating immoral
doctrines but likewise for not being truthful when it said that it or any of its
nominees/party-list representatives have not violated or failed to comply with laws, rules,
or regulations relating to the elections.
Furthermore, should this Commission grant the petition, we will be exposing our youth to an
environment that does not conform to the teachings of our faith. Lehman Strauss, a
famous bible teacher and writer in the U.S.A. said in one article that older practicing
homosexuals are a threat to the youth. As an agency of the government, ours too is the
States avowed duty under Section 13, Article II of the Constitution to protect our youth
from moral and spiritual degradation.[8]
When Ang Ladlad sought reconsideration,[9] three commissioners voted to overturn the First
Assailed Resolution (Commissioners Gregorio Y. Larrazabal, Rene V. Sarmiento, and Armando Velasco),
while three commissioners voted to deny Ang Ladlads Motion for Reconsideration (Commissioners
Nicodemo T. Ferrer, Lucenito N. Tagle, and Elias R. Yusoph). The COMELEC Chairman, breaking the tie
and speaking for the majority in his Separate Opinion, upheld the First Assailed Resolution, stating that:
I. The Spirit of Republic Act No. 7941
Ladlad is applying for accreditation as a sectoral party in the party-list system. Even
assuming that it has properly proven its under-representation and marginalization, it
cannot be said that Ladlads expressed sexual orientations per se would benefit the nation
as a whole.
Section 2 of the party-list law unequivocally states that the purpose of the party-list system
of electing congressional representatives is to enable Filipino citizens belonging to
marginalized and under-represented sectors, organizations and parties, and who lack
well-defined political constituencies but who could contribute to the formulation and
enactment of appropriate legislation that will benefit the nation as a whole, to become
members of the House of Representatives.
If entry into the party-list system would depend only on the ability of an organization to
represent its constituencies, then all representative organizations would have found
themselves into the party-list race. But that is not the intention of the framers of the law.
The party-list system is not a tool to advocate tolerance and acceptance of misunderstood
persons or groups of persons. Rather, the party-list system is a tool for the
realization of aspirations of marginalized individuals whose interests are also
the nations only that their interests have not been brought to the attention of the nation
because of their under representation. Until the time comes when Ladlad is able to
justify that having mixed sexual orientations and transgender identities is
beneficial to the nation, its application for accreditation under the party-list
system will remain just that.
II. No substantial differentiation
In the United States, whose equal protection doctrine pervades Philippine jurisprudence,
courts do not recognize lesbians, gays, homosexuals, and bisexuals (LGBT) as a special
class of individuals. x x xSignificantly, it has also been held that homosexuality is not a
constitutionally protected fundamental right, and that nothing in the U.S. Constitution
discloses a comparable intent to protect or promote the social or legal equality of
homosexual relations, as in the case of race or religion or belief.
xxxx
Thus, even if societys understanding, tolerance, and acceptance of LGBTs is elevated,

there can be no denying that Ladlad constituencies are still males and females, and they
will remain either male or female protected by the same Bill of Rights that
applies to all citizens alike.
xxxx
IV. Public Morals
x x x There is no question about not imposing on Ladlad Christian or Muslim religious

practices. Neither is there any attempt to any particular religious groups moral rules
on Ladlad. Rather, what are being adopted as moral parameters and precepts are
generally accepted public morals. They are possibly religious-based, but as a society,
the Philippines cannot ignore its more than 500 years of Muslim and Christian
upbringing, such that some moral precepts espoused by said religions have
sipped [sic] into society and these are not publicly accepted moral norms.
V. Legal Provisions
But above morality and social norms, they have become part of the law of the land. Article
201 of the Revised Penal Code imposes the penalty of prision mayor upon Those who
shall publicly expound or proclaim doctrines openly contrary to public morals. It penalizes
immoral doctrines, obscene publications and exhibition and indecent shows. Ang
Ladlad apparently falls under these legal provisions. This is clear from its Petitions
paragraph 6F: Consensual partnerships or relationships by gays and lesbians who are
already of age It is further indicated in par. 24 of the Petition which waves for the record:
In 2007, Men Having Sex with Men or MSMs in the Philippines were estimated as
670,000. Moreoever, Article 694 of the Civil Code defines nuisance as any act, omission x
x x or anything else x x x which shocks, defies or disregards decency or morality x x x.
These are all unlawful.[10]
On January 4, 2010, Ang Ladlad filed this Petition, praying that the Court annul the Assailed
Resolutions and direct the COMELEC to grant Ang Ladlads application for accreditation.Ang Ladlad also
sought the issuance ex parte of a preliminary mandatory injunction against the COMELEC, which had
previously announced that it would begin printing the final ballots for the May 2010 elections by January
25, 2010.
On January 6, 2010, we ordered the Office of the Solicitor General (OSG) to file its Comment on
behalf of COMELEC not later than 12:00 noon of January 11, 2010.[11] Instead of filing a Comment,
however, the OSG filed a Motion for Extension, requesting that it be given until January 16, 2010 to
Comment.[12] Somewhat surprisingly, the OSG later filed a Comment in support of petitioners
application.[13] Thus, in order to give COMELEC the opportunity to fully ventilate its position, we required
it to file its own comment.[14] The COMELEC, through its Law Department, filed its Comment on February
2, 2010.[15]
In the meantime, due to the urgency of the petition, we issued a temporary restraining order
on January 12, 2010, effective immediately and continuing until further orders from this Court, directing
the COMELEC to cease and desist from implementing the Assailed Resolutions.[16]
Also, on January 13, 2010, the Commission on Human Rights (CHR) filed a Motion to Intervene
or to Appear as Amicus Curiae, attaching thereto its Comment-in-Intervention.[17]The CHR opined that the
denial of Ang Ladlads petition on moral grounds violated the standards and principles of the Constitution,
the Universal Declaration of Human Rights (UDHR), and the International Covenant on Civil and Political
Rights (ICCPR). On January 19, 2010, we granted the CHRs motion to intervene.
On January 26, 2010, Epifanio D. Salonga, Jr. filed his Motion to Intervene[18] which motion was
granted on February 2, 2010.[19]
The Parties Arguments
Ang Ladlad argued that the denial of accreditation, insofar as it justified the exclusion by using
religious dogma, violated the constitutional guarantees against the establishment of religion. Petitioner
also claimed that the Assailed Resolutions contravened its constitutional rights to privacy, freedom of
speech and assembly, and equal protection of laws, as well as constituted violations of
the Philippines international obligations against discrimination based on sexual orientation.
The OSG concurred with Ang Ladlads petition and argued that the COMELEC erred in denying petitioners
application for registration since there was no basis for COMELECs allegations of immorality. It also opined
that LGBTs have their own special interests and concerns which should have been recognized by the
COMELEC as a separate classification. However, insofar as the purported violations of petitioners freedom
of speech, expression, and assembly were concerned, the OSG maintained that there had been no
restrictions on these rights.
In its Comment, the COMELEC reiterated that petitioner does not have a concrete and genuine
national political agenda to benefit the nation and that the petition was validly dismissed on moral grounds.
It also argued for the first time that the LGBT sector is not among the sectors enumerated by the
Constitution and RA 7941, and that petitioner made untruthful statements in its petition when it alleged
its national existence contrary to actual verification reports by COMELECs field personnel.
Our Ruling
We grant the petition.
Compliance with the Requirements of the

Constitution and Republic Act No. 7941
The COMELEC denied Ang Ladlads application for registration on the ground that the LGBT sector
is neither enumerated in the Constitution and RA 7941, nor is it associated with or related to any of the
sectors in the enumeration.
Respondent mistakenly opines that our ruling in Ang Bagong Bayani stands for the proposition
that only those sectors specifically enumerated in the law or related to said sectors (labor, peasant,
fisherfolk, urban poor, indigenous cultural communities, elderly, handicapped, women, youth, veterans,
overseas workers, and professionals) may be registered under the party-list system. As we explicitly ruled
in Ang Bagong Bayani-OFW Labor Party v. Commission on Elections,[20] the enumeration of marginalized
and under-represented sectors is not exclusive. The crucial element is not whether a sector is specifically
enumerated, but whether a particular organization complies with the requirements of the Constitution and
RA 7941.
Respondent also argues that Ang Ladlad made untruthful statements in its petition when it alleged
that it had nationwide existence through its members and affiliate organizations. The COMELEC claims
that upon verification by its field personnel, it was shown that save for a few isolated places in the country,
petitioner does not exist in almost all provinces in the country.[21]
This argument that petitioner made untruthful statements in its petition when it alleged its national
existence is a new one; previously, the COMELEC claimed that petitioner was not being truthful when it
said that it or any of its nominees/party-list representatives have not violated or failed to comply with laws,
rules, or regulations relating to the elections. Nowhere was this ground for denial of petitioners
accreditation mentioned or even alluded to in the Assailed Resolutions. This, in itself, is quite curious,
considering that the reports of petitioners alleged non-existence were already available to the COMELEC
prior to the issuance of the First Assailed Resolution. At best, this is irregular procedure; at worst, a belated
afterthought, a change in respondents theory, and a serious violation of petitioners right to procedural
due process.
Nonetheless, we find that there has been no misrepresentation. A cursory perusal of Ang
Ladlads initial petition shows that it never claimed to exist in each province of the Philippines. Rather,
petitioner alleged that the LGBT community in the Philippines was estimated to constitute at least 670,000
persons; that it had 16,100 affiliates and members around the country, and 4,044 members in its
electronic discussion group.[22] Ang Ladlad also represented itself to be a national LGBT umbrella
organization with affiliates around the Philippines composed of the following LGBT networks:
Abra Gay Association
Aklan Butterfly Brigade (ABB) Aklan
Albay Gay Association
Arts Center of Cabanatuan City Nueva Ecija
Boys Legion Metro Manila
Cagayan de Oro People Like Us (CDO PLUS)
Cant Live in the Closet, Inc. (CLIC) Metro Manila
Cebu Pride Cebu City
Circle of Friends
Dipolog Gay Association Zamboanga del Norte
Gay, Bisexual, & Transgender Youth Association (GABAY)
Gay and Lesbian Activists Network for Gender Equality (GALANG)

Metro Manila
Gay Mens Support Group (GMSG) Metro Manila
Gay United for Peace and Solidarity (GUPS) Lanao del Norte
Iloilo City Gay Association Iloilo City
Kabulig Writers Group Camarines Sur
Lesbian Advocates Philippines, Inc. (LEAP)
LUMINA Baguio City
Marikina Gay Association Metro Manila

Metropolitan Community Church (MCC) Metro Manila
Naga City Gay Association Naga City
ONE BACARDI
Order of St. Aelred (OSAe) Metro Manila
PUP LAKAN
RADAR PRIDEWEAR
Rainbow Rights Project (R-Rights), Inc. Metro Manila
San Jose del Monte Gay Association Bulacan
Sining Kayumanggi Royal Family Rizal
Society of Transexual Women of the Philippines (STRAP) Metro Manila
Soul Jive Antipolo, Rizal
The Link Davao City
Tayabas Gay Association Quezon
Womens Bisexual Network Metro Manila
Zamboanga Gay Association Zamboanga City[23]
Since the COMELEC only searched for the names ANG LADLAD LGBT or LADLAD LGBT, it is no
surprise that they found that petitioner had no presence in any of these regions. In fact, if COMELECs
findings are to be believed, petitioner does not even exist in Quezon City, which is registered as Ang
Ladlads principal place of business.
Against this backdrop, we find that Ang Ladlad has sufficiently demonstrated its compliance with
the legal requirements for accreditation. Indeed, aside from COMELECs moral objection and the belated
allegation of non-existence, nowhere in the records has the respondent ever found/ruled that Ang
Ladlad is not qualified to register as a party-list organization under any of the requisites under RA 7941 or
the guidelines in Ang Bagong Bayani. The difference, COMELEC claims, lies in Ang Ladlads morality, or
lack thereof.
Religion as the Basis for Refusal to Accept Ang
Ladlads Petition for Registration
Our Constitution provides in Article III, Section 5 that [n]o law shall be made respecting an
establishment of religion, or prohibiting the free exercise thereof. At bottom, what our non-establishment
clause calls for is government neutrality in religious matters.[24] Clearly, governmental reliance on religious
justification is inconsistent with this policy of neutrality.[25] We thus find that it was grave violation of the
non-establishment clause for the COMELEC to utilize the Bible and the Koran to justify the exclusion of Ang
Ladlad.
Rather than relying on religious belief, the legitimacy of the Assailed Resolutions should depend,
instead, on whether the COMELEC is able to advance some justification for its rulings beyond mere
conformity to religious doctrine. Otherwise stated, government must act for secular purposes and in ways
that have primarily secular effects. As we held in Estrada v. Escritor:[26]
x x x The morality referred to in the law is public and necessarily secular, not religious as
the dissent of Mr. Justice Carpio holds. "Religious teachings as expressed in public debate
may influence the civil public order but public moral disputes may be resolved only on
grounds articulable in secular terms." Otherwise, if government relies upon religious
beliefs in formulating public policies and morals, the resulting policies and morals would
require conformity to what some might regard as religious programs or agenda. The non-
believers would therefore be compelled to conform to a standard of conduct buttressed
by a religious belief, i.e., to a "compelled religion," anathema to religious freedom.
Likewise, if government based its actions upon religious beliefs, it would tacitly approve
or endorse that belief and thereby also tacitly disapprove contrary religious or non-
religious views that would not support the policy. As a result, government will not provide
full religious freedom for all its citizens, or even make it appear that those whose beliefs
are disapproved are second-class citizens.
In other words, government action, including its proscription of immorality as expressed
in criminal law like concubinage, must have a secular purpose. That is, the government
proscribes this conduct because it is "detrimental (or dangerous) to those conditions upon
which depend the existence and progress of human society" and not because the conduct
is proscribed by the beliefs of one religion or the other. Although admittedly, moral
judgments based on religion might have a compelling influence on those engaged in
public deliberations over what actions would be considered a moral disapprobation
punishable by law. After all, they might also be adherents of a religion and thus have
religious opinions and moral codes with a compelling influence on them; the human mind
endeavors to regulate the temporal and spiritual institutions of society in a uniform
manner, harmonizing earth with heaven. Succinctly put, a law could be religious or
Kantian or Aquinian or utilitarian in its deepest roots, but it must have an articulable and
discernible secular purpose and justification to pass scrutiny of the religion clauses. x x x
Recognizing the religious nature of the Filipinos and the elevating influence of religion in
society, however, the Philippine constitution's religion clauses prescribe not a strict but a
benevolent neutrality. Benevolent neutrality recognizes that government must pursue its
secular goals and interests but at the same time strive to uphold religious liberty to the
greatest extent possible within flexible constitutional limits. Thus, although the morality
contemplated by laws is secular, benevolent neutrality could allow for accommodation of
morality based on religion, provided it does not offend compelling state interests.[27]
Public Morals as a Ground to Deny Ang Ladlads

Petition for Registration
Respondent suggests that although the moral condemnation of homosexuality and homosexual
conduct may be religion-based, it has long been transplanted into generally accepted public morals. The
COMELEC argues:
Petitioners accreditation was denied not necessarily because their group consists of LGBTs
but because of the danger it poses to the people especially the youth. Once it is recognized
by the government, a sector which believes that there is nothing wrong in having sexual
relations with individuals of the same gender is a bad example. It will bring down the
standard of morals we cherish in our civilized society. Any society without a set of moral
precepts is in danger of losing its own existence.[28]
We are not blind to the fact that, through the years, homosexual conduct, and perhaps
homosexuals themselves, have borne the brunt of societal disapproval. It is not difficult to imagine the
reasons behind this censure religious beliefs, convictions about the preservation of marriage, family, and
procreation, even dislike or distrust of homosexuals themselves and their perceived lifestyle. Nonetheless,
we recall that the Philippines has not seen fit to criminalize homosexual conduct. Evidently, therefore,
these generally accepted public morals have not been convincingly transplanted into the realm of law.[29]
The Assailed Resolutions have not identified any specific overt immoral act performed by Ang Ladlad. Even
the OSG agrees that there should have been a finding by the COMELEC that the groups members have
committed or are committing immoral acts.[30] The OSG argues:
x x x A person may be sexually attracted to a person of the same gender, of a different
gender, or more than one gender, but mere attraction does not translate to immoral acts.
There is a great divide between thought and action. Reduction ad absurdum. If immoral
thoughts could be penalized, COMELEC would have its hands full of disqualification cases
against both the straights and the gays. Certainly this is not the intendment of the law.[31]
Respondent has failed to explain what societal ills are sought to be prevented, or why special
protection is required for the youth. Neither has the COMELEC condescended to justify its position that
petitioners admission into the party-list system would be so harmful as to irreparably damage the moral
fabric of society. We, of course, do not suggest that the state is wholly without authority to regulate
matters concerning morality, sexuality, and sexual relations, and we recognize that the government will
and should continue to restrict behavior considered detrimental to society. Nonetheless, we cannot
countenance advocates who, undoubtedly with the loftiest of intentions, situate morality on one end of
an argument or another, without bothering to go through the rigors of legal reasoning and explanation. In
this, the notion of morality is robbed of all value. Clearly then, the bare invocation of morality will not
remove an issue from our scrutiny.
We also find the COMELECs reference to purported violations of our penal and civil laws flimsy, at
best; disingenuous, at worst. Article 694 of the Civil Code defines a nuisance as any act, omission,
establishment, condition of property, or anything else which shocks, defies, or disregards decency or
morality, the remedies for which are a prosecution under the Revised Penal Code or any local ordinance,
a civil action, or abatement without judicial proceedings.[32] A violation of Article 201 of the Revised Penal
Code, on the other hand, requires proof beyond reasonable doubt to support a criminal conviction. It
hardly needs to be emphasized that mere allegation of violation of laws is not proof, and a mere blanket
invocation of public morals cannot replace the institution of civil or criminal proceedings and a judicial
determination of liability or culpability.
As such, we hold that moral disapproval, without more, is not a sufficient governmental interest
to justify exclusion of homosexuals from participation in the party-list system. The denial of Ang
Ladlads registration on purely moral grounds amounts more to a statement of dislike and disapproval of
homosexuals, rather than a tool to further any substantial public interest.Respondents blanket
justifications give rise to the inevitable conclusion that the COMELEC targets homosexuals themselves as
a class, not because of any particular morally reprehensible act.It is this selective targeting that implicates
our equal protection clause.
Equal Protection
Despite the absolutism of Article III, Section 1 of our Constitution, which provides nor shall any
person be denied equal protection of the laws, courts have never interpreted the provision as an absolute
prohibition on classification. Equality, said Aristotle, consists in the same treatment of similar
persons.[33] The equal protection clause guarantees that no person or class of persons shall be deprived
of the same protection of laws which is enjoyed by other persons or other classes in the same place and
in like circumstances.[34]
Recent jurisprudence has affirmed that if a law neither burdens a fundamental right nor targets a suspect
class, we will uphold the classification as long as it bears a rational relationship to some legitimate
government end.[35] In Central Bank Employees Association, Inc. v. Banko Sentral ng Pilipinas,[36] we
declared that [i]n our jurisdiction, the standard of analysis of equal protection challenges x x x have
followed the rational basis test, coupled with a deferential attitude to legislative classifications and a
reluctance to invalidate a law unless there is a showing of a clear and unequivocal breach of the
Constitution.[37]
The COMELEC posits that the majority of the Philippine population considers homosexual conduct
as immoral and unacceptable, and this constitutes sufficient reason to disqualify the petitioner.
Unfortunately for the respondent, the Philippine electorate has expressed no such belief. No law exists to
criminalize homosexual behavior or expressions or parties about homosexual behavior. Indeed, even if
we were to assume that public opinion is as the COMELEC describes it, the asserted state interest here
that is, moral disapproval of an unpopular minority is not a legitimate state interest that is sufficient to
satisfy rational basis review under the equal protection clause. The COMELECs differentiation, and its
unsubstantiated claim that Ang Ladlad cannot contribute to the formulation of legislation that would
benefit the nation, furthers no legitimate state interest other than disapproval of or dislike for a disfavored
group.
From the standpoint of the political process, the lesbian, gay, bisexual, and transgender have the
same interest in participating in the party-list system on the same basis as other political parties similarly
situated. State intrusion in this case is equally burdensome. Hence, laws of general application should
apply with equal force to LGBTs, and they deserve to participate in the party-list system on the same basis
as other marginalized and under-represented sectors.
It bears stressing that our finding that COMELECs act of differentiating LGBTs from heterosexuals
insofar as the party-list system is concerned does not imply that any other law distinguishing between
heterosexuals and homosexuals under different circumstances would similarly fail. We disagree with the
OSGs position that homosexuals are a class in themselves for the purposes of the equal protection
clause.[38] We are not prepared to single out homosexuals as a separate class meriting special or
differentiated treatment. We have not received sufficient evidence to this effect, and it is simply
unnecessary to make such a ruling today. Petitioner itself has merely demanded that it be recognized
under the same basis as all other groups similarly situated, and that the COMELEC made an unwarranted
and impermissible classification not justified by the circumstances of the case.
Freedom of Expression and Association
Under our system of laws, every group has the right to promote its agenda and attempt to
persuade society of the validity of its position through normal democratic means.[39] It is in the public
square that deeply held convictions and differing opinions should be distilled and deliberated upon. As we
held in Estrada v. Escritor:[40]
In a democracy, this common agreement on political and moral ideas is distilled in the
public square. Where citizens are free, every opinion, every prejudice, every aspiration,
and every moral discernment has access to the public square where people deliberate the
order of their life together. Citizens are the bearers of opinion, including opinion shaped
by, or espousing religious belief, and these citizens have equal access to the public square.
In this representative democracy, the state is prohibited from determining which
convictions and moral judgments may be proposed for public deliberation. Through a
constitutionally designed process, the people deliberate and decide. Majority rule is a
necessary principle in this democratic governance. Thus, when public deliberation on
moral judgments is finally crystallized into law, the laws will largely reflect the beliefs and
preferences of the majority, i.e., the mainstream or median groups. Nevertheless, in the
very act of adopting and accepting a constitution and the limits it specifies including
protection of religious freedom "not only for a minority, however small not only for a
majority, however large but for each of us" the majority imposes upon itself a self-denying
ordinance. It promises not to do what it otherwise could do: to ride roughshod over the
dissenting minorities.
Freedom of expression constitutes one of the essential foundations of a democratic society, and
this freedom applies not only to those that are favorably received but also to those that offend, shock, or
disturb. Any restriction imposed in this sphere must be proportionate to the legitimate aim pursued. Absent
any compelling state interest, it is not for the COMELEC or this Court to impose its views on the populace.
Otherwise stated, the COMELEC is certainly not free to interfere with speech for no better reason than
promoting an approved message or discouraging a disfavored one.
This position gains even more force if one considers that homosexual conduct is not illegal in this
country. It follows that both expressions concerning ones homosexuality and the activity of forming a
political association that supports LGBT individuals are protected as well.
Other jurisdictions have gone so far as to categorically rule that even overwhelming public
perception that homosexual conduct violates public morality does not justify criminalizing same-sex
conduct.[41] European and United Nations judicial decisions have ruled in favor of gay rights claimants on
both privacy and equality grounds, citing general privacy and equal protection provisions in foreign and
international texts.[42] To the extent that there is much to learn from other jurisdictions that have reflected
on the issues we face here, such jurisprudence is certainly illuminating. These foreign authorities, while
not formally binding on Philippine courts, may nevertheless have persuasive influence on the Courts
analysis.
In the area of freedom of expression, for instance, United States courts have ruled that existing
free speech doctrines protect gay and lesbian rights to expressive conduct. In order to justify the
prohibition of a particular expression of opinion, public institutions must show that their actions were
caused by something more than a mere desire to avoid the discomfort and unpleasantness that always
accompany an unpopular viewpoint.[43]
With respect to freedom of association for the advancement of ideas and beliefs, in Europe, with
its vibrant human rights tradition, the European Court of Human Rights (ECHR) has repeatedly stated that
a political party may campaign for a change in the law or the constitutional structures of a state if it uses
legal and democratic means and the changes it proposes are consistent with democratic principles. The
ECHR has emphasized that political ideas that challenge the existing order and whose realization is
advocated by peaceful means must be afforded a proper opportunity of expression through the exercise
of the right of association, even if such ideas may seem shocking or unacceptable to the authorities or the
majority of the population.[44]A political group should not be hindered solely because it seeks to publicly
debate controversial political issues in order to find solutions capable of satisfying everyone
concerned.[45] Only if a political party incites violence or puts forward policies that are incompatible with
democracy does it fall outside the protection of the freedom of association guarantee.[46]
We do not doubt that a number of our citizens may believe that homosexual conduct is distasteful,
offensive, or even defiant. They are entitled to hold and express that view. On the other hand, LGBTs and
their supporters, in all likelihood, believe with equal fervor that relationships between individuals of the
same sex are morally equivalent to heterosexual relationships. They, too, are entitled to hold and express
that view. However, as far as this Court is concerned, our democracy precludes using the religious or
moral views of one part of the community to exclude from consideration the values of other members of
the community.
Of course, none of this suggests the impending arrival of a golden age for gay rights litigants. It well may
be that this Decision will only serve to highlight the discrepancy between the rigid constitutional analysis
of this Court and the more complex moral sentiments of Filipinos. We do not suggest that public opinion,
even at its most liberal, reflect a clear-cut strong consensus favorable to gay rights claims and we neither
attempt nor expect to affect individual perceptions of homosexuality through this Decision.
The OSG argues that since there has been neither prior restraint nor subsequent punishment imposed
on Ang Ladlad, and its members have not been deprived of their right to voluntarily associate, then there
has been no restriction on their freedom of expression or association. The OSG argues that:
There was no utterance restricted, no publication censored, or any assembly denied.

[COMELEC] simply exercised its authority to review and verify the qualifications of
petitioner as a sectoral party applying to participate in the party-list system. This lawful
exercise of duty cannot be said to be a transgression of Section 4, Article III of the
Constitution.
xxxx
A denial of the petition for registration x x x does not deprive the members of the petitioner
to freely take part in the conduct of elections. Their right to vote will not be hampered by
said denial. In fact, the right to vote is a constitutionally-guaranteed right which cannot
be limited.
As to its right to be elected in a genuine periodic election, petitioner contends that the
denial of Ang Ladlads petition has the clear and immediate effect of limiting, if not
outrightly nullifying the capacity of its members to fully and equally participate in public
life through engagement in the party list elections.
This argument is puerile. The holding of a public office is not a right but a privilege
subject to limitations imposed by law. x x x[47]
The OSG fails to recall that petitioner has, in fact, established its qualifications to participate in the
party-list system, and as advanced by the OSG itself the moral objection offered by the COMELEC was
not a limitation imposed by law. To the extent, therefore, that the petitioner has been precluded, because
of COMELECs action, from publicly expressing its views as a political party and participating on an equal
basis in the political process with other equally-qualified party-list candidates, we find that there has,
indeed, been a transgression of petitioners fundamental rights.
Non-Discrimination and International Law
In an age that has seen international law evolve geometrically in scope and promise, international
human rights law, in particular, has grown dynamically in its attempt to bring about a more just and
humane world order. For individuals and groups struggling with inadequate structural and governmental
support, international human rights norms are particularly significant, and should be effectively enforced
in domestic legal systems so that such norms may become actual, rather than ideal, standards of conduct.
Our Decision today is fully in accord with our international obligations to protect and promote
human rights. In particular, we explicitly recognize the principle of non-discrimination as it relates to the
right to electoral participation, enunciated in the UDHR and the ICCPR.
The principle of non-discrimination is laid out in Article 26 of the ICCPR, as follows:

Article 26
All persons are equal before the law and are entitled without any discrimination to the
equal protection of the law. In this respect, the law shall prohibit any discrimination and
guarantee to all persons equal and effective protection against discrimination on any
ground such as race, colour, sex, language, religion, political or other opinion, national or
social origin, property, birth or other status.
In this context, the principle of non-discrimination requires that laws of general application relating
to elections be applied equally to all persons, regardless of sexual orientation. Although sexual orientation
is not specifically enumerated as a status or ratio for discrimination in Article 26 of the ICCPR, the ICCPR
Human Rights Committee has opined that the reference to sex in Article 26 should be construed to include
sexual orientation.[48] Additionally, a variety of United Nations bodies have declared discrimination on the
basis of sexual orientation to be prohibited under various international agreements.[49]
The UDHR provides:
Article 21.
(1) Everyone has the right to take part in the government of his country, directly
or through freely chosen representatives.
Likewise, the ICCPR states:
Article 25
Every citizen shall have the right and the opportunity, without any of the
distinctions mentioned in article 2 and without unreasonable restrictions:
(a) To take part in the conduct of public affairs, directly or through freely chosen
representatives;
(b) To vote and to be elected at genuine periodic elections which shall be by
universal and equal suffrage and shall be held by secret ballot, guaranteeing the free
expression of the will of the electors;
(c) To have access, on general terms of equality, to public service in his country.
As stated by the CHR in its Comment-in-Intervention, the scope of the right to electoral participation is
elaborated by the Human Rights Committee in its General Comment No. 25 (Participation in Public Affairs
and the Right to Vote) as follows:
1. Article 25 of the Covenant recognizes and protects the right of every citizen to
take part in the conduct of public affairs, the right to vote and to be elected and the right
to have access to public service. Whatever form of constitution or government is in force,
the Covenant requires States to adopt such legislative and other measures as may be
necessary to ensure that citizens have an effective opportunity to enjoy the rights it
protects. Article 25 lies at the core of democratic government based on the consent of the
people and in conformity with the principles of the Covenant.
xxxx
15. The effective implementation of the right and the opportunity to stand for
elective office ensures that persons entitled to vote have a free choice of candidates. Any
restrictions on the right to stand for election, such as minimum age, must be justifiable
on objective and reasonable criteria. Persons who are otherwise eligible to stand for
election should not be excluded by unreasonable or discriminatory requirements such as
education, residence or descent, or by reason of political affiliation. No person should
suffer discrimination or disadvantage of any kind because of that person's candidacy.
States parties should indicate and explain the legislative provisions which exclude any
group or category of persons from elective office.[50]
We stress, however, that although this Court stands willing to assume the responsibility of giving
effect to the Philippines international law obligations, the blanket invocation of international law is not the
panacea for all social ills. We refer now to the petitioners invocation of the Yogyakarta Principles (the
Application of International Human Rights Law In Relation to Sexual Orientation and Gender
Identity),[51] which petitioner declares to reflect binding principles of international law.
At this time, we are not prepared to declare that these Yogyakarta Principles contain norms that
are obligatory on the Philippines. There are declarations and obligations outlined in said Principles which
are not reflective of the current state of international law, and do not find basis in any of the sources of
international law enumerated under Article 38(1) of the Statute of the International Court of
Justice.[52] Petitioner has not undertaken any objective and rigorous analysis of these alleged principles of
international law to ascertain their true status.
We also hasten to add that not everything that society or a certain segment of society wants or
demands is automatically a human right. This is not an arbitrary human intervention that may be added
to or subtracted from at will. It is unfortunate that much of what passes for human rights today is a much
broader context of needs that identifies many social desires as rights in order to further claims that
international law obliges states to sanction these innovations. This has the effect of diluting real human
rights, and is a result of the notion that if wants are couched in rights language, then they are no longer
controversial.
Using even the most liberal of lenses, these Yogyakarta Principles, consisting of a declaration
formulated by various international law professors, are at best de lege ferenda and do not constitute
binding obligations on the Philippines. Indeed, so much of contemporary international law is characterized
by the soft law nomenclature, i.e., international law is full of principles that promote international
cooperation, harmony, and respect for human rights, most of which amount to no more than well-
meaning desires, without the support of either State practice or opinio juris.[53]
As a final note, we cannot help but observe that the social issues presented by this case are
emotionally charged, societal attitudes are in flux, even the psychiatric and religious communities are
divided in opinion. This Courts role is not to impose its own view of acceptable behavior. Rather, it is to
apply the Constitution and laws as best as it can, uninfluenced by public opinion, and confident in the
knowledge that our democracy is resilient enough to withstand vigorous debate.
WHEREFORE, the Petition is hereby GRANTED. The Resolutions of the Commission on Elections
dated November 11, 2009 and December 16, 2009 in SPP No. 09-228 (PL) are hereby SET ASIDE. The
Commission on Elections is directed to GRANT petitioners application for party-list accreditation.
SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice

MARTIN S. VILLARAMA, JR. JOSE P. PEREZ

JOSE C. MENDOZA
Associate Justice
CERTIFICATION
of the Court.
REYNATO S. PUNO
Chief Justice
[1]
319 U.S. 624, 640-42 (1943).
[2]
Rollo, pp. 33-40.
[3]
Id. at 41-74.
[4]
An Act Providing For The Election Of Party-List Representatives Through The Party-List System, And
Appropriating Funds Therefor (1995).
[5]
Rollo, pp. 89-101.
[6]
412 Phil. 308 (2001).
[7]
Ang Ladlad outlined its platform, viz:
As a party-list organization, Ang Ladlad is willing to research, introduce, and work for the passage into law
of legislative measures under the following platform of government:
a) introduction and support for an anti-discrimination bill that will ensure equal rights for LGBTs in
employment and civil life;
b) support for LGBT-related and LGBT-friendly businesses that will contribute to the national
economy;
c) setting up of micro-finance and livelihood projects for poor and physically challenged
LGBT Filipinos;
d) setting up of care centers that will take care of the medical, legal, pension, and other needs of
old and abandoned LGBTs. These centers will be set up initially in the key cities of the country; and
e) introduction and support for bills seeking the repeal of laws used to harass and legitimize
extortion against the LGBT community. Rollo, p. 100.
[8]
Id. at 36-39. Citations omitted. Italics and underscoring in original text.
[9]
Id. at 77-88.
[10]
Id. at 50-54. Emphasis and underscoring supplied.
[11]
Id. at 121.
[12]
Id. at 129-132.
[13]
Id. at 151-283.
[14]
Id. at 284.
[15]
Id. at 301-596.
[16]
Id. at 126.
[17]
Id. at 133-160.
[18]
Id. at 288-291.
[19]
Id. at 296.
[20]
Supra note 6.
[21]
It appears that on September 4, 2009, the Second Division directed the various COMELEC Regional
Offices to verify the existence, status, and capacity of petitioner. In its Comment, respondent
submitted copies of various reports stating that ANG LADLAD LGBT or LADLAD LGBT did not exist in
the following areas: Batangas (October 6, 2009); Romblon (October 6, 2009); Palawan (October 16,
2009); Sorsogon (September 29, 2009); Cavite, Marinduque, Rizal (October 12, 2009); Basilan,
Maguindanao, Lanao del Sur, Sulu, Tawi Tawi (October 19, 2009); Biliran, Leyte, Southern Leyte,
Samar, Eastern Samar, Northern Samar (October 19, 2009); Albay, Camarines Sur, Camarines Norte,
Catanduanes, Masbate, Sorsogon (October 25, 2009); Ilocos Sur, Ilocos Norte, La Union, Pangasinan
(October 23, 2009); North Cotabato, Sarangani, South Cotabato, Sultan Kudarat (October 23, 2009);
Aklan, Antique, Iloilo and Negros Occidental (October 25, 2009); Bohol, Cebu, Siquijor (October 24,
2009); Negros Oriental (October 26, 2009); Cordillera Administrative Region (October 30, 2009);
Agusan del Norte, Agusan del Sur, Dinagat Islands, Surigao del Norte, Surigao del Sur (October 26,
2009); Cagayan de Oro, Bukidnon, Camiguin, MIsamis Oriental, Lanao del Norte (October 31, 2009);
Laguna (November 2, 2009); Occidental Mindoro, Oriental Mindoro (November 13, 2009); Quezon
(November 24, 2009); Davao City, Davao del Sur, Davao del Norte, Compostela Valley, Davao Oriental
(November 19, 2009); Caloocan, Las Pinas, Makati, Mandaluyong, Manila, Marikina, Muntinlupa,
Navotas, Paranaque, Pasay, Pasig, Pateros, Quezon City, San Juan, Taguig, Valenzuela (December
16, 2009). Rollo, pp.323-596.
[22]
Id. at 96.
[23]
Id. at 96-97.
[24]
BERNAS, THE 1987 CONSTITUTION OF THE PHILIPPINES: A COMMENTARY 346 (2009).
[25]
Estrada v. Escritor, 455 Phil. 411 (2003), citing Smith, S., "The Rise and Fall of Religious Freedom in
Constitutional Discourse", 140 UNIVERSITY OF PENNSYLVANIA LAW REVIEW, 149, 160 (1991).
[26]
455 Phil. 411 (2003).
[27]
Id. at 588-589.
[28]
Rollo, p. 315.
[29]
In Anonymous v. Radam, A.M. No. P-07-2333, December 19, 2007, 541 SCRA 12, citing Concerned
Employee v. Mayor, A.M. No. P-02-1564, 23 November 2004, 443 SCRA 448, we ruled that immorality
cannot be judged based on personal bias, specifically those colored by particular mores. Nor should it
be grounded on "cultural" values not convincingly demonstrated to have been recognized in the realm
of public policy expressed in the Constitution and the laws. At the same time, the constitutionally
guaranteed rights (such as the right to privacy) should be observed to the extent that they protect
behavior that may be frowned upon by the majority.
[30]
Rollo, pp. 178.
[31]
Id. at 179-180.
[32]
CIVIL CODE OF THE PHILIPPINES, Art. 699.
[33]
POLITICS VII. 14.
[34]
Abakada Guro Party v. Executive Secretary, G.R. No. 168056, September 1, 2005, 2005, 469 SCRA 1,
139.
[35]
In BERNAS, THE 1987 CONSTITUTION OF THE PHILIPPINES: A COMMENTARY 139-140 (2009), Fr.
Joaquin Bernas, S.J. writes:
For determining the reasonableness of classification, later jurisprudence has developed three
kinds of test[s] depending on the subject matter involved. The most demanding is the strict
scrutiny test which requires the government to show that the challenged classification serves
a compelling state interest and that the classification is necessary to serve that interest. This
[case] is used in cases involving classifications based on race, national origin, religion,
alienage, denial of the right to vote, interstate migration, access to courts, and other rights
recognized as fundamental.
Next is the intermediate or middle-tier scrutiny test which requires government to show that the
challenged classification serves an important state interest and that the classification is at least
substantially related to serving that interest. This is applied to suspect classifications like
gender or illegitimacy.
The most liberal is the minimum or rational basis scrutiny according to which government need
only show that the challenged classification is rationally related to serving a legitimate state
interest. This is the traditional rationality test and it applies to all subjects other than those
listed above.
[36]
487 Phil. 531, 583 (2004).
[37]
Id. at 584. See also Mid-States Freight Lines v. Bates, 111 N.Y.S. 2d 568.
[38]
The OSG argues that [w]hile it is true that LGBTs are immutably males and females, and they are
protected by the same Bill of Rights that applies to all citizens alike, it cannot be denied that as a
sector, LGBTs have their own special interests and concerns. Rollo, p. 183.
[39]
Article III, Section 4 of the Constitution provides that [n]o law shall be passed abridging the freedom
of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition
the government for redress of grievances.
[40]
Supra note 26.
[41]
In Bowers v. Hardwick, 478 U.S. 186 (1986), the US Supreme Court first upheld the constitutionality
of a Georgia sodomy law that criminalized oral and anal sex in private between consenting adults
when applied to homosexuals. Seventeen years later the Supreme Court directly
overruled Bowers in Lawrence v. Texas, 539 U.S. 558 (2003), holding that "Bowers was not correct
when it was decided, and it is not correct today."
In Lawrence, the US Supreme Court has held that the liberty protected by the Constitution allows
homosexual persons the right to choose to enter into intimate relationships, whether or not said
relationships were entitled to formal or legal recognition.
Our prior cases make two propositions abundantly clear. First, the fact that the governing majority
in a State has traditionally viewed a particular practice as immoral is not a sufficient reason for
upholding a law prohibiting the practice; neither history nor tradition could save a law prohibiting
miscegenation from constitutional attack. Second, individual decisions by married persons, concerning
the intimacies of their physical relationship, even when not intended to produce offspring, are a form
of liberty protected by the Due Process Clause of the Fourteenth Amendment. Moreover, this
protection extends to intimate choices by unmarried as well as married persons.
The present case does not involve minors. It does not involve persons who might be injured or
coerced or who are situated in relationships where consent might not easily be refused. It does not
involve public conduct or prostitution. It does not involve whether the government must give formal
recognition to any relationship that homosexual persons seek to enter. The case does involve two
adults who, with full and mutual consent from each other, engaged in sexual practices common to a
homosexual lifestyle. The petitioners are entitled to respect for their private lives. The State cannot
demean their existence or control their destiny by making their private sexual conduct a crime. Their
right to liberty under the Due Process Clause gives them the full right to engage in their conduct
without intervention of the government. It is a promise of the Constitution that there is a realm of
personal liberty which the government may not enter. The Texas statute furthers no legitimate state
interest which can justify its intrusion into the personal and private life of the individual.
In similar fashion, the European Court of Human Rights has ruled that the avowed state interest in
protecting public morals did not justify interference into private acts between homosexuals. In Norris
v. Ireland, the European Court held that laws criminalizing same-sex sexual conduct violated the right
to privacy enshrined in the European Convention.
The Government are in effect saying that the Court is precluded from reviewing Irelands observance of
its obligation not to exceed what is necessary in a democratic society when the contested interference
with an Article 8 (Art. 8) right is in the interests of the "protection of morals". The Court cannot accept
such an interpretation. x x x.
x x x The present case concerns a most intimate aspect of private life. Accordingly, there must
exist particularly serious reasons before interferences on the part of public authorities can be legitimate
x x x.
x x x Although members of the public who regard homosexuality as immoral may be shocked,
offended or disturbed by the commission by others of private homosexual acts, this cannot on its own
warrant the application of penal sanctions when it is consenting adults alone who are involved. (Norris
v. Ireland (judgment of October 26, 1988, Series A no. 142, pp. 20-21, 46); Marangos
v. Cyprus (application no. 31106/96, Commission's report of 3 December 1997, unpublished)).
The United Nations Human Rights Committee came to a similar conclusion in Toonen v. Australia (Comm.
No. 488/1992 U.N. GAOR Hum. Rts. Comm., 50th Sess., U.N. Doc. CCPR/c/50/D/488/1992
(1994)), involving a complaint that Tasmanian laws criminalizing consensual sex between adult males
violated the right to privacy under Article 17 of the International Covenant on Civil and Political
Rights. The Committee held:
x x x it is undisputed that adult consensual sexual activity in private is covered by the concept of
privacy x x x any interference with privacy must be proportional to the end sought and be
necessary in the circumstances of any given case.
[42]
See Toonen v. Australia, (Comm. No. 488/1992 U.N. GAOR Hum. Rts. Comm., 50th Sess., U.N. Doc.
CCPR/c/50/D/488/1992 (1994)); Dudgeon v. United Kingdom, 45 Eur. H.R. Rep. 52 (1981) (decision
by the European Court of Human Rights, construing the European Convention on Human Rights and
Fundamental Freedoms); Norris v. Ireland, 13 Eur. Ct. H.R. 186 (1991); Modinos v. Cyprus, 16 Eur.
H.R. Rep. 485 (1993). See also, L. and V. v Austria (2003-I 29; (2003) 36 EHRR 55) and S.L. v
Austria (2003-I 71; (2003) 37 EHRR 39), where the European Court considered that Austrias differing
age of consent for heterosexual and homosexual relations was discriminatory; it embodied a
predisposed bias on the part of a heterosexual majority against a homosexual minority, which could
not amount to sufficient justification for the differential treatment any more than similar negative
attitudes towards those of a different race, origin or colour.
[43]
See Fricke v. Lynch, 491 F. Supp. 381 (1980) and Gay Student Services v. Texas A&M University, 737
F. 2d 1317 (1984).
[44]
Case of the United Macedonian Organisation Ilinden and Others v. Bulgaria Application No. 5941/00;
Judgment of January 20, 2006. Note that in Baczkowski and Others v. Poland, Application No. 1543/06;
Judgment of May 3, 2007, the ECHR unanimously ruled that the banning of an LGBT gay parade
in Warsaw was a discriminatory violation of Article 14 of the ECHR, which provides:
The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without
discrimination on any ground such as sex, race, colour, language, religion, political or other
opinion, national or social origin, association with a national minority, property, birth or other
status.
It also found that banning LGBT parades violated the groups freedom of assembly and
association. Referring to the hallmarks of a democratic society, the Court has attached
particular importance to pluralism, tolerance and broadmindedness. In that context, it
has held that although individual interests must on occasion be subordinated to those
of a group, democracy does not simply mean that the views of the majority must
always prevail: a balance must be achieved which ensures the fair and proper
treatment of minorities and avoids any abuse of a dominant position.
[45]
Case of Freedom & Democracy Party (OZDEP) v. Turkey, Application No. 23885/94; Judgment
of December 8, 1999.
[46]
Article 11 of the European Convention for the Protection of Human Rights and Fundamental Freedoms
(European Convention) provides:
1. Everyone has the right to freedom of peaceful assembly and to freedom of association with others,
including the right to form and to join trade unions for the protection of his interests.
2. No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law
and are necessary in a democratic society in the interests of national security or public safety, for
the prevention of disorder or crime, for the protection of health or morals or for the protection of
the rights and freedoms of others. This article shall not prevent the imposition of lawful restrictions
on the exercise of these rights by members of the armed forces, of the police or of the administration
of the State. Convention for the Protection of Human Rights and Fundamental Freedoms, 213
U.N.T.S. 222, entered into force September 3, 1953, as amended by Protocols Nos. 3, 5, 8, and
11 which entered into force on September 21, 1970, December 20, 1971, January 1, 1990, and
November 1, 1998, respectively.
*
Note that while the state is not permitted to discriminate against homosexuals, private individuals
cannot be compelled to accept or condone homosexual conduct as a legitimate form of
behavior. In Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, Inc. (515 U.S.
557 (1995)), the US Supreme Court discussed whether anti-discrimination legislation operated to
require the organizers of a private St. Patricks Day parade to include among the marchers an Irish-
American gay, lesbian, and bisexual group. The court held that private citizens organizing a public
demonstration may not be compelled by the state to include groups that impart a message the
organizers do not want to be included in their demonstration. The court observed:
[A] contingent marching behind the organizations banner would at least bear witness to the
fact that some Irish are gay, lesbian, or bisexual, and the presence of the organized
marchers would suggest their view that people of their sexual orientations have as much
claim to unqualified social acceptance as heterosexuals x x x. The parades organizers may
not believe these facts about Irish sexuality to be so, or they may object to unqualified social
acceptance of gays and lesbians or have some other reason for wishing to keep GLIBs
message out of the parade. But whatever the reason, it boils down to the choice of a
speaker not to propound a particular point of view, and that choice is presumed to lie beyond
the governments power to control.
So, too, in Boy Scouts of America v. Dale (530 U.S. 640 [2000]), the US Supreme Court held that
the Boy Scouts of America could not be compelled to accept a homosexual as a scoutmaster,
because the Boy Scouts believe that homosexual conduct is inconsistent with the values it seeks to
instill in its youth members; it will not promote homosexual conduct as a legitimate form of behavior.
When an expressive organization is compelled to associate with a person whose views the group does not
accept, the organizations message is undermined; the organization is understood to embrace, or at
the very least tolerate, the views of the persons linked with them. The scoutmasters presence would,
at the very least, force the organization to send a message, both to the youth members and the
world, that the Boy Scouts accepts homosexual conduct as a legitimate form of behavior.
[47]
Rollo, pp. 197-199.
[48]
In Toonen v. Australia, supra note 42, the Human Rights Committee noted that in its view the
reference to sex in Articles 2, paragraph 2, and 26 is to be taken as including sexual orientation.
[49]
The Committee on Economic, Social and Cultural Rights (CESCR) has dealt with the matter in its
General Comments, the interpretative texts it issues to explicate the full meaning of the provisions of
the Covenant on Economic, Social and Cultural Rights. In General Comments Nos. 18 of 2005 (on the
right to work) (Committee on Economic, Social and Cultural Rights, General Comment No. 18: The
right to work, E/C.12/GC/18, November 24, 2005), 15 of 2002 (on the right to water) (Committee on
Economic, Social and Cultural Rights, General Comment No. 15: The right to water, E/C.12/2002/11,
November 26, 2002) and 14 of 2000 (on the right to the highest attainable standard of health)
(Committee on Economic, Social and Cultural Rights, General Comment No. 14: The right to the
highest attainable standard of health, E/C.12/2000/4, August 14, 2000), it has indicated that the
Covenant proscribes any discrimination on the basis of, inter-alia, sex and sexual orientation.
The Committee on the Rights of the Child (CRC) has also dealt with the issue in a General Comment. In
its General Comment No. 4 of 2003, it stated that, State parties have the obligation to ensure that all
human beings below 18 enjoy all the rights set forth in the Convention [on the Rights of the Child]
without discrimination (Article 2), including with regard to race, colour, sex, language, religion, political
or other opinion, national, ethnic or social origin, property, disability, birth or other status. These
grounds also cover [inter alia] sexual orientation. (Committee on the Rights of the Child, General
Comment No. 4: Adolescent health and development in the context of the Convention on the Rights
of the Child, July 1, 2003, CRC/GC/2003/4).
The Committee on the Elimination of Discrimination Against Women (CEDAW), has, on a number of
occasions, criticized States for discrimination on the basis of sexual orientation. For example, it also
addressed the situation in Kyrgyzstan and recommended that, lesbianism be reconceptualized as a
sexual orientation and that penalties for its practice be abolished (Concluding Observations of the
Committee on the Elimination of Discrimination Against Women regarding Kyrgyzstan, February 5,
1999, A/54/38 at par. 128).
[50]
General Comment No. 25: The right to participate in public affairs, voting rights and the right of equal
access to public service (Art. 25) December 16, 1996. CCPR/C/21/Rev.1/Add.7.
[51]
The Yogyakarta Principles on the Application of International Human Rights Law in relation to Sexual
Orientation and Gender Identity is a set of international principles relating to sexual orientation and
gender identity, intended to address documented evidence of abuse of rights of lesbian, gay, bisexual,
and transgender (LGBT) individuals. It contains 29 Principles adopted by human rights practitioners
and experts, together with recommendations to governments, regional intergovernmental institutions,
civil society, and the United Nations.
[52]
One example is Principle 3 (The Right to Recognition Before the Law), which provides:
Everyone has the right to recognition everywhere as a person before the law. Persons of diverse sexual
orientations and gender identities shall enjoy legal capacity in all aspects of life. Each persons self-
defined sexual orientation and gender identity is integral to their personality and is one of the most
basic aspects of self-determination, dignity and freedom. No one shall be forced to undergo medical
procedures, including sex reassignment surgery, sterilization or hormonal therapy, as a requirement
for legal recognition of their gender identity. No status, such as marriage or parenthood, may be
invoked as such to prevent the legal recognition of a persons gender identity. No one shall be
subjected to pressure to conceal, suppress or deny their sexual orientation or gender identity.
States shall:
a) Ensure that all persons are accorded legal capacity in civil matters, without discrimination on the
basis of sexual orientation or gender identity, and the opportunity to exercise that capacity,
including equal rights to conclude contracts, and to administer, own, acquire (including through
inheritance), manage, enjoy and dispose of property;
b) Take all necessary legislative, administrative and other measures to fully respect and
legally recognise each persons self-defined gender identity;
c) Take all necessary legislative, administrative and other measures to ensure that
procedures exist whereby all State-issued identity papers which indicate a persons
gender/sex including birth certificates, passports, electoral records and other
documents reflect the persons profound self-defined gender identity;
d) Ensure that such procedures are efficient, fair and non-discriminatory, and respect the dignity
and privacy of the person concerned;
e) Ensure that changes to identity documents will be recognized in all contexts where the
identification or disaggregation of persons by gender is required by law or policy;
f) Undertake targeted programmes to provide social support for all persons experiencing gender
transitioning or reassignment. (Emphasis ours)
[53]
See Pharmaceutical and Health Care Association of the Philippines v. Secretary of Health, G.R. No.
173034, October 9, 2007, 535 SCRA 265, where we explained that soft law does not fall into any of
the categories of international law set forth in Article 38, Chapter III of the 1946 Statute of the
International Court of Justice. It is, however, an expression of non-binding norms, principles, and
practices that influence state behavior. Certain declarations and resolutions of the UN General
Assembly fall under this category.

Supreme Court
Baguio City
SECOND DIVISION
ROSIE QUIDET, G.R. No. 170289

Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
PEREZ, and
MENDOZA,* JJ.

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:

Conspiracy must be proved as clearly and convincingly as the commission of the offense itself for
it is a facile device by which an accused may be ensnared and kept within the penal fold. In case of
reasonable doubt as to its existence, the balance tips in favor of the milder form of criminal liability as
what is at stake is the accuseds liberty. We apply these principles in this case.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeals (CA) July
22, 2005 Decision[1] in CA-G.R. CR No. 23351 which affirmed with modifications the March 11, 1999
Decision[2] of the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 20 in Criminal Case Nos. 92-
079 and 92-080.
Factual Antecedents
On January 13, 1992, petitioner Rosie Quidet (petitioner), Feliciano Taban, Jr. (Taban), and
Aurelio Tubo (Tubo) were charged with homicide in Criminal Case No. 92-079 for the death of Jimmy
Tagarda (Jimmy) allegedly committed as follows:
That on or about the 19th day of October 1991 at 8:00 oclock in the evening,
more or less, at Barangay Looc, Salay, Misamis Oriental, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused Feliciano Taban, Jr., Rosie
Quidet and Aurelio Tubo, with intent to kill, conspiring, confederating, x x x and [sic]
helping one another, taking advantage of the darkness of the night, in order to facilitate
the commission of the offense with the use of sharp pointed x x x instruments which the
accused conveniently provided themselves did then and there, willfully, unlawfully and
feloniously attack, assault, stab one Jimmy Tagarda thus the victim sustained several
wounds in different parts of his body and as a consequence of which the victim died
immediately thereafter.
CONTRARY TO and in violation of Article 249 of the Revised Penal Code.[3]
On even date, the aforesaid accused were charged with frustrated homicide in Criminal Case No. 92-080
for the stab wounds sustained by Jimmys cousin, Andrew Tagarda (Andrew), arising from the same
incident, viz:
That on or about the 19th day of October 1991 at 8:00 oclock in the evening,
more or less, at Barangay Looc, Salay, Misamis Oriental, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, with intent to kill, and with
the use of sharp pointed x x x instrument, and x x x conspiring, confederating and helping
one another, and taking advantage of the night [in] order to facilitate the commission of
the offense, did then and there, willfully, unlawfully and feloniously attack, assault, and
stab one Andrew Tagarda thereby hitting his left chest and nose, the accused having
performed all the acts of execution which would produce the crime of Homicide as a
consequence except for reason or cause independent of the will of the accused that is,
the stab was deflected by the victim.
CONTRARY TO and in violation of Article 249 in relation to Article 6 of the Revised

Penal Code.[4]
Upon arraignment, all the accused entered a plea of not guilty in Criminal Case No. 92-080
(frustrated homicide). Meanwhile, in Criminal Case No. 92-079 (homicide), Taban entered a voluntary plea
of guilt while petitioner and Tubo maintained their innocence. Accordingly, on June 24, 1992, the trial
court rendered a partial judgment[5] sentencing Taban to imprisonment of six (6) years and one (1) day
of prision mayor, as minimum, to twelve (12) years, two (2) months and one (1) day of reclusion
temporal, as maximum, and ordering him to pay the heirs of Jimmy P50,000.00 as civil
indemnity.[6] Thereafter, joint trial ensued.
On October 19, 1991, at around 8:00 oclock in the evening, Jimmy, Andrew, Edwin Balani[7] (Balani), and
Rolando Mabayo (Mabayo) visited a friend in Sitio Punta, Looc, Salay, Misamis Oriental. Along the way,
they saw Taban, together with petitioner and Tubo, come out of the house of one Tomas Osep
(Osep). Taban suddenly stabbed Andrew on the chest with a knife. Andrew retaliated by boxing
Taban. Jimmy tried to pacify Andrew and Taban but the latter stabbed him in the abdomen. Taban then
immediately fled.
Meanwhile, after Jimmy fell down, Tubo threw a drinking glass at Andrews face while petitioner boxed
Andrews jaw. Tubo stabbed Jimmy who was then lying face down on the ground twice on the back with
an ice pick after which he fled. Petitioner then boxed Jimmys mouth. At this juncture, Balani rushed to
Jimmys aid and boxed petitioner who retaliated by punching
Balani. Thereafter, petitioner left the scene. Mabayo was unable to help Jimmy or
Andrew because he was shocked by the incident.
After the incident, Jimmy was brought to the clinic of Dr. Precioso Tacandang (Dr. Tacandang). Jimmy
was then in critical condition, thus, Dr. Tacandang advised the relatives of Jimmy to bring him to the
Northern Mindanao Regional Training Hospital. Upon arrival at the aforesaid hospital, Jimmy was declared
dead by the attending physician, Dr. Cedric Dael (Dr. Dael). Jimmy sustained a vital or mortal stab wound
at the epigastric area four centimeters below the cyphoid process and another stab wound on the left
lumbar. Andrew, who sustained minor injuries, was treated by Dr. Dael.
On the night of the stabbing incident, Taban, Tubo and petitioner were drinking liquor in the house of
Osep. Taban left the group to urinate on a nearby coconut tree. Outside Oseps house, he was suddenly
boxed by Andrew and kicked by Jimmy causing him to fall near a fishing boat. There Taban found a fishing
knife with which he stabbed Jimmy and Andrew in order to defend himself. After which, he fled for fear
for his life. Meanwhile, petitioner went out to look for Taban. As he was stepping out of Oseps house, he
was boxed by Balani. Petitioner fought back. Andrew tried to help Balani but petitioner was able to evade
Andrews attacks. Instead, petitioner was able to box Andrew. Petitioner then called out to Tubo to come
out and run. When Tubo stepped out of the house, neither Taban nor petitioner was present but he saw
a person being lifted by several people. Upon seeing this, Tubo, likewise, fled for fear for his life.
On May 16, 1995, the RTC rendered a judgment finding petitioner and Tubo guilty of
homicide[8] and all three accused (petitioner, Tubo and Taban) guilty of frustrated homicide, viz:
1) In Criminal Case No. 92-079, accused Rosie Quidet and Aurelio Tubo are
hereby sentenced, there being no mitigating or aggravating circumstances present,
to the penalty of EIGHT (8) YEARS AND ONE (1) DAY OF PRISION MAYOR with its
medium period as minimum under the Indeterminate Sentence Law to FOURTEEN
(14) YEARS, EIGHT (8) MONTHS AND ONE (1) DAY OF RECLUSION TEMPORAL in
its medium period [as maximum] under the same law.
2) In Criminal Case No. 92-080 for Frustrated Homicide, there being no mitigating
or aggravating circumstances present, this court hereby sentences all the accused
[Feliciano Taban, Jr., Rosie Quidet and Aurelio Tubo] in this case to an Indeterminate
Sentence [Law] of FOUR (4) YEARS OF PRISION CORRECCIONAL in its medium
period as the minimum under the Indeterminate Sentence Law to TEN (10) YEARS
OF PRISION MAYOR in its medium period as the maximum under the same law. With
costs.
3) To pay jointly and severally the heirs of Jimmy Tagarda in the sum
of P50,000.00 for Criminal Case No. 92-079;
4) And likewise to pay solidarily the heirs of the victim Andrew Tagarda the sum
of P10,000.00 for committing the crime of Frustrated Homicide.[9]
The period of preventive imprisonment during which the accused were detained
pending the trial of these cases shall be credited in full in favor of all the accused.
SO ORDERED.[10]
The trial court found that the stabbing of Jimmy and Andrew was previously planned by the accused. The
active participation of all three accused proved conspiracy in the commission of the crimes. Furthermore,
the positive identification of the accused by the prosecution witnesses cannot be offset by the defense of
plain denial.
From this judgment, only petitioner appealed to the CA.
On July 22, 2005, the CA promulgated the assailed Decision, affirming with modifications, the judgment
of the RTC, viz:
WHEREFORE, the instant appeal is hereby DISMISSED for lack of merit. The assailed
decision is hereby AFFIRMED with the following modifications: (a) That in Criminal Case
No. 92-080 the crime is only Attempted Homicide; and (b) the civil indemnity in the
amount of ten thousand (P10,000.00) pesos which was awarded to the heirs of Andrew
Tagarda be deleted as the same has not been fully substantiated. No costs.
SO ORDERED.[11]
In upholding the conviction of the accused for homicide, the CA held that conspiracy was duly established
as shown by the concerted acts of the accused in inflicting mortal wounds on Jimmy. Hence, all of the
accused are guilty of homicide for the death of Jimmy.
The CA, however, disagreed with the trial courts finding that the accused are liable for frustrated homicide
with respect to the injuries sustained by Andrew. According to the CA, the accused failed to inflict mortal
wounds on Andrew because the latter successfully deflected the attack. Andrew suffered only minor
injuries which could have healed within five to seven days even without medical treatment. The crime
committed, therefore, is merely attempted homicide.
The CA also deleted the award of civil indemnity to the heirs of Andrew because the same was not fully
substantiated.
Issue
Whether the Decision of the CA finding petitioner to have acted in conspiracy with the other
accused (Taban and Tubo) in the commission of the offenses charged is in accordance with law and/or
jurisprudence.[12]
Petitioner claims that the evidence merely established that: (1) Taban went out of Oseps store
while petitioner and Tubo remained inside; (2) a commotion took place between Taban and Andrew; (3)
after this altercation, petitioner and Tubo stepped out of Oseps store; and (4) petitioners participation in
the incident is limited to boxing Andrew after the latter had already been stabbed by Taban, and boxing
Jimmys mouth after the latter had been stabbed by Taban and Tubo in succession.
Petitioner insists that it cannot be said that he had the same criminal purpose and design as Taban
and Tubo. His participation was not necessary to the completion of the criminal acts because by the time
he boxed Andrew and Jimmy, the stabbing had already taken place. The evidence further established that
the stabbing incident was purely accidental and that the accused had no grudge against the victims. Also,
petitioner was unarmed negating his intent to kill.
Petitioner also cites People v. Vistido[13] where it was ruled that conspiracy was not established
under facts similar to the present case. In Vistido, the accused was merely convicted of slight physical
injuries.
Respondent contends that conspiracy was duly established. Petitioner was not merely present
during the commission of the crime but he aided Taban and Tubo by inflicting blows on Andrew and
Jimmy after the latter were stabbed. The simultaneous movement of the accused towards the victims and
their successive escape from the crime scene clearly evince conspiracy. Respondent also stresses that the
factual findings of the trial court should be accorded respect for it is in a better position to evaluate
testimonial evidence.
Our Ruling

The existence of conspiracy was not proved beyond
reasonable doubt. Thus, petitioner is criminally liable only
for his individual acts.
Conspiracy exists when two or more persons come to an agreement concerning the commission
of a felony and decide to commit it.[14] The essence of conspiracy is the unity of action and purpose.[15] Its
elements, like the physical acts constituting the crime itself, must be proved beyond reasonable doubt.
When there is conspiracy, the act of one is the act of all.
Conspiracy can be inferred from and established by the acts of the accused themselves when said
acts point to a joint purpose and design, concerted action and community of interests.[16] However, in
determining whether conspiracy exists, it is not sufficient that the attack be joint and simultaneous for
simultaneousness does not of itself demonstrate the concurrence of will or unity of action and purpose
which are the bases of the responsibility of the assailants.[17] What is determinative is proof establishing
that the accused were animated by one and the same purpose.[18]
As a general rule, factual findings of the trial court, which is in a better position to evaluate the
testimonial evidence, are accorded respect by this Court. But where the trial court overlooked,
misunderstood or misapplied some facts or circumstances of weight and substance which can affect the
result of the case, this Court is duty-bound to correct this palpable error for the right to liberty, which
stands second only to life in the hierarchy of constitutional rights, cannot be lightly taken away. In the
instant case, we find that the prosecution failed to prove beyond reasonable doubt that petitioner
conspired with Taban and Tubo in committing the crimes of homicide and attempted homicide.
Both the trial court and the CA ruled that the evidence duly established conspiracy. In particular,
the CA noted:
[T]his Court HOLDS that there was conspiracy. x x x
With respect to Criminal Case No. 92-080 (for frustrated homicide), it was
revealed that after Andrews chest was stabbed by Taban, Tubo also threw a drinking
glass at Andrews face while [petitioner] boxed Andrews jaws.
From the foregoing facts, it can be inferred that all the accused acted in solidum in
trying to inflict injuries to Andrew. Had it been otherwise, Tubo and [petitioner] would
have just left the scene of the crime.
With respect to Criminal Case No. 92-079 (for homicide), it was revealed that
after Andrew was stabbed by Taban using a double-bladed knife, Taban subsequently
stabbed Jimmy before fleeing from the crime scene. Moments later, while Andrew was
recovering from fist and glass blows from [petitioner] and Tubo, Tubo [straddled] Jimmy
and stabbed him twice with an icepick before [he] left. [Petitioner], on the other hand,
delivered a fist blow to Jimmys mouth notwithstanding the fact that Jimmy was already
stabbed by Taban and Tubo.
From the foregoing facts, it can be inferred that all the accused in Criminal Case
No. 92-079 confederated and mutually helped each other to insure the killing of Jimmy
Tagarda. Hence, conspiracy was present in the cases at bar.[19]
We disagree. To determine if petitioner conspired with Taban and Tubo, the focus of the inquiry
should necessarily be the overt acts of petitioner before, during and after the stabbing incident. From this
viewpoint, we find several facts of substance which militate against the finding that petitioner conspired
with Taban and Tubo.
First, there is no evidence that petitioner, Taban or Tubo had any grudge or enmity against Jimmy
or Andrew. The prosecution eyewitnesses (Andrew and Balani) as well as the three accused were one in
testifying that there was no misunderstanding between the two groups prior to the stabbing incident.
During the testimony of prosecution witness Balani, the trial court itself grappled with the issue of motive:
COURT: (to the witness)
Q- [W]hen you saw Feliciano Taban and Tubo stabbing Jimmy Tagarda, you mean to tell
this court that they were enemies?
A- No sir.
xxxx
Q- Now, was there any information that you received that the reason why the accused
Taban and Tubo stabbed Jimmy Tagarda and Andrew Tagarda was x x x of some
previous misunderstanding?
A- No, I did not know.
Q- Until now, you cannot tell this court the reason why the stabbing took place except the
fact that the group of the accused were having [a] drinking session and your
group also had a [prior] drinking session somewhere?
A- Yes, sir.[20]
Second, the stabbing incident appears to have arisen from a purely accidental encounter between
Tabans and Andrews groups with both having had a drinking session. On direct examination, prosecution
witness Andrew testified that Taban, Tubo and petitioner successively went out of Oseps house to engage
their group. This version of the events made it appear that the three accused laid in wait to carry out the
crimes. However, on cross-examination, Andrew contradicted himself when he stated that it was only
Taban who their group initially saw with a knife outside Oseps house and who suddenly stabbed
Andrew. After he was stabbed, Andrew stated that he retaliated by boxing Taban and it was only then
when he (Andrew) saw Tubo and petitioner come out of Oseps house.[21] The records of the preliminary
investigation of this case confirm this latter version of the events when Andrew stated that it was only
after the commotion between him and Taban that Tubo and petitioner stepped out of Oseps store to help
Taban defend himself in the ensuing fight.[22] Significantly, when the defense on cross-examination
confronted Andrew with this inconsistency between his statements on direct examination and the
preliminary investigation, Andrew answered that at the time of the incident it was only Taban that he
saw.[23] The same observation can be made on the testimony of the prosecutions second eyewitness,
Balani. While on direct examination Balani claimed that the three accused successively came out of Oseps
house, on cross-examination, he modified his stance by stating that it was only Taban who initially
accosted their group and that petitioner and Tubo were inside Oseps house prior to the commotion.[24] This
material inconsistency in the testimonies of the prosecutions eyewitnesses belies the prosecutions theory
that the three accused had a pre-conceived plan to kill Jimmy and Andrew.
Third, unlike Taban and Tubo, petitioner was unarmed during the incident, thus, negating his intent to kill
the victims. By the prosecution witnesses account, petitioners participation was limited to boxing Andrew
and Jimmy after Taban and Tubo had stabbed the victims. His acts were neither necessary nor
indispensable to the commission of the crimes as they were done after the stabbing. Thus, petitioners act
of boxing the victims can be interpreted as a mere show of sympathy to or camaraderie with his two co-
accused.
Taken together, the evidence of the prosecution does not meet the test of moral certainty in order to
establish that petitioner conspired with Taban and Tubo to commit the crimes of homicide and attempted
homicide. We agree with petitioner that this case is similar to People v. Vistido[25] and the ruling there
applies with equal force here. In Vistido, we held thus
There is no question that "a person may be convicted for the criminal act of another
where, between them, there has been conspiracy or unity of purpose and intention in the
commission of the crime charged." It is, likewise, settled that "to establish conspiracy, it
is not necessary to prove previous agreement to commit a crime, if there is proof that the
malefactors have acted in consort and in pursuance of the same objective." Nevertheless,
"the evidence to prove the same must be positive and convincing. As a facile device by
which an accused may be ensnared and kept within the penal fold, conspiracy requires
conclusive proof if we are to maintain in full strength the substance of the time-honored
principle in criminal law requiring proof beyond reasonable doubt before conviction."
In the case at bar, the evidence for the prosecution does not comply with this
basic requirement. To begin with, there is no evidence that appellant and his co-accused
had any enmity or grudge against the deceased. On the contrary, the cousin of the
deceased, Reynaldo Pagtakhan, testified that prior to the stabbing incident, they did not
have any quarrel with them. In the absence of strong motives on their part to kill the
deceased, it can not safely be concluded that they conspired to commit the crime involved
herein.
Neither could it be assumed that when the appellant and his co-accused were
together drinking wine, at the time and place of the incident, they were there purposely
to wait for and to kill the deceased. For, they could not have surmised beforehand that
between 3:00 and 4:00 o'clock in the morning of November 1, 1969, the deceased and
his cousin after coming home from their work at the cemetery would go to the Marzan
Restaurant, and thereafter, would take a taxi for home, and then, alight at M. Francisco
Street. The meeting between the appellant's group and the deceased appears to be purely
accidental which negates the existence of conspiracy between the appellant and his co-
accused.
Besides, the appellant was unarmed; only his two companions (Pepito Montao
and one John Doe) were armed with daggers. If he (appellant) had really conspired with
his co-accused to kill the deceased, he could have provided himself with a weapon. But
he did not. Again, this fact belies the prosecution's theory that the appellant had entered
into a conspiracy with his co-accused to kill the deceased.
Moreover, although the appellant and his co-accused acted with some degree of
simultaneity in attacking the deceased, nevertheless, the same is insufficient to prove
conspiracy. The rule is well-settled that "simultaneousness does not of itself demonstrate
the concurrence of will nor the unity of action and purpose which are the basis of the
responsibility of two or more individuals." To establish common responsibility it is not
sufficient that the attack be joint and simultaneous; it is necessary that the assailants be
animated by one and the same purpose. In the case at bar, the appellant Raymundo
Vistido and the accused Pepito Montao, did not act pursuant to the same objective. Thus,
the purpose of the latter was to kill as shown by the fact that he inflicted a mortal wound
below the abdomen of the deceased which caused his death. On the other hand, the act
of the appellant in giving the deceased one fist blow after the latter was stabbed by the
accused Pepito Montao an act which is certainly unnecessary and not indispensable for
the consummation of the criminal assault does not indicate a purpose to kill the deceased,
but merely to "show off" or express his sympathy or feeling of camaraderie with the
accused Pepito Montao. Thus, in People vs. Portugueza, this Court held that:
Although the appellants are relatives and had acted with some
degree of simultaneity in attacking their victim, nevertheless, this fact
alone does not prove conspiracy. (People vs. Caayao, 48 Off. Gaz. 637).
On the contrary, from the nature and gravity of the wounds inflicted on
the deceased, it can be said that the appellant and the other defendant
did not act pursuant to the same objective. Florentino Gapole's purpose
was to kill the deceased, as shown by the fact that he inflicted a mortal
wound which almost severed the left arm. The injury inflicted by the
appellant, merely scratching the subcutaneous tissues, does not indicate
a purpose to kill the victim. It is not enough that appellant had
participated in the assault made by his co-defendant in order to consider
him a co-principal in the crime charged. He must have also made the
criminal resolution of his co-accused his own. x x x.
and, in People vs. Vicente, this Court likewise held:
In regard to appellant Ernesto Escorpizo, there seems to be no

dispute that he stabbed Soriano several times with a small knife only after
the latter had fallen to the ground seriously wounded, if not already dead.
There is no showing that this accused had knowledge of the criminal
intent of Jose Vicente against the deceased. In all likelihood, Escorpizo's
act in stabbing the fallen Soriano with a small knife was not in furtherance
of Vicente's aim, which is to kill, but merely to 'show off' or express his
sympathy or feeling of camaraderie with Vicente. x x x.
By and large, the evidence for the prosecution failed to show the existence of
conspiracy which, according to the settled rule, must be shown to exist as clearly and
convincingly as the crime itself. In the absence of conspiracy, the liability of the defendants
is separate and individual, each is liable for his own acts, the damage caused thereby,
and the consequences thereof. While the evidence shows that the appellant boxed the
deceased, it is, however, silent as to the extent of the injuries, in which case, the appellant
should be held liable only for slight physical injuries.[26]
We reach the same conclusion here. For failure of the prosecution to prove conspiracy beyond reasonable
doubt, petitioners liability is separate and individual. Considering that it was duly established that petitioner
boxed Jimmy and Andrew and absent proof of the extent of the injuries sustained by the latter from these
acts, petitioner should only be made liable for two counts of slight physical injuries. In addition, he should
pay P5,000.00 as moral damages to the heirs of Jimmy and another P5,000.00 as moral damages to
Andrew.[27] Actual damages arising from said acts cannot, however, be awarded for failure to prove the
same.
Anent the penalty imposed on Taban and Tubo, in Criminal Case No. 92-080, the CA correctly
modified the same. The crime committed was attempted homicide and not frustrated homicide because
the stab wounds that Andrew sustained were not life-threatening.[28] Although Taban and Tubo did not
appeal their conviction, this part of the appellate courts judgment is favorable to them, thus, they are
entitled to a reduction of their prison terms.[29] The rule is that an appeal taken by one or more of several
accused shall not affect those who did not appeal except insofar as the judgment of the appellate court is
favorable and applicable to the latter.[30]
Anent the award of damages for which Taban and Tubo should be made solidarily liable, in
Criminal Case No. 92-079, the trial court properly awarded civil indemnity in the amount of P50,000.00 to
the heirs of Jimmy. Civil indemnity is automatically granted to the heirs of the deceased victim without
need of further evidence other than the fact of the commission of the crime.[31] In addition, the trial court
should have awarded moral damages in the sum of P50,000.00 in consonance with current
jurisprudence.[32] As to actual damages, the prosecution was able to prove burial-related expenses with
supporting receipt[33] only to the extent of P5,000.00. In People v. Villanueva,[34] we held that when actual
damages proven by receipts during the trial amount to less than P25,000.00, the award of temperate
damages for P25,000.00 is justified in lieu of actual damages for a lesser amount. We explained that it
was anomalous and unfair that
the heirs of the victim who tried but succeeded in proving actual damages amounting to less
than P25,000.00 would be in a worse situation than those who might have presented no receipts at all
but would be entitled to P25,000.00 temperate damages.[35] Accordingly, an award of P25,000.00 as
temperate damages in lieu of actual damages is proper under the premises. As to loss of earning capacity,
the same cannot be awarded due to lack of proof other than the self-serving testimony of Jimmys
mother. In Criminal Case No. 92-080, the CA correctly ruled that Andrew is not entitled to an award of
actual damages for failure to substantiate the same. However, he is entitled to moral damages in the
amount of P30,000.00 for the pain, trauma and suffering arising from the stabbing incident.[36] It may be
noted that the afore-discussed higher indemnities are not favorable to Taban and Tubo who did not
appeal, but in line with our ruling in People v. Pacaa,[37] they shall be held solidarily liable therefor since
these amounts are not in the form of a penalty.[38]
Finally, the records indicate that the three accused were placed under preventive imprisonment
prior to and during the trial of this case. This can be surmised from the motion to grant bail filed by
petitioner which was subsequently granted[39] by the trial court. It is not clear, however, for how long and
under what conditions they were put in preventive imprisonment. The trial court should, thus, determine
the length and conditions of the preventive imprisonment so this may be credited, if proper, in favor of
the accused as provided in Article 29[40] of the Revised Penal Code.
WHEREFORE, the petition is PARTIALLY GRANTED. The July 22, 2005 Decision of the Court
of Appeals in CA-G.R. CR No. 23351 is AFFIRMED with the following MODIFICATIONS:
1) In Criminal Case No. 92-079, Rosie Quidet is found guilty beyond reasonable doubt of slight physical
injuries and is meted the sentence of fifteen (15) days of arresto menor. He is ordered to pay the
heirs of Jimmy Tagarda P5,0000.00 as moral damages. Feliciano Taban, Jr. and Aurelio Tubo are
ordered to solidarily pay the heirs of Jimmy Tagarda P50,0000 as civil indemnity, P50,000.00 as moral
damages and P25,000.00 as temperate damages.
2) In Criminal Case No. 92-080, Feliciano Taban, Jr. and Aurelio Tubo are found guilty beyond reasonable
doubt of attempted homicide and are meted the sentence of four (4) months of arresto mayor in its
medium period as minimum to four (4) years of prision correccional in its medium period as
maximum. They are ordered to solidarily pay Andrew Tagarda P30,000.00 as moral damages. Rosie
Quidet is found guilty beyond reasonable doubt of slight physical injuries and is meted the sentence
of fifteen (15) days of arresto menor. He is ordered to pay Andrew Tagrda P5,000.00 as moral
damages
3) The period of preventive imprisonment of Feliciano Taban, Jr., Aurelio Tubo and Rosie Quidet shall be
credited in their favor in accordance with Article 29 of the Revised Penal Code.
4) The bail bond of Rosie Quidet is cancelled.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION JOSE PORTUGAL PEREZ

JOSE CATRAL MENDOZA

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
In lieu of Justice Roberta A. Abad, per Special Order No 832 dated March 30, 2010.
[1]
Rollo, pp. 7-17; penned by Associate Justice Normandie B. Pizarro and concurred in by
Associate Justices Arturo G. Tayag and Rodrigo F. Lim, Jr.
[2]
Id. at 47-52; penned by Judge Alejandro M. Velez.
[3]
Records, p. 1.
[4]
Id. at 7.
[5]
Id. at 153-154.
[6]
Id at 154.
[7]
Also referred to as Balane in other parts of the records.
[8]
Taban was no longer included in the sentencing for homicide because, as stated earlier, he
was already sentenced by the trial court after he entered a plea of guilty in Criminal Case No.
92-079.
[9]
Should be payable only to Andrew Tagarda, not to his heirs.
[10]
Rollo, pp. 51-52.
[11]
Id. at 17.
[12]
Id. at 27.
[13]
169 Phil. 599 (1977).
[14]
REVISED PENAL CODE, Article 8.
[15]
People v. Pudpud, 148-A Phil. 550, 558 (1971).
[16]
People v. Cadevida, G.R. No. 94528, March 1, 1993, 219 SCRA 218, 228.
[17]
People v. Vistido, supra note 12 at 606.
[18]
Id.
[19]
Rollo, pp. 13-14.
[20]
TSN, February 26, 1993, pp. 80-83.
[21]
TSN, October 22, 1992, p. 45.
[22]
Records, p. 373.
[23]
TSN, October 30, 1992, pp. 43-45.
[24]
[25]
Supra note 12.
[26]
Id. at 604-607.
[27]
People v. Loreto, 446 Phil. 592, 614 (2003).
[28]
TSN, November 24, 1992, p. 42; TSN, February 24, 1993, p. 51.
[29]
People v. Pacaa, 398 Phil. 869, 884 (2000).
[30]
RULES OF COURT, RULE 122, SECTION 11(A).
[31]
Arcona v. Court of Appeals, 442 Phil. 7, 15 (2002).
[32]
Id. at 15-16.
[33]
Exhibit G, records, p. 291.
[34]
456 Phil. 14 (2003).
[35]
Id. at 29-30.
[36]
See People v. Bermudez, 368 Phil. 426, 443 (1999).
[37]
Supra note 28.
[38]
Id. at 885.
[39]
Records, p. 25.
[40]
ARTICLE 29. Period of Preventive Imprisonment Deducted from Term of Imprisonment.
Offenders or accused who have undergone preventive imprisonment shall be credited in the
service of their sentence consisting of deprivation of liberty, with the full time during which
they have undergone preventive imprisonment, if the detention prisoner agrees voluntarily in
writing to abide by the same disciplinary rules imposed upon convicted prisoners, except in
the following cases:
1. When they are recidivists, or have been convicted previously twice or more times of
any crime;
2. When upon being summoned for the execution of their sentence they have failed to
surrender voluntarily;
If the detention prisoner does not agree to abide by the same disciplinary rules imposed upon
convicted prisoners, he shall be credited in the service of his sentence with four-fifths of the
time during which he has undergone preventive imprisonment.
Whenever an accused has undergone preventive imprisonment for a period equal to or more than
the possible maximum imprisonment of the offense charged to which he may be sentenced
and his case is not yet terminated, he shall be released immediately without prejudice to the
continuation of the trial thereof or the proceeding on appeal, if the same is under review. In
case the maximum penalty to which the accused may be sentenced is destierro, he shall be
released after thirty (30) days of preventive imprisonment.
Supreme Court
Manila
SECOND DIVISION
VOLTAIRE I. ROVIRA, G.R. No. 160825

Petitioner,
Present:

BRION,
DEL CASTILLO,
HEIRS OF JOSE C. DELESTE, ABAD, and
namely Josefa L. Deleste, Jose PEREZ, JJ.
Ray L. Deleste, Raul Hector L.
Deleste and Ruben Alex L. Deleste, Promulgated:
Respondents. March 26, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A trial courts ruling on the matter of attorneys fees initiated through a motion, in a suit for recovery of
ownership and possession of land, may be appealed by a mere notice of appeal. Since the suit is not one
where multiple appeals are taken, a record on appeal is not necessary.
This Petition for Review on Certiorari assails the June 30, 2003 Decision[1] of the Court of Appeals (CA) in
CA-G.R. SP No. 69383 which set aside and vacated the Orders of the Regional Trial Court (RTC)
of Iligan City, Branch 01 dated October 17, 2001[2] and January 17, 2002.[3] Also assailed is the October
20, 2003 Resolution[4] denying the motion for reconsideration.The CA found that the RTC gravely abused
its discretion amounting to lack or excess of jurisdiction when it recalled its Order granting the notice of
appeal despite having been already divested of its jurisdiction.
Factual Antecedents
In 1963, a suit for recovery of ownership and possession of 34 hectares of land was instituted before the
Court of First Instance of Lanao del Norte. Originally entitled Edilberto Noel as Administrator of the
Intestate Estate of Gregorio Nanaman and Hilaria Tabuclin versus Dr. Jose C. Deleste, this was docketed
as Civil Case No. 698. This case was decided with finality in 1995 by the Supreme Court which declared
the parties as co-owners of the land and ordered defendant Dr. Jose C. Deleste (Dr. Deleste) to return
half of it to the plaintiffs.
On May 24, 2000, herein petitioner Atty. Voltaire Rovira (Atty. Rovira) filed as an incident to the said Civil
Case No. 698 a motion to resolve his claim for attorney's fees for services rendered to Dr. Deleste. The
respondents filed their opposition to the said motion.
On April 16, 2001, the RTC of Iligan City, Branch 01, issued an Order granting the motion of
Atty. Rovira and awarded him attorney's fees of 25% of the 17-hectare portion adjudicated to Dr. Deleste.
On July 5, 2001, the respondents filed a Notice of Appeal. On August 16, 2001, Atty. Rovira filed a Motion
for Writ of Execution and to Dismiss Appeal to which the respondents filed their opposition. In the Order
of September 4, 2001, the RTC granted the Notice of Appeal of the respondents and further instructed:
"Let the order of this Court granting attorney's fees to Atty. Rovira, dated April 16, 2001 together with his
testimony be transmitted to the CA." However, Atty. Rovira filed a motion for reconsideration alleging
among others that the respondents' notice of appeal failed to comply with the requirements of Rule 13 of
the Rules of Court.
On October 17, 2001, the RTC issued an Order, the dispositive portion of which reads:
In view of this new development, this Court hereby sets aside its order of September 4,
2001 and hereby dismisses the appeal filed by the defendants. Let therefore a writ of
execution [be issued] to implement the order of this Court entered on April 16, 2001.
As the Clerk of Court prematurely and before the lapse of the fifteen day period within
which movant may file a motion for reconsideration transmitted to the Court of Appeals
the order of April 16, 2001 together with the testimony of Atty. Voltaire Rovira, he is
hereby directed to request the Clerk of Court of the Court of Appeals to return the same
to this Court.
SO ORDERED.[5]
Respondents filed a motion for reconsideration of the aforesaid Order but this was denied in the January
17, 2002 Order. Hence, the respondents filed a petition for certiorari with the CA.
The CA found the trial court to have committed grave abuse of discretion. It found that the trial
court was already divested of jurisdiction when it recalled its Order granting the notice of appeal because
respondents appeal had already been perfected and there was the ensuing elevation of its records. As
previously mentioned, the CA set aside and vacated the two Orders of the RTC and disposed as follows:
WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED. The assailed orders
dated October 17, 2001 and January 17, 2002 are SET ASIDE and VACATED. Accordingly
the preliminary injunction earlier issued is hereby made PERMANENT, and the respondent
Judge is ordered to give due course to the appeal of the petitioners.
SO ORDERED.[6]
Petitioner filed a motion for reconsideration which the CA denied in its October 20, 2003 Resolution.[7]
Issues
Petitioner raises the following issues:
I
WHETHER RESPONDENTS PERFECTED THEIR APPEAL [THEREBY DIVESTING] THE
TRIAL COURT OF JURISDICTION OVER PETITIONER'S CLAIM FOR ATTORNEY'S FEES
II
WHETHER THE COURT OF APPEALS HAD JURISDICTION OVER CA- G.R. SP. NO. 59393,
RESPONDENTS' PETITION FOR CERTIORARI WITH THE COURT OF APPEALS which
(a) Did not mention in the statement of material dates when respondents filed their
motion for reconsideration to the assailed RTC order of October 16, 2001;
(b) Contained deliberate suppressions and omissions of material portions of the record
and other documents relevant or pertinent thereto as are referred to in the petition, as
required in Section 3, Rule 46 of the Rules of Court in relation with Rule 65;
(c) Did not contain the full names of the petitioners as required in Section 3, Rule 46 in
relation with Section 1, Rule 3 of the Rules of Court. [Furthermore,] "Heirs of Jose
C. Deleste" is not a natural or juridical person or one authorized by law to institute an
action in Court.[8]
Petitioner's Arguments
Petitioner contends that respondents' appeal was not perfected for their
failure to file a record on appeal to elevate the incident to the CA during the execution process in Civil
Case No. 698 and for failure of their notice of appeal to comply with the mandatory provisions of Rule 13
of the Rules of Court. He also contends that a petition for certiorari being a remedy in equity must strictly
comply with Section 1, Rule 65 in relation with Section 3, Rule 46 of the Rules of Court otherwise the
appellate court does not acquire jurisdiction over the petition.
Respondents, on the other hand, contend that the intent of the rules for the preferred mode of service
had been met considering that their notice of appeal, although served by registered mail, was immediately
received by the petitioner. They argue that lapses in compliance with technical rules can be disregarded
so as not to override substantial justice. Respondents also contend that the case subject of the petition is
not one falling under the category of "special proceedings or other cases of multiple or separate appeals
where the law or the rules require the filing of a record on appeal." They also submit that they substantially
complied with the rules and that the CA correctly ruled in not dismissing the petition and in ordering the
RTC to give due course to the appeal considering respondents' strong and substantial points in their
opposition to petitioner's motion to resolve attorneys fees.
Our Ruling
The petition has no merit.
Perfection of Appeal
Rule 41 of the Rules of Court provides:
Sec.2. Modes of appeal.

(a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the Regional
Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of
appeal with the court which rendered the judgment or final order appealed from and
serving a copy thereof upon the adverse party. No record on appeal shall be required
except in special proceedings and other cases of multiple or separate appeals where the
law or these Rules so require. In such cases, the record on appeal shall be filed and served
in like manner.
Multiple appeals are allowed in special proceedings, in actions for partition of property with accounting, in
the special civil actions of eminent domain and foreclosure of mortgage.[9] The rationale behind allowing
more than one appeal in the same case is to enable the rest of the case to proceed in the event that a
separate and distinct issue is resolved by the court and held to be final.[10] In such a case, the filing of a
record on appeal becomes indispensable since only a particular incident of the case is brought to the
appellate court for resolution with the rest of the proceedings remaining within the jurisdiction of the trial
court.[11]
The main action involved herein, being a suit for recovery of ownership and possession, is not one
where multiple appeals can be taken or are necessary. The choice[12] of asserting a claim for attorney's
fees in the very action in which the services in question have been rendered, as done by the petitioner
herein, will not convert a regular case into one falling under the category of other cases of multiple or
separate appeals where the law or these Rules so require." The main case handled by petitioner lawyer
has already been decided with finality up to the appeal stage and is already in the execution stage. The
trial court has also already resolved the incident of attorney's fees. Hence, there is no reason why the
original records of the case must remain with the trial court. There was also no need for respondents to
file a record on appeal because the original records could already be sent to the appellate court[13] for the
resolution of the appeal on the matter of the attorney's fees.
To repeat, since the case has not been made out for multiple appeals, a record on appeal is unnecessary
to perfect the appeal. The only requirement to perfect the appeal in the present case is the filing of a
notice of appeal[14] in due time. This the respondents did. Concededly, the respondents did not strictly
follow Rule 13, Sec. 11[15] on priorities on modes of service. However, since rules of procedure are mere
tools designed to facilitate the attainment of justice, their strict and rigid application which would result in
technicalities that tend to frustrate rather than promote substantial justice must be avoided.[16] The
relaxation of the rules on service is all the more proper in the present case, where petitioner had already
received his copy of the notice of appeal by registered mail, since the Court has previously ruled that a
litigant's failure to furnish his opponent with a copy of his notice of appeal is not a sufficient cause for
dismissing it and that he could simply have been ordered to furnish appellee with a copy of his appeal.[17]
The appeal of respondents having been perfected by the filing of the notice of appeal in due time and the
time to appeal of petitioner having expired,[18] the CA correctly found that the trial court had already lost
jurisdiction over the case at the time it rendered its October 17, 2001 Order.
Also, the April 16, 2001 Order of the RTC granting attorney's fees to Atty. Rovira together with his
testimony are in fact pertinent records of the case, though very incomplete. Since these records were
transmitted to the CA, the statement of the CA holding that the records of Civil Case No. 698 were elevated
to it by virtue of the September 4, 2001 Order of the RTC is not without basis, contrary to the contention
of petitioner.
Jurisdiction of the CA over the Petition for Certiorari
The discretion on initially determining the sufficiency of a petition for certiorari lies with the court before
which the petition was filed. In this matter, the CA determined the petition filed before it to be
sufficient. We sustain the CAs determination for the reasons specified below.
First, the failure to comply with the rule on a statement of material dates in the petition may be excused
since the dates are evident from the records.[19] In the case at bar, the petition for certiorari filed before
the CA contained a statement of material dates. Although the date of filing of the motion for
reconsideration was not stated, it is nevertheless evident from the records that the said motion for
reconsideration was filed on time on December 10, 2001.[20]
Second, the Rules do not specify the precise documents, pleadings or parts of the records that should be
appended to the petition other than the judgment, final order, or resolution being assailed. The Rules only
state that such documents, pleadings or records should be relevant or pertinent to the assailed resolution,
judgment or orders; as such, the initial determination of which pleading, document or parts of the records
are relevant to the assailed order, resolution or judgment, falls upon the petitioner. The CA will ultimately
determine if the supporting documents are sufficient to even make out a prima facie case.[21] The CA,
having given due course to the petition, must have found the documents sufficient. We find no sufficient
reason to reverse the Decision of the CA.
Third, the caption of the petition filed with the CA may not have specified the individual names of the heirs
of Dr. Deleste but the verification contained all the names and signatures of the four heirs. The petition
sufficiently contains the full names of the petitioners therein, thus substantially complying with the
requirement of the Rules of Court.
Technicalities that impede the cause of justice must be avoided. In Heirs

of Generoso A. Juaban v. Bancale, [22]
which also finds application to the present case, the Court
elaborated:
The court has the discretion to dismiss or not to dismiss an appellant's appeal. It
is a power conferred on the court, not a duty. The discretion must be a sound one, to be
exercised in accordance with the tenets of justice and fair play, having in mind the
circumstances obtaining in each case. Technicalities, however, must be avoided. The law
abhors technicalities that impede the cause of justice. The court's primary duty is to render
or dispense justice.
Litigations must be decided on their merits and not on technicality. Every party
litigant must be afforded the amplest opportunity for the proper and just determination
of his cause, free from the unacceptable plea of technicalities. Thus, dismissal of appeals
purely on technical grounds is frowned upon where the policy of the court is to encourage
hearings of appeals on their merits and the rules of procedure ought not to be applied in
a very rigid, technical sense; rules of procedure are used only to help secure, not override
substantial justice. It is a far better and more prudent course of action for the court to
excuse a technical lapse and afford the parties a review of the case on appeal to attain
the ends of justice rather than dispose of the case on technicality and cause a grave
injustice to the parties, giving a false impression of speedy disposal of cases while actually
resulting in more delay, if not a miscarriage of justice.
WHEREFORE, the petition is DENIED. The June 30, 2003 Decision of the Court of Appeals in CA-G.R.
SP No. 69383 and its October 20, 2003 Resolution are AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
ANTONIO T. CARIO
Acting Chief Justice
[1]
Rollo, pp. 21-27; penned by Associate Justice Roberto A. Barrios and concurred in by Associate
Justices Elvi John S. Asuncion and Edgardo F. Sundiam.
[2]
Id. at 60-61; penned by Judge Mamindiara P. Mangotara.
[3]
CA rollo, p. 23.
[4]
Rollo, pp. 45-46.
[5]
Id. at 61.
[6]
Id. at 26-27.
[7]
Id. at 46.
[8]
Id. at 218.
[9]
Roman Catholic Archbishop of Manila v. Court of Appeals, 327 Phil. 810, 819 (1996).
[10]
Id.
[11]
Marinduque Mining and Industrial Corporation v. Court of Appeals, G.R. No. 161219, October
6, 2008, 567 SCRA 483, 493.
[12]
A claim for attorney's fees may be asserted either in the very action in which the services in
question have been rendered, or in a separate action. Quirante v. Intermediate Appellate
Court, 251 Phil. 704, 708 (1989).
[13]
Marinduque Mining and Industrial Corporation v. Court of Appeals, supra note 11 at 494.
[14]
See Cortes v. Court of Appeals, 443 Phil. 42 (2003).
[15]
Sec. 11. Priorities in modes of service and filing. Whenever practicable, the service and filing
of pleadings and other papers shall be done personally. Except with respect to papers
emanating from the court, a resort to other modes must be accompanied by a written
explanation why the service or filing was not done personally. A violation of this Rule may be
cause to consider the paper as not filed.
[16]
Ace Navigation Co., Inc. v. Court of Appeals, 392 Phil. 606, 613 (2000).
[17]
Precision Electronics Corporation v. National Labor Relations Commission, G.R. No. 86657,
October 23, 1989, 178 SCRA 667, 670.
[18]
Sec. 9. Perfection of appeal; effect thereof. A party's appeal by notice of appeal is deemed
perfected as to him upon the filing of the notice of appeal in due time.
A party's appeal by record on appeal is deemed perfected with respect to the subject matter
thereof upon the approval of the record on appeal filed in due time.
In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection
of the appeals filed in due time and the expiration of the time to appeal of the other
parties.
In appeals by record on appeal, the court loses jurisdiction only over the subject
matter thereof upon the approval of the records on appeal filed in due time and the
expiration of the time to appeal of the other parties.
In either case, prior to the transmittal of the original record or the record on appeal, the court
may issue orders for the protection and preservation of the rights of the parties which do
not involve any matter litigated by the appeal, approve compromises, permit appeals of
indigent litigants, order execution pending appeal in accordance with section 2 of Rule 39,
and allow withdrawal of the appeal. (Underscoring supplied)
[19]
Great Southern Maritime Services Corp. v. Acua, 492 Phil. 518, 527 (2005).
[20]
CA rollo, p. 16.
[21]
Quintano v. National Labor Relations Commission, 487 Phil. 412, 424-425 (2004).
[22]
G.R. No. 156011, July 3, 2008, 557 SCRA 1, 14, citing Great Southern Maritime Services Corp.
v. Acua, supra note 19.

Supreme Court
Manila
SECOND DIVISION
DANILO D. ANSALDO, G.R. No. 159381

Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.

Respondent. March 26, 2010
x----------------------------------------------------------------------
----x
DECISION
DEL CASTILLO, J.:

For a complex crime of estafa through falsification of a public document to prosper, all the elements of
both the crimes of estafa and falsification of a public document must exist. In this case, not all the
elements of the crime of falsification of a public document are present. Consequently, petitioner can only
be found guilty of estafa.
This petition for review on certiorari assails the Decision[1] of the Court of Appeals (CA) dated March 20,
2003 in CA-G.R. CR. No. 25122 which affirmed with modification the Decision[2]of the Regional Trial Court
(RTC) of Malolos, Bulacan, Branch 21 in Criminal Case No. 97-156477, finding
petitioner Danilo D. Ansaldo guilty beyond reasonable doubt of the complex crime of estafa through
falsification of public/official document. Likewise assailed is the Resolution dated July 24, 2003 which
denied the Motion for Reconsideration.
Factual Antecedents
The Information against the petitioner and his wife, Rosalinda Ansaldo, contained the following accusatory
allegations:
That [on] or about February 15, 1995 or sometime prior and subsequent thereto, in the
City of Manila, Philippines, the said accused, conspiring and confederating together, and
mutually helping each other, being private individuals, did then and there willfully,
unlawfully and feloniously commit estafa thru falsification of public/official document, in
the following manner, to wit: the said accused, with intent to defraud and cause damage,
forged and falsified a Deed of Real Estate Mortgage which was subsequently notarized by
Notary Public Juan N. Domingo and entered in his Notarial Register as Doc. No. 47; Page
No. 59; Book No. VI; Series of 1995 and therefore a public and/or official document, by
then and there misrepresenting that they are the real spouses Nina Z. Ramirez and
Mariano Ramirez, the registered and absolute owners of a piece of land described as TCT
No. 188686 situated in Barrio Bagbagan, Municipality of Muntinlupa, Province of Rizal
valued at P500,000.00 by signing, feigning or simulating or causing to be signed, feigned
and simulated the signatures of spouses Nia Z. Ramirez and Mariano Z. Ramirez, thereby
making it appear as it did appear that spouses Nia Z. Ramirez & Mariano Ramirez
participated and intervened in the preparation and execution of the aforesaid Deed of
Real Estate Mortgage, said accused well knowing that such was not the case, in that said
spouses did not participate and execute the same, much less signed the said document,
nor did they authorized [sic] herein accused or anybody else for that matter to sign and
affix their signatures in said document, which is an outright forgery and falsification; that
after the said Deed of Real Estate Mortgage was forged and falsified in the manner above
set-forth, accused presented the same to one Nora L. Herrera, who, believing in the
authenticity and genuineness of the same as represented to her by the said accused, gave
and delivered the mortgage consideration in the amount of P300,000.00 to the said
accused, who, once in their possession thereof, with abuse of trust and confidence and
with intent to defraud, willfully, unlawfully and feloniously misappropriated, misapplied
and converted the same to their own personal use and benefit, to the damage and
prejudice of Nia Z. Ramirez in the amount of P500,000.00, the value of the property in
question.[3]
On arraignment, petitioner entered a plea of not guilty. However, his wife and co-accused, remains at
large. Thereafter, trial ensued.
Nia Z. Ramirez (Ramirez) wanted to subdivide her lot in Muntinlupa City. In 1993, her niece,
Edna Tadeo introduced the petitioner and his wife while they were inside her store in 509 Plaza Sta.
Cruz, Manila, as the people who could help with her problem. Petitioner and his wife represented
themselves as having direct connections with the Land Registration Authority (LRA) and assured Ramirez
that they could have her property subdivided. Ramirez thus entrusted to them her owners duplicate copy
of Transfer Certificate of Title (TCT) No. 188686, which covered the said lot, on condition that it would be
returned after a month. This prerequisite is evidenced by an Acknowledgment Receipt dated January 5,
1995.[4]
The one-month period agreed upon elapsed with the petitioner and his wife failing to inform Ramirez of
the status of the anticipated subdivision. Ramirez repeatedly demanded them to return her owners
duplicate title of the land to no avail. Ramirez was later surprised to find out that the land covered by her
TCT was the subject of a document in which it appeared that she mortgaged the same to a certain Nora
Herrera. The deed was even annotated at the back of the TCT. However, Ramirez claimed that her
signature in the document was a forgery. At the time of the mortgage, there were no other persons other
than the petitioner and his wife to whom she entrusted her TCT.
The Version of the Petitioner
Petitioner denied that he was introduced to Ramirez in 1993. He claimed that in the early morning
of January 5, 1995, he was in his house when he saw Ramirez talking to his wife. He had no knowledge
of the topic of their conversation. He later signed a piece of paper without reading the contents thereof
since Ramirez assured him that it was merely for formality. The paper turned out to be the
Acknowledgment Receipt.
Petitioner denied participation in the preparation, execution and registration of the deed of real
estate mortgage. He also denied residing at the address where Ramirez sent a demand letter for the
return of her TCT. However, he admitted that his wife was engaged in the registration and follow-up of
documents covering real property.
According to the petitioner, he went to Japan with his wife on June 7, 1998. He came home but
his wife stayed behind. Upon his arrival, he was apprehended.
On December 6, 2000, the trial court rendered a Decision convicting the petitioner of falsification. The
dispositive portion reads:
WHEREFORE, in view of the above observations and findings, accused Danilo Ansaldo is
hereby convicted of the crime charged in the information, defined and punished under
Article 172 paragraph 1 without any mitigating nor aggravating circumstances attendant
in its commission, granting the accused the benefit of the Indeterminate Sentence Law,
he is hereby sentenced to suffer an indeterminate prisionterm from six (6) months
of arresto mayor maximum as minimum to four (4) years, two (2) months
of prision correccional medium as maximum and to pay a fine of P5,000.00 and to
indemnify the complainant the sum of P300,000.00 representing the amount received by
the Ansaldos in mortgaging the property.
Accused Danilo Ansaldo shall be credited with the full extent of his preventive
imprisonment under Article 29 of the Revised Penal Code. The bond posted for his
provisional liberty is hereby cancelled.
Danilo Ansaldos body is hereby committed to the custody of the Director of the Bureau of
Corrections, National Penitentiary, Muntinlupa City through the City Jail Warden of Manila.
The charge against Rosalinda Ansaldo is hereby archived to be brought back to the active
calendar of the court upon her apprehension. Let warrant of arrest be issued for that
purpose.
The complainant is hereby ordered to pay the docket fee corresponding to the civil
damages awarded.
SO ORDERED.[5]
In finding petitioner guilty of falsification, the trial court noted that no other person was in possession of
the TCT prior to the falsification other than petitioner and his wife. Based thereon, the court a
quo concluded that petitioner and his wife were the ones who mortgaged the property by pretending to
be the spouses Ramirez.
Petitioner appealed his conviction to the CA which affirmed with modification the Decision of the RTC. The
appellate court found petitioner guilty of the complex crime of estafa thru falsification of a public
document. The dispositive portion reads as follows:
WHEREFORE, the Decision of the court a quo finding accused-appellant guilty of the crime
of Estafa through Falsification of a Public Document and ordering him to pay the fine in
the amount of P5,000.00are hereby AFFIRMED with MODIFICATION as to the penalty
imposed upon him. Accordingly, there being no mitigating or aggravating circumstance
to consider, accused-appellant is hereby sentenced to suffer an indeterminate penalty of
four (4) years, two (2) months and one (1) day of Prision Correccional maximum as
Minimum, to ten (10) years of Prision Mayor medium as Maximum. He is further ordered
to cause the release/discharge of the mortgage constituted on the property in the amount
of P300,000.00 and return to private complainant Transfer Certificate of Title No. 188686
free from liens and encumbrances. No costs.
SO ORDERED.[6]
Petitioner filed a Motion for Reconsideration but it was denied by the CA in its Resolution[7] dated July 24,
2003.
Issues
Hence, this petition for review raising the following issues:
1.) Whether x x x the trial courts ruling, as affirmed by [the] court a

quo erroneously applied the legal presumption that the possessor or user of a forged
document is the author of the forgery in arriving at its findings that the petitioner (and his
wife) committed the complex crime of Estafa by the act of falsifying the subject Deed of
Real Estate Mortgage.
2.) Whether x x x the court a quo, seriously erred in affirming [the] trial courts
ruling which accorded probative value to a mere certified true copy of a document
entitled Deed of Real Estate Mortgagein support of the latters factual conclusion that the
signatures respectively written above the printed names of Nia Z. Ramirez and that of her
husband (which appear therein as the parties-mortgagors) were forged.
3.) Whether x x x the court a quo committed serious error in its assailed Decision
in affirming the factual findings and rulings of the trial court, and in further modifying the
latters decision by increasingthe original sentence from an imprisonment of six (6) months
of arresto mayor maximum as minimum to four (4) years two (2) months
of prision correctional medium as maximum to a longer prison term of [four] (4) years,
two (2) months and one (1) day of Prision Correctional maximum as Minimum, to ten
(10) years of Prision Mayor medium as Maximum (and also in further ordering the
petitioner to cause the release/discharge of the mortgage constituted on the property in
the amount of P300,000.00 and to return to private complainant Transfer Certificate of
Title No. 188686 free from liens and encumbrances) declaring the conviction of the
petitioner for complex crime of Estafa through Falsification of a Public Document despite
the fact that the appealed decision of the trial court clearly shows that the petitioner was
found guilty of committing only the simple crime of Falsification of a Public
Document penalized under paragraph 1 of Article 172 of the Revised Penal Code.
4.) Whether x x x the court a quo has departed from the accepted and usual
course of judicial proceedings, or so far sanctioned such departure by the trial court, as
to call for an exercise of the power of supervision, when it -- failed to carefully evaluate
and weigh the evidence presented by prosecution which clearly does not support the
judgment of conviction against the petitioner; -- overlooked certain facts of substance and
value that, if properly considered, would certainly affect the outcome of the case; -- based
its findings on misapprehension of facts, from erroneous inferences, and surmises or
conjectures; and -- rendered its rulings contrary to law, the rules on evidence, and existing
jurisprudence in violation of the petitioners constitutional rights to due process and to be
presumed innocent.
5.) Whether x x x the court a quo has also departed from the accepted and usual
course of judicial proceedings when it failed to squarely resolve or pass upon each and
every assignment of error and properly consider supporting arguments set forth by the
petitioner herein in his Appellants Brief, as well as the specific grounds and corresponding
arguments set forth in his Motion for Reconsideration.[8]
Our Ruling
The petition is partly granted.
For petitioner to be convicted of the complex crime of estafa through falsification of public
document committed in the manner described in the Information, all the elements of the two crimes
of estafa and falsification of public document must exist.[9]
To secure a conviction for estafa under Article 315, paragraph 2(a) of the Revised Penal Code (RPC), the
following requisites must concur:
(1) The accused made false pretenses or fraudulent representations as to his power,
influence, qualifications, property, credit, agency, business or imaginary transactions;
(2) The false pretenses or fraudulent representations were made prior to or

simultaneous with the commission of the fraud;
(3) The false pretenses or fraudulent representations constitute the very cause
which induced the offended party to part with his money or property;
(4) That as a result thereof, the offended party suffered damage.[10]
It is undisputed that petitioner committed estafa. He and his wife falsely represented to Ramirez that they
had the influence and capability to cause the subdivision of the lot. In view of said false representation,
Ramirez was induced to part with the owners copy of her TCT on the condition that the same would be
returned after a month as evidenced by the Acknowledgment Receipt.
However, petitioner and his wife never complied with their obligations. It is also on record that Ramirez
made a formal demand for the return of the TCT but petitioner and his wife failed to comply. Their failure
to return the said title despite demand is evidence of deceit that resulted in damages to Ramirez. It was
also established that the property covered by TCT No. 188686 was eventually mortgaged
for P300,000.00 to a third person without the knowledge and consent of Ramirez.
The following testimony of Ramirez clearly established that petitioner falsely represented that he has the
capacity to cause the subdivision of the property; that false pretenses induced her (Ramirez) to entrust
her TCT to petitioner; and that as a result thereof, Ramirez suffered damage to the extent of P300,000.00,
thus:
Q Tell us when did you come to meet both Rosalinda and Danilo Ansaldo?
A In 1993.
Q Where did you meet these people?

A They went to my stall.
Q Where is your stall located?

A 509 Plaza Sta. Cruz, Manila.
Q How did it happen that the accused came to meet you?

A She was introduced to me by my niece.
Q What is the name of your niece?

A Edna Tadeo.
Q And why [were] these persons introduced to you by your niece?

A I might need the help of the spouses, I can trust them.
Q Help is a general term would you be more specific?

A According to my niece if I have problems about land I can ask the help of these spouses.
Q What about the spouses did they tell you anything?

A According to them they can help regarding [my problem with my lot].
Q Did you not elaborate to them the kind of problem you [were] having with the lot?
A If they can help me subdivide my lot in Muntinlupa with title no. 188686.
Q In whose name is the title?

A In our name, the two of us.
PROS GLORIOSO:
Witness producing a certified Xerox copy of Transfer Certificate of Title 188686 in the
name of Nia Ramirez which we request that this be marked Exhibit B, the second
page Exhibit B-1.
COURT:
Mark them.
PROS GLORIOSO:
Q Did you believe in their representations?
A Yes, sir, because of their good words.
Q Immediately on that first meeting you believe in them?

A Yes, sir.
Q And so after that what did you do?

A I endorsed to them the title of my land because according to them they can help me.
Q On that first meeting you endorsed to them the title?

A We first talked with each other.
Q In other words you are telling us there [were] so many things that transpired before
you finally surrendered to them the title?
A Yes, sir.
Q How long [after . . .] from that first meeting up to the time that you gave the title to
them?
A About two years.
Q What kind of copy did you give to them?

A The original owners copy.
Q When did you give it to them?

A January 5, 1995.
Q Why do you say that it was on January 5, 1995 that this original copy was given to
them?
A They signed an acknowledgement receipt
(witness producing a document and handing the same to the prosecutor).
PROS GLORIOSO:
Witness producing a receipt which she handed to this representation.
Q There are signatures appearing at the bottom portion like received by a

certain Ansaldo who is this?
A Rosalinda Ansaldo.
Q Why did you say that?

A She signed in my presence.
Q And there is another signature contained on the left portion whose is this?
A Danilo Ansaldo.
Q Why did you say that?
A He signed in [my] presence.
Q They were together when they signed this acknowledgement receipt?

A Yes, sir.[11]
Petitioner did not deny his signature on the Acknowledgement Receipt.[12] On the contrary he claimed that
he merely affixed his signature without reading the contents thereof[13] and that he did not bother to
inquire from his wife the contents of the Acknowledgement Receipt,[14] which we find not worthy of
credence. However, he admitted that his wife was engaged in facilitating the registration of documents
involving real property.[15]
On the other hand, we find that we cannot convict petitioner of the crime of falsification of a public
document penalized under Article 172 of the RPC. The following requisites must concur, to wit:
(1) That the offender is a private individual or a public officer or employee who took
advantage of his official position;
(2) That he committed any of the acts of falsification enumerated in article 171 of
the Revised Penal Code (which in this case involves forging a signature);
(3) That the falsification was committed in a public or official or commercial

document.[16]
There is no doubt that petitioner is a private individual,[17] being a businessman. It is likewise not disputed
that the Deed of Mortgage is a public document, having been notarized by a notary public with the
solemnities required by law. However, we find no evidence on record showing that the petitioner and his
wife falsified the subject Deed of Mortgage. There is simply no evidence showing that petitioner had any
participation in the execution of the mortgage document. There is no proof at all that he was the one who
signed the Deed of Mortgage. The testimony of Ramirez consisted only of the following:
Q How did you come to know that the property was mortgaged?
A A woman came to me named Lina Santos and showed me the document, a mortgage
document.
Q And when was that?

A That same year.
Q Before this Lina Santos came to you were you not bothered when they did not return
to you your title after one month?
A At first I was not bothered because we have an agreement but I [got] worried when
this Lina Santos came to me.
Q What proof can you show us that this lot was mortgaged instead of subdivided as
promised by the accused?
A There is an entry at the back an encumbrance.
PROS GLORIOSO:
We request that this be encircled and marked Exhibit B-2.
COURT:
Mark it.
PROS GLORIOSO:
Q What else aside from this encumbrance?
A Real estate mortgage document.
PROS GLORIOSO:
Witness producing a real estate mortgage consisting of four pages which we request to
be marked Exhibits D, D-1, D-2 and D-3, wherein the mortgagors are the spouses
Nia Ramirez and Mariano Ramirez and the mortgagee is one Nora Herrera.
COURT:
Mark them.
PROS GLORIOSO:
Q I noticed that this Exhibit D-2 signatures appearing atop the typewritten name Nia
Ramirez will you tell us whose signature is that?
A I do not know but this is not my signature.
Q What about the signature appearing atop the typewritten name Mariano Ramirez
whose signature is that?
A I do not know but definitely this is not the signature of my husband.
Q You deny these are your signatures, will you please show to us your actual signature?
A (Witness signing on a piece of paper handed to her by the prosecutor.)[18]
On cross-examination, Ramirez also narrated that:
Q And due to the alleged failure of both accused to deliver to you the subdivision of the
lot that was the time that you made an inquiry and found out that your lot was
already mortgaged, is it not?
A A woman informed me about it.
Q After informing you what you did was to verify your title at the office of the Register of
Deeds, is it not?
A Yes, sir.
Q And you found out that your lot was actually mortgaged?
A Yes, sir.
Q Did you secure a copy, - and [did] you know from that very moment the name in whose
favor your lot was mortgaged?
A Yes, sir.
Q Did you secure a copy of the deed of mortgage of your lot?

A It is there.
Q And you noticed the residence of the person in whose favor your lot was mortgaged?
A Yes, sir.
Q The name of the mortgagee was a certain Nora Herrera?

A Yes, sir.
Q Did you go to the residence of Nora Herrera?

A No, sir.
Q Did it not occur to your mind to do that in order to tell Nora Herrera that [you were]
not the person who mortgaged the land in her favor?
A Nora Herrera was already informed by somebody that I was not the same person who
mortgaged the lot to her.
Q From the date you discovered that the lot was already mortgaged to Nora Herrera did
you see personally Nora Herrera?
A No, sir, no more.[19]
Based on the foregoing, we cannot conclude beyond reasonable doubt that it was petitioner and his wife
who committed the forgery. In the first place, Lina Santos (Santos) was not presented to corroborate the
testimony of Ramirez that she was the one who informed the latter regarding the mortgage or she could
shed light on the circumstances leading to her alleged discovery that the subject property had been
mortgaged. Moreover, as narrated by Ramirez, Santos did not categorically point to herein petitioner as
the author of the forgery. If at all, Santos only claimed that the property of Ramirez had been mortgaged
but did not mention the personalities involved therein. Likewise, the failure to present the so-called
mortgagee, Nora Herrera, casts doubt as to the participation of the petitioner in the execution of the
mortgage instrument. Undoubtedly, Nora Herrera could have testified on the persons she dealt with
relative to the mortgage.
The denial of Ramirez that she affixed her signature on the Deed of mortgage does not prove that it was
petitioner and his wife who signed in her behalf. Neither could it be considered as proof that petitioner,
together with his wife, falsely represented themselves as the spouses Ramirez.
For committing the offense of estafa against Ramirez, the petitioner must be penalized in the
manner provided by law. In this regard, Article 315 of the RPC states that the penalty
of prision correccional in its maximum period to prision mayor in its minimum period shall be
imposed if the amount of the fraud is over P12,000.00 but does not exceed P22,000.00. Should
the amount exceed the latter sum, the penalty provided shall be imposed in its maximum period,
adding one year for each additional P10,000.00. However, the total penalty that may be imposed
should not exceed 20 years. In such cases, the penalty shall be referred to
as prision mayor or reclusion temporal.
Under the Indeterminate Sentence Law (ISL), whenever an offense is punished by the RPC or its
amendments, the accused shall be sentenced by the court to an indeterminate penalty, the
maximum term of which, in view of the attending circumstances, can properly be imposed under
the RPC, while the minimum term of which shall be within the range of the penalty next lower to
that prescribed for the offense.
The amount defrauded in this case is P300,000.00 which is the mortgage amount. Thus, the
maximum imposable penalty shall be 20 years of reclusion temporal. Applying the ISL, the
minimum penalty is prision correccional in its minimum and medium periods with a range of six
(6) months and one (1) day to four (4) years and two (2) months.
WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals
is MODIFIED. Petitioner Danilo D. Ansaldo is hereby found guilty of the crime of estafa and is
sentenced to suffer an indeterminate penalty of four (4) years and two (2) months
of prision correccional as minimum to twenty (20) years of reclusion temporal as maximum.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of the opinion of the Courts
Division.
ANTONIO T. CARPIO
[1]
Rollo, pp. 51-65; penned by Associate Justice Josefina Guevara Salonga and concurred in by
Associate Justices Marina L. Buzon and Danilo B. Pine.
[2]
Id. at 73-79; penned by Acting Presiding Judge Romulo A. Lopez.
[3]
Records, pp. 1-2.
[4]
Id. at 54-55.
[5]
Id. at 125-126.
[6]
CA rollo, p. 128.
[7]
Rollo, p. 67.
[8]
Id. at 24-25.
[9]
Gonzaludo v. People, G.R. No. 150910, February 6, 2006, 481 SCRA 569, 577.
[10]
Id.
[11]
TSN, May 19, 1998, pp. 6-10.
[12]
See TSN, March 17, 2000, p. 14.
[13]
Id.
[14]
Id. at 10.
[15]
Id. at 9.
[16]
Luis B. Reyes, THE REVISED PENAL CODE, BOOK II, 17th Edition (2008), p. 232.
[17]
TSN, March 17, 2000, p. 2.
[18]
TSN, May 19, 1998, pp.11-13.
[19]
Id. at 19-21.
Supreme Court
Manila
SECOND DIVISION
ANGELITA DE GUZMAN, G.R. No. 158104
Petitioner,
- versus- Present:
EMILIO A. GONZALEZ III, then
Officer-In-Charge, Office of the CARPIO, J., Chairperson,
Deputy Ombudsman for Luzon, BRION,
ADORACION A. AGBADA, Graft DEL CASTILLO,
Investigator, and COMMISSION ON ABAD, and
AUDIT REGION II CAGAYAN, PEREZ, JJ.
represented by ERLINDA F.
LANGCAY, HON. LEO REYES,
Presiding Judge of Regional Trial Promulgated:
Court of Sanchez Mira, Cagayan,

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The filing of the Information against petitioner Angelita de Guzman notwithstanding the lack of
certification on her cashbook examination could not in any manner be said to be premature much less
whimsical or arbitrary. Public respondents cannot be said to have gravely abused their discretion
amounting to lack or excess of jurisdiction.
This petition for certiorari[1] with plea for temporary restraining order and writ of preliminary injunction
seeks to annul the Order[2] dated December 23, 2002 of the Office of the Deputy Ombudsman for Luzon
in Criminal Case No. 2908-S(02) (OMB-1-01-0905-J), disapproving the recommendation of Trial
Prosecutor Bonifacio J. Bayag, Jr. (Prosecutor Bayag, Jr.) to dismiss the case for lack of sufficient evidence
to establish probable cause for the charge of Malversation of Public Funds. Also subject of the present
petition is the Order[3] dated February 26, 2003which denied the Motion for Reconsideration of the earlier
resolution.
Factual Antecedents
Petitioner Angelita de Guzman, in her official capacity as the Municipal Treasurer of Claveria, Cagayan,
was audited of her cash and accounts covering the period from January 26, 1999 to May 25, 2000. Per
affidavit of State Auditor II Erlinda F. Langcay, the audit examination revealed a shortage in the aggregate
amount of P368,049.42. In a letter dated October 30, 2000, the audit team demanded petitioner to
produce the missing funds and submit her written explanation about the occurrence of the shortage within
72 hours. The letter was received on November 13, 2000 but no compliance was made. Consequently,
petitioner was indicted for malversation of public funds before the Regional Trial Court of Sanchez, Mira,
Cagayan based on the Resolution[4] of the Ombudsman on November 27, 2001.
Alleging that she was not able to participate during the preliminary investigation as she was then
out of the country, petitioner moved[5] for and was granted a reinvestigation by the court on May 29,
2002.[6] As ordered, petitioner submitted her counter-affidavit, those of her witnesses and
other controverting evidence.
Report and Recommendation of
Prosecutor Bayag, Jr.
After the reinvestigation, Prosecutor Bayag, Jr. submitted his Report[7] dated November 15,
2002 recommending the dismissal of the case for insufficiency of evidence to establish a probable
cause. Pertinent portions of the Report read:
The defenses pieces of evidence negate the existence of a shortage. The audit conducted
was not yet completed or terminated for the reason that the requisite certification on
the accuseds cash book was not yet accomplished, thereby leaving the cash book open.
The deposits made in November 2000 and January 2001 which correspond to the amount
of the alleged missing funds were duly recorded and reflected on the cash book as
adjusting entries.
xxxx
[Based on] analytical and judicious evaluation of the evidence adduced by and arguments
raised by both parties, we find the prima facie presumption of misappropriation of public
funds having been fully controverted and contradicted by the accuseds evidence which
warrant her exoneration and dismissal of the instant case.[8]
Report and Recommendation of Graft
Investigation Officer II Agbada
Upon review of the Report of Prosecutor Bayag, Jr., Graft Investigation Officer
II Adoracion A. Agbada (Agbada) recommended on December 23, 2002 the disapproval of the Report
and, instead, to proceed with the prosecution of the case. Agbada anchored her findings of probable cause
on the following circumstances:
Firstly, the non-accomplishment by the auditors of the Commission on Audit (COA) of the
certification on the petitioners cash book leaving the same open, would not negate the existence of
shortage of the amount of P368,049.42. The certification is a mere formal requirement of the audit. It
does not refer to a substantive aspect of the audit. Thus, even granting that the certification has not been
accomplished by the COA auditors, it is immaterial as far as the finding of shortage is concerned.
Secondly, the petitioner was given sufficient time by the COA to comment or respond to its
findings. She received on November 13, 2000 a demand letter from COA but failed to comply with the
said directive. Instead, on December 4, 2000 and January 12, 2001, she transmitted to the COA a total
of 10 deposit slips showing that the total amount of P368,049.42 was credited to the account of
the Municipality of Claveria. This was a clear case of restitution of funds. As held in several cases,
restitution of funds is a mere mitigating circumstance. It does not obliterate the criminal liability of the
accused for malversation of public funds.
Thirdly, there is prima facie presumption of misappropriation of funds by the petitioner because she failed
to have duly forthcoming the amount of P368,049.42 with which she is chargeable.This presumption was
not overturned by the evidence of the petitioner. It must be noted that the deposit of the amount was
made by the petitioner only on November 20 and 27, 2000 and January 8 and 12, 2001. Said deposit was
made after the petitioner had received on November 13, 2000 the demand letter issued by the audit
team. In effect, the restitution was not made immediately. Thus, the presumption that the petitioner used
the money for her personal use and benefit was not duly controverted.
Ruling of the Office of the Deputy Ombudsman
for Luzon
Emilio A. Gonzalez III (Gonzalez), the Officer-in Charge of the Office of the Deputy Ombudsman
for Luzon approved on January 6, 2003 the recommendation of Agbada.
Petitioner filed a Motion for Reconsideration but Agbada recommended its denial on February 26,
2003. Gonzalez approved Agbadas recommendation on
February 27, 2003.
Issues
On May 23, 2003, petitioner filed the instant petition for certiorari raising the following errors:
A. PUBLIC RESPONDENTS GONZALEZ AND AGBADA COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION
WHEN THEY RECOMMENDED THE CONTINUATION OF THE PROSECUTION OF THE
CASE AGAINST PETITIONER DESPITE FINDINGS OF THE REINVESTIGATING
PROSECUTOR THAT THERE WAS NO SUFFICIENT EVIDENCE TO ESTABLISH
PROBABLE CAUSE AS THE AUDIT IS NOT YET COMPLETE AND/OR TERMINATED.
B. PUBLIC RESPONDENT LANGCAY GRAVELY ABUSED HER DISCRETION IN FILING THE

CRIMINAL COMPLAINT A QUO DESPITE THE NON-COMPLETION OF THE CASH
AUDIT.[9]
Petitioner argues that there was no sufficient evidence to establish probable cause since the audit
examination was not completely terminated in view of the non-accomplishment of the certification of
cashbook examination. She asserts that the accomplishment of the certificate is mandatory and not a
mere formal requirement. She claims that since the audit examination sans the accompanying certificate
was deemed not complete, the Office of the Ombudsman gravely abused its discretion in filing the criminal
information for malversation of public funds against her.
Our Ruling
Parenthetically, we find the matters raised by petitioner in her argumentation to be mainly

questions of fact which are not proper in a petition of this nature. Petitioner is basically questioning the
assessment and evaluation made by the Office of the Ombudsman of the pieces of evidence submitted
at the reinvestigation. The Office of the Ombudsman found that the evidence on hand is sufficient to
justify a probable cause to indict petitioner. Relying on the Report of Prosecutor Bayag, Jr., petitioner
contended otherwise. At this juncture, it is worth emphasizing that where what is being questioned is the
sufficiency of evidence, it is a question of fact.[10] A petition for certiorari under Rule 65 does not include
review of the correctness of a board or tribunals evaluation of the evidence but is confined to issues of
jurisdiction or grave abuse of discretion.[11]
Moreover, the allegations of petitioner are also defenses that must be presented as evidence in
the hearing of the criminal case. They are essentially evidentiary matters that negate misappropriation
which require an examination of the parties evidence. As such, they are inappropriate for consideration in
a petition for certiorari before us inasmuch as they do not affect the jurisdiction of the public
respondents. In petitions for certiorari, evidentiary matters or matters of fact raised in the court below are
not proper grounds nor may such be ruled upon in the proceedings.[12]
Granting that we dispense with the technicalities and regard the submissions of petitioner as
matters tendering an issue of law, we still find no reason to reverse the finding of probable cause by the
Office of the Ombudsman.
The Constitution and Republic Act (RA) No. 6770 (the Ombudsman Act of 1989) confer on the
Office of the Ombudsman the power to investigate and prosecute on its own or on complaint by any
person, any act or omission of any public officer or employee, office or agency when such act or omission
appears to be illegal, unjust or improper. Sections 12 and 13, Article XI of the Constitution provide:
Sec. 12. The Ombudsman and his Deputies, as protectors of the people, shall act
promptly on complaints filed in any form or manner against public officials or employees
of the government or any subdivision, agency or instrumentality thereof, including
government-owned or controlled corporation and shall, in appropriate cases, notify the
complainants of the action taken and results thereof.
Sec. 13. The Office of the Ombudsman shall have the following powers, function
and duties:
(1.) Investigate on its own or on complaint by any person, any act or omission of
any public official, employee, officer or agency, when such act or omission appears to be
illegal, unjust, improper or inefficient.
Section 15 of the Ombudsman Act of 1989 states:
Sec. 15. Powers, Functions and Duties- The Office of the Ombudsman shall have
the following powers, functions and duties:
(1) Investigate and prosecute on its own or on complaint by any person, any act
or omission of any public officer or employee, office or agency, when such act or omission
appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of this primary jurisdiction, it may
take over, at any stage, from any investigatory agency of the government, the
investigation of such cases.
Petitioner ascribes grave abuse of discretion amounting to lack or excess of jurisdiction on public
respondents Gonzalez and Agbada when they reversed a prior finding of lack of probable cause by
Prosecutor Bayag, Jr. She maintains that when the Information was filed in court, the audit examination
was not yet complete as the State Auditors have not executed the corresponding certification on the cash
book examination. Otherwise stated, the information was filed prematurely.
We cannot subscribe to petitioners proposition.
A finding of probable cause needs only to rest on evidence showing that more likely than not a
crime has been committed and was committed by the suspect. Probable cause need not be based on
clear and convincing evidence of guilt, neither on evidence establishing guilt beyond reasonable doubt,
and definitely not on evidence establishing absolute certainty of guilt.[13] In disapproving the
recommendation of Prosecutor Bayag, Jr. and adopting instead that of Agbada, respondent Gonzalez as
Deputy Ombudsman for Luzon was merely exercising his power and discharging his duty as mandated by
the Constitution and by laws. It is discretionary upon him whether or not he would rely mainly on the
findings of fact of Prosecutor Bayag, Jr. in making a review of the latters report and recommendation. He
can very well make his own findings of fact.[14] Thus, given this vast power and authority, he can conduct
a preliminary investigation with or without the report from COA. The findings in the COA report or the
finality or lack of finality of such report is irrelevant to the investigation of the Office of the Ombudsman
in its determination of probable cause, as we declared in Dimayuga v. Office of the Ombudsman.[15] Thus,
the filing of the Information against petitioner notwithstanding the lack of certification on her cashbook
examination could not in any manner be said to be premature much less whimsical or arbitrary. Public
respondents cannot be said to have gravely abused their discretion amounting to lack or excess of
jurisdiction.
To recapitulate, the discretion to determine whether a case should be filed or not lies with the
Ombudsman. Unless grave abuse of discretion amounting to lack or excess of jurisdiction is shown, judicial
review is uncalled for as a policy of non-interference by the courts in the exercise of the Ombudsmans
constitutionally mandated powers.
WHEREFORE the instant petition for certiorari is DISMISSED for lack of merit. The Order
dated December 23, 2002 of the Office of the Deputy Ombudsman for Luzon finding probable cause
against petitioner Angelita de Guzman for Malversation of Public Funds and the Order dated February 26,
2003 denying petitioners Motion for Reconsideration are hereby AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

Associate Justice
Associate Justice
JOSE PORTUGAL PEREZ
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
ANTONIO T. CARIO
[1]
Rollo, pp. 3-25.
[2]
Id. at 189-190.
[3]
Id. at 191-192.
[4]
Id. at 153-155.
[5]
Id. at 158-159.
[6]
Id. at 191-192.
[7]
Id. at 184-188.
[8]
Id. at 187.
[9]
Id. at 13.
[10]
Paterno v. Paterno, G.R. No. 63680, March 23, 1990, 183 SCRA 630, 636.
[11]
Ang Biat Huan Sons Industries, Inc. v. Court of Appeals, G.R. No. 154837, March 22, 2007,
518 SCRA 697, 702.
[13]
Webb v. Hon. De Leon, 317 Phil. 758, 789 (1995).
[14]
Cruz, Jr. v People, G.R. No. 110436, June 27, 1994, 233 SCRA 439, 451.
[15]
G.R No. 129099, July 20, 2006, 495 SCRA 461, 467.
SECOND DIVISION
Appellee,
Present:
- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
RICHARD NAPALIT y DE
GUZMAN, Promulgated:
Appellant. March 19, 2010

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Under paragraph 16, Article 14 of the Revised Penal Code, the qualifying circumstance of treachery is
present when the offender employs means, methods, or forms in the execution of the crime which tend
directly and especially to insure its execution without risk to himself arising from any defensive or
retaliatory act which the victim might make.[1] What is decisive is that the execution of the attack, without
the slightest provocation from a victim who is unarmed, made it impossible for the victim to defend himself
or to retaliate.[2]
In this case, appellant Richard Napalit y De Guzman assails the August 15, 2007 Decision[3] of the Court
of Appeals (CA) in CA-G.R. CR-HC No. 01137 which affirmed with modification the April 10, 2005
Decision[4] of the Regional Trial Court (RTC) of Malabon City, Branch 170, finding him guilty beyond
reasonable doubt of murder.
Factual Antecedents
On October 26, 2001, an Information[5] was filed charging appellant Richard Napalit y De Guzman,
together with two John Does who are still at large, with the crime of murder. The accusatory portion of
the Information reads:
That on or about the 16th day of October, 2001 in the City of Malabon, Philippines and
within the jurisdiction of this Honorable court, the above-named accused, conspiring,
confederating and helping one another, while armed with a bladed weapon, with intent
to kill, treachery and evident premeditation, did then and there, willfully, unlawfully and
feloniously attack, assault and stab one JOSEPH GENETE, hitting him on the nape and
back of the body, thereby [inflicting] injuries which caused his death.
CONTRARY TO LAW.
Appellant pleaded not guilty to the charge when arraigned on November 27, 2001.[6]
The prosecution presented Glen Guanzon (Guanzon), Marivic G. Duavis (Duavis), and Dr. Bienvenido G.
Torres (Dr. Torres), as witnesses.
Based on their testimonies, the prosecution established that at around 2:00 oclock in the morning
of October 16, 2001, the victim, Joseph Genete (Genete), together with Guanzon and three other
companions were walking along Langaray Street, Malabon, after a drinking spree. When they passed by
the group of the appellant, the latter shouted ano, gusto nyo, away? and then stabbed Genete with an
ice pick at the back. Guanzon attempted to help Genete but the former was also stabbed by a companion
of the appellant known only as alias Paksiw. Genete,Guanzon and their companions attempted to flee but
they were pursued by the group of the appellant. At a distance of about 10 meters, Genete fell to the
ground. The appellant and his companions then fled from the crime scene.
Guanzon and Genete were brought to the hospital but Genete died the following day. Guanzon survived
and identified the appellant as the perpetrator of the crime.
Dr. Torres testified that the cause of death of the victim was hypovolimia or extensive loss of fluid and
blood due to stab wound.[7] Duavis testified on the expenses incurred as a result of the incident.
The defense presented appellant as its sole witness. Appellant denied knowing Guanzon or Genete or
participating in the killing of the latter. He also claimed that he was asleep in his house located at Block
14-B, Lot 40, Phase II, Area 3, Dagat-Dagatan, Malabon, when the crime was committed.
The trial court found the version of the prosecution more credible. It noted that the series of events as
narrated by Guanzon, who claimed to have personally witnessed the crime, and who was also stabbed by
appellants companion, led to no other conclusion than that it was the appellant who fatally stabbed the
victim. Moreover, the trial court found Guanzons testimony to be credible, straightforward, and without
any sign of a coached or rehearsed account. No ill motive was likewise imputed on Guanzon for testifying
against the appellant.
The trial court also found the qualifying circumstance of treachery to have attended the
commission of the crime. Thus:
The killing of the victim was attended by the qualifying circumstance of

treachery. The victim was not warned of the danger to his person as the assault was so
sudden and unexpected making it impossible for the victim to defend himself or to
retaliate. The essence of treachery is the swift and unexpected attack by an aggressor on
an unarmed and unsuspecting victim [without the] slightest provocation, depriving the
latter of any real chance to defend himself.[8]
The dispositive portion of the Decision reads:
WHEREFORE, in the light of the foregoing, the Court finds accused RICHARD
NAPALIT y DE GUZMAN guilty beyond reasonable doubt of the crime charged and
x x x sentence[s him to] reclusion perpetua and to pay the heirs of the victim the amount
of P52,849.00 as actual damages and P50,000.00 as civil indemnity, together with costs
of suit.
Let the accused be credited with whatever preventive imprisonment he has

undergone by reason of this case.
SO ORDERED.[9]
Appellant appealed to the CA raising the following as errors:
I. THE COURT A QUO ERRED IN FINDING THE ACCUSED-

APPELLANT GUILTY OF THE CRIME CHARGED DESPITE THE PROSECUTIONS
FAILURE TO PROVE HIS GUILT BEYOND REASONABLE DOUBT.
II. ASSUMING ARGUENDO THAT THE ACCUSED IS GUILTY THE

TRIAL COURT ERRED IN CONVICTING HIM FOR MURDER INSTEAD OF
HOMICIDE CONSIDERING THAT NEITHER THE QUALIFYING CIRCUMSTANCE
OF TREACHERY NOR PREMEDITATION WAS DULY ESTABLISHED.[10]
The defense argued that there was no treachery because the victim was forewarned of the attack
when the appellant shouted ano, gusto nyo, away?. It also claimed that the prosecution failed to prove
that appellant consciously adopted the mode of attack as to insure its commission without risk to
himself.[11]
The Office of the Solicitor General (OSG), on the other hand, insisted that the trial court properly
disregarded appellants defenses of denial and alibi in view of Guanzons positive identification that
appellant was the one who assaulted and fatally stabbed the victim.[12] The OSG asserted
that Guanzons testimony is entitled to full faith and credit because it was not shown that he had ill motive
to testify against the appellant.[13]
The OSG further averred that the trial court properly appreciated the qualifying circumstance of
treachery because the victim was surprised by the attack and had no opportunity to raise any
defense. There was also no evidence of any prior altercation between the parties or that the victim
provoked the attack. The OSG likewise opined that the infliction of the wound at the back of the victim
showed that appellant consciously adopted the mode of the attack to avoid any risk to himself.[14]
On August 15, 2007, the CA rendered the herein assailed Decision which affirmed the factual
findings of the trial court that it was appellant who fatally stabbed Genete.[15] At the same time, the CA
adopted the findings of the trial court that treachery attended the commission of the crime.[16] Anent the
award of actual damages, the CA found that only the amount of P33,693.55 out of the P52,849.00
awarded by the trial court, was duly supported by receipts.[17]
The dispositive portion of the Decision of the CA reads:
WHEREFORE, the decision of the Regional Trial Court of Malabon, Branch 170 is
hereby AFFIRMED with MODIFICATION. Accused-appellant RICHARD NAPALIT y DE
GUZMAN is found GUILTY beyond reasonable doubt of MURDER as defined in Article 248
of the Revised Penal Code, as amended by Republic Act No. 7659, qualified with treachery
and is sentenced to suffer the penalty of Reclusion Perpetua. RICHARD NAPALIT y DE
GUZMAN is ordered to pay the heirs of the deceased the amount of P50,000.00 as civil
indemnity and as modified, the reduced amount of P33,693.55 as actual damages.
SO ORDERED.[18]
Hence, this appeal.
On March 5, 2008, we directed the parties to file their respective supplemental briefs.[19] On May
8, 2008, appellant manifested that he will no longer file a supplemental brief because the issues have
already been thoroughly discussed in his appellants brief.[20] On even date, appellee likewise manifested
that it will no longer file a supplemental brief and that it is adopting in toto the arguments presented in
its appellees brief.[21]
Our Ruling
In his brief filed before the CA, appellant did not anymore contest the findings of the trial court that he
was the one who fatally stabbed the victim. Appellant presented no argument to rebut the finding that he
was the perpetrator of the crime other than the general declaration that an accused must be presumed
innocent unless proven otherwise by proof beyond reasonable doubt. At any rate, we reviewed the records
of the case and we find no cogent reason not to adopt the findings of the court a quo which was affirmed
by the CA that, indeed, it was appellant who killed the victim. Moreover, we note that the findings of the
trial court as affirmed by the appellate court are duly supported by the records of the case.
The only issue before us is whether the killing was attended by the qualifying circumstance of treachery,
which both the trial court and the CA found in the affirmative.
There is treachery when the offender commits any of the crimes against the person, employing means,
methods or forms in the execution thereof which tend directly and specially to insure its execution, without
risk to himself arising from the defense which the offended party might make.[22]
The eyewitness account of Guanzon undoubtedly showed that the killing was treacherous. Thus:
Q. Mr. Witness, do you remember where you were on October 16, 2001 at
around 2:00 oclock in the morning?
A. Yes, sir.
Q. Where were you then?

A. I was walking together with Joseph Genete, sir.
Q. Where?
A. In Langaray, Malabon City, sir.
Q. What happened while you were walking with Joseph Genete on that particular
date and time?
A. We were suddenly attacked and stabbed, sir.
Q. Do you know who were [the] persons who suddenly attacked and stabbed
you?
A. Yes, sir, I know.
Q. Will you please tell us the x x x [persons] who stabbed you and
Joseph Genete?
A. Napalit, sir.
Q. Do you know the complete name of this Mr. Napalit?
A. Richard Napalit, sir.
Q. Mr. Witness, if Mr. Richard Napalit is present, will you please look around and
tell us if Richard Napalit is present in this courtroom now?
A. Yes, sir, he is here.
Q. Will you please rise and point to Mr. Napalit?

A. He is there, sir. x x x
Q. Why do you know Mr. Napalit, the accused in this case?

A. Because when he stabbed my companion, I saw him in front of me, sir.
Q. At what direction did Mr. Napalit come from when he stabbed your friend
Joseph Genete?
A. He came from my side passing in front of me and then suddenly
stabbed Genete, sir.
Q. What did you do when you saw the accused Richard Napalit suddenly stab
the victim Joseph Genete?
A. I ran towards Joseph, sir.
Q. What is the reason why you ran towards Joseph?

A. To help him, sir.
Q. Were you able to assist or help Mr. Genete?

A. No, sir.
Q. Why?
A. Because when I stepped forward, his companion also stabbed me, sir.
Q. What part of your body was stabbed at that time?

A. At my back, sir.
Q. Do you know who stabbed you?

A. Yes, sir.
Q. What is his name?

A. Alias Paksiw, sir.
Q. What part of the body of Mr. Joseph Genete was stabbed by the accused in
this case?
A. At the back, sir.[23]
During his cross-examination, Guanzon testified that:

Q. Now, before Richard Napalit stabbed Joseph Genete, did Richard Napalit utter
anything?
A. Yes, sir.
Q. What did he say before he stabbed Joseph Genete?

A. He said, ano gusto nyo away?, then he suddenly stabbed us, sir.
Q. When he said those words, did you say anything?

A. None, sir.
Q. How about Joseph Genete?

A. None also, sir.
Q. How about your three (3) companions, Otek, Rexel and Rodel?
A. None, sir.
Q. Do you mean to say, without any aggression on your part, you were suddenly
attacked?
A. Yes, sir.[24]
The essence of treachery is the sudden and unexpected attack by the aggressor on an unsuspecting
victim, depriving him of any real chance to defend himself. Even when the victim was forewarned of the
danger to his person, treachery may still be appreciated since what is decisive is that the execution of the
attack made it impossible for the victim to defend himself or to retaliate.[25] In the instant case, there is no
doubt that the victim was surprised by the attack coming from the appellant. The victim was merely
walking along the street unsuspecting of any harm that would befall his person. That appellant
shouted ano, gusto nyo, away? immediately before stabbing the victim could not be deemed as sufficient
warning to the latter of the impending attack on his person. Records show that after challenging the
unsuspecting victim to a fight, appellant immediately lunged at him and stabbed him at the back. Under
the circumstances, the victim was indisputably caught off guard by the sudden and deliberate attack
coming from the appellant, leaving him with no opportunity to raise any defense against the attack. The
mode of the attack adopted by the appellant rendered the victim unable and unprepared to
defend himself.
Anent the award of damages, we note that the appellate court awarded only the amounts
of P50,000.00 as civil indemnity and P33,693.55 as actual damages. In line with prevailing
jurisprudence,[26] we also award the amount of P50,000.00 as moral damages. Further, we also award
the amount of P25,000.00 as exemplary damages pursuant to our ruling in People v. Angeles[27] where
we held that under Article 2230 of the Civil Code, exemplary damages may be awarded in criminal cases
when the crime was committed with one or more aggravating circumstances, in this case, treachery. This
is intended to serve as deterrent to serious wrongdoings and as vindication of undue sufferings and
wanton invasion of the rights of an injured, or as a punishment for those guilty of outrageous conduct. The
imposition of exemplary damages is also justified under Article 2229 of the Civil Code in order to set an
example for the public good.
WHEREFORE, the August 15, 2007 Decision of the Court of Appeals in CA-G.R. CR-HC No. 01137 which
found appellant Richard Napalit y De Guzman guilty beyond reasonable doubt of murder and sentenced
him to suffer the penalty of reclusion perpetua and to indemnify the heirs of the victim the amounts
of P50,000.00 as civil indemnity and P33,693.55 as actual damages
is AFFIRMED with MODIFICATIONS that appellant is further ordered to pay P50,000.00 as moral
damages and P25,000.00 as exemplary damages.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
People v. Tan, 373 Phil. 190, 200-201 (1999).
[2]
Id. at 201.
[3]
Rollo, pp. 2-12; penned by Associate Justice Regalado E. Maambong and concurred in by
Associate Justices Celia C. Librea-Leagogo and Sixto C. Marella, Jr.
[4]
Records, pp. 126-129; penned by Judge Benjamin T. Antonio.
[5]
Id. at 1.
[6]
Id. at 14.
[7]
TSN, July 25, 2002, pp. 111-112.
[8]
Records, p. 128.
[9]
Id. at 129.
[10]
CA rollo, p. 20.
[11]
Id. at 25.
[12]
Id. at 47.
[13]
Id. at 49.
[14]
Id. at 51.
[15]
Rollo, p. 7.
[16]
Id. at 9.
[17]
Id. at 10.
[18]
Id. at 11.
[19]
Id. at 17.
[20]
Id. at 18.
[21]
Id. at 21-22.
[22]
REVISED PENAL CODE, Art. 14, par. 16.
[23]
TSN, April 11, 2002, pp. 2-3.
[24]
Id. at 7.
[25]
People v. Angeles, G.R. No. 177134, August 14, 2009.
[26]
People v. Badriago, G.R. No. 183566, May 8, 2009.
[27]
Supra.
SECOND DIVISION

Appellee,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
ROLDAN MORALES y MIDARASA, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The requirement of proof beyond a reasonable doubt has this vital role in our criminal procedure for
cogent reasons. The accused during a criminal prosecution has at stake interest of immense importance,
both because of the possibility that he may lose his liberty upon conviction and because of the certainty
that he would be stigmatized by the conviction. Accordingly, a society that values the good name and
freedom of every individual should not condemn a man for commission of a crime when there is
reasonable doubt about his guilt.[1] Due process commands that no man shall lose his liberty unless the
Government has borne the burden of convincing the factfinder of his guilt. To this end, the reasonable-
doubt standard is indispensable, for it impresses on the trier of fact the necessity of reaching certitude of
the facts in issue.[2]
Moreover, use of the reasonable-doubt standard is indispensable to command the respect and confidence
of the community in applications of criminal law. It is critical that the moral force of criminal law not be
diluted by a standard of proof that leaves people in doubt whether innocent men are being condemned.
It is also important in our free society that every individual going about his ordinary affairs has confidence
that his government cannot adjudge him guilty of a criminal offense without convincing a
proper factfinder of his guilt with utmost certainty.[3]
Lest there remain any doubt about the constitutional stature of the reasonable-doubt standard, we
explicitly hold that the Due Process Clause protects the accused against conviction except upon proof
beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged.[4]
On appeal is the Decision[5] of the Court of Appeals (CA) promulgated on April 24,
2006 affirming in toto the Decision[6] of the Regional Trial Court (RTC) of Quezon City, Branch 103 finding
appellant Roldan Morales y Midarasa guilty of the crimes of possession and sale of dangerous drugs.
Factual Antecedents
Appellant was charged in two separate Informations before the RTC with possession and sale
of methylamphetamine hydrochloride (shabu), to wit:
Criminal Case No. Q-03-114256
That on or about the 2nd day of January, 2003 in Quezon City, Philippines, the said accused
not being authorized by law to possess or use any dangerous drug, did then and there,
willfully, unlawfully and knowingly have in her/his/their possession and control, zero point
zero three (0.03) grams of methylamphetamine hydrochloride, a dangerous drug.
CONTRARY TO LAW.[7]
Criminal Case No. Q-03-114257
That on or about the 2nd day of January, 2003, in Quezon City, Philippines, the said
accused, not being authorized by law to sell, dispense, deliver, transport or distribute any
dangerous drug, did, then and there, willfully and unlawfully sell, dispense, deliver,
transport, distribute or act as broker in the said transaction, zero point zero three (0.03)
gram of methylamphetamine hydrochloride, a dangerous drug.
CONTRARY TO LAW.[8]
Upon arraignment, appellant, assisted by counsel, pleaded not guilty to both charges read in
Filipino, a language known and understood by him.[9] On motion of the City Prosecutor, the cases
were consolidated for joint trial.[10] Trial on the merits ensued thereafter.
The testimonies of PO1 Eduardo Roy (PO1 Roy) and PO3 Armando Rivera (PO3 Rivera) were
presented by the prosecution:
PO1 Roy testified that on January 2, 2003, at about 2:00 p.m., he was on duty at Police Station 9
where he made a pre-operation report on the buy-bust operation to be conducted on the herein appellant
that same afternoon.[11] He then proceeded to Brgy. San Vicente, Quezon City with PO3 Rivera for the
operation.[12] At a point near Jollibee, they met the informant who, upon seeing the subject appellant,
went with him to meet PO1 Roy.[13] After being introduced to the appellant as a buyer of piso worth
of shabu, appellant immediately produced a sachet containing the alleged drug. When appellant received
the marked money amounting to P100.00,[14] PO1 Roy raised his left hand, at which point his back-up
officer, PO3 Rivera appeared and immediately arrested the appellant.[15] The appellant was immediately
brought to the Police Station for investigation, while the two sachets of shabu and aluminum foil
discovered on the said appellant were brought to the Crime Laboratory for examination.[16]
PO3 Rivera testified that he was the back-up officer of PO1 Roy, the poseur-buyer in the buy-bust
operation conducted against the appellant in the afternoon of January 2, 2003.[17] In preparation for the
said operation, he conducted a short briefing and recorded the particulars of the operation they were
about to carry out: the place of the operation which is at the parking lot of Jollibee Philcoa; the
identification of the suspect as the appellant; and the preparation of the buy-bust money to be
used.[18] With respect to the buy-bust money, he prepared one P50.00 bill, two P20.00 bills and
one P10.00 bill, by making the appropriate marking on the top portion of each bill and recording their
respective serial numbers.[19] Later that afternoon, police officers proceeded to the meeting place. PO3
Rivera positioned himself in a parked vehicle[20] about 20 meters from the situs of the transaction.[21] He
thus had a clear view of the appellant with the informant and PO1 Roy.[22] Shortly thereafter, he saw PO1
Roy make the pre-arranged signal at which point he approached the appellant to arrest him.[23] He
recovered the marked money from the appellant and proceeded to frisk the latter.[24] Upon conducting
the body search, he found another sachet which he suspected to be shabu and two
aluminum foils. Appellant was brought to the Police Station for detention, while the items seized from him
were brought to the Crime Laboratory for examination.[25] The two sachets tested positive
for Methylamphetamine Hydrochloride (shabu) while the aluminum foil sheets tested negative of the
aforementioned substance.[26]
Both PO1 Roy and PO3 Rivera identified a Joint Affidavit dated January 3, 2003 during their
respective testimonies, which they acknowledged to have executed subsequent to the buy-bust
operation.[27]
The defense presented the testimonies of Joaquin Artemio Marfori, Arsenia Morales and the
appellant:
Appellant denied the charges against him.[28] He testified that he is a resident of Dolores, Quezon
where he worked in a fertilizer store.[29] He was in Manila at that time to bring money for his parents who
live at Cruz na Ligas.[30] As his mother did not give him enough money for his fare back to Quezon, he
sidelined as a parking attendant at Philcoa in order to earn the balance of his bus fare.[31] However,
sometime that afternoon, two male persons in civilian clothes suddenly approached him and his co-
attendant, identified themselves as policemen and poked their guns at them.[32] The said policemen
handcuffed them and proceeded to frisk them.[33] He averred that nothing was found on him and yet the
policemen still brought him to the police station.[34] He denied the allegation made against him that he
sold, much less possessed, the shabu subject of this action.[35] He further testified that in the tricycle on
the way to the police station, PO1 Roy took out a plastic of shabu from his (PO1 Roys) pocket and once
at the station, the said policeman showed it to the desk officer and claimed that the plastic sachet was
found on the appellant.[36]
He likewise denied having received the buy-bust money and claimed that the P50.00 bill and the
two P20.00 bills, totaling P90.00, were given to him by his mother for his bus fare to Quezon.[37] He
disclaimed any knowledge of the P10.00 bill.[38] He further testified that he personally knew PO3 Rivera
prior to the arrest, since his first cousin and PO3 Rivera had a quarrel which he had no involvement
whatsoever.[39] He noted the fact that it was PO3 Rivera who arrested him.[40]
Witness Joaquin Artemio Marfori testified that he is the employer of the appellant in his agricultural
and poultry supply store in Babayan, Calamba, Laguna.[41] He further stated that he allowed the appellant
to go on vacation on December 12, 2003 to celebrate the New Year with his family in Manila.[42] However,
the appellant failed to report back for work at the start of the New Year.[43]
Finally, witness Arsenia Morales (Arsenia) corroborated the testimony of her son that she gave
him P90.00, consisting of one P50.00 bill and two P20.00 bills as bus fare back to Laguna where he
worked.[44] Thinking that her son was already on his way home, she was surprised to receive a call from
her daughter informing her that her son, the appellant, was arrested for possession and sale of shabu.[45]
On April 29, 2004, the trial court rendered a Decision finding the appellant guilty beyond
reasonable doubt of illegal possession and illegal sale of dangerous drugs. The dispositive portion of the
said Decision reads:
WHEREFORE, in view of the foregoing disquisition, judgment is hereby rendered finding
the accused ROLDAN MORALES y Midarasa, GUILTY beyond reasonable doubt in Criminal
Case No. Q-03-114257 for violation of Section 5, Article II, R.A. [No.] 9165 for drug
pushing [of] zero point zero three (0.03) gram of white crystalline substance
containing Methylamphetamine hydrochloride and is hereby sentenced to suffer Life
Imprisonment and to pay a fine of Five Hundred Thousand (P500,000.00) pesos.
The Court likewise finds the accused ROLDAN MORALES y Midarasa GUILTY beyond
reasonable doubt in Criminal Case No. Q-03-114256 for violation of Section 11, Article II,
R.A. [No.] 9165 for drug possession x x x of zero point zero three (0.03) gram of white
crystalline substance containing Methylamphetamine hydrochloride and is hereby
sentenced to suffer an imprisonment term of Twelve (12) Years and One (1) Month to
Thirteen (13) Years and to pay a fine of Three Hundred Fifty Thousand (P350,000.00)
Pesos.
The sachets of shabu subject of these cases are ordered transmitted to the PDEA thru
Dangerous Drugs Board for proper disposition after this decision becomes final.
SO ORDERED.[46]
The trial court held that the prosecution witnesses positively identified the appellant as the person
who possessed and sold to the poseur-buyer the shabu subject of this case, during the buy-bust
operation conducted in the afternoon of January 2, 2003.[47] The trial court found that from the
evidence presented, the prosecution was able to sufficiently establish the following: (1) the fact
of the buy-bust operation conducted in the afternoon of January 2, 2003 at the parking lot of
Jollibee Philcoa which led to the arrest of the appellant; and (2) the corpus delicti, through the
presentation in court of the two sachets of white substance which was confirmed by the Chemistry
Report to be methylamphetamine hydrochloride (shabu), found in the possession of and sold by
the appellant.[48]
The CA affirmed the Decision of the trial court in toto. It found that contrary to the allegations of
the appellant, there was no instigation that took place.[49] Rather, a buy-bust operation was employed by
the police officers to apprehend the appellant while in the act of unlawfully selling drugs.[50] The appellate
court further held that what is material in a prosecution for illegal sale of prohibited drugs is the proof that
the transaction or sale actually took place, coupled with the presentation in court of
the corpus delicti.[51] Stripped of non-essentials, the CA summarized the antecedent facts of the case as
follows:
PO1 Eduardo Roy prepared a pre-arranged report on the buy-bust operation to be

conducted against appellant at Barangay San Vicente, Quezon City upon an informants
tip that appellant was selling shabu in the said area. On the other hand, PO3
Armando Ragundiaz Rivera recorded the briefing, summary, identification of appellant
and the buy-bust money to be used in the operation consisting of one (1) fifty peso
bill, two (2) twenty peso bill[s] and one (1) ten peso bill. PO1 Roy who acted as the
poseur-buyer and PO3 Rivera as his back-up proceeded to University
Avenue corner Commonwealth Avenue, Barangay San Vicente, Quezon City together
with the informant.
PO1 Roy and the informant met appellant at the parking lot of Jollibee restaurant while
PO3 Rivera positioned himself at the side of a parked car where he can easily have a clear
view of the three. After PO1 Roy was introduced by the informant to the appellant as a
buyer of shabu, the latter immediately produced a sachet containing the said prohibited
drugs and handed the same to him. PO1 Roy raised his left hand as the pre-arranged
signal that the transaction was consummated. Thereafter, PO3 Rivera went to the area,
introduced himself as a police officer and frisked appellant from whom he recovered the
marked money and a matchbox, where the suspected shabu was placed, and two (2)
aluminum foils. They informed appellant of his constitutional rights and brought him to
the police station while the two (2) small transparent heat sealed sachets containing the
suspected prohibited drugs and paraphernalia were turned over to the crime laboratory
for examination, and which [was] later, found to be positive
for methylamphetamine hydrochloride (commonly known as shabu).[52]
Thence, the CA rendered judgment to wit:
WHEREFORE, premises considered, the assailed decision of the Regional Trial Court of
Quezon City, Branch 103 dated April 29, 2004 is hereby AFFIRMED IN TOTO.
SO ORDERED.[53]
Appellant elevated the case to this Court via Notice of Appeal.[54] In our Resolution dated July 12,
2006, we resolved to accept the case and required the parties to submit their respective supplemental
briefs simultaneously, if they so desire, within 30 days from notice.[55] Both parties adopted their respective
appellants and appellees briefs, instead of filing supplemental briefs.[56]
Our Ruling
Appellant claims that he should not be convicted of the offenses charged since his guilt has not
been proven by the prosecution beyond reasonable doubt.[57] In support of his contention, appellant
alleges that the arresting officers did not even place the proper markings on the alleged shabu and
paraphernalia at the time and place of the alleged buy-bust operation.[58] Appellant hence posits that this
created serious doubt as to the items and actual quantity of shabu recovered, if at all.[59]
The Office of the Solicitor General, on the other hand, insists that the direct testimony of the two
arresting officers sufficiently established the elements of illegal sale and possession of shabu.[60]
At the outset, we draw attention to the unique nature of an appeal in a criminal case: the appeal
throws the whole case open for review and it is the duty of the appellate court to correct, cite and
appreciate errors in the appealed judgment whether they are assigned or unassigned.[61] On the basis of
such review, we find the present appeal meritorious.
Prevailing jurisprudence uniformly hold that the trial courts findings of fact, especially when
affirmed by the CA, are, as a general rule, entitled to great weight and will not be disturbed on
appeal.[62] However, this rule admits of exceptions and does not apply where facts of weight and substance
with direct and material bearing on the final outcome of the case have been overlooked, misapprehended
or misapplied.[63] After due consideration of the records of this case, evidence presented and relevant law
and jurisprudence, we hold that this case falls under the exception.
In actions involving the illegal sale of dangerous drugs, the following elements must first be
established: (1) proof that the transaction or sale took place and (2) the presentation in court of
the corpus delicti or the illicit drug as evidence.[64]
On the other hand, in prosecutions for illegal possession of a dangerous drug, it must be shown
that (1) the accused was in possession of an item or an object identified to be a prohibited or regulated
drug, (2) such possession is not authorized by law, and (3) the accused was freely and consciously aware
of being in possession of the drug.[65] Similarly, in this case, the evidence of the corpus delicti must be
established beyond reasonable doubt.[66]
With respect to corpus delicti, Section 21 of Republic Act (RA) No. 9165 provides:
Section 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered

Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential
Chemicals, Instruments/Paraphernalia and/or Laboratory Equipment. The PDEA shall take
charge and have custody of all dangerous drugs, plant sources or dangerous drugs,
controlled precursors and essential chemicals, as well as instruments/paraphernalia
and/or laboratory equipment so confiscated, seized and or surrendered, for proper
disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs
shall, immediately after seizure and confiscation, physically inventory and
photograph the same in the presence of the accused or the persons/s from
whom such items were confiscated and/or seized, or his/her representative
or counsel, a representative from the media and the Department of Justice
(DOJ), and any elected public official who shall be required to sign the copies
of the inventory and be given a copy thereof; x x x (Emphasis supplied)
In People v. Partoza,[67] we held that the identity of the corpus delicti was not proven beyond
reasonable doubt. In the said case, the apprehending policeman did not mark the seized drugs after he
arrested the appellant in the latters presence. Neither did he make an inventory and take a photograph
of the confiscated items in the presence of the appellant. There was no representative from the media
and the Department of Justice, or any elected public official who participated in the operation and who
were supposed to sign an inventory of seized items and be given copies thereof. Hence, we held in the
afore-cited case that there was no compliance with the statutory safeguards. In addition, while the
apprehending policeman admitted to have in his possession the shabu from the time the appellant was
apprehended at the crime scene to the police station, records are bereft of proof on how the seized items
were handled from the time they left the hands of the said police officer.
We declared in People v. Orteza,[68] that the failure to comply with Paragraph 1, Section
21, Article II of RA 9165 implied a concomitant failure on the part of the prosecution to establish the
identity of the corpus delicti:
In People v. Laxa, where the buy-bust team failed to mark the confiscated marijuana
immediately after the apprehension of the accused, the Court held that the deviation from
the standard procedure in anti-narcotics operations produced doubts as to the origins of
the marijuana. Consequently, the Court concluded that the prosecution failed to establish
the identity of the corpus delicti.
The Court made a similar ruling in People v. Kimura, where the Narcom operatives failed
to place markings on the seized marijuana at the time the accused was arrested and to
observe the procedure and take custody of the drug.
More recently, in Zarraga v. People, the Court held that the material inconsistencies with
regard to when and where the markings on the shabu were made and the lack of
inventory on the seized drugs created reasonable doubt as to the identity of
the corpus delicti. The Court thus acquitted the accused due to the prosecution's failure
to indubitably show the identity of the shabu.
Likewise, in People v. Obmiranis,[69] we acquitted the appellant due to flaws in the conduct of the
post-seizure custody of the dangerous drug allegedly recovered from the appellant, together with the
failure of the key persons who handled the same to testify on the whereabouts of the exhibit before it
was offered in evidence in court.
In the instant case, it is indisputable that the procedures for the custody and disposition of
confiscated dangerous drugs, as mandated in Section 21 of RA 9165, were not observed. The records
utterly failed to show that the buy-bust team complied with these procedures despite their mandatory
nature as indicated by the use of shall in the directives of the law. The procedural lapse is plainly evident
from the testimonies of the two police officers presented by the prosecution, namely: PO1 Roy and PO3
Rivera.
PO1 Roy, in his testimony, failed to concretely identify the items seized from the
appellant. Moreover, he confirmed that they did not make a list of the items seized. The patent lack of
adherence to the procedural mandate of RA 9165 is manifest in his testimony, to wit:
FISCAL JURADO
x x x You mentioned that you gave the pre-arranged signal, what is that?
WITNESS
A- Raising my left hand.
Q- And what happened next?

A- My back up PO3 Rivera came.
Q- What [did] your back up do when you raised your hand?

A- He arrested Morales.
Q- What were you doing when he arrested Morales?

A- I put the informant away from the scene.
Q- And what happened next after that?

A- We brought him to the police station.
Q- How about the shabu, what did you do with it?

A- We brought it to the crime lab.
Q- How did you send it to crime lab?

A- Shabu and paraphernalia recovered by my companion from the suspect.
Q- How many items were sent to the crime lab?

A- 2 shabu and paraphernalia.
Q- What are the paraphernalia?

A- Foil, sir.
Q- How many foil?

A- I cannot recall.
Q- What happened to the accused in the police station?

A- He was investigated.
Q- Do you know the accused?
A- Yes, sir.
Q- What is his name?

A- Roldan Morales.
xxxx
FISCAL JURADO
Q- If the said sachet and paraphernalia will be shown to you, how would you
be able to identify the said items?
WITNESS
A- I could not recall pare-pareho yung shabu
ATTY. MOSING
I will object because that would be leading on the part of the prosecution because he
could not identify on what shabu.
COURT
That question is overruled.
FISCAL JURADO
I am showing to you an item, would you be able to identify?
COURT
Fiscal showing several shabu.
WITNESS
A- This one.
FISCAL JURADO
Q- There is
another plastic sachet?
WITNESS
A- Recovered.
Q- How about these two?

A- I was not the one who confiscated that.
Q- What happened to the said item submitted to the crime lab?

A- Positive, sir.
xxxx
FISCAL JURADO
xxxx
Q- How about the specimen forwarded to the crime lab?
WITNESS
A- My companion brought that.
Q- What was your participation in the case?

A- Poseur buyer.
xxxx
ATTY. MOSING
xxxx
Q- After the arrest you brought the suspect and the items to the station?
A- Yes, sir.
Q- Did you not make a list of items you have confiscated in this case?
A- No, we turned it over to the investigator.
Q- You have presented the buy bust money a while ago, was that buy bust money
suppose to be turned over to the investigator?
A- No, inquest. Upon request, I was the one who received it.[70] (Emphasis supplied)
The testimony of the other arresting officer, PO3 Rivera further confirms the failure of the buy-
bust team to observe the procedure mandated under Section 21 of RA 9165:
COURT
Q- Where did you position yourself?
WITNESS
A- Parked vehicle.
FISCAL JURADO
Q- What did you notice?
WITNESS
A- The confidential informant introduced our poseur buyer to the suspect and after a few
conversation I waited and I saw the pre-arranged signal. And
when he raised his left hand that is the signal that the transaction
is consummated.
Q- After he made that signal, what did you do?

A- I rushed to the area and arrest[ed] the suspect.
Q- Who was the person you took x x x custody [of]?

A- Roldan Morales
Q- And what did you do with him?
A- Because he ha[d] a marked money I got hold of it and arrest[ed] him.
Q- And what did you do with him?

A- I frisked him.
Q- And what was the result of your frisking?

A- A box of match which I was able to recover [containing] another suspected shabu.
Q- Where did you find that on his body?

A- Front [pocket of] pants.
Q- How about the match?

A- The same.
Q- What else did you find?

A- Aluminum foil.
Q- And after you recovered that evidence, what did you do with the accused?
A- We informed him of his constitutional rights and brought him to the station.
Q- How about the items you recovered?

A- Delivered it to the crime lab for examination.
Q- What else did you deliver [to] the crime lab?

A- Request, sir.[71] (Emphasis supplied)
Other than PO1 Roy and PO3 Rivera, the prosecution did not present any other witnesses. Hence,
the investigator, referred to by PO1 Roy in his testimony as the one who took delivery of the seized items,
was not identified nor was he presented in court. More importantly, the testifying police officers did not
state that they marked the seized drugs immediately after they arrested the appellant and in the latters
presence. Neither did they make an inventory and take a photograph of the confiscated items in the
presence of the appellant. There was likewise no mention of any representative from the media and the
Department of Justice, or any elected public official who participated in the operation and who were
supposed to sign an inventory of seized items and be given copies thereof. None of these statutory
safeguards were observed.
Even PO1 Roy, the poseur-buyer, was not certain as to the identity of the confiscated shabu, to
wit:
FISCAL JURADO:
Q- If the said sachet and paraphernalia will be shown to you, how would you be able to
identify the said items?
WITNESS
A-
I could not recall pare-pareho yung shabu.[72]
The procedural lapses in the handling and identification of the seized items
collectively raise doubts as to whether the items presented in court were the exact same items that were
confiscated from appellant when he was apprehended.
While this Court recognizes that non-compliance by the buy-bust team with Section 21 of RA 9165
is not fatal as long as there is a justifiable ground therefor, for and as long as the integrity and the
evidentiary value of the siezed items are properly preserved by the apprehending team,[73] these
conditions were not met in the case at bar. No explanation was offered by the testifying police officers for
their failure to observe the rule. In this respect, we cannot fault the apprehending policemen either, as
PO1 Roy admitted that he was not a PDEA operative[74] and the other witness, PO3 Rivera, testified that
he was not aware of the procedure involved in the conduct of anti-drug operations by the PNP.[75] In fine,
there is serious doubt whether the drug presented in court was the same drug recovered from the
appellant. Consequently, the prosecution failed to prove beyond reasonable doubt the identity of
the corpus delicti.
Furthermore, the evidence presented by the prosecution failed to reveal the identity of the person
who had custody and safekeeping of the drugs after its examination and pending presentation in
court. Thus, the prosecution likewise failed to establish the chain of custody which is fatal to its cause.
In fine, the identity of the corpus delicti in this case was not proven beyond reasonable
doubt. There was likewise a break in the chain of custody which proves fatal to the prosecutions
case. Thus, since the prosecution has failed to establish the element of corpus delicti with the prescribed
degree of proof required for successful prosecution of both possession and sale of prohibited drugs, we
resolve to ACQUIT Roldan Morales y Midarasa.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated April 24,
2006 in CA-G.R. CR-H.C. No. 00037 affirming the judgment of conviction of the Regional Trial Court of
Quezon City, Branch 103 dated April 29, 2004 is hereby REVERSED and SET
ASIDE. Appellant Roldan Morales y Midarasa is ACQUITTED based on reasonable doubt, and is ordered
to be immediately RELEASED from detention, unless he is confined for any other lawful cause.
The Director of the Bureau of Corrections is DIRECTED to IMPLEMENT this Decision and to
report to this Court the action taken hereon within five days from receipt.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
In the Matter of Samuel Winship, 397 U.S. 358, 90 S.Ct. 1068 (1970).
[2]
Id.
[3]
Id.
[4]
Id.
[5]
Rollo, pp. 3-11; penned by Associate Justice Sesinando E. Villon and concurred in by Associate
Justices Edgardo P. Cruz and Rosanlinda Asuncion-Vicente.
[6]
Records, pp. 63-66; penned by Presiding Judge Jaime N. Salazar, Jr.
[7]
Id at 2-3.
[8]
Id at 4-5.
[9]
Id. at 15.
[10]
Id. at 16.
[11]
TSN, March 20, 2003, pp. 3-4.
[12]
Id. at 4.
[13]
Id.
[14]
Id. at 5.
[15]
Id. at 5-6.
[16]
Id at 6.
[17]
Id at 12-13.
[18]
Id.
[19]
Id.
[20]
Id at 13.
[21]
Id at 16.
[22]
Id at 13.
[23]
Id at 13-14.
[24]
Id at 14.
[25]
Id.
[26]
Id at 14-15.
[27]
Id. at 8 and 15, respectively.
[28]
TSN, June 19, 2003, pp. 3-5.
[29]
Id. at 3 and 8.
[30]
Id. at 9.
[31]
Id. at 3 and 8.
[32]
Id.
[33]
Id.
[34]
Id. at 4.
[35]
Id.
[36]
Id. at 4-5.
[37]
Id. at 5.
[38]
Id.
[39]
Id. at 6-7.
[40]
Id.
[41]
TSN, August 5, 2003, pp. 3-4.
[42]
Id. at 4.
[43]
Id. at 5.
[44]
TSN, November 6, 2003, pp. 3-4.
[45]
Id.
[46]
Records, p. 66.
[47]
Id. at 65.
[48]
Id.
[49]
[50]
Id. at 93.
[51]
Id. at 95.
[52]
Id. at 88-89.
[53]
Id. at 95.
[54]
Id. at 101.
[55]
Rollo, p. 12.
[56]
Id. at 22-23; 25-26.
[57]
CA rollo, pp. 40, 45.
[58]
Id. at 48.
[59]
Id. at 49.
[60]
Id. at 63, 76-78.
[61]
People v. Kamad, G.R. No. 174198, January 19, 2010, citing People v. Balagat, G.R. No.
177163, April 24, 2009.
[62]
People v. Milan, 370 Phil. 493, 499 (1999).
[63]
People v. Robles, G.R. No. 177220, April 24, 2009.
[64]
People v. Darisan, G.R. No. 176151, January 30, 2009, 577 SCRA 486, 490.
[65]
Id.
[66]
People v. Partoza, G.R. No. 182418, May 8, 2009.
[67]
Id.
[68]
G.R. No. 173051, July 31, 2007, 528 SCRA 750, 758-759.
[69]
G.R. No. 181492, December 16, 2008, 574 SCRA 140, 158.
[70]
TSN, March 20, 2003, pp. 5-11.
[71]
Id. at 13-14.
[72]
Id. at 7.
[73]
Section 21(a) of the Implementing Rules and Regulations of RA 9165 provides:
SECTION 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous
Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. The PDEA shall take charge and
have custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors
and essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment
so confiscated and/or surrendered, for proper disposition in the following manner:
(a) The apprehending officer/team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph the same in
the presence of the accused or the person/s from whom such items were confiscated and/or
seized, or his/her representative or counsel, a representative from the media and the
Department of Justice (DOJ), and any elected public official who shall be required to sign the
copies of the inventory and be given a copy thereof: Provided, that the physical inventory and
photograph shall be conducted at the place where the search warrant is served; or at the
nearest police station or at the nearest office of the apprehending officer/team, whichever is
practicable, in case of warrantless seizures; Provided, further, that non-compliance
with these requirements under justifiable grounds, as long as the integrity and the
evidentiary value of the seized items are properly preserved by the apprehending
officer/team, shall not render void and invalid such seizures of and custody over
said items; x x x (Emphasis supplied)
[74]
TSN, March 20 2003 pp. 8-9.
[75]
Id. at 16.
SECOND DIVISION

Appellee,
- versus - Present:

MARCELO BUSTAMANTE y BRION,
ZAPANTA, NEIL BALUYOT y DEL CASTILLO,
TABISORA, RICHARD DELOS ABAD, and
TRINO y SARCILLA, HERMINIO PEREZ, JJ.
JOSE y MONSON, EDWIN
SORIANO y DELA CRUZ and
ELMER SALVADOR y JAVALE, Promulgated:
Appellants. March 19, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The police authorities are the ones tasked to promote and maintain peace and order in our country. Thus,
it becomes doubly deplorable when they themselves commit the criminal act. In this case, appellants insist
on their innocence; they deny that they killed the victim Romeleo Quintos on June 1, 1997 inside the
detention cell of the Ninoy Aquino International Airport (NAIA).But we are not persuaded. We took a
second hard look at the evidence presented and we hold that both the trial court and the appellate court
correctly found that the prosecution proved beyond reasonable doubt that the appellants are guilty of
murder.
This is an appeal from the July 19, 2005 Decision[1] of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
00665 which affirmed in toto the March 17, 2000 Decision[2] of the Regional Trial Court (RTC) of Pasay
City, Branch 109, finding the appellants guilty beyond reasonable doubt of the crime of murder. Also
assailed is the March 6, 2006 Resolution[3] of the CA denying the separate motions for reconsideration
filed by the appellants.
Factual Antecedents
On May 22, 1998, two Informations were filed against the herein appellants, together
with Carlito Lingat and Mutalib Abdulajid, charging them with the crimes of Murder and Arbitrary
Detention. The Informations read:
Crim. Case No. 98-0547 (for Murder):
The undersigned Ombudsman Investigator, Office of the Deputy Ombudsman for the
Military, hereby accuses NEIL BALUYOT, RICHARD DELOS TRINO, HERMINIO JOSE,
EDWIN SORIANO, MARCELO BUSTAMANTE, CARLITO LINGAT, MUTALIB ABDULAJID,
AND ELMER SALVADOR of the crime of MURDER defined and penalized under Article 248
of the Revised Penal Code, committed as follows:
That in the early morning of June 01, 1997, between 2:00 to 3:00 oclock [in the morning],
or sometime prior or subsequent thereto, in Pasay City, Philippines, and within the
jurisdiction of this Honorable Court, the accused NEIL BALUYOT, RICHARD DELOS
TRINO, HERMINIO JOSE, EDWIN SORIANO, MARCELO BUSTAMANTE, and CARLITO
LINGAT, all public officers, being then members of the Philippine National Police (PNP)
Force, assigned [at] the Ninoy Aquino International Airport (NAIA), and accused ELMER
SALVADOR and MUTALIB ABDULAJID, security guards, also assigned at the NAIA,
conspiring and confederating with one another, with intent to kill and taking advantage
of their superior strength, did then and there willfully, unlawfully and feloniously tie a
plastic nylon cord around the neck of one Romeleo A. Quintos, and hang him at the end
portion of the detention cell, which caused the instantaneous death of
said Romeleo A. Quintos to the damage and prejudice of the heirs of said victim.
CONTRARY TO LAW.[4]
Criminal Case No. 98-0548 (for Arbitrary Detention)
The undersigned Ombudsman Investigator, Office of the Ombudsman for the

Military, hereby accuses EDWIN D. SORIANO, MARCELO Z. BUSTAMANTE, HERMINIO
M. JOSE, CARLITO D. LINGAT and NEIL T. BALUYOT of the crime of ARBITRARY
DETENTION, defined and penalized under Article 124 of the Revised Penal Code,
committed as follows:
That on or about June 01, 1997, in Pasay City, Metro Manila, Philippines, and
within the jurisdiction of this Honorable Court, the abovenamed accused, all public
officers, being then members of the Philippine National Police Force assigned at
the Ninoy Aquino International Airport, conspiring and confederating with each other,
committing the offense in relation to their office, and without any legal ground, did then
and there willfully, unlawfully, and feloniously detain and restrain Romeleo A. Quintos of
his personal liberty, without his consent and against his will since midnight of May 31,
1997 until around 3:15 a.m. of June 01, 1997 when said Romeleo A. Quintos was found
dead inside the detention cell.
CONTRARY TO LAW.[5]
Neil Baluyot (Baluyot), Richard Delos Trino (Delos Trino), Herminio Jose (Jose), Edwin Soriano
(Soriano), Marcelo Bustamante (Bustamante), Carlito Lingat (Lingat) and Elmer Salvador (Salvador), were
arraigned on July 14, 1998 where they all entered a plea of not guilty.[6] Mutalib Abdulajid (Abdulajid)
remains at large.
The records show that at around midnight of May 31, 1997, Romeleo Quintos (Romeleo) and his
friend, Ancirell Sales (Ancirell), went to the NAIA to fetch Rolando Quintos(Rolando), brother of Romeleo,
who was arriving from the United States. At the arrival extension area of the NAIA, Ancirell alighted from
the car driven by Romeleo to check whether Rolando had already arrived. Upon his return, he was
surprised to see Romeleo arguing with a man in uniform later identified as Soriano who
arrested Romeleo for expired license.
Romeleo vehemently denied the charge causing a heated

altercation. Outraged, Romeleo challenged Soriano to a gun duel. Thinking that Romeleo was a military
man, Soriano called for reinforcement. In a few minutes, Lingat and Bustamante arrived followed by
Jose. They asked Romeleo to hand over his license but the request went unheeded. Thus, Jose seized the
ignition key of the vehicle and ordered Romeleo to alight from the vehicle but the latter
refused. Thereupon, Soriano, Lingat, Bustamante and Jose pulled Romeleo out of the vehicle and brought
him to the Intelligence and Investigation Division of the NAIA (IID-NAIA) supposedly for questioning. At
the IID-NAIA, it was decided that Romeleo be brought to the Pasay General Hospital for examination
where he was found positive for alcoholic breath. Thereafter, Romeleo was brought back to the IID-NAIA
for further investigation.
Romeleo was shoved into a cell already occupied by prosecution witness

Noel Gabornes (Gabornes), who had earlier been arrested for being an unauthorized porter. Professing
his innocence, Romeleo cursed and shouted at Baluyot, Delos Trino, Jose, Soriano,
Bustamante, Lingat, Salvador and Abdulajid to release him as he was only at the airport to fetch his
brother. Jose ordered him to stop but Romeleo persisted. Infuriated, Jose entered the cell and kicked the
victim hard on the stomach. Salvador also entered the cell followed by Baluyot while Delos Trino stayed
near the door. Romeleo was still reeling from the blow delivered by Jose when Baluyot boxed him in the
abdomen. Salvador also punched him at the solar plexus causing the victim to writhe in pain at a corner
of the cubicle. To avoid being hit, Gabornes went outside the cell.
Gasping for breath, Romeleo sought succor from Gabornes but the latter declined, afraid to get
involved. After a while, Gabornes asked Jose if he could go home but the latter did not answer. Instead,
Jose directed Salvador to transfer Gabornes to an adjacent cell. Thereafter, Gabornes overheard Jose
saying tapusin na natin ito. Intrigued, Gabornes peered through the iron grill to see what was
happening. From his vantage point, he saw Baluyot handing a piece of grayish plastic cord
to Salvador. Thereafter, he heard Romeleo coughing and gasping for breath as if he was being
strangled. Peering closely, the witness saw Salvador and Abdulajid twisting the cord with a piece of
wood, garrote style. Romeleos hand could be seen trying to reach for the piece of wood in a backward
angle in a vain effort to stop the twisting. After a couple of minutes, Gabornes saw a body being carried
out of the cell. Delos Trino then approached Gabornesand said: Kung anong nakita mo, nakita mo lang.
Kung anong narinig mo, narinig mo lang. Sana huwag mo ng ikalat ito. Fearing for his
life, Gabornes promised not to tell anybody about the incident. Thereafter, he was released.
At about that time, the victims brother, Rolando, had already arrived from the United
States. Informed by Ancirell of the detention of his brother Romeleo, Rolando set out for home to deposit
his luggage but immediately went back to the airport with Ancirell and a
cousin, Rabadon Gavino (Gavino), to check on Romeleo. At around 3:00 a.m. of the same day, they
arrived at the IID-NAIA office and were met in the hallway by Bustamante who told them
that Romeleo was in the detention cell. Asking for directions, the group was ushered towards a dark
cell. When the lights were turned on, they were horrified to see the lifeless body of Romeleo hanging with
a cord around his neck with the other end tied around the iron grills of the cell window.
Rolando, Ancirell and Gavino, along with Soriano and Lingat, immediately brought the victim to
the San Juan De Dios Hospital aboard a police car. Rolando and his companions carried the victim to the
emergency room. Soriano and Lingat remained in the vehicle but returned to the NAIA after a
while. Romeleo was declared dead on arrival by the attending physician. Gabornes later learned of the
victims identity through the newspapers.
Baluyot, Delos Trino, Jose, Soriano, Bustamante, and Lingat, were all members of the Philippine National
Police (PNP) assigned with the IID-NAIA, while Salvador and Abdulajid were security guards of
the Lanting Security Agency assigned at NAIA.
After due proceedings, the trial court promulgated its Decision dated March 17, 2000, the decretal portion
reads:
In view of all the foregoing, the Court finds the accused Neil Baluyot y Tabisora,
Richard delos Trino y Sarcilla, Herminio Jose y Mozon, Edwin Soriano y dela Cruz,
Marcelo Bustamante y Zapanta, CarlitoLingat y Salvador, Elmer Salvador y Javale,
and Mutalib Abdulajid guilty beyond reasonable doubt of MURDER in Criminal Case No.
98-0457. It appearing on evidence that the accused voluntarily surrendered at the
Criminal Investigation and Detection Group as evidenced by Exh. 21, the Court credits
them with the mitigating circumstances of voluntary surrender and hereby sentences each
of them to RECLUSION PERPETUA and for each accused to pay the heirs of the victim
indemnity in the amount of P50,000.00.
In Criminal Case No. 98-0548 for Arbitrary Detention, it appearing from the evidence that
the victim Romeleo Quintos was detained at the IID for three (3) hours and fifteen (15)
minutes, the same is punished or penalized under Art. 124, paragraph 1 of the Revised
Penal Code which is herein below reproduced:
ART. 124. Arbitrary Detention. Any public officer or employee who,

without legal grounds, detains a person, shall suffer:
1. The penalty of arresto mayor in its maximum period

to prision correctional in its minimum period if the detention has not
exceeded three days;
xxxx
hence the case is not within the jurisdiction of this Court.
The OIC of this Court is hereby ordered to transmit the records of Criminal Case No. 98-
0548 for Arbitrary detention to the Metropolitan Trial Court.
The Petition for Bail filed by all the accused is hereby considered moot and academic.
Let an Alias Warrant of arrest be issued in so far as accused Mutalib Abdulajid is

concerned who remains at large.
SO ORDERED.[7]
The CA affirmed the Decision of the RTC in a Decision dated July 19, 2005, thus:
IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby AFFIRMED

in toto. Costs de officio.
SO ORDERED.[8]
Aggrieved, appellants filed their respective Motions for Reconsideration. In the

meantime, Lingat died. On March 6, 2006, the CA denied the motions for reconsideration. [9]
All the appellants, except Bustamante, filed notices of appeal. Bustamante filed an Urgent Motion
for Leave to Admit Second Motion for Reconsideration[10] but it was denied by the CA in its
Resolution[11] dated April 28, 2006. Thereafter, Bustamante filed a Petition for Review on Certiorari but the
same was treated as an appeal in the Resolution[12] dated January 15, 2007.
Issues
The issues raised are: (1) whether the uncorroborated testimony of the lone eyewitness, Gabornes, is
sufficient to produce a judgment of conviction; (2) whether conspiracy was proven beyond reasonable
doubt; and (3) whether appellants should be held liable only for homicide, and not for murder.
Our Ruling
Upon careful consideration of the evidence presented by both the prosecution and the defense, we are
unable to consider the appellants appeal with favor.
The uncorroborated testimony of a single

witness, if credible, is enough to warrant
conviction.
We find that the CA did not err in affirming the Decision of the trial court convicting the appellants of
murder based on the testimony of Gabornes, the lone eyewitness. It is settled jurisprudence that the
testimony of a single witness, if credible, is enough to warrant conviction. Both the trial court and the CA
found Gabornes to be credible and whose testimony is entitled to full faith. We find no cogent reason to
depart from said findings.
As borne out by the records, Gabornes positively identified and categorically pointed to appellants as the
ones who conspired with one another to kill Romeleo on June 1, 1997. He narrated the incident in a clear
and convincing manner. He testified on the degree of participation of each of the accused with regard to
the killing of Romeleo inside the IID-NAIA detention cell in such a manner that only an unbiased
eyewitness could narrate. Gabornes was not shown to have had any ill motives to testify falsely against
the appellants. As correctly observed by both the trial court and the CA, the fact that Gabornes was
previously arrested for being an unauthorized porter is not enough reason for him to falsely accuse
appellants of a very grave offense.
We also hold that the CA correctly disregarded the affidavit of recantation of Gabornes dated February
21, 2005. In the said affidavit, Gabornes denied that he was inside the detention cell of the NAIA on June
1, 1997. Instead, he claimed that he was under the fly-over near the NAIA playing a card
game. Consequently, he averred that there is no truth to his testimony given before the trial court pointing
to the appellants as the perpetrators of the crime. We are not persuaded.
Our ruling in People v. Ballabare[13] is instructive:
It is absurd to disregard a testimony that has undergone trial and scrutiny by the court
and the parties simply because an affidavit withdrawing the testimony is subsequently
presented by the defense. In the first place, any recantation must be tested in a public
trial with sufficient opportunity given to the party adversely affected by it to cross-examine
the recanting witness. x x x
In the second place, to accept the new evidence uncritically would be to make a solemn
trial a mockery and place the investigation at the mercy of unscrupulous witnesses. For
even assuming that Tessie Asenitahad made a retraction, this circumstance alone does
not require the court to disregard her original testimony. A retraction does not necessarily
negate an earlier declaration. For this reason, courts look with disfavor upon retractions
because they can easily be obtained from witnesses usually through intimidation or for
monetary considerations. Hence, when confronted with a situation where a witness
recants his testimony, courts must not automatically exclude the original testimony solely
on the basis of the recantation. They should determine which testimony should be given
credence through a comparison of the original testimony and the new testimony, applying
the general rules of evidence. x x x [14]
As we have already discussed, Gabornes testimony given before the National Bureau of
Investigation (NBI) and the trial court was replete with details that only a person who witnessed such
gruesome crime could narrate. Even during cross-examination, he remained steadfast in his account that
the appellants were the ones who killed Romeleo. Also, both the trial court and the appellate court had
several opportunities of taking a hard look at the records of the case considering the motions for
reconsideration filed by the appellants. Both the CA and the RTC found beyond reasonable doubt that the
appellants were indeed the authors of the crime.
The prosecution satisfactorily

established that appellants conspired
with each other in killing Romeleo.

We are not persuaded by the contention of the appellants that there was no conspiracy
considering that they were in different areas of the NAIA premises when the crime took place. As correctly
held by the CA:
At bar, appellants claimed that they were either at the NAIA parking lot or were
at the adjacent IID-NAIA office when the crime took place. These places, however, are
but a short distance away from the scene of the crime and one could travel to and from
these points in a little over a few seconds or minutes of leisure walking, as readily admitted
by appellants in their own version of the event. Verily, the possibility of appellants to be
at the scene of the crime at the time of its commission, is thus not farfetched.[15]
Besides, it is not required for conspiracy to exist that there be an agreement for an appreciable period
prior to the occurrence. It is sufficient that at the time of the commission of the offense, the accused had
the same purpose and were united in its execution. Direct proof of such agreement is not necessary. It
may be deduced from the mode and manner in which the offense was perpetrated, or inferred from the
acts of the accused which point to a joint purpose and design, concerted action and community of
interest.[16]
This community of design is present among the appellants as deduced from their individual
acts. The RTC observed thus:
The act of the accused Elmer Salvador, Neil Baluyot y Tabisora, and Richard
Delos Trino y Sarcilla of boxing the victim on the stomach and the act of
accused Herminio Jose who said tapusin na natin itotogether with the act of accused
Neil Baluyot of handing a tale or cord to Elmer Salvador who thereafter twisted the cord
which was around the neck of the victim with a piece of wood with the help of
accused Mutalib Abdulajid who up to the present remained at large, all acts of which were
done in the presence of all the accused namely: Neil Baluyot y Tabisora, Richard
Delos Trino y Sarcilla, Herminio Jose y Mozon, Edwin Soriano y dela Cruz, Marcelo
Bustamante y Zapanta, Carlito Lingat y Damaso and Elmer Salvador (including the
accused who is at large) clearly show that all accused conspired, confederated and helped
one another in murdering the victim with abuse of superior strength by strangling and
hanging the victim Romeleo Quintos causing him to die of asphyxia. In conspiracy, the
act of one is the act of all.
xxxx
Likewise, the act of accused Carlito Lingat y Damaso and Edwin Soriano y Dela Cruz of
not coming to the hospital to give the medical clerk the name and circumstances of the
victim including the facts surrounding the victims death is very suspicious indeed and is
contrary to the SOP of officers who bring victims to the hospital. Also the failure of all the
accused to immediately report to the police investigator of Pasay City is quite unusual. In
the same manner the acts of accused Neil Baluyot y Tabisora, Herminio Jose
y Mozon and Richard Delos Trino y Sarcilla of leaving the IID office and cell which is the
scene of the crime and then going to Biňan and to Atty. Augusto Jimenez is quite unusual
for persons who professed innocence.[17]
Moreover, the doctrine is well settled that conspiracy need not be proved by direct evidence but may be
proven through the series of acts done by each of the accused in pursuance of their common unlawful
purpose. For collective responsibility among the accused to be established, it is sufficient that at the time
of the aggression, all of them acted in concert, each doing his part to fulfill their common design to kill the
victim.[18]
The CA correctly observed that:
A fortiori, appellants should be held liable for the death of Romeleo Quintos. Their
sequential attack, one after another, revealed their unlawful intent to kill the
victim. Herminio Joses utterances of tapusin na natin ito only strengthens the link that
binds the acts of the appellants in their coordinated effort to kill Romeleo. x x x[19]
The circumstance of abuse of superior strength

qualified the killing to murder.
There is likewise no merit to appellants contention that they should only be held liable for homicide, and
not for murder, because the qualifying circumstance of abuse of superior strength was not specifically
alleged in the Information.
Contrary to the assertion of the appellants, the Information specifically alleged that the appellants were
x x x conspiring and confederating with one another, with intent to kill and taking
advantage of their superior strength, did then and there willfully, unlawfully and
feloniously tie a plastic nylon cord around the neck of one Romeleo A. Quintos, and hang
him at the end portion of the detention cell, which caused the instantaneous death of
said Romeleo A. Quintos to the damage and prejudice of the heirs of said victim.
It has been satisfactorily established that Baluyot, Delos Trino, Jose, Soriano, Bustamante,
and Lingat, were all members of the PNP assigned with the IID-NAIA, while Salvador and Mutalib were
security guards of the Lanting Security Agency assigned at NAIA. The eight of them acted in concert and
definitely took advantage of their superior strength in subduing and killing their lone victim who was
unarmed. Thus, all the appellants must be held liable for the crime of murder.
All told, appellants miserably failed to show convincing reasons to overturn the Decision of both the trial
court and the CA. In this case, the CA ascertained the factual findings of the trial court to be supported
by proof beyond reasonable doubt which led to the conclusion that appellants acted in unison in
killing Romeleo. It is worthy to stress that findings of fact of the CA, especially if they affirm factual findings
of the trial court, will not be disturbed by this Court, unless these findings are not supported by evidence.[20]
The liabilities
of Carlito Lingat and Mutalib Abdulajid
It has not escaped our notice that Abdulajid was not arraigned and remains at large up to this
time. However, in the Decision of the trial court which was affirmed by the CA, Abdulajid was likewise
found guilty as charged. This is erroneous considering that without his having been arraigned, the trial
court did not acquire jurisdiction over his person.
As regards Lingat, his death pending appeal and prior to the finality of conviction extinguished his criminal
and civil liabilities.[21] Moreover, the death of Lingat would result in the dismissal of the criminal case
against him.[22]
Damages
We note that both the trial court and the CA awarded the heirs of the victim only the amount
of P50,000.00 as civil indemnity. In line with prevailing jurisprudence,[23] we also award the amount
of P50,000.00 as moral damages. Further, we also award the amount of P25,000.00 as exemplary
damages pursuant to our ruling in People v. Angeles[24] where we held that under Article 2230 of the
Civil Code, exemplary damages may be awarded in criminal cases when the crime was committed
with one or more aggravating circumstances, (in this case, abuse of superior strength). This is
intended to serve as deterrent to serious wrongdoings and as vindication of undue sufferings and
wanton invasion of the rights of an injured, or as a punishment for those guilty of outrageous
conduct. The imposition of exemplary damages is also justified under Article 2229 of the Civil
Code in order to set an example for the public good. In addition, and in lieu of actual damages,
we also award temperate damages in the amount of P25,000.00.[25]
Likewise, we note that both the trial court and the CA overlooked the fact that during the testimony
of Clementina Quintos, the mother of the victim, sufficient evidence was presented to show that the victim
before his untimely death, was gainfully employed in a private company with a monthly salary
of P15,000.00.
Fiscal Barrera:
Q Would you describe Romeleo Quintos prior to his death?

A He was gainfully employed. He is an executive at IPC (International product
Corporation), Makati as operation officer.
xxxx
Q How much was your son Romeleo Quintos receiving as operation officer at IPC?
A P15,000.00, sir, monthly.
Q Do you have any evidence to show that he earn Five Thousand pesos [sic] (P15,000.00)
a month as project engineer?
A Yes, sir.
Fiscal Barrera:
May I request that the Certification dated January 22, 1999 issued by IPC be marked
as Exh. EEE; the name appearing thereat that Romeleo Quintos has been an employee
of IPC from January 8, 1997 up to June 1, 1997 with the position of operation officer with
monthly salary of P15,000.00 x x x be marked as Exh. EEE-1 and the signature of a
person who issued the certification be marked as Exh. EEE-2.[26]
The formula[27] for unearned income is as follows:
Life Expectancy x [Gross Annual Income (GAI) less Living Expenses (50% GAI)]
Where Life Expectancy= 2/3 x (80 age of the deceased)
Article 2206 of the Civil Code provides:
Art. 2206. That amount of damages for death caused by a crime or quasi-delict shall be
at least Three Thousand Pesos, even though there may have been mitigating
circumstances. In addition:
(1) the defendant shall be liable for the loss of the earning capacity of the deceased, and
the indemnity shall be paid to the heirs of the latter, such indemnity shall in every case
be assessed and awarded by the court, unless the deceased on account of permanent
physical disability not caused by the accused, had no earning capacity at the time of his
death;
xxxx
Hence, the testimony of the victims mother that Romeleo was earning P15,000.00 per month is sufficient
basis for an award of damages for loss of earning capacity.
It is well settled that the factors that should be taken into account in determining the compensable amount
of lost earnings are: (1) the number of years for which the victim would otherwise have lived; (2) the rate
of loss sustained by the heirs of the deceased.
The unearned income of Romeleo is computed as follows:
Unearned Income = 2/3 (80 30[28]) [(P15,000.00 x 12) (P15,000.00 x 12)]

= 2/3 (50) (P180,000.00 P90,000.00)
= 2/3 (50) (P90,000.00)
= 9,000,000.00/3
= P 3,000,000.00
WHEREFORE, the July 19, 2005 Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 00665
is MODIFIED. Appellants Neil Baluyot, Richard Delos Trino, Herminio Jose, Edwin Soriano, Marcelo
Bustamante, and Elmer Salvador, are hereby found GUILTY beyond reasonable doubt of the crime of
Murder and are sentenced to suffer the penalty of reclusion perpetuaand to pay the heirs
of Romeleo Quintos the amounts of P50,000.00 as civil indemnity, P50,000.00 as moral
damages, P25,000.00 as temperate damages, P25,000.00 as exemplary damages, and P3,000,000.00 as
lost income. In view of the death of Carlito Lingat pending appeal and prior to the finality of his conviction,
Criminal Case No. 98-0547 is DISMISSED and the appealed Decision is SET ASIDE insofar
as Carlito Lingat is concerned. Insofar as Mutalib Abdulajid is concerned, the March 17, 2000 Decision of
the Regional Trial Court of Pasay City, Branch 109 in Criminal Case No. 98-0547 is NULLIFIED for failure
of the trial court to acquire jurisdiction over his person. Consequently, the appealed July 19, 2005 Decision
of the Court of Appeals in CA-G.R. CR-H.C. No. 00665 is likewise SET ASIDE insofar
as Mutalib Abdulajid is concerned.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
CA rollo, pp. 786-803; penned by then Associate Justice Conrado M. Vasquez, Jr. and
concurred in by Associate Justices Rebecca De Guia-Salvador and Aurora Santiago Lagman.
[2]
Id. at 128-179; penned by Judge Lilia C. Lopez.
[3]
Id. at 854-855.
[4]
Id. at 85-86.
[5]
Id. at 87.
[6]
[7]
[8]
Id. at 802.
[9]
Id. at 854-855.
[10]
Id. at 858-867.
[11]
Id. at 871.
[12]
Rollo, p. 167.
[13]
332 Phil. 384 (1996).
[14]
Id. at 396-397.
[15]
CA rollo, p. 801
[16]
People v. Ricafranca, 380 Phil. 631, 642-643 (2000).
[17]
[18]
People v. Magalang, G.R. No. 84274, January 27, 1993, 217 SCRA 571, 574.
[19]
CA rollo, p. 800.
[20]
Baas, Jr. v. Court of Appeals, 382 Phil. 144, 154 (2000).
[21]
People v. Abungan, 395 Phil. 456, 458 (2000).
[22]
Id. at 462.
[23]
People v. Badriago, G.R. 183566, May 8, 2009.
[24]
G.R. No. 177134, August 14, 2009.
[25]
People v. Diaz, G.R. No. 185841, August 4, 2009.
[26]
TSN, February 25, 1999, pp. 4-5.
[27]
People v. Jabiniao, Jr., G.R. No. 179499, 30 April 2008, 553 SCRA 769, 787.
[28]
Romeleo was 30 years old at the time of his death on June 1, 1997.
SECOND DIVISION
RYAN S. PLAZA, Clerk of Court, A.M. No. P-08-2559

Municipal Trial Court, Argao, Cebu, (Formerly OCA IPI No. 08-2940-P)
Complainant,
- versus - Present:
ATTY. MARCELINA R. AMAMIO, CARPIO, J., Chairperson,

Clerk of Court, GENOVEVA R. LEONARDO-DE CASTRO,*
VASQUEZ, Legal Researcher and BRION,
FLORAMAY PATALINGHUG, DEL CASTILLO, and
Court Stenographer, all of the ABAD, JJ.
Regional Trial Court, Branch 26,
Argao, Cebu, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The court and its premises shall be used exclusively for court or judicial functions and not for any
other purpose. As temples of justice, their dignity and sanctity must be preserved at all times.
Factual Antecedents
On July 25, 2007, Ryan S. Plaza (Plaza), Clerk of Court II of the Municipal Trial Court of Argao,
Cebu, filed a complaint[1] against Atty. Marcelina R. Amamio (Amamio), Clerk of Court; Genoveva R.
Vasquez (Vasquez), Legal Researcher, and Floramay Patalinghug (Patalinghug), Court Stenographer, all
of the Regional Trial Court (RTC) of Argao, Cebu, Branch 26, for intentional violation of Administrative
Circular No. 3-92[2], when they allowed Sara Lee, a private company selling beauty and fashion products,
to hold a party and raffle draw inside the Argao Hall of Justice on July 14, 2007.
The facts as summarized by the Office of the Court Administrator (OCA) are as follows:
The complainant alleges that sometime in the first week of July 2007, he heard
that some of the personnel of RTC (Branch 26) were planning to hold a Sara Lee party in
the Argao Hall of Justice and that upon learning of the plan, he informed the personnel
of the said court about Administrative Circular No. 3-92 prohibiting the use of the Halls of
Justice for residential or commercial purposes.
The complainant claims that in the morning of July 14, 2007, a Saturday, the
security guard on duty, Mr. Roger O. Jimenez, telephoned him with the information that
there were persons from Sara Lee who wanted to enter the Argao Hall of Justice to put
up the decorations, sound system and catering equipment for the Sara Lee party. The
complainant states that he directed Mr. Jimenez not to allow the persons to enter the
premises. He then called up Atty. Amamio to inform her of the situation and of the
infraction that would be committed should the Sara Lee party push through. The
complainant alleges that Atty. Amamio insisted that she had authorized the Sara Lee party
and raffle draw.
The complainant then recounts the events that transpired as recorded in the
security logbook of the Argao Hall of Justice x x x. In the logbook, Mr. Jimenez wrote that
at around 11:05 in the morning of July 14, 2007, he received a telephone call from Ms.
Vasquez approving the use of the entrance lobby for the raffle draw which she claimed
was authorized by Atty. Amamio. According to the entries in the logbook, the raffle draw
started at around 2:00 p.m. and ended at 5:00 p.m., with fifty-one (51) participants
attending the event.
The complainant adds that even the security guards on duty who recorded the
Sara Lee event in the logbook were later subjected to x x x harassment by the
respondents who questioned the guards [as to] why the said event was recorded in the
logbook. He claims that Atty. Amamio even reprimanded the guards x x x, castigating the
latter for also jotting down in the logbook court personnel who were not in uniform.
The complainant stresses that holding the party and raffle draw inside
the Argao Hall of Justice was a clear violation of Administrative Circular 3-92 and had
exposed the properties and records contained within it to risk of damage and loss.
The joint comment (denominated as Compliance) dated August 21, 2007 of

respondents Amamio, Vasquez and Patalinghug vehemently and strongly RESIST the
charges against them for utter lack of both legal and factual bases x x x.
The respondents do not deny that they allowed the holding of the Sara Lee raffle
draw on July 14, 2007 at the ground floor lobby of the Argao Hall of Justice, but only after
respondents Amamio and Vasquez had fully discussed the matter upon receipt of the
letter dated June 4, 2007 of Mrs. Virginia C. Tecson, business manager of the Fuller Life
Direct Selling and Personal Collection, requesting permission to hold the raffle draw of
Sara Lee at the Argao Hall of Justice.
The respondents argue that similar activities had been held before at
the Argao Hall of Justice. They said that during the fiesta of Argao in September 2006, a
stage for beauty pageant was put up right at the entrance of the Argao Hall of Justice. The
contestants and other participants used the ground floor lobby, the stairs and the second
floor lobby of the said building. On January 28, 2007, the Municipality of Argao held
a Sinulog parade which culminated in the town plaza. Since the Argao Hall of Justice
fronts the town plaza, some spectators entered the building and went up the second floor
to watch the performance in the plaza. They add that on the ground floor lobby, several
persons, including the barangay tanods, were taking alcoholic beverages.
The respondents also claim that at the Cebu City Hall of Justice, raffle draws were
being conducted regularly and that the latest, which was held on March 30, 2007, was
sponsored by the very same people from Sara Lee. The respondents contend that the
prizes to this raffle draw, which included a multicab, were displayed on the ground floor
lobby of the building for one week.
According to the respondents, these were all taken into consideration when they
decided to grant the request of Mrs. Tecson. They insist that the proposed raffle draw
was a relatively minor event compared to the abovementioned activities.
The respondents added that since the building which houses the Argao Hall of
Justice has been declared a cultural heritage and is the centerpiece of the said
municipality, then the activity planned by Sara Lee was appropriate in promoting the town
of Argao. Respondents Amamio and Vasquez maintain that it was their honest belief that
the building was not to be used exclusively for court purposes, but also to be shown to
visitors who wanted to visit and see the historical building.
Thus, in her letter dated June 11, 2007, respondent Amamio formally granted the
request of Mrs. Tecson with the specific instructions to use only the ground floor lobby of
the building, to conduct their activity peacefully and orderly, to refrain from causing any
damage to the building and its premises and to clean the premises after the raffle draw.
Since respondent Vasquez could not attend the raffle draw,

respondent Amamio claims that she requested respondent Patalinghug to be at
the Argao Hall of Justice on the day of the raffle draw to make sure that her (Amamios)
instructions would be strictly observed.
Respondent Amamio denies the complainants allegation that the latter informed
the former about violating Administrative Circular No. 3-92. The said respondent declares
that she need not be informed about the issuance [of said circular] since she had
practically read and studied carefully all circulars that had been issued by the Supreme
Court not only as a dutiful Clerk of Court of the Regional Trial Court, but as a lawyer
herself.
The respondents deny that a party was held, saying that only a raffle draw was
conducted and that only softdrinks and finger foods were served to the participants. They
also claim that there was no danger to the building and the records since the raffle draw
was merely held at the ground floor lobby and that those who attended the raffle draw
were decent people, majority of them being women. Neither was there any commercial
activity or transaction which involved the buying and selling of goods for profit. According
to the respondents, Mrs. Tecsons primary reason for requesting the use of the ground
floor lobby of the Argao Hall of Justice was for her staff to experience and to
imbibe Argaos rich historical past.
The respondents also deny that they harassed and intimidated the security guards
who recorded the raffle draw in the logbook. Respondents Vasquez and Patalinghug only
inspected the logbook to find out who attended the raffle draw and
respondent Amamio merely called the attention of the guards as to why even the trivial
non-wearing of the office uniform of some employees were entered when Circular No.
49-2007 dated May 15, 2007 directed the optional wearing of uniforms.
Finally, the three respondents maintain that they had performed their duties to
the best of their abilities, acted with absolute good faith devoid of malice, and had no
intention to prejudice the interests of the Court. They insist that they have never violated
any rule, regulation, or law in the execution of their assigned tasks.[3]
On July 27, 2007, the matter was indorsed to Judge Maximo A. Perez, RTC of Argao, Cebu,
Branch 26, for appropriate action and investigation.[4]
Report and Recommendation of the Investigating Judge

In his Report[5] dated August 30, 2007, Judge Perez recommended the dismissal of the complaint
for lack of substantial evidence to substantiate the charge. He found that respondents did not violate A.M
No. 01-9-09-SC[6] which clarified Administrative Circular No. 3-92, for lack of showing that respondents
have used the Argao Hall of Justice for residential, dwelling or sleeping purposes; for lack of proof that
respondents have utilized the Argao Hall of Justice for commercial purposes because there was no buying
and selling of goods for profit on July 14, 2007; and neither was there selling of tickets. Nonetheless,
Judge Perez recommended that the respondents be sternly warned to be more circumspect in complying
with the guidelines for the use of the Hall of Justice.
Report and Recommendation of the OCA
In its Report and Recommendation,[7] the OCA did not agree with the findings of Judge Perez. On
the contrary, the OCA found that respondents violated Administrative Circular No. 3-92 by allowing the
holding of a raffle draw in the lobby of the Argao Hall of Justice. Accordingly, the OCA recommended that-
xxxx
2. Atty. Marcelina R. Amamio, Clerk of Court, Regional Trial Court (Branch

26), Argao, Cebu be SUSPENDED for one month and one day for simple misconduct with
a STERN WARNING that a repetition of the same or similar act shall be dealt with more
severely.
3. Ms. Genoveva R. Vasquez, Legal Researcher and

Ms. Floramay Patalinghug, Court Stenographer, both of the Regional Trial Court (Branch
26), Argao, Cebu be REPRIMANDED for violation of office rules and regulations with a
STERN WARNING that a repetition of the same or similar act shall be dealt with more
severely.
Our Ruling
We adopt the findings and recommendations of the OCA.
As a preliminary matter, we note that on May 22, 2008, complainant Plaza manifested before the Court
his intention to desist from pursuing the case. He wrote thus:
xxxx
At this point in time, I am respectfully informing your office that it is now my intention not
to pursue the matter any more for the reason that the attention of the respective
respondents has also been called x x xby the Executive Judge and besides, the incident
has already been heard before the said judge and I was already satisfied with the
outcome/resolution of the said proceedings.
x x x x[8]
At this point, we remind herein complainant that the discretion whether to continue with the proceedings
rests exclusively with the Court, notwithstanding the complainants intention to desist.Our ruling in Guray v.
Judge Baustista[9] is instructive:
This Court looks with disfavor at affidavits of desistance filed by complainants, especially
if done as an afterthought. Contrary to what the parties might have believed, withdrawal
of the complaint does not have the legal effect of exonerating respondent from any
administrative disciplinary sanction. It does not operate to divest this Court of jurisdiction
to determine the truth behind the matter stated in the complaint. The Courts disciplinary
authority cannot be dependent on or frustrated by private arrangements between parties.
An administrative complaint against an official or employee of the judiciary cannot simply

be withdrawn by a complainant who suddenly claims a change of mind. Otherwise, the
prompt and fair administration of justice, as well as the discipline of court personnel, would
be undermined. x x x [10]
Moreover, that the case has been heard by the Investigating Judge does not mean that he may order its
termination. As clearly stated in the Indorsement[11] of the OCA dated July 27, 2007, Judge Perez was only
directed to conduct an investigation and to submit his report thereon to the OCA, for further evaluation
by the latter. Likewise, it is immaterial and irrelevant whether complainant was satisfied with the outcome
of the case.
It is undisputed that on July 14, 2007, Sara Lee held a raffle draw at the ground floor lobby of
the Argao Hall of Justice. Ms. Virginia C. Tecson, Sara Lees Business Manager, wrote a letter addressed
to the Executive Judge of the RTC, Branch 26, Argao, Cebu, requesting permission for the holding of a
raffle draw at the Argao Hall of Justice. In their Compliance,[12]respondents Amamio and Vasquez
admitted that they discussed the said request between themselves,[13] notwithstanding the fact that the
said request was addressed to the Executive Judge.In a letter[14] dated June 11, 2007,
respondent Amamio granted the request of Sara Lee. As correctly noted by the OCA,
respondent Amamio exceeded her authority in taking it upon herself to grant the request of Sara Lees
representative, instead of referring the letter to the Executive Judge to whom it was addressed anyway.[15]
Indeed, the holding of a raffle draw at the Argao Hall of Justice by the staff of Sara Lee degraded
the honor and dignity of the court and exposed the premises, as well as the judicial records to danger of
loss or damage. In Administrative Circular No. 3-92, we have already reminded all judges and court
personnel that the Halls of Justice may be used only for purposes directly related to the functioning and
operation of the courts of justice, and may not be devoted to any other use x x x.
As correctly observed by the OCA:
A careful reading of the paragraph shows the Courts categorical statement that
the Halls of Justice are to be used only for court purposes and for no other purpose,
despite the use of the word may, which the respondents and the investigating judge
argue as permissive and not mandatory. The mention of residential and commercial
purposes are used as concrete examples since such instances actually happened xx x and
were in fact the subject of administrative cases, and are thus enumerated, not to exclude
other acts (as clearly indicated by the word least of all prior to the enumeration) but rather
to illustrate the general prohibition. Thus, the argument that the raffle draw event was not
residential nor commercial (despite the erudite distinction made by the respondents as to
what is commercial and what is not) deserves scant consideration.[16]
In fact, this reminder in Administrative Circular No. 3-92 was reiterated in Administrative Circular
No. 1-99[17] where we described courts as temples of justice and as such, their dignity and sanctity must,
at all times, be preserved and enhanced. The Court thus exhorted its officials and employees to strive to
inspire public respect for the justice system by, among others, not using their offices as a residence or for
any other purpose than for court or judicial functions.
On October 23, 2001, the Court also issued A.M. No. 01-9-09-SC, Section 3, Part I of which
provides
SEC. 3. USE OF HOJ.
SEC. 3.1 The HOJ shall be for the exclusive use of Judges, Prosecutors, Public
Attorneys, Probation and Parole Officers and, in the proper cases, the Registries of Deeds,
including their support personnel.
SEC. 3.2 The HOJ shall be used only for court and office purposes and shall not
be used for residential, i.e., dwelling or sleeping, or commercial purposes.
SEC. 3.3 Cooking, except for boiling water for coffee or similar
beverage, shall not be allowed in the HOJ.
Finally, we agree with the OCA that the fact the Argao Hall of Justice had been used for similar
activities does not justify the holding of the raffle draw thereat. Thus:
x x x The Argao Hall of Justice is not meant to be used for festivities, and in fact
should remain closed to the public during such occasions. The contention that there was
no danger to the building and the records since the raffle draw was merely held at the
ground floor lobby and that those who attended the raffle draw were decent people,
majority of whom are women, is untenable. Time and again, the Court has always
stressed in pertinent issuances and decisions that courts are temples of justice, the honor
and dignity of which must be upheld and that their use shall not expose judicial records
to danger of loss or damage. So strict is the Court about this that it has declared that the
prohibition against the use of Halls of Justice for purposes other than that for which they
have been built extends to their immediate vicinity including their grounds.
If the building housing the Argao Hall of Justice is such an important historical
landmark, all the more reason why activities, such as Sara Lee raffle draw, should not be
held within. At most, the said Hall of Justice could have been made part of a regular local
tour, to be viewed at designated hours, which viewing shall be confined to certain areas
not intrusive to court operations and records.[18]
ACCORDINGLY, we ADOPT the findings and recommendations of the Office of the Court
Administrator. Atty. Marcelina R. Amamio, Clerk of Court, Regional Trial Court of Argao, Cebu, Branch 26,
is hereby found GUILTY of simple misconduct and is ordered SUSPENDED for one month and one day
with a STERN WARNING that a repetition of the same or similar act shall be dealt with more
severely. Ms. Genoveva R. Vasquez, Legal Researcher and Ms. Floramay Patalinghug, Court
Stenographer, both of the Regional Trial Court of Argao, Cebu, Branch 26, are hereby found GUILTY of
violation of office rules and regulations and are REPRIMANDED with a STERN WARNING that a
repetition of the same or similar act shall be dealt with more severely.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION
ROBERTO A. ABAD
Associate Justice
*
In lieu of Justice Jose P. Perez, per raffle dated January 6, 2010.
[1]
Rollo, pp. 8-11.
[2]
Prohibition Against Use of Halls of Justice for Residential or Commercial Purposes.
[3]
Rollo, pp. 1-4.
[4]
Id. at 22.
[5]
Id. at 37-41.
[6]
Guidelines on the Occupancy, Use, Operation and Maintenance of Halls of Justice. Resolution
dated October 23, 2001.
[7]
Rollo, pp. 1-7.
[8]
Id. at 84.
[9]
413 Phil. 1 (2001).
[10]
Id. at 11-12.
[11]
Rollo, p. 22.
[12]
Rollo, pp. 43-50.
[13]
Id. at 43.
[14]
Id. at 52.
[15]
Id. at 6.
[16]
Id. at 5.
[17]
Enhancing the Dignity of Courts as Temples of Justice and Promoting Respect for their Officials
and Employees.
[18]
Rollo, pp. 5-6.
SECOND DIVISION

REVENUE,

- versus - BRION,
DEL CASTILLO,
ABAD, and
FAR EAST BANK & TRUST PEREZ, JJ.
COMPANY (NOW BANK OF
THE PHILIPPINE ISLANDS), Promulgated:
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
DEL CASTILLO, J.:

Entitlement to a tax refund is for the taxpayer to prove and not for the government to disprove.
This Petition for Review on Certiorari assails the January 31, 2006 Decision[1] of the Court of
Appeals (CA) in CA-G.R. SP No. 56773 which reversed and set aside the October 4, 1999 Decision[2] of
the Court of Tax Appeals (CTA) in CTA Case No. 5487. Also assailed is the July 19, 2006 Resolution[3] of
the CA denying the motion for reconsideration.
The CTA found that respondent Far East Bank & Trust Company failed to prove that the income
derived from rentals and sale of real property from which the taxes were withheld were reflected in its
1994 Annual Income Tax Return. The CA found otherwise.
Factual Antecedents
On April 10, 1995, respondent filed with the Bureau of Internal Revenue (BIR) two Corporate
Annual Income Tax Returns, one for its Corporate Banking Unit (CBU)[4] and another for its Foreign
Currency Deposit Unit (FCDU),[5] for the taxable year ending December 31, 1994. The return for the CBU
consolidated the respondents overall income tax liability for 1994, which reflected a refundable income
tax of P12,682,864.00, computed as follows:
FCDU CBU
Gross Income P13,319,068 5,348,080,630
Less: Deductions 1,397,157 5,432,828,719
Net Income 11,921,911 [84,748,089]

Tax Rate 35% 35%
Income Tax Due Thereon 4,172,669 NIL
Consolidated Tax Due for _______________________________________
Both CBU and FCDU Operations P 4,172,669
Less:
Quarterly Income Tax Payments

CBU -1st Quarter 633,085
-2nd Quarter 11,844,333
FCDU -1st Quarter 955, 280
-2nd Quarter 1,104,942
Less:
Creditable Taxes 2,317,893
Withheld at Source
Refundable Income Tax [P12,682,864][6]
Pursuant to Section 69[7] of the old National Internal Revenue Code (NIRC),
the amount of P12,682,864.00 was carried over and applied against respondents income tax liability for
the taxable year ending December 31, 1995. On April 15, 1996, respondent filed its 1995 Annual Income
Tax Return, which showed a total overpaid income tax in the amount of P17,443,133.00, detailed as
follows:
FCDU CBU
Gross Income P16,531,038 7,076,497,628
Less: Deductions 1,327,549 7,086,821,354
Net Income 15,203,539 [10,423,728]

Tax Rate 35% 35%
Income Tax Due Thereon 5,321,239 NIL
Consolidated Tax Due for _______________________________________
Both CBU and FCDU Operations P 5,321,239
Less:
Prior years (1994) excess
income tax credit 12,682,864
Additional prior years excess
income tax credit 6,283,484
Creditable Taxes
Withheld at Source 3,798,024
Refundable Income Tax [P17,443,133][8]
Out of the P17,433,133.00 refundable income tax, only P13,645,109.00 was sought to be
refunded by respondent. As to the remaining P3,798,024.00, respondent opted to carry it over to the next
taxable year.
On May 17, 1996, respondent filed a claim for refund of the amount of P13,645,109.00 with the BIR. Due
to the failure of petitioner Commissioner of Internal Revenue (CIR) to act on the claim for refund,
respondent was compelled to bring the matter to the CTA on April 8, 1997 via a Petition for Review
docketed as CTA Case No. 5487.
After the filing of petitioners Answer, trial ensued.
To prove its entitlement to a refund, respondent presented the following documents:
Exhibits Nature and Description
A Corporate Annual Income Tax Return covering income of respondents CBU for the
year ended December 31, 1994 together with
attachments
B Corporate Annual Income Tax Return covering income of respondents FCDU for
the year ended December 31, 1994 together
with attachments
C Corporate Annual Income Tax Return covering income of respondents CBU for the
year ended December 31, 1995 together with
attachments
D Corporate Annual Income Tax Return covering income of respondents FCDU for
the year ended December 31, 1995 together
with attachments
N to Z; Certificates of Creditable
AA to UU Withholding Tax and Monthly Remittance Returns of Income Taxes
Withheld issued by various withholding agents
for the year ended December 31, 1994
VV Letter claim for refund dated May 8, 1996 filed with the Revenue District Office
No. 33 on May 17, 1996[9]
Petitioner, on the other hand, did not present any evidence.
Ruling of the Court of Tax Appeals
On October 4, 1999, the CTA rendered a Decision denying respondents claim for refund on the ground
that respondent failed to show that the income derived from rentals and sale of real property from which
the taxes were withheld were reflected in its 1994 Annual Income Tax Return.
On October 20, 1999, respondent filed a Motion for New Trial based on excusable negligence. It
prayed that it be allowed to present additional evidence to support its claim for refund.
However, the motion was denied on December 16, 1999 by the CTA. It reasoned, thus:
[Respondent] is reminded that this case was originally submitted for decision as
early as September 22, 1998 (p. 497, CTA Records). In view, however, of the Urgent
Motion to Admit Memorandum filed on April 27, 1999 by Atty. Louella Martinez, who
entered her appearance as collaborating counsel of Atty. Manuel Salvador allegedly due
to the latter counsels absences, this Court set aside its resolution of September 22, 1998
and considered this case submitted for decision as of May 7, 1999. Nonetheless, it took
[respondent] another five months after it was represented by a new counsel and after a
decision unfavorable to it was rendered before [respondent] realized that an additional
material documentary evidence has to be presented by way of a new trial, this time
initiated by a third counsel coming from the same law firm. x x x
Furthermore, in ascertaining whether or not the income upon which the taxes
were withheld were included in the returns of the [respondent], this Court based its
findings on the income tax returns and their supporting schedules prepared and reviewed
by the [respondent] itself and which, to Us, are enough to support the conclusion
reached.
WHEREFORE, in view of the foregoing, [respondents] Motion for New Trial is
hereby DENIED for lack of merit.
SO ORDERED.[10]
On appeal, the CA reversed the Decision of the CTA. The CA found that
respondent has duly proven that the income derived from rentals and sale of real property upon which
the taxes were withheld were included in the return as part of the gross income.
Hence, this present recourse.

Issue
The lone issue presented in this petition is whether respondent has proven its entitlement to the
refund.[11]
Our Ruling
We find that the respondent miserably failed to prove its entitlement to the refund. Therefore, we
grant the petition filed by the petitioner CIR for being meritorious.
A taxpayer claiming for a tax credit or refund of creditable withholding tax must comply with the
following requisites:
1) The claim must be filed with the CIR within the two-year period from the date of payment of
the tax;
2) It must be shown on the return that the income received was declared as part of the gross
income; and
3) The fact of withholding must be established by a copy of a statement duly issued by the payor
to the payee showing the amount paid and the amount of the tax withheld.[12]
The two-year period requirement is based on Section 229 of the NIRC of 1997 which provides that:
SECTION 229. Recovery of Tax Erroneously or Illegally Collected. No suit or

proceeding shall be maintained in any court for the recovery of any national internal
revenue tax hereafter alleged to have been erroneously or illegally assessed or collected,
or of any penalty claimed to have been collected without authority, or of any sum alleged
to have been excessive or in any manner wrongfully collected, until a claim for refund or
credit has been duly filed with the Commissioner; but such suit or proceeding may be
maintained, whether or not such tax, penalty, or sum has been paid under protest or
duress.
In any case, no such suit or proceeding shall be filed after the expiration of two
(2) years from the date of payment of the tax or penalty regardless of any supervening
cause that may arise after payment: Provided, however, That the Commissioner may,
even without a written claim therefor, refund or credit any tax, where on the face of the
return upon which payment was made, such payment appears clearly to have been
erroneously paid. (Formerly Section 230 of the old NIRC)
While the second and third requirements are found under Section 10 of Revenue Regulation No. 6-85, as
amended, which reads:
Section 10. Claims for tax credit or refund. Claims for tax credit or refund of
income tax deducted and withheld on income payments shall be given due course only
when it is shown on the return that the income payment received was declared as part
of the gross income and the fact of withholding is established by a copy of the statement
duly issued by the payer to the payee (BIR Form No. 1743.1) showing the amount paid
and the amount of tax withheld therefrom.
Respondent timely filed its claim for refund.
There is no dispute that respondent complied with the first requirement. The filing of respondents
administrative claim for refund on May 17, 1996 and judicial claim for refund on April 8, 1997 were well
within the two-year period from the date of the filing of the return on April 10, 1995.[13]
Respondent failed to prove that the income

derived from rentals and sale of real property
were included in the gross income as reflected in
its return.
However, as to the second and third requirements, the tax court and the appellate court arrived
at different factual findings.
The CTA ruled that the income derived from rentals and sales of real property were not included
in respondents gross income. It noted that in respondents 1994 Annual Income Tax Return, the phrase
NOT APPLICABLE was printed on the space provided for rent, sale of real property and trust income. The
CTA also declared that the certifications issued by respondent cannot be considered in the absence of the
Certificates of Creditable Tax Withheld at Source. The CTA ruled that:
x x x the Certificates of Creditable Tax Withheld at Source submitted by [respondent]

pertain to rentals of real property while the Monthly Remittance Returns of Income Taxes
Withheld refer to sales of real property. But, if we are to look at Schedules 3, 4, and 5 of
the Annual Income Tax Return of [respondent] for 1994 (Exhibit A), there was no
showing that the Rental Income and Income from Sale of Real Property were
included as part of the gross income appearing in Section A of the said
return. In fact, under the said schedules, the phrase NOT APPLICABLE was printed by
[respondent]. Verily, the income of [respondent] coming from rent and sale of
real property upon which the creditable taxes withheld were based were not
duly reflected. As to the certifications issued by the [respondent] (Exh. UU), the same
cannot be considered in the absence of the requisite Certificates of Creditable
Tax Withheld at Source.
Based on the foregoing, [respondent] has failed to comply with two

essential requirements for a valid claim for refund. Consequently, the same
cannot be given due course. [14] (Emphasis supplied)
On the other hand, the CA found thus:
We disagree with x x x CTAs findings. In the case of Citibank, N.A. vs. Court of
Appeals (280 SCRA 459), the Supreme Court held that:
a refund claimant is required to prove the inclusion of

the income payments which were the basis of the withholding
taxes and the fact of withholding. However, a detailed proof of the
truthfulness of each and every item in the income tax return is not
required. x x x
x x x The grant of a refund is founded on the assumption that the tax

return is valid; that is, the facts stated therein are true and correct. x x x
In the case at bench, the BIR examined [respondent] Banks Corporate Annual
Income Tax Returns for the years 1994 and 1995 when they were filed on April 10,
1995 and April 15, 1996, respectively.Presumably, the BIR found no false declaration in
them because it did not allege any false declaration thereof in its Answer (to the petition
for review) filed before x x x CTA. Nowhere in the Answer, did the BIR dispute the amount
of tax refund being claimed by [respondent] Bank as inaccurate or erroneous. In fact, the
reason given by the BIR (in its Answer to the petition for review) why the claimed tax
refund should be denied was that x x x the amount of P13,645,109.00 was not illegally or
erroneously collected, hence, the petition for review has no basis [see Record, p. 32]. The
amount of P17,433,133.00 reflected as refundable income tax in [respondent] Banks
Corporate Annual Income Tax Return for the year 1995 was not disputed by the BIR to
be inaccurate because there were certain income not included in the return of the
[respondent]. Verily, this leads Us to a conclusion that [respondent] Banks Corporate
Annual Income Tax Returns submitted were accepted as regular and even accurate by
the BIR.
Incidentally, under Sec. 16 of the NIRC, the Commissioner of the BIR is tasked
to make an examination of returns and assess the correct amount of tax, to
wit:
Sec. 16. Power of the Commissioner to make assessment and

prescribe additional requirements for tax administration and
enforcement.
(a) After a return is filed as required under the provision of this

Code, the Commissioner shall examine it and assess the correct amount
of tax. x x x
which the [petitioner] Commissioner undeniably failed to

do. Moreover, noteworthy is the fact that during the hearing of the petition for review
before the CTA, [petitioner] Commissioner of the BIR submitted the case for decision in
view of the fact that he has no evidence to present nor records to submit relative to the
case x x x
Thus, although it is a fact that [respondent] failed to indicate said income payments under
the appropriate Schedules 3, 4, and 5 of Section C of its 1994 Annual Income Tax Return
(Exhibit A), however, We give credence to [respondent] Banks assertion that it
reported the said income payments as part of its gross income when it
included the same as part of the Other Income, Trust Income, and Interest
Income stated in the Schedule of Income (referred to as an attachment in Section C of
Exhibit A, x x x and in the 1994 audited Financial Statements (FS) supporting
[respondents] 1994 Annual Corporate Income Tax Return. The reason why the phrase
NOT APPLICABLE was indicated in schedules 3, 4, and 5 of Section C of [respondents]
1994 Annual Income Tax Return is due to the fact that [respondent] Bank already
reported the subject rental income and income from sale of real property in the Schedule
of Income under the headings Other Income/Earnings, Trust Income and Interest
Income. Therefore, [respondent] Bank still complied with the second requirement that
the income upon which the taxes were withheld are included in the return as part of the
gross income.
xxxx
[Respondent] Banks various documentary evidence showing that it had satisfied all
requirements under the Tax Code vis--vis the Bureau of Internal Revenues failure
to adduce any evidence in support of their denial of the claim, [respondent] Bank
should, therefore, be granted the present claim for refund.[15] (Emphasis supplied)
Between the decision of the CTA and the CA, it is the formers that is based on the evidence and
in accordance with the applicable law and jurisprudence.
To establish the fact of withholding, respondent submitted Certificates of Creditable Tax Withheld
at Source and Monthly Remittance Returns of Income Taxes Withheld, which pertain to rentals and
sales of real property, respectively. However, a perusal of respondents 1994 Annual Income Tax
Return shows that the gross income was derived solely from sales of services. In fact, the phrase
NOT APPLICABLE was printed on the schedules pertaining to rent, sale of real property, and trust
income.[16] Thus, based on the entries in the return, the income derived from rentals and sales of real
property upon which the creditable taxes were withheld were not included in respondents gross
income as reflected in its return. Since no income was reported, it follows that no tax was
withheld. To reiterate, it is incumbent upon the taxpayer to reflect in his return the income upon which
any creditable tax is required to be withheld at the source.[17]
Respondents explanation that its income derived from rentals and sales of real properties were
included in the gross income but were classified as Other Earnings in its Schedule of Income[18] attached
to the return is not supported by the evidence. There is nothing in the Schedule of Income to show that
the income under the heading Other Earnings includes income from rentals and sales of real property. No
documentary or testimonial evidence was presented by respondent to prove this. In fact, respondent,
upon realizing its omission, filed a motion for new trial on the ground of excusable negligence with the
CTA. Respondent knew that it had to present additional evidence showing the breakdown of the Other
Earnings reported in its Schedule of Income attached to the return to prove that the income from rentals
and sales of real property were actually included under the heading Other Earnings.[19] Unfortunately, the
CTA was not convinced that there was excusable negligence to justify the granting of a new trial.
Accordingly, the CA erred in ruling that respondent complied with the second requirement.
Respondent failed to present all the Certificates

of Creditable Tax Withheld at Source.
The CA likewise failed to consider in its Decision the absence of several Certificates of Creditable
Tax Withheld at Source. It immediately granted the refund without first verifying whether the fact of
withholding was established by the Certificates of Creditable Tax Withheld at Source as required
under Section 10 of Revenue Regulation No. 6-85. As correctly pointed out by the CTA, the
certifications (Exhibit UU) issued by respondent cannot be considered in the absence of the required
Certificates of Creditable Tax Withheld at Source.
The burden is on the taxpayer to prove its

entitlement to the refund.
Moreover, the fact that the petitioner failed to present any evidence or to
refute the evidence presented by respondent does not ipso facto entitle the respondent to a tax refund. It
is not the duty of the government to disprove a taxpayers claim for refund. Rather, the burden of
establishing the factual basis of a claim for a refund rests on the taxpayer.[20]
And while the petitioner has the power to make an examination of the returns and to assess the
correct amount of tax, his failure to exercise such powers does not create a presumption in favor of the
correctness of the returns. The taxpayer must still present substantial evidence to prove his claim for
refund. As we have said, there is no automatic grant of a tax refund.[21]
Hence, for failing to prove its entitlement to a tax refund, respondents claim must be denied. Since
tax refunds partake of the nature of tax exemptions, which are construed strictissimi juris against the
taxpayer, evidence in support of a claim must likewise be strictissimi scrutinized and duly proven.[22]
WHEREFORE, the petition is GRANTED. The assailed January 31, 2006 Decision of the Court
of Appeals in CA-G.R. SP No. 56773 and its July 19, 2006 Resolution are REVERSED and SET
ASIDE. The October 4, 1999 Decision of the Court of Tax Appeals denying respondents claim for tax
refund for failure to prove that the income derived from rentals and sale of real property from which the
taxes were withheld were reflected in its 1994 Annual Income Tax
Return, is REINSTATED and AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons attestation,
it is hereby certified that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 127-139; penned by Associate Justice Edgardo F. Sundiam and concurred in by
Associate Justices Martin S. Villarama, Jr. (now a Member of this Court)
and Japar B. Dimaampao.
[2]
Id. at 142-151; penned by Associate Justice Amancio Q. Saga and concurred in by Presiding
Justice Ernesto D. Acosta and Associate Justice Ramon O. De Veyra.
[3]
Id. at 140-141.
[4]
Id. at 154-155.
[5]
Id. at 178.
[6]
Id. at 143.
[7]
Section 69. Final Adjustment Return. Every corporation liable to tax under Section 24 shall file
a final adjustment return covering the total net income for the preceding calendar or fiscal
year. If the sum of the quarterly tax payments made during the said taxable year is not equal
to the total tax due on the entire taxable net income of that year the corporation shall either:
(a) Pay the excess still due; or
(b) Be refunded the excess amount paid, as the case may be.
In case the corporation is entitled to a refund of the excess estimated quarterly income taxes
paid, the refundable amount shown on its final adjustment return may be credited against
the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable
year. (Now Section 76 of the NIRC of 1997).
[8]
Rollo, p. 143.
[9]
Id. at 147-148.
[10]
Id. at 152-153.
[11]
Id. at 111.
[12]
Banco Filipino Savings and Mortgage Bank v. Court of Appeals, G.R. No. 155682, March 27,
2007, 519 SCRA 93, 96.
[13]
Rollo, p. 149.
[14]
Id. at 150.
[15]
Id. at 136 to 138.
[16]
Id. at 155.
[17]
Far East Bank and Trust Company v. Court of Appeals, G.R. No. 129130, December 9, 2005,
477 SCRA 49, 54.
[18]
Rollo, p. 173.
[19]
[20]
Philippine Long Distance Telephone Company v. Commissioner of Internal Revenue, G.R. No.
157264, January 31, 2008, 543 SCRA 329, 335.
[21]
Philam Asset Management, Inc. v. Commissioner of Internal Revenue, G.R. Nos. 156637 and
162004, December 14, 2005, 477 SCRA 761, 775.
[22]
Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal
Revenue, G.R. No. 159490, February 18, 2008, 546 SCRA 150, 163.
EN BANC
ERPASCUAL DIEGA y PAJARES, G.R. No. 173510

Petitioner,
- versus -
COURT OF APPEALS,
Respondent.
x---------------------------x

Appellee, Present:
- versus - PUNO, C. J.,

CARPIO,
ERPASCUAL DIEGA y PAJARES, CORONA,
Appellant. CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ, and
MENDOZA, JJ.
Promulgated:
March 15, 2010
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The accused may be convicted on the basis of circumstantial evidence, provided the proven circumstances
constitute an unbroken chain leading to one fair reasonable conclusion pointing to the accused, to the
exclusion of all others, as the guilty person.[1]
The instant appeal assails the Decision[2] of the Court of Appeals (CA) dated February 9, 2006 in CA-G.R.
CR-H.C. No. 01384 which affirmed with modification the Decision[3] of the Regional Trial Court (RTC) of
Malolos, Bulacan, Branch 21 dated March 3, 1991 in Criminal Case No. 949-M-95, finding appellant guilty
beyond reasonable doubt of the complex crime of rape with homicide.
Factual Antecedents
The Amended Information[4] against the appellant contains the following accusatory allegations:
That on or about the 17th day of March, 1995, in the Municipality of San Jose del Monte,
Province of Bulacan, Philippines and within the jurisdiction of this Honorable Court the
above-named accused, with lewd design, by means of force and intimidation, did then
and there willfully, unlawfully and feloniously have carnal knowledge of AAA[5] against the
latters will and without her consent, and by reason or on occasion of the said rape, said
accused did then and there, willfully, unlawfully and feloniously, with intent to kill the said
AAA, attack, strangulate and assault her with wood vine and blunt instrument, thereby
inflicting upon her mortal injuries/wounds which directly caused her death.
Contrary to law.
Upon arraignment, the appellant entered a plea of not guilty. Thereafter, trial ensued.

The Brief for the Appellee[6] contains a summary of the following evidence
for the prosecution:
The victim, AAA, was a 13-year old girl residing with her family in Rodriguez, Rizal. She was a 1st year high
school student and would usually leave her home at 4:00 oclock in the morning and walk for about a
kilometer to a terminal where she could take a ride to school. The path towards the terminal passes a
farm within a 50-hectare plantation located at Upper Ciudad Real, Araneta, San Jose Del Monte, Bulacan,
where the appellant was employed as a stay-in security guard. AAA uses the same route on her way
home.
On March 17, 1995, AAA failed to return home at the usual time. Her parents frantically searched for her,
but it was only on the next day, March 18, 1995, between 9:00 and 10:00 oclock in the morning, when
the dead body of AAA was discovered inside the plantation.
AAAs corpse was covered with leaves. A wood vine was tied around her neck and her head bore several
wounds. Her school uniform was crumpled and her panty was missing. The medico-legal examination
conducted around 24 hours from AAAs death indicated that she died of asphyxia by strangulation,
hemorrhages as a result of traumatic injuries, head and body. There were deep, fresh lacerations
at 3:00 and 9:00 oclock positions and a shallow fresh laceration at 7:00 oclock position in her hymen
which are compatible with recent loss of virginity. Moreover, the doctor who conducted the examination
on the cadaver of AAA saw several injuries in the middle left forearm, suggesting that AAA used her hands
to protect herself.
The police investigation revealed that on March 17, 1995, between 1:00 and 2:00 oclock in the afternoon,
Juanito Manalo III (Juanito) was tending to the grazing carabaos inside the plantation when he saw the
appellant stooping down. The appellant stood up clad only in his shorts and waved his pistol to call
Juanito. As Juanito approached, he saw that the appellant had a menacing look and noticed AAA lying
unconscious on the ground. The appellant then pointed his pistol to Juanito and ordered him to touch the
body of AAA and to tie a vine around her neck. Out of fear, Juanito obeyed and discovered that AAA no
longer had undergarments. He was permitted to leave, but only after the appellant threatened to kill him
and his family if he would reveal to anyone what he witnessed. As Juanito fled from the scene, he was
seen by Martin Gailan (Martin) and Arnel Alminana (Arnel).
Martin and Arnel were also privy to the death threats made by the appellant against Juanito on several
occasions causing Juanito to leave his abode temporarily. They also claimed that although the appellant
reported for work on March 17, 1995, he was not in his post and could not be located. At the time the
appellant was questioned by the police, it was observed that he had fresh scratches on his arms, neck,
and back.
The police investigation also revealed that prior to the commission of the crime, AAA and her aunt used
to pass by the plantation and every time the appellant would see them, especially when he was drunk,
he would whistle at AAA and even touch her upper arm. At one time, the appellant uttered to AAAs
aunt, Misis, ingatan mo ang iyong pamangkin. According to the aunt, the appellant always looked
lecherously at AAA.
Initially the appellant voluntarily submitted himself to detention. However, he was released to the custody
of his former counsel after his waiver was withdrawn. Pending trial, he absconded and remained at-large
until his arrest in his hometown in Baybay Gamay in Northern Samar.
The appellant denied any wrongdoing. According to him, he did not know AAA. He claimed he was at
Balete, in the center of the farm from midnight to 10:00 oclock in the morning of March 17,
1995. Thereafter, until 3:00 oclock in the afternoon, he was in Makabod, Montalban, Rizal, which was on
the other side of the river where the crime was committed.
The appellant alleged that he was being falsely accused of the rape-slay because he informed the farm
manager that AAAs family was squatting within the farm and that he prevented their carabaos from
grazing inside the compound. He belied the claim of Juanito but admitted not knowing of any motive why
Juanito would falsely testify against him.
On March 19, 1995, the police invited him and other employees of the farm for questioning. After all of
them were questioned, he was the only one who was not allowed to leave. On March 22, 1995, the police
prepared his statement despite the fact that he was not assisted by counsel. Thereafter, the statement
was subscribed before one of the officers.
The appellant claimed that he was released after five days of incarceration without a case having been
filed against him. However, on March 26, 1995, or two days after being released, he was again brought
to the police station for questioning. During his imprisonment, the parents of AAA allegedly admitted in a
confrontation held in the presence of the jail warden and the investigating police officer that they filed the
complaint due to the land dispute with the owners of the farm and not because of the death of their
daughter, AAA.
On April 4, 1995, the appellant further claimed that he was released from detention, again without any
complaint being filed against him. However, on April 10, 1995 a warrant of arrest was issued against him
based on the sworn statement of Juanito. The police attempted to serve the warrant at his workplace but
failed since he was no longer an employee of the farm. It was only on October 30, 1997 that he was
arrested in his home province of Northern Samar.
On March 3, 1999, the RTC rendered judgment convicting the appellant of rape with homicide. The
dispositive portion of the Decision reads:
WHEREFORE, all premises considered, this Court resolves that the prosecution has
successfully undertaken its burden to prove the guilt of the accused beyond reasonable
doubt. Accordingly, accused Erpascual Diega y Pajares is hereby found GUILTY of the
crime of Rape with Homicide as charged. In view thereof and pursuant to Article 335 of
the Revised Penal Code as amended, considering that by reason or on occasion of the
Rape, Homicide [was] committed, the accused is sentenced to suffer the penalty of
DEATH by lethal injection.
He is further directed to indemnify [the] heirs of AAA the sum of P50,000.00 for the latters
death, the amount of P42,000.00 for actual damages and the additional sum
of P100,000.00 for moral damages.
With costs against the accused.[7]

The case was forwarded to this Court for automatic review and docketed as G.R. No.
138232. However, in consonance with our ruling in People v. Mateo,[8] the case was transferred to the CA
for proper disposition.
The CA affirmed with modification the trial courts Decision and disposed as follows:
WHEREFORE, in view of the foregoing, the Decision dated March 13, 1999 of the Regional
Trial Court of Malolos, Bulacan, Branch 21 is AFFIRMED with MODIFICATION that
the civil indemnity ex delicto be increased from P50,000.00 to P100,000.00 conformably
with the ruling in People vs. Paraiso, 349 SCRA 335.
SO ORDERED.[9]
The case once again reached this Court and was docketed as G.R. No. 174099. Meanwhile, the appellants
counsel filed a motion for extension to file petition for review on certiorari which was docketed as G.R. No.
173510. The motion was granted[10] and a petition for review was filed.[11] G.R. Nos. 174099 and 173510
were subsequently consolidated since both cases involve the same parties and issues and assail the same
Decision of the CA.[12]
The Issue
Appellant attributes the following error to the appellate court:
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN

UPHOLDING THE FINDINGS OF THE REGIONAL TRIAL COURT THAT CIRCUMSTANTIAL
EVIDENCE ARE STRONG ENOUGH TO CONVICT THE ACCUSED AND SENTENCED HIM
TO DEATH.[13]
Our Ruling
In a special complex crime of rape with homicide, the following elements must concur: (1) the
appellant had carnal knowledge of a woman; (2) carnal knowledge of a woman was achieved by means
of force, threat or intimidation; and (3) by reason or on occasion of such carnal knowledge by means of
force, threat or intimidation, the appellant killed a woman.[14] Both rape and homicide must be established
beyond reasonable doubt.[15]
Considering that there were no witnesses to the commission of the crime charged herein, the
weight of the prosecutions evidence must then be appreciated in light of the well-settled rule that an
accused can be convicted even in the absence of an eyewitness, as long as sufficient circumstantial
evidence is presented by the prosecution to prove beyond reasonable doubt that the accused committed
the crime.[16]
Circumstantial evidence consists of proof of collateral facts and circumstances from which the
existence of the main fact may be inferred according to reason and common experience.[17] It is sufficient
to sustain conviction if: (a) there is more than one circumstance; (b) the facts from which the inferences
were derived have been established; and (c) the combination of all circumstances is such as to warrant a
finding of guilt beyond reasonable doubt.[18]
For circumstantial evidence to be sufficient to support a conviction, all the circumstances must be
consistent with each other, consistent with the hypothesis that accused is guilty and at the same time
inconsistent with the hypothesis that he is innocent, and with every other rational hypothesis except that
of guilt.[19] In other words, a judgment of conviction based on circumstantial evidence can be sustained
when the circumstances proved form an unbroken chain that results in a fair and reasonable conclusion
pointing to the accused, to the exclusion of all others, as the perpetrator.[20]
Here, the circumstantial evidence presented by the prosecution leads to the inescapable conclusion that
the appellant committed the complex crime of rape with homicide. When considered together, the
circumstances point to the appellant as the culprit to the exclusion of all others.
First. The appellant lived and worked as a security guard in the farm where AAA was raped and killed.
Due to the nature of his job, he had all the opportunity to observe the people who travelled to and from
the farm.
Second. AAA routinely passed by the farm in going to school. She used the same path on her way
home.
Third. The appellant displayed lewd interest whenever he saw AAA by touching her arms and
making lewd comments.
Fourth. Although the appellant reported for duty on the day the crime was committed, he was
not on his post and could not be located.
Fifth. On March 17, 1995, at around 1:00 to 2:00 oclock in the afternoon, Juanito identified the
appellant, clad only in short pants, as the only person beside the unconscious AAA, whose blouse was
unbuttoned and crumpled, and whose skirt was raised above her knees, near the banana grove inside
the farm.
Sixth. The appellant threatened to kill Juanito, and with the use of a pistol, ordered him to touch
the body of AAA and to tie a vine around her neck.
Seventh. When Juanito obeyed, he noticed that AAA no longer had undergarments.
Eighth. The threat on the life of Juanito by the appellant was persistent. Prosecution witnesses
Martin and Arnel testified that the appellant continued to threaten Juanito on several occasions.
Ninth. During the police investigation, the appellant had several scratches on his arms, neck, and
body, which the investigators determined to have been caused by fingernails.
Tenth. The autopsy revealed that AAA was raped, beaten and strangled to death on or about the
time and date Juanito saw the appellant beside the unconscious body of AAA.
Eleventh. The appellant was observed to be restless after the crime.
Twelfth. As soon as the waiver was withdrawn by the former counsel of the appellant, the latter
abandoned his job and never returned.
Thirteenth. The appellant also fled his residence before the warrant of arrest could be served by
the police. The case was even delayed for two years until his capture in a remote barangay in Northern
Samar.
The appellant however assails the sufficiency of the circumstantial evidence and alleges that Juanito was
the perpetrator of the crime. According to appellant, on the day the crime was committed, Juanito left the
office at 1:00 oclock in the afternoon, which is the time AAA usually passes through the farm every school
day. At 1:30 oclock in the afternoon, he was seen by his co-workers scampering towards the forest.
Thereafter, the police invited him for questioning and thus had the opportunity to tell the police what he
witnessed. However, he remained silent. Juanito even went into hiding momentarily after the discovery
of the crime.
The appellant also claims that he could not have threatened Juanito since he was already detained
pending police investigation of the incident. The threat against Juanito was merely imagined. Further, the
appellant argues that the testimonies of Martin and Arnel that they saw Juanito run from the scene of the
crime are unworthy of credence because they did not inform the police of this incident at the very instance
they were invited for questioning.
The appellant likewise posits that the police imputed the rape and murder of AAA to him since
there was no other lead in solving the case. There were also no pieces of physical evidence recovered
from the crime scene. The police instead relied on the alleged scratches found on his back and arms to
link him to the crime. However, the appellant argues that this is unbelievable since he was not subjected
to a medical examination to determine whether the alleged scratches were indeed inflicted by fingernails.
At the very least, the police should have taken pictures of said scratches, but they did not do so.
The appellant assails the trial courts finding that he had a motive for committing the crime in view of the
testimony of AAAs aunt that he touched AAA maliciously and uttered lewd remarks. He claims that if the
testimony of AAAs aunt were true, then a complaint should have been filed against him or, at least, the
aunt should have told the parents of AAA of this incident. However, she did not do so. Appellant likewise
alleges that the family of the victim had ill motives in filing the case against him because they had a
previous land dispute.
The appellant further insists that his voluntary submission to a polygraph examination despite the absence
of a lawyer is indicative of his innocence. Moreover, he claims to have been in the office at around 10:00
oclock in the morning on the day the crime was committed. He was also seen on the same day by the
prosecution witness on board a truck at around 3:00 oclock in the afternoon and again sometime around 5
oclock in the afternoon.
Lastly, the appellant contends that he was denied due process since it was only the sworn statements of
the prosecution witnesses that the police investigators prepared that served as basis for the issuance of a
warrant for his arrest. The appellant claims that Juanito and the other witnesses should have been
presented to the Municipal Trial Court judge, who, in turn, should have examined them personally by way
of probing questions. He further avers that the illegality of his arrest is also apparent from his detention
for five days without being charged with any offense.
The appellants arguments fail to impress.
Juanitos presence at the crime scene at the time AAA was raped and killed does not necessarily
mean that he was the author of the crime. Juanito has sufficiently explained in a clear and categorical
manner his presence thereat. He testified on how he unexpectedly found the appellant clad only in his
shorts stooping down on the grassy portion of the banana grove inside the farm. He recounted how the
appellant told him to approach the unconscious body of AAA and forced him under threat of death, to tie
her with a wood vine. He also narrated his flight after the appellant decided to let him
go. Juanitos testimony deserves credence since it was unshaken by cross-examination and unflawed by
contradictions.
The credibility of Juanito is not adversely affected by his initial silence since he was under constant threat
by the appellant. After learning of the fate suffered by AAA at the hands of the appellant, it was only
natural for Juanito to take the threat against him and his family seriously. The threat was real and present
even after Juanito left. In fact, appellant told Martin and Arnelthat he would kill Juanito.
Moreover, it is not true that Juanito kept the matter to himself. He told his mother of the crime he
witnessed and even wrote a letter to her before leaving for the province to avoid the appellant.[21]
Similarly, the belated disclosure of Martin and Arnel that they saw Juanito run from the banana grove at
the time AAA was raped and slain does not diminish their credibility. People react differently to what they
observed depending on their situation and state of mind. Martin and Arnel did not bother to report to the
police investigators that they saw Juanito running from the plantation because, at that time, they did not
know that it was somehow related to the fateful incident. They also knew that Juanito was a good-natured
boy incapable of committing misdemeanors. It was, therefore, difficult for them to link him to the rape
and murder of AAA.
Further, these prosecution witnesses would not fabricate and concoct such a tale against a man with
whom they had no previous misunderstanding or quarrel, and are in fact telling the truth, motivated by a
sincere desire to obtain justice for the criminal acts committed by the appellant on the young and
defenseless AAA.
We find absurd the contention of the appellant that he was implicated by the police since the latter had
no other leads in their investigation. Among the 12 employees of the farm who were questioned by the
police investigators, the appellant became the prime suspect due to his inability to explain the fingernail
scratches discovered on different parts of his body. Although he vehemently denied having scratches, the
prosecution sufficiently established the contrary. At the police station, he explained that the scratches on
his arm were caused by a barbwire while the scratches in other parts of his body were caused by mosquito
bites. However, the ocular inspection conducted by the police investigators revealed that the barbwire
was only knee-high and could not have caused the scratches on appellants arms. Moreover, it was clear
from the appearance of the fresh scratches on the appellants body that the same were not caused by
mosquito bites. They were more compatible with fingernail marks. The lack of a medical examination does
not diminish their evidentiary weight. After all, it was the appellants counsel who refused to have him
examined.[22]
Motive has also been proven by the prosecution. AAAs aunt testified that prior to the commission of
the crime, the appellant maliciously stared at and uttered remarks with sexual overtones to AAA on several
occasions. Her failure to relay these incidents to AAAs parents did not render her testimony unworthy of
credence. While it may have been best for the aunt to report the malicious acts of the appellant to the
parents of AAA, there was no legal imperative to do so.
Conversely, the evil motive imputed to the aunt of AAA due to a land dispute between the
appellants employer and the parents of AAA deserves scant consideration. The charge of revenge and
resentment is nothing more than unmitigated speculation as not a shred of evidence was offered in
support thereof. While there was evidence of an existing land dispute between the family of the victim
and the employer of the appellant, there was no proof to substantiate the allegation that the said hostility
motivated the aunt of AAA to testify falsely against him.Besides, the land dispute was between the
plantation owner and the family of AAA and not between the latter and the appellant. In the absence of
evidence that the prosecution witnesses were actuated by improper motive, the presumption is that they
were not so actuated and that their testimonies are entitled to credence.[23]
Appellants voluntary submission to a polygraph test even without the assistance of counsel also deserves
scant consideration. When he was taken to the polygraph section of the police department, appellant was
declared unfit for a polygraph test. Thus, he was told to return on another day, but did not comply.
Consequently, no polygraph examination was ever conducted on the appellant.
Against the prosecutions evidence, the appellant presents the defense of denial and alibi. Denial
is intrinsically a weak defense and must be supported by strong evidence of non-culpability in order to be
credible. Courts likewise view the defense of alibi with suspicion and caution, not only because it is
inherently weak and unreliable, but also because it can be fabricated easily.[24] For alibi to prevail, it must
also be established by positive, clear and satisfactory proof that it was physically impossible for the
appellant to have been at the scene of the crime at the time of its commission, and not merely that the
appellant was somewhere else.[25]
Here, the appellant stated that he was about 400 meters away from the crime scene at the approximate
time AAA was raped and murdered. An hour later, the appellant was with a certain Capt.
Antonio Dionisio at a place that was two kilometers away from the crime scene. Thus, it was not at all
physically impossible for the appellant to be at the place of the incident at the time it occurred. The fact
that Capt. Antonio Dionisio did not corroborate the appellants alibi puts more doubt in the latters defense.
Thus, the appellants twin defenses of denial and alibi pale in the light of the array of circumstantial
evidence presented by the prosecution.[26] The positive assertions of the prosecution witnesses deserve
more credence and evidentiary weight than the negative averments of the appellant.
Lastly, the appellants contention that his arrest was attended with irregularity is unworthy of credence.
Records show that the prepared statements were given by the witnesses after they answered the
questions of the police authorities.[27] His arrest, therefore, was not based merely on statements prepared
by the police authorities for the prosecution witnesses.
Further, we agree with the CA that, even if his arrest was unlawful because of the absence of a
valid warrant of arrest, he was deemed to have waived his right to assail the same as he never bothered
to question the legality thereof and, in fact, even voluntarily entered his plea.[28] The appellant was deemed
to have waived his right to assail the legality of his arrest when he voluntarily submitted himself to the
court by entering a plea instead of filing a motion to quash the information for lack of jurisdiction over his
person.[29]
The Proper Imposable Penalty
Rape with Homicide under Article 335 of the Revised Penal Code in relation to RA 7659, provides
that when by reason or on the occasion of rape, homicide is committed, the penalty shall be
death. However, in view of the subsequent passage of RA 9346, entitled An Act Prohibiting the Imposition
of the Death Penalty in the Philippines, we are mandated to impose on the appellant the penalty
of reclusion perpetua without eligibility for parole.[30]
The Damages
As to damages, civil indemnity ex delicto in the amount of P100,000.00 was correctly awarded by the CA.
However, the award of actual damages amounting to P42,000.00 is not proper since it was not sufficiently
proven. It is settled that actual damages must be substantiated by documentary evidence, such as receipts
to prove the expenses incurred as a result of the death of the victim.[31] Here, the amount is not supported
by any document on record. In lieu of actual damages, we award temperate damages in the amount
of P25,000.00.[32] Moral damages in the amount of P100,000.00 awarded by the trial court and affirmed
by the CA must be reduced to P75,000.00 in line with current jurisprudence.[33] An award of exemplary
damages in the amount of P50,000.00 is, however, justified.[34] Article 2229 of the Civil Code grants an
award of exemplary damages in order to deter the commission of similar acts and to allow the courts to
forestall behavior that can have grave and deleterious consequences on society.[35]
WHEREFORE, the Decision of the Court of Appeals dated February 9, 2006 in CA-G.R. CR-H.C.
No. 01384 is AFFIRMED with MODIFICATIONS. Appellant Erpascual Diegay Pajares is
found GUILTY beyond reasonable doubt of the complex crime of rape with homicide and sentenced to
suffer the penalty of reclusion perpetua without eligibility for parole.Appellant is ordered to pay the heirs
of AAA the amounts of P100,000.00 as civil indemnity, P75,000.00 as moral damages, P50,000.00 as
exemplary damages, and P25,000.00 as temperate damages.
SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice




MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

JOSE CATRAL MENDOZA

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion of the
Court.
REYNATO S. PUNO
Chief Justice
[1]
People v. Asis, 439 Phil. 707, 717718 (2002).
[2]
CA rollo, pp. 203-236; penned by Associate Justice Bienvenido L. Reyes and concurred in by
Associate Justices Arturo D. Brion (now a Member of this Court)
and Mariflor Punzalan Castillo.
[3]
Records, pp. 204-211; penned by Judge Cesar M. Solis.
[4]
Id. at 53. Emphasis in the original text.
[5]
Pursuant to Section 44 of Republic Act (RA) No. 9262, otherwise known as the Anti-Violence Against
Women and Their Children Act of 2004, and Section 63, Rule XI of the Rules and Regulations
Implementing R.A. No. 9262, the real name of the child-victim is withheld to protect his/her
privacy. Fictitious initials are used instead to represent him/her. Likewise, the personal circumstances or
any other information tending to establish or compromise his/her identity, as well as those of his/her
immediate family or household members shall not be disclosed.
[6]
[7]
Records, p. 211.
[8]
G.R. Nos. 147678-87, July 7, 2004, 433 SCRA 640.
[9]
CA rollo, p. 236.
[10]
Rollo (G.R. No. 173510), p. 7
[11]
Id. at 9-23.
[12]
Per Resolution dated October 16, 2006.
[13]
Rollo (G.R. No. 173510), p. 15.
[14]
People v. Yatar, G.R. No. 150224, May 19, 2004, 428 SCRA 504, 521.
[15]
People v. Nanas, 415 Phil. 683, 696 (2001).
[16]
People v. Yatar, supra note 14 at 513.
[17]
People v. Darilay, 465 Phil. 747, 767 (2004).
[18]
[19]
People v. Darilay, supra.
[20]
People v. Pascual, G.R. No. 172326, January 19, 2009, 576 SCRA 242 252.
[21]
TSN, April 29, 1998, p. 7.
[22]
TSN, March 6, 1998, p. 7.
[23]
People v. Diaz, 443 Phil. 67, 86 (2003).
[24]
People v. Pascual, supra note 20 at 259.
[25]
People v. De la Cruz, G.R. No. 173308, June 25, 2008, 555 SCRA 329, 340.
[26]
[27]
[28]
People v. De la Cruz, supra at 338.
[29]
Id.
[30]
[31]
People v. Sison, G.R. No. 172752, June 28, 2008, 555 SCRA 156, 173.
[32]
People v. Bascugin, G.R. No. 184704, June 30, 2009.
[33]
Id.
[34]
Id.
[35]
Id.
SECOND DIVISION
EDNA DIAGO LHUILLIER, G.R. No. 171092

Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
BRITISH AIRWAYS, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Jurisdictio est potestas de publico introducta cum necessitate juris dicendi. Jurisdiction is a power
introduced for the public good, on account of the necessity of dispensing justice.[1]
Factual Antecedents
On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint[2] for damages against
respondent British Airways before the Regional Trial Court (RTC) of Makati City. She alleged that
on February 28, 2005, she took respondents flight 548 from London, United
Kingdom to Rome, Italy. Once on board, she allegedly requested Julian Halliday (Halliday), one of the
respondents flight attendants, to assist her in placing her hand-carried luggage in the overhead
bin. However, Halliday allegedly refused to help and assist her, and even sarcastically remarked that If I
were to help all 300 passengers in this flight, I would have a broken back!
Petitioner further alleged that when the plane was about to land in Rome, Italy, another flight
attendant, Nickolas Kerrigan (Kerrigan), singled her out from among all the passengers in the business
class section to lecture on plane safety. Allegedly, Kerrigan made her appear to the other passengers to
be ignorant, uneducated, stupid, and in need of lecturing on the safety rules and regulations of the
plane. Affronted, petitioner assured Kerrigan that she knew the planes safety regulations being a frequent
traveler. Thereupon, Kerrigan allegedly thrust his face a mere few centimeters away from that of the
petitioner and menacingly told her that We dont like your attitude.
Upon arrival in Rome, petitioner complained to respondents ground manager and demanded an
apology. However, the latter declared that the flight stewards were only doing their job.
Thus, petitioner filed the complaint for damages, praying that respondent be ordered to pay P5
million as moral damages, P2 million as nominal damages, P1 million as exemplary
damages, P300,000.00 as attorneys fees, P200,000.00 as litigation expenses, and cost of the suit.
On May 16, 2005, summons, together with a copy of the complaint, was served on the respondent
through Violeta Echevarria, General Manager of Euro-Philippine Airline Services, Inc.[3]
On May 30, 2005, respondent, by way of special appearance through counsel, filed a Motion to
Dismiss[4] on grounds of lack of jurisdiction over the case and over the person of the
respondent. Respondent alleged that only the courts of London, United Kingdom or Rome, Italy, have
jurisdiction over the complaint for damages pursuant to the Warsaw Convention,[5]Article 28(1) of which
provides:
An action for damages must be brought at the option of the plaintiff, either before
the court of domicile of the carrier or his principal place of business, or where he has a
place of business through which the contract has been made, or before the court of the
place of destination.
Thus, since a) respondent is domiciled in London; b) respondents principal place of business is in

London; c) petitioner bought her ticket in Italy (through Jeepney Travel S.A.S, in Rome);[6] and d) Rome,
Italy is petitioners place of destination, then it follows that the complaint should only be filed in the proper
courts of London, United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over the person of
the respondent because the summons was erroneously served on Euro-Philippine Airline Services, Inc.
which is not its resident agent in the Philippines.
On June 3, 2005, the trial court issued an Order requiring herein petitioner to file her
Comment/Opposition on the Motion to Dismiss within 10 days from notice thereof, and for respondent to
file a Reply thereon.[7] Instead of filing a Comment/Opposition, petitioner filed on June 27, 2005, an Urgent
Ex-Parte Motion to Admit Formal Amendment to the Complaint and Issuance of Alias
Summons.[8] Petitioner alleged that upon verification with the Securities and Exchange Commission, she
found out that the resident agent of respondent in the Philippines is Alonzo Q. Ancheta. Subsequently,
on September 9, 2005, petitioner filed a Motion to Resolve Pending Incident and Opposition to Motion to
Dismiss.[9]
On October 14, 2005, the RTC of Makati City, Branch 132, issued an Order[10] granting
respondents Motion to Dismiss. It ruled that:
The Court sympathizes with the alleged ill-treatment suffered by the plaintiff. However,
our Courts have to apply the principles of international law, and are bound by treaty
stipulations entered into by the Philippines which form part of the law of the land. One of
this is the Warsaw Convention. Being a signatory thereto, the Philippines adheres to its
stipulations and is bound by its provisions including the place where actions involving
damages to plaintiff is to be instituted, as provided for under Article 28(1) thereof. The
Court finds no justifiable reason to deviate from the indicated limitations as it will only run
counter to the provisions of the Warsaw Convention. Said adherence is in consonance
with the comity of nations and deviation from it can only be effected through proper
denunciation as enunciated in the Santos case (ibid). Since the Philippines is not the place
of domicile of the defendant nor is it the principal place of business, our courts are thus
divested of jurisdiction over cases for damages. Neither was plaintiffs ticket issued in this
country nor was her destination Manila but Rome in Italy. It bears stressing however, that
referral to the court of proper jurisdiction does not constitute constructive denial of
plaintiffs right to have access to our courts since the Warsaw Convention itself provided
for jurisdiction over cases arising from international transportation. Said treaty stipulations
must be complied with in good faith following the time honored principle
of pacta sunt servanda.
The resolution of the propriety of service of summons is rendered moot by the Courts
want of jurisdiction over the instant case.
WHEREFORE, premises considered, the present Motion to Dismiss is hereby GRANTED

and this case is hereby ordered DISMISSED.
Petitioner filed a Motion for Reconsideration but the motion was denied in an
Order[11] dated January 4, 2006.
Petitioner now comes directly before us on a Petition for Review on Certiorari on pure questions
of law, raising the following issues:
Issues
I. WHETHER X X X PHILIPPINE COURTS HAVE
JURISDICTION OVER A TORTIOUS CONDUCT COMMITTED AGAINST A FILIPINO
CITIZEN AND RESIDENT BY AIRLINE PERSONNEL OF A FOREIGN CARRIER
TRAVELLING BEYOND THE TERRITORIAL LIMIT OF ANY FOREIGN COUNTRY; AND
THUS IS OUTSIDE THE AMBIT OF THE WARSAW CONVENTION.
II. WHETHER X X X RESPONDENT AIR CARRIER OF

PASSENGERS, IN FILING ITS MOTION TO DISMISS BASED ON LACK OF
JURISDICTION OVER THE SUBJECT MATTER OF THE CASE AND OVER ITS PERSON
MAY BE DEEMED AS HAVING IN FACT AND IN LAW SUBMITTED ITSELF TO THE
JURISDICTION OF THE LOWER COURT, ESPECIALLY SO, WHEN THE VERY LAWYER
ARGUING FOR IT IS HIMSELF THE RESIDENT AGENT OF THE CARRIER.
Petitioner argues that her cause of action arose not from the contract of carriage, but from
the tortious conduct committed by airline personnel of respondent in violation of the provisions of the Civil
Code on Human Relations. Since her cause of action was not predicated on the contract of carriage,
petitioner asserts that she has the option to pursue this case in this jurisdiction pursuant to Philippine laws.
In contrast, respondent maintains that petitioners claim for damages fell within the ambit of Article
28(1) of the Warsaw Convention. As such, the same can only be filed before the courts of London, United
Kingdom or Rome, Italy.
Our Ruling
The Warsaw Convention has the force and effect

of law in this country.
It is settled that the Warsaw Convention has the force and effect of law in this country. In Santos III v.
Northwest Orient Airlines,[12] we held that:
The Republic of the Philippines is a party to the Convention for the Unification of
Certain Rules Relating to International Transportation by Air, otherwise known as the
Warsaw Convention. It took effect on February 13, 1933. The Convention was concurred
in by the Senate, through its Resolution No. 19, on May 16, 1950. The Philippine
instrument of accession was signed by President Elpidio Quirinoon October 13, 1950, and
was deposited with the Polish government on November 9, 1950. The Convention
became applicable to the Philippines on February 9, 1951. On September 23, 1955,
President Ramon Magsaysay issued Proclamation No. 201, declaring our formal
adherence thereto, to the end that the same and every article and clause thereof may be
observed and fulfilled in good faith by the Republic of the Philippines and the citizens
thereof.
The Convention is thus a treaty commitment voluntarily assumed by the Philippine

government and, as such, has the force and effect of law in this country.[13]
The Warsaw Convention applies because the air

travel, where the alleged tortious conduct
occurred, was between the United
Kingdom and Italy, which are both signatories to
the Warsaw Convention.
Article 1 of the Warsaw Convention provides:
1. This Convention applies to all international carriage of persons, luggage or

goods performed by aircraft for reward. It applies equally to gratuitous carriage
by aircraft performed by an air transport undertaking.
2. For the purposes of this Convention the expression "international carriage"

means any carriage in which, according to the contract made by the
parties, the place of departure and the place of destination, whether or not
there be a break in the carriage or a transhipment, are situated either within
the territories of two High Contracting Parties, or within the territory of a single
High Contracting Party, if there is an agreed stopping place within a territory
subject to the sovereignty, suzerainty, mandate or authority of another Power,
even though that Power is not a party to this Convention. A carriage without
such an agreed stopping place between territories subject to the sovereignty,
suzerainty, mandate or authority of the same High Contracting Party is not
deemed to be international for the purposes of this Convention. (Emphasis
supplied)
Thus, when the place of departure and the place of destination in a contract of carriage are
situated within the territories of two High Contracting Parties, said carriage is deemed an international
carriage. The High Contracting Parties referred to herein were the signatories to the Warsaw Convention
and those which subsequently adhered to it.[14]
In the case at bench, petitioners place of departure was London, United Kingdom while her place
of destination was Rome, Italy.[15] Both the United Kingdom[16] and Italy[17] signed and ratified the Warsaw
Convention. As such, the transport of the petitioner is deemed to be an international carriage within the
contemplation of the Warsaw Convention.
Since the Warsaw Convention applies in the

instant case, then the jurisdiction over the
subject matter of the action is governed by the
provisions of the Warsaw Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages
before
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has been made;
or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation domiciled in London, United
Kingdom with London as its principal place of business. Hence, under the first and second jurisdictional
rules, the petitioner may bring her case before the courts of London in the United Kingdom. In the
passenger ticket and baggage check presented by both the petitioner and respondent, it appears that the
ticket was issued in Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the
option to bring her case before the courts of Rome in Italy. Finally, both the petitioner and respondent
aver that the place of destination is Rome, Italy, which is properly designated given the routing presented
in the said passenger ticket and baggage check. Accordingly, petitioner may bring her action before the
courts of Rome, Italy. We thus find that the RTC of Makati correctly ruled that it does not have jurisdiction
over the case filed by the petitioner.
Santos III v. Northwest Orient Airlines[18] applies

in this case.
Petitioner contends that Santos III v. Northwest Orient Airlines[19] cited by the trial court is
inapplicable to the present controversy since the facts thereof are not similar with the instant case.
In Santos III v. Northwest Orient Airlines,[20] Augusto Santos III, a resident of the Philippines,
purchased a ticket from Northwest Orient Airlines in San Francisco, for transport between San
Francisco and Manila via Tokyo and back to San Francisco. He was wait-listed in
the Tokyo to Manila segment of his ticket, despite his prior reservation. Contending that Northwest Orient
Airlines acted in bad faith and discriminated against him when it canceled his confirmed reservation and
gave his seat to someone who had no better right to it, Augusto Santos III sued the carrier for damages
before the RTC. Northwest Orient Airlines moved to dismiss the complaint on ground of lack of jurisdiction
citing Article 28(1) of the Warsaw Convention. The trial court granted the motion which ruling was affirmed
by the Court of Appeals. When the case was brought before us, we denied the petition holding that under
Article 28(1) of the Warsaw Convention, Augusto Santos III must prosecute his claim in the United States,
that place being the (1) domicile of the Northwest Orient Airlines; (2) principal office of the carrier; (3)
place where contract had been made (San Francisco); and (4) place of destination (San Francisco).[21]
We further held that Article 28(1) of the Warsaw Convention is jurisdictional in character. Thus:
A number of reasons tends to support the characterization of Article 28(1) as a jurisdiction

and not a venue provision. First, the wording of Article 32, which indicates the places
where the action for damages "must" be brought, underscores the mandatory nature of
Article 28(1). Second, this characterization is consistent with one of the objectives of the
Convention, which is to "regulate in a uniform manner the conditions of international
transportation by air." Third, the Convention does not contain any provision prescribing
rules of jurisdiction other than Article 28(1), which means that the phrase "rules as to
jurisdiction" used in Article 32 must refer only to Article 28(1). In fact, the last sentence
of Article 32 specifically deals with the exclusive enumeration in Article 28(1) as
"jurisdictions," which, as such, cannot be left to the will of the parties regardless of the
time when the damage occurred.
xxxx
In other words, where the matter is governed by the Warsaw Convention, jurisdiction
takes on a dual concept. Jurisdiction in the international sense must be established in
accordance with Article 28(1) of the Warsaw Convention, following which the jurisdiction
of a particular court must be established pursuant to the applicable domestic law. Only
after the question of which court has jurisdiction is determined will the issue of venue be
taken up. This second question shall be governed by the law of the court to which the
case is submitted.[22]
Contrary to the contention of petitioner, Santos III v. Northwest Orient Airlines[23] is analogous to
the instant case because (1) the domicile of respondent is London, United Kingdom;[24] (2) the principal
office of respondent airline is likewise in London, United Kingdom;[25] (3) the ticket was purchased in
Rome, Italy;[26] and (4) the place of destination is Rome, Italy.[27] In addition, petitioner based her
complaint on Article 2176[28] of the Civil Code on quasi-delict and Articles 19[29] and 21[30] of the Civil Code
on Human Relations. In Santos III v. Northwest Orient Airlines,[31] Augusto Santos III similarly posited that
Article 28 (1) of the Warsaw Convention did not apply if the action is based on tort. Hence, contrary to
the contention of the petitioner, the factual setting of Santos III v. Northwest Orient Airlines[32] and the
instant case are parallel on the material points.
Tortious conduct as ground for the petitioners

complaint is within the purview of
the Warsaw Convention.
Petitioner contends that in Santos III v. Northwest Orient Airlines,[33] the cause of action was
based on a breach of contract while her cause of action arose from the tortious conduct of the airline
personnel and violation of the Civil Code provisions on Human Relations.[34] In addition, she claims that
our pronouncement in Santos III v. Northwest Orient Airlines[35] that the allegation of willful misconduct
resulting in a tort is insufficient to exclude the case from the comprehension of the Warsaw Convention,
is more of an obiter dictum rather than the ratiodecidendi.[36] She maintains that the fact that said acts
occurred aboard a plane is merely incidental, if not irrelevant.[37]
We disagree with the position taken by the petitioner. Black defines obiter dictum as "an opinion
entirely unnecessary for the decision of the case" and thus "are not binding as precedent."[38] In Santos
III v. Northwest Orient Airlines,[39] Augusto Santos III categorically put in issue the applicability of Article
28(1) of the Warsaw Convention if the action is based on tort.
In the said case, we held that the allegation of willful misconduct resulting in a tort is insufficient
to exclude the case from the realm of the Warsaw Convention. In fact, our ruling that a cause of action
based on tort did not bring the case outside the sphere of the Warsaw Convention was
our ratio decidendi in disposing of the specific issue presented by Augusto Santos III.Clearly, the
contention of the herein petitioner that the said ruling is an obiter dictum is without basis.
Relevant to this particular issue is the case of Carey v. United Airlines,[40] where the passenger
filed an action against the airline arising from an incident involving the former and the airlines flight
attendant during an international flight resulting to a heated exchange which included insults and
profanity. The United States Court of Appeals (9th Circuit) held that the passenger's action against the
airline carrier arising from alleged confrontational incident between passenger and flight attendant on
international flight was governed exclusively by the Warsaw Convention, even though the incident
allegedly involved intentional misconduct by the flight attendant.[41]
In Bloom v. Alaska Airlines,[42] the passenger brought nine causes of action against the airline in
the state court, arising from a confrontation with the flight attendant during an international flight
to Mexico. The United States Court of Appeals (9th Circuit) held that the Warsaw Convention governs
actions arising from international air travel and provides the exclusive remedy for conduct which falls
within its provisions. It further held that the said Convention created no exception for an injury suffered
as a result of intentional conduct [43] which in that case involved a claim for intentional infliction of emotional
distress.
It is thus settled that allegations of tortious conduct committed against an airline passenger during
the course of the international carriage do not bring the case outside the ambit of the Warsaw Convention.
Respondent, in seeking remedies from the trial
court through special appearance of counsel, is
not deemed to have voluntarily submitted itself
to the jurisdiction of the trial court.
Petitioner argues that respondent has effectively submitted itself to the jurisdiction of the trial
court when the latter stated in its Comment/Opposition to the Motion for Reconsideration that Defendant
[is at a loss] x x x how the plaintiff arrived at her erroneous impression that it is/was Euro-Philippines
Airlines Services, Inc. that has been making a special appearance since x xx British Airways x x x has been
clearly specifying in all the pleadings that it has filed with this Honorable Court that it is the one making a
special appearance.[44]
In refuting the contention of petitioner, respondent cited La Naval Drug Corporation v. Court of
Appeals[45] where we held that even if a party challenges the jurisdiction of the court over his person, as
by reason of absence or defective service of summons, and he also invokes other grounds for the dismissal
of the action under Rule 16, he is not deemed to be in estoppel or to have waived his objection to the
jurisdiction over his person.[46]
This issue has been squarely passed upon in the recent case of Garcia
v. Sandiganbayan,[47] where we reiterated our ruling in La Naval Drug Corporation v. Court of
Appeals[48] and elucidated thus:
Special Appearance to Question a Courts Jurisdiction Is Not

Voluntary Appearance
The second sentence of Sec. 20, Rule 14 of the Revised Rules of Civil Procedure clearly
provides:
Sec. 20. Voluntary appearance. The defendants voluntary appearance in

the action shall be equivalent to service of summons. The inclusion in a
motion to dismiss of other grounds aside from lack of jurisdiction over the
person of the defendant shall not be deemed a voluntary appearance.
Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of the
court over his person, together with other grounds raised therein, is not deemed
to have appeared voluntarily before the court. What the rule on voluntary
appearance the first sentence of the above-quoted rule means is that the voluntary
appearance of the defendant in court is without qualification, in which case he is
deemed to have waived his defense of lack of jurisdiction over his person due to
improper service of summons.
The pleadings filed by petitioner in the subject forfeiture cases, however, do not show
that she voluntarily appeared without qualification. Petitioner filed the following pleadings
in Forfeiture I: (a) motion to dismiss; (b) motion for reconsideration and/or to admit
answer; (c) second motion for reconsideration; (d) motion to consolidate forfeiture case
with plunder case; and (e) motion to dismiss and/or to quash Forfeiture I. And in
Forfeiture II: (a) motion to dismiss and/or to quash Forfeiture II; and (b) motion for partial
reconsideration.
The foregoing pleadings, particularly the motions to dismiss, were filed by petitioner solely
for special appearance with the purpose of challenging the jurisdiction of the SB over her
person and that of her three children. Petitioner asserts therein that SB did not acquire
jurisdiction over her person and of her three children for lack of valid service of summons
through improvident substituted service of summons in both Forfeiture I and Forfeiture
II. This stance the petitioner never abandoned when she filed her motions for
reconsideration, even with a prayer to admit their attached Answer
Ex Abundante Ad Cautelam dated January 22, 2005 setting forth affirmative defenses
with a claim for damages. And the other subsequent pleadings, likewise, did not abandon
her stance and defense of lack of jurisdiction due to improper substituted services of
summons in the forfeiture cases. Evidently, from the foregoing Sec. 20, Rule 14 of the
1997 Revised Rules on Civil Procedure, petitioner and her sons did not voluntarily appear
before the SB constitutive of or equivalent to service of summons.
Moreover, the leading La Naval Drug Corp. v. Court of Appeals applies to the instant case.
Said case elucidates the current view in our jurisdiction that a special appearance before
the courtchallenging its jurisdiction over the person through a motion to dismiss even if
the movant invokes other groundsis not tantamount to estoppel or a waiver by
the movant of his objection to jurisdiction over his person; and such is not constitutive of
a voluntary submission to the jurisdiction of the court.
Thus, it cannot be said that petitioner and her three children voluntarily appeared before
the SB to cure the defective substituted services of summons. They are, therefore,
not estopped from questioning the jurisdiction of the SB over their persons nor are they
deemed to have waived such defense of lack of jurisdiction. Consequently, there being
no valid substituted services of summons made, the SB did not acquire jurisdiction over
the persons of petitioner and her children. And perforce, the proceedings in the subject
forfeiture cases, insofar as petitioner and her three children are concerned, are null and
void for lack of jurisdiction. (Emphasis supplied)
In this case, the special appearance of the counsel of respondent in filing the Motion to Dismiss
and other pleadings before the trial court cannot be deemed to be voluntary submission to the jurisdiction
of the said trial court. We hence disagree with the contention of the petitioner and rule that there was no
voluntary appearance before the trial court that could constitute estoppel or a waiver of respondents
objection to jurisdiction over its person.
WHEREFORE, the petition is DENIED. The October 14, 2005 Order of
the Regional Trial Court of Makati City, Branch 132, dismissing the complaint for lack of jurisdiction,
is AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
50 C.J.S. 1089.
[2]
Records, pp. 1-5.
[3]
Id. at 11.
[4]
Id. at 12-16.
[5]
Convention for the Unification of Certain Rules Relating To International Transportation by Air,
signed at Warsaw on October 12, 1929.
[6]
Records, p. 8.
[7]
Id. at 21
[8]
Id. at 25-27.
[9]
Id. at 37-41.
[10]
Id. at 56-57; penned by Judge Rommel O. Baybay. Emphasis in the original text.
[11]
Id. at 75.
[12]
G.R. No. 101538, June 23, 1992, 210 SCRA 256.
[13]
Id. at 260-261.
[14]
Mapa v. Court of Appeals, 341 Phil. 281, 295 (1997).
[15]
Rollo, pp. 155-157.
[16]
The United Kingdom signed the Warsaw Convention on October 12, 1929 and ratified the same
on February 14, 1933. The Convention became effective in the United Kingdom on March 15, 1933.
[17]
Italy signed the Warsaw Convention on October 12, 1929 and ratified the same on February 14,
1933. The Convention became effective in Italy on May 15, 1933.
[18]
Supra note 12.
[19]
Id.
[20]
Id.
[21]
In said case, we distinguished between a destination and an agreed stopping place. We held
that:
Article 1(2) also draws a distinction between a destination and an agreed stopping
place. It is the destination and not an agreed stopping place that controls for purposes of
ascertaining jurisdiction under the Convention.
The contract is a single undivided operation, beginning with the place of departure
and ending with the ultimate destination. The use of the singular in the expression
indicates the understanding of the parties to the Convention that every contract of carriage
has one place of departure and one place of destination. An intermediate place where the
carriage may be broken is not regarded as a place of destination. Id. at 270-271.
[22]
Id. at 266-267.
[23]
Id.
[24]
Rollo, p. 139.
[25]
Id.
[26]
Id. at 174.
[27]
Id. at 155-157.
[28]
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by provisions of this Chapter.
[29]
Article 19. 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.
[30]
Article 21. Any person, who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
[31]
Supra note 12.
[32]
Id.
[33]
Id.
[34]
Rollo, pp. 159 and 162.
[35]
Supra note 12.
[36]
Rollo, p. 159.
[37]
Id. at 162.
[38]
Blacks Law Dictionary, 6th ed., 1990.
[39]
Supra note 12.
[40]
255 F.3d 1044.
[41]
Id.
[42]
36 Fed. Appx. 278, 2002 WL 1136727 (C.A. 9).
[43]
Id.
[44]
Rollo, p. 169.
[45]
G.R. No. 103200, August 31, 1994, 236 SCRA 78.
[46]
Id. at 89.
[47]
G.R. No. 170122, October 12, 2009.
[48]
Supra.
SECOND DIVISION
TITAN CONSTRUCTION G.R. No. 169548

CORPORATION,
Petitioner,
Present:
- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
MANUEL A. DAVID, SR. and
MARTHA S. DAVID, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The review of factual matters is not the province of this Court.[1] The Supreme Court is not
a trier of facts, and is not the proper forum for the ventilation and substantiation of factual issues.[2]
This Petition for Review assails the July 20, 2004 Decision[3] of the Court of Appeals (CA) in CA-
G.R. CV No. 67090 which affirmed with modification the March 7, 2000 Decision[4] of the Regional Trial
Court (RTC) of Quezon City, Branch 80. Also assailed is the August 31, 2005 Resolution[5] of the CA
denying the motion for reconsideration.
Factual Antecedents
Manuel A. David, Sr. (Manuel) and Martha S. David (Martha) were married on March 25, 1957. In
1970, the spouses acquired a 602 square meter lot located at White Plains, Quezon City, which was
registered in the name of MARTHA S. DAVID, of legal age, Filipino, married to Manuel A. David and
covered by Transfer Certificate of Title (TCT) No. 156043 issued by the Register of Deeds of Quezon
City.[6] In 1976, the spouses separated de facto, and no longer communicated with each other.[7]
Sometime in March 1995, Manuel discovered that Martha had previously sold the property to Titan
Construction Corporation (Titan) for P1,500,000.00 through a Deed of Sale[8] dated April 24, 1995, and
that TCT No. 156043 had been cancelled and replaced by TCT No. 130129 in the name of Titan.
Thus, on March 13, 1996, Manuel filed a Complaint[9] for Annulment of Contract
and Recovenyance against Titan before the RTC of Quezon City. Manuel alleged that the sale executed
by Martha in favor of Titan was without his knowledge and consent, and therefore void. He prayed that
the Deed of Sale and TCT No. 130129 be invalidated, that the property be reconveyed to the spouses,
and that a new title be issued in their names.
In its Answer with Counterclaim,[10] Titan claimed that it was a buyer in

good faith and for value because it relied on a Special Power of Attorney (SPA) [11] dated January 4, 1995
signed by Manuel which authorized Martha to dispose of the property on behalf of the spouses. Titan thus
prayed for the dismissal of the complaint.
In his unverified Reply,[12] Manuel claimed that the SPA was spurious, and that the signature
purporting to be his was a forgery; hence, Martha was wholly without authority to sell the property.
Subsequently, Manuel filed a Motion for Leave to File Amended Complaint[13] which was granted
by the trial court. Thus, on October 15, 1996, Manuel filed an Amended Complaint[14] impleading Martha
as a co-defendant in the proceedings. However, despite personal service of summons[15] upon Martha,
she failed to file an Answer. Thus, she was declared in default.[16] Trial then ensued.
On March 7, 2000, the RTC issued a Decision which (i) invalidated both the Deed of Sale and TCT
No. 130129; (ii) ordered Titan to reconvey the property to Martha and Manuel; (iii) directed the Register
of Deeds of Quezon City to issue a new title in the names of Manuel and Martha; and (iv) ordered Titan
to pay P200,000.00 plus P1,000.00 per appearance as attorneys fees, and P50,000.00 as costs of suit.
The RTC found that:
1) The property was conjugal in character since it was purchased by Manuel

and Martha with conjugal funds during their marriage. The fact that TCT No. 156043 was registered in
the name of MARTHA S. DAVID x x x married to Manuel A. David did not negate the propertys
conjugal nature.
2) The SPA professing to authorize Martha to sell the property on behalf of the spouses was spurious, and
did not bear Manuels genuine signature. This was the subject of expert testimony, which Titan
failed to rebut. In addition, despite the fact that the SPA was notarized, the genuineness and due
execution of the SPA was placed in doubt since it did not contain Manuels residence certificate,
and was not presented for registration with the Quezon City Register of Deeds, in violation of
Section 64 of Presidential Decree No. 1529.[17]
3) The circumstances surrounding the transaction with Martha should have put Titan on notice of the
SPAs dubious veracity. The RTC noted that aside from Marthas failure to register the SPA with the
Register of Deeds, it was doubtful that an SPA would have even been necessary, since the SPA
itself indicated that Martha and Manuel lived on the same street in Navotas.
The dispositive portion of the trial courts Decision reads:
Wherefore, judgment is hereby rendered:
1.) Declaring the Deed of Sale dated April 24, 1995 as void
ab initio and without force and effect.
2.) Declaring null and void TCT No. 130129 issued by the
Register of Deeds of Quezon City in the name of defendant Titan
Construction Corporation.
3.) Ordering defendant Titan Construction Corporation

to reconvey the subject property to plaintiff and his spouse.
4.) Ordering the Register of Deeds of Quezon City to make

and issue a new title in the name of plaintiff Manuel David and his Spouse,
Martha David.
5.) Ordering defendant to

pay P200,000.00 plus P1,000.00 per appearance as attorneys fees
and P50,000.00 as costs of suit.
SO ORDERED.[18]
In its Decision dated July 20, 2004, the CA affirmed the Decision of the trial court but deleted the
award of attorneys fees and the amount of P50,000.00 as costs.
The dispositive portion of the Decision reads:
WHEREFORE, with the MODIFICATION by deleting the award of attorneys fees

in favor of plaintiff-appellee Manuel A. David, Sr. and the amount of P50,000.00 as costs,
the Decision appealed from is AFFIRMED in all other respects, with costs against
defendant-appellant Titan Construction Corporation.[19]
Titan moved for reconsideration but the motion was denied on August 31, 2005.
Issues
Titan raises the following assignment of errors:
A. THE COURT OF APPEALS PATENTLY ERRED IN DECLARING THE

SUBJECT DEED OF SALE NULL AND VOID AND FAILED TO APPLY TO THIS CASE
THE PERTINENT LAW AND JURISPRUDENCE ON THE TORRENS SYSTEM OF
LAND REGISTRATION.
B. THE COURT OF APPEALS PATENTLY ERRED IN RULING THAT

TITAN WAS NOT A BUYER IN GOOD FAITH CONTRARY TO THE STANDARDS
APPLIED BY THIS HONORABLE COURT IN CASES INVOLVING SIMILAR FACTS.
C. THE COURT OF APPEALS PATENTLY ERRED BY DISCARDING THE

NATURE OF A NOTARIZED SPECIAL POWER OF ATTORNEY CONTRARY TO
JURISPRUDENCE AND BY GIVING UNDUE WEIGHT TO THE ALLEGED EXPERT
TESTIMONY VIS--VIS THE CONTESTED SIGNATURES AS THEY APPEAR TO THE
NAKED EYE CONTRARY TO JURISPRUDENCE.
D. THE COURT OF APPEALS PATENTLY ERRED BY FAILING TO

DETECT BADGES OF CONNIVANCE BETWEEN RESPONDENTS.
E. THE COURT OF APPEALS PATENTLY ERRED BY NOT RULING THAT

ASSUMING THE SPA WAS NULL AND VOID, THE SAME IS IMMATERIAL SINCE
THE RESPONDENTS SHOULD BE CONSIDERED ESTOPPED FROM DENYING THAT
THE SUBJECT PROPERTY WAS SOLELY THAT OF RESPONDENT MARTHA S.
DAVID.
F. THE COURT OF APPEALS PATENTLY ERRED BY NOT RULING

THAT ASSUMING THE SALE WAS VOID, ON GROUNDS OF EQUITY MARTHA S.
DAVID SHOULD REIMBURSE PETITIONER OF HIS PAYMENT WITH LEGAL
INTEREST.[20]
Titan is claiming that it was a buyer in good faith and for value, that the property was Marthas
paraphernal property, that it properly relied on the SPA presented by Martha, and that the RTC erred in
giving weight to the alleged expert testimony to the effect that Manuels signature on the SPA was
spurious. Titan also argues, for the first time, that the CA should have ordered Martha to reimburse the
purchase price paid by Titan.
Our Ruling

The property is part of the spouses conjugal
partnership.
The Civil Code of the Philippines,[21] the law in force at the time of the celebration of the marriage between
Martha and Manuel in 1957, provides:
Article 160. All property of the marriage is presumed to belong to the

conjugal partnership, unless it be proved that it pertains exclusively to the husband or to
the wife.
Article 153 of the Civil Code also provides:
Article 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the marriage at the expense of the
common fund, whether the acquisition be for the partnership, or for only one of the
spouses;
xxxx
These provisions were carried over to the Family Code. In particular, Article 117 thereof provides:
Art. 117. The following are conjugal partnership properties:
(1) Those acquired by onerous title during the marriage at

the expense of the common fund, whether the acquisition be for the partnership,
or for only one of the spouses;
xxxx
Article 116 of the Family Code is even more unequivocal in that [a]ll property acquired during the
marriage, whether the acquisition appears to have been made, contracted or registered in
the name of one or both spouses, is presumed to be conjugal unless the contrary is proved.
We are not persuaded by Titans arguments that the property was Marthas exclusive property
because Manuel failed to present before the RTC any proof of his income in 1970, hence he could not
have had the financial capacity to contribute to the purchase of the property in 1970; and that Manuel
admitted that it was Martha who concluded the original purchase of the property. In consonance with our
ruling in Spouses Castro v. Miat,[22] Manuel was not required to prove that the property was acquired with
funds of the partnership. Rather, the presumption applies even when the manner in which the property
was acquired does not appear.[23] Here, we find that Titan failed to overturn the presumption that the
property, purchased during the spouses marriage, was part of the conjugal partnership.
In the absence of Manuels consent, the Deed

of Sale is void.
Since the property was undoubtedly part of the conjugal partnership, the sale to Titan required
the consent of both spouses. Article 165 of the Civil Code expressly provides that the husband is the
administrator of the conjugal partnership. Likewise, Article 172 of the Civil Code ordains that (t)he wife
cannot bind the conjugal partnership without the husbands consent, except in cases provided by law.
Similarly, Article 124 of the Family Code requires that any disposition or encumbrance of conjugal
property must have the written consent of the other spouse, otherwise, such disposition is void. Thus:
Art. 124. The administration and enjoyment of the conjugal partnership shall belong to
both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject
to recourse to the court by the wife for proper remedy, which must be availed of within
five years from the date of the contract implementing such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority
of the court or the written consent of the other spouse. In the absence of such authority
or consent, the disposition or encumbrance shall be void. However, the transaction shall
be construed as a continuing offer on the part of the consenting spouse and the third
person, and may be perfected as a binding contract upon the acceptance by the other
spouse or authorization by the court before the offer is withdrawn by either or
both offerors.
The Special Power of Attorney purportedly signed

by Manuel is spurious and void.
The RTC found that the signature of Manuel appearing on the SPA was not his genuine signature.
As to the issue of the validity or invalidity of the subject Special Power of Attorney x x x the
Court rules that the same is invalid. As aptly demonstrated by plaintiffs evidence
particularly the testimony of expert witness Atty. Desiderio Pagui, which the defense failed
to rebut and impeach, the subject Special Power of Attorney does not bear the genuine
signature of plaintiff Manuel David thus rendering the same as without legal effect.
Moreover, the genuineness and the due execution of the Special Power of Attorney was
placed in more serious doubt as the same does not contain the Residence Certificate of
the plaintiff and most importantly, was not presented for registration with the Quezon City
Register of Deeds which is a clear violation of Sec. 64 of P.D. No. 1529.
As regards defendant Titan Construction Corporations assertion that plaintiffs failure to

verify his Reply (wherein the validity of the Special Power of Attorney is put into question)
is an implied admission of its genuineness and due execution, [this] appears at first blush
a logical conclusion. However, the Court could not yield to such an argument considering
that a rigid application of the pertinent provisions of the Rules of Court will not be given
premium when it would obstruct rather than serve the broader interest of justice.[24]
Titan claims that the RTC gave undue weight to the testimony of Manuels witness, and that expert
testimony on handwriting is not conclusive.
The contention lacks merit. The RTCs ruling was based not only on the testimony of Manuels
expert witness finding that there were significant differences between the standard handwriting of Manuel
and the signature found on the SPA, but also on Manuels categorical denial that he ever signed any
document authorizing or ratifying the Deed of Sale to Titan.[25]
We also note that on October 12, 2004, Titan filed before the CA a Manifestation with Motion for
Re-Examination of Another Document/ Handwriting Expert[26] alleging that there is an extreme
necessity[27] for a conduct of another examination of the SPA by a handwriting expert as it will materially
affect and alter the final outcome[28] of the case. Interestingly, however, Titan filed on January 6, 2005 a
Manifestation/Motion to Withdraw Earlier Motion for Re-Examination of PNP Laboratory Expert[29] this time
praying that its motion for re-examination be withdrawn. Titan claimed that after a circumspect evaluation,
deemed it wise not to pursue anymore said request (re-examination) as there is a great possibility that
the x x x [PNP and the NBI] might come out with two conflicting opinions and conclusions x x x that might
cause some confusion to the minds of the Honorable Justices in resolving the issues x x x as well as the
waste of material time and resources said motion may result.[30]
In any event, we reiterate the well-entrenched rule that the factual findings of trial courts, when
adopted and confirmed by the CA, are binding and conclusive and will generally not be reviewed on
appeal.[31] We are mandated to accord great weight to the findings of the RTC, particularly as regards its
assessment of the credibility of witnesses[32] since it is the trial court judge who is in a position to observe
and examine the witnesses first hand.[33] Even after a careful and independent scrutiny of the records, we
find no cogent reason to depart from the rulings of the courts below.[34]
Furthermore, settled is the rule that only errors of law and not of fact are reviewable by this Court
in a petition for review on certiorari under Rule 45 of the Rules of Court. This applies with even greater
force here, since the factual findings by the CA are in full agreement with those of the trial court.[35]
Indeed, we cannot help but wonder why Martha was never subpoenaed by Titan as a witness to
testify on the character of the property, or the circumstances surrounding the transaction with
Titan. Petitioners claim that she could not be found is belied by the RTC records, which show that she
personally received and signed for the summons at her address in Greenhills, San Juan. Titan neither filed
a cross claim nor made any adverse allegation against Martha.
On the Failure to Deny the Genuineness and Due

Execution of the SPA
Titan claimed that because Manuel failed to specifically deny the genuineness and due execution
of the SPA in his Reply, he is deemed to have admitted the veracity of said document, in accordance with
Rule 8, Sections 7 and 8,[36] of the Rules of Court.
On this point, we fully concur with the findings of the CA that:
It is true that the reply filed by Manuel alleging that the special power of attorney is a
forgery was not made under oath. However, the complaint, which was verified by Manuel
under oath, alleged that the sale of the subject property executed by his wife, Martha, in
favor of Titan was without his knowledge, consent, and approval, express or implied; and
that there is nothing on the face of the deed of sale that would show that he gave his
consent thereto. In Toribio v. Bidin, it was held that where the verified complaint alleged
that the plaintiff never sold, transferred or disposed their share in the inheritance left by
their mother to others, the defendants were placed on adequate notice that they would
be called upon during trial to prove the genuineness or due execution of the disputed
deed of sale. While Section 8, Rule 8 is mandatory, it is a discovery procedure and must
be reasonably construed to attain its purpose, and in a way as not to effect a denial of
substantial justice. The interpretation should be one which assists the parties in obtaining
a speedy, inexpensive, and most important, a just determination of the disputed issues.
Moreover, during the pre-trial, Titan requested for stipulation that the special
power of attorney was signed by Manuel authorizing his wife to sell the subject property,
but Manuel refused to admit the genuineness of said special power of attorney and stated
that he is presenting an expert witness to prove that his signature in the special power of
attorney is a forgery. However, Titan did not register any objection x x x. Furthermore,
Titan did not object to the presentation of Atty. Desiderio Pagui, who testified as an expert
witness, on his Report finding that the signature on the special power of attorney was not
affixed by Manuel based on his analysis of the questioned and standard signatures of the
latter, and even cross-examined said witness. Neither did Titan object to the admission of
said Report when it was offered in evidence by Manuel on the ground that he is barred
from denying his signature on the special power of attorney. In fact, Titan admitted the
existence of said Report and objected only to the purpose for which it was offered.
In Central Surety & Insurance Company v. C.N. Hodges, it was held that where a party
acted in complete disregard of or wholly overlooked Section 8, Rule 8 and did not object
to the introduction and admission of evidence questioning the genuineness and due
execution of a document, he must be deemed to have waived the benefits of said Rule.
Consequently, Titan is deemed to have waived the mantle of protection given [it] by
Section 8, Rule 8.[37]
It is true that a notarial document is considered evidence of the facts expressed therein.[38] A
notarized document enjoys a prima facie presumption of authenticity and due execution[39] and only clear
and convincing evidence will overcome such legal presumption.[40] However, such clear and convincing
evidence is present here. While it is true that the SPA was notarized, it is no less true that there were
defects in the notarization which mitigate against a finding that the SPA was either genuine or duly
executed. Curiously, the details of Manuels Community Tax Certificate are conspicuously absent, yet
Marthas are complete. The absence of Manuels data supports his claim that he did not execute the same
and that his signature thereon is a forgery. Moreover, we have Manuels positive testimony that he never
signed the SPA, in addition to the expert testimony that the signature appearing on the SPA was not
Manuels true signature.
Moreover, there were circumstances which mitigate against a finding that Titan was a buyer in
good faith.
First, TCT No. 156043 was registered in the name of MARTHA S. DAVID, of legal age, Filipino,
married to Manuel A. David but the Deed of Sale failed to include Marthas civil status, and only described
the vendor as MARTHA S. DAVID, of legal age, Filipino citizen, with postal address at 247
Governor Pascual, Navotas, Rizal. And it is quite peculiar that an SPA would have even been necessary,
considering that the SPA itself indicated that Martha and Manuel lived on the same street (379 and 247
Governor Pascual Street, respectively).
Second, Titans witness Valeriano Hernandez, the real estate agent who brokered the sale
between Martha and Titan, testified that Jerry Yao (Yao), Titans Vice President for Operations (and Titans
signatory to the Deed of Sale), specifically inquired why the name of Manuel did not appear on the Deed
of Sale.[41] This indicates that Titan was aware that Manuels consent may be necessary. In addition, Titan
purportedly sent their representative to the Register of Deeds of Quezon City to verify TCT No. 156043,
so Titan would have been aware that the SPA was never registered before the Register of Deeds.
Third, Valeriano Hernandez also testified that during the first meeting between Martha and Yao,
Martha informed Yao that the property was mortgaged to a casino for P500,000.00. Without even seeing
the property, the original title, or the SPA, and without securing an acknowledgment receipt from Martha,
Titan (through Yao) gave Martha P500,000.00 so she could redeem the property from the
casino.[42] These are certainly not actions typical of a prudent buyer.
Titan cannot belatedly claim that the RTC should
have ordered Martha to reimburse the purchase
price.
Titan argues that the CA erred in not ruling that, even assuming the sale was void, on grounds of equity,
Martha should reimburse petitioner its payment with legal interest. We note that this equity argument was
raised for the first time before the CA, which disposed of it in this manner:
Anent defendant-appellants claim that the court a quo and this Court never considered
the substantial amount of money paid by it to Martha David as consideration for the sale
of the subject property, suffice it to say that said matter is being raised for the first time
in the instant motion for reconsideration. If well-recognized jurisprudence
precludes raising an issue only for the first time on appeal proper, with more
reason should such issue be disallowed or disregarded when initially raised
only in a motion for reconsideration of the decision of the appellate court.
Nonetheless, record shows that only defendant-appellant was initially sued by plaintiff-
appellee in his complaint for annulment of contract and reconveyance upon the allegation
that the sale executed by his wife, Martha David, of their conjugal property in favor of
defendant-appellant was without his knowledge and consent and, therefore, null and void.
In its answer, defendant-appellant claimed that it bought the property in good faith and
for value from Martha David and prayed for the dismissal of the complaint and the
payment of his counterclaim for attorneys fees, moral and exemplary damages.
Subsequently, plaintiff-appellee filed a motion for leave to file amended complaint
by impleading Martha David as a defendant, attaching the amended complaint thereto,
copies of which were furnished defendant-appellant, through counsel. The amended
complaint was admitted by the court a quo in an Order dated October 23, 1996. Martha
David was declared in default for failure to file an answer. The record does not show
[that] a cross-claim was filed by defendant-appellant against Martha David
for the return of the amount of PhP1,500,000.00 it paid to the latter as
consideration for the sale of the subject property. x x x Thus, to hold Martha
David liable to defendant-appellant for the return of the consideration for the
sale of the subject property, without any claim therefore being filed against
her by the latter, would violate her right to due process. The essence of due
process is to be found in the reasonable opportunity to be heard and submit any evidence
one may have in support of his defense. It is elementary that before a person can be
deprived of his property, he should be first informed of the claim against him and the
theory on which such claim is premised.[43] (Emphasis supplied)
While it is true that litigation is not a game of technicalities,[44] it is equally true that elementary
considerations of due process require that a party be duly apprised of a claim against him before judgment
may be rendered. Thus, we cannot, in these proceedings, order the return of the amounts paid by Titan
to Martha. However, Titan is not precluded by this Decision from instituting the appropriate action against
Martha before the proper court.
WHEREFORE, the petition is DENIED. The July 20, 2004 Decision of the Court of Appeals in
CA-G.R. CV No. 67090 which affirmed with modifications the March 7, 2000 Decision of the Regional Trial
Court of Quezon City, Branch 80, and its August 31, 2005 Resolution denying the motion for
reconsideration, are AFFIRMED, without prejudice to the recovery by petitioner Titan Construction
Corporation of the amounts it paid to Martha S. David in the appropriate action before the proper court.
SO ORDERED.
MARIANO DEL CASTILLO

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
City of Naga v. Court of Appeals, 254 Phil. 12, 18 (1989).
[2]
Soriano III v. Yuzon, G.R. No. L-79520, August 10, 1988, 164 SCRA 227, 240-241.
[3]
Rollo, pp. 67-78; penned by Associate Justice Marina L. Buzon and concurred in by Associate
Justices Mario L. Guaria III and Santiago Javier Ranada.
[4]
Records, pp. 316-321; penned by Judge Agustin S. Dizon.
[5]
Rollo, pp. 20-23; penned by Associate Justice Marina L. Buzon and concurred in by Associate
Justices Mario L. Guaria III, Monina Arevalo-Zenarosa, and Estela M. Perlas-Bernabe.
Associate Justice Santiago Javier Ranada wrote a Separate Opinion, id. at 24-28.
[6]
Records, p. 7; TSN, April 3, 1997, pp. 6-7.
[7]
TSN, April 3, 1997, p. 25.
[8]
Records, pp. 12-14.
[9]
Id. at 1-5.
[10]
Id. at 34-38.
[11]
Id. at 39-40.
[12]
Id. at 42-44.
[13]
Id. at 53-55.
[14]
Id. at 56-60.
[15]
Id. at 64-65.
[16]
Id. at 84.
[17]
Amending and Codifying The Laws Relative To Registration Of Property And For Other
Purposes (1978). Section 64 provides:
Section 64. Power of attorney. Any person may, by power of attorney,
convey or otherwise deal with registered land and the same shall be registered
with the Register of Deeds of the province or city where the land lies. Any
instrument revoking such power of attorney shall be registered in like manner.
[18]
Records, p. 321.
[19]
Rollo, p. 78.
[20]
Id. at 40-41.
[21]
REPUBLIC ACT NO. 386, An Act to Ordain and Institute the Civil Code of
the Philippines (1949).
[22]
445 Phil. 282 (2003).
[23]
Id. at 293.
[24]
Records, p. 319.
[25]
TSN, April 3, 1997, pp. 12-13.
[26]
[27]
Id. at 151.
[28]
Id.
[29]
Id. at 156-157.
[30]
Id. at 156.
[31]
Abapo-Almario v. Court of Appeals, 383 Phil. 933, 940 (2000).
[32]
Ferrer v. People, G.R. No. 143487, February 22, 2006, 483 SCRA 31, 50.
[33]
People v. Umali, G.R. No. 84450, February 4, 1991, 193 SCRA 493, 501.
[34]
People v. Garchitorena, G.R. No. 184172, May 8, 2009
[35]
Blanco v. Quasha, 376 Phil. 480, 491 (1999).
[36]
Sec. 7. Action or defense based on document.
Whenever an action or defense is based upon a written instrument or
document, the substance of such instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be attached to the pleading as an
exhibit, which shall be deemed to be a part of the pleading, or said copy may with
like effect be set forth in the pleading.
Sec. 8. How to contest such documents.
When an action or defense is founded upon a written instrument, copied
in or attached to the corresponding pleading as provided in the preceding section,
the genuineness and due execution of the instrument shall be deemed admitted
unless the adverse party, under oath, specifically denies them, and sets forth what
he claims to be the facts; but the requirement of an oath does not apply when the
adverse party does not appear to be a party to the instrument or when compliance
with an order for an inspection of the original instrument is refused.
[37]
Rollo, pp. 13-15.
[38]
Mendiola v. Court of Appeals, 193 Phil. 326, 335 (1981). Rule 132, Section 30 of the Rules of
Court provides:
Section 30. Proof of notarial documents. Every instrument duly
acknowledged or proved and certified as provided by law, may be presented in
evidence without further proof, the certificate of acknowledgment being prima
facie evidence of the execution of the instrument or document involved.
[39]
Gutierrez v. Mendoza-Plaza, G.R. No. 185477, December 4, 2009.
[40]
Domingo v. Robles, 493 Phil. 916, 921 (2005).
[41]
TSN, August 21, 1998, p. 7.
[42]
Id. at 3-6.
[43]
Rollo, pp. 21-22.
[44]
In Sea Power Shipping Enterprises, Inc. v. Court of Appeals, 412 Phil. 603, 611-612 (2001),
we held:
It is true that a litigation is not a game of technicalities and that the rules
of procedure should not be strictly enforced at the cost of substantial justice.
However, it does not mean that the Rules of Court may be ignored at will and at
random to the prejudice of the orderly presentation and assessment of the issues
and their just resolution. It must be emphasized that procedural rules should not
be belittled or dismissed simply because their non-observance may have resulted
in prejudice to a partys substantial rights. Like all rules, they are required to be
followed except only for the most persuasive of reasons.
SECOND DIVISION
RENO FOODS, INC., and/or G.R. No. 164016
VICENTE KHU,
- versus - BRION,
DEL CASTILLO,
ABAD, and
Nagkakaisang Lakas ng Manggagawa PEREZ, JJ.
(NLM) - KATIPUNAN on behalf of
its member, NENITA CAPOR, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
There is no legal or equitable justification for awarding financial assistance to an employee who was
dismissed for stealing company property. Social justice and equity are not magical formulas to erase the
unjust acts committed by the employee against his employer. While compassion for the poor is desirable,
it is not meant to coddle those who are unworthy of such consideration.
This Petition for Review on Certiorari[1] assails the June 3, 2004 Decision[2] of the Court of Appeals
(CA) in CA-G.R. SP No. 76789 which denied the petition for certiorari filed by the petitioners and affirmed
the award of financial assistance to respondent Nenita Capor.
Factual Antecedents
Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of canned meat products of which
Vicente Khu is the president and is being sued in that capacity. Respondent Nenita Capor(Capor) was an
employee of Reno Foods until her dismissal on October 27, 1998.
It is a standard operating procedure of petitioner-company to subject all its employees to reasonable

search of their belongings upon leaving the company premises. On October 19, 1998, the guard on duty
found six Reno canned goods wrapped in nylon leggings inside Capors fabric clutch bag. The only other
contents of the bag were money bills and a small plastic medicine container.
Petitioners accorded Capor several opportunities to explain her side, often with the assistance of the union
officers of Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan. In fact, after petitioners sent a Notice
of Termination to Capor, she was given yet another opportunity for reconsideration through a labor-
management grievance conference held on November 17, 1999.Unfortunately, petitioners did not find
reason to change its earlier decision to terminate Capors employment with the company.
On December 8, 1998, petitioners filed a complaint-affidavit against Capor for qualified theft in the Office
of the City Prosecutor, Malabon-Navotas Substation. On April 5, 1999, a Resolution[3] was issued finding
probable cause for the crime charged. Consequently, an Information was filed against Capor docketed as
Criminal Case No. 207-58-MN.
Meanwhile, the Nagkakaisang Lakas ng Manggagawa (NLM) Katipunan filed on behalf of Capor a
complaint[4] for illegal dismissal and money claims against petitioners with the Head Arbitration Office of
the National Labor Relations Commission (NLRC) for the National Capital Region. The complaint prayed
that Capor be paid her full backwages as well as moral and exemplary damages. The complaint was
docketed as NLRC NCR Case No. 00-01-00183-99.
In the proceedings before the Labor Arbiter, Capor alleged that she was unaware that her clutch bag
contained the pilfered canned products. She claimed that petitioners might have planted the evidence
against her so it could avoid payment of her retirement benefits, as she was set to retire in about a years
time.
After the submission of the parties respective position papers, the Labor Arbiter rendered his
Decision[5] dated November 16, 1999 finding Capor guilty of serious misconduct which is a just cause for
termination.
The Labor Arbiter noted that Capor was caught trying to sneak out six cans of Reno products without
authority from the company. Under Article 232 of the Labor Code, an employer may terminate the services
of an employee for just cause, such as serious misconduct. In this case, the Labor Arbiter found that theft
of company property is tantamount to serious misconduct; as such, Capor is not entitled to reinstatement
and backwages, as well as moral and exemplary damages.
Moreover, the Labor Arbiter ruled that consistent with prevailing jurisprudence, an employee who commits
theft of company property may be validly terminated and consequently, the said employee is not entitled
to separation pay.[6]
On appeal, the NLRC affirmed the factual findings and monetary awards of the Labor Arbiter but
added an award of financial assistance. The decretal portion of the September 20, 2002 Decision[7] reads:
WHEREFORE, premises considered, the decision under review is hereby

MODIFIED by granting an award of financial assistance in the form of separation pay
equivalent to one-half month pay for every year of service. In all other respects the
decision stands affirmed. All other claims of the complainant are dismissed for lack of
merit.[8]
Both parties moved for a reconsideration of the NLRC Decision. Petitioners asked that the award of
financial assistance be deleted, while Capor asked for a finding of illegal dismissal and for reinstatement
with full backwages.[9]
On February 28, 2003, the NLRC issued its Resolution[10] denying both motions for reconsideration for lack
of merit.
Aggrieved, petitioners filed a Petition for Certiorari[11] before the CA imputing grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the NLRC for awarding financial assistance
to Capor.
Citing Philippine Long Distance Telephone Company v. National Labor Relations
Commission, [12]
petitioners argued that theft of company property is a form of serious misconduct under
Article 282(a) of the Labor Code for which no financial assistance in the form of separation pay should be
allowed.
Unimpressed, the appellate court affirmed the NLRCs award of financial assistance to Capor. It
stressed that the laborers welfare should be the primordial and paramount consideration when carrying
out and interpreting provisions of the Labor Code. It explained that the mandate laid down in Philippine
Long Distance Telephone Company v. National Labor Relations Commission[13] was not absolute, but
merely directory.
Issue
The issue before us is whether the NLRC committed grave abuse of discretion amounting to lack
or excess of jurisdiction in granting financial assistance to an employee who was validly dismissed for theft
of company property.
Our Ruling
Conviction in a criminal case is not necessary to

find just cause for termination of employment.
On the date that the appellate court issued its Decision, Capor filed a Manifestation[14] informing the CA of
her acquittal in the charge of qualified theft. The dispositive portion of said Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered

acquitting Nenita Capor of the crime charged against her in this case on the ground of
reasonable doubt with costs de oficio.
Capor thus claims that her acquittal in the criminal case proves that petitioners failed to
present substantial evidence to justify her termination from the company. She therefore asks for a finding
of illegal dismissal and an award of separation pay equivalent to one month pay for every year of service.
On the other hand, petitioners argue that the dismissal of a criminal action should not carry a
corresponding dismissal of the labor action since a criminal conviction is unnecessary in warranting a valid
dismissal for employment.
Petitioners further maintain that the ruling in Philippine Long Distance Telephone Company v. National
Labor Relations Commission[15] regarding the disallowance of separation pay for those dismissed due to
serious misconduct or moral turpitude is mandatory. Petitioners likewise argue that in Zenco Sales, Inc. v.
National Labor Relations Commission,[16] the Supreme Court found grave abuse of discretion on the part
of the NLRC when it ignored the principles laid down in the Philippine Long Distance Telephone Company
v. National Labor Relations Commission. Thus, petitioners pray for the reversal of the CA Decision and
reinstatement of the Labor Arbiters Decision dated November 16, 1999.
Capor was acquitted in Criminal Case No. 207-58-MN based on reasonable doubt. In his Decision,
the trial judge entertained doubts regarding the guilt of Capor because of two circumstances: (1) an
ensuing labor dispute (though it omitted to state the parties involved), and (2) the upcoming retirement
of Capor. The trial judge made room for the possibility that these circumstances could have motivated
petitioners to plant evidence against Capor so as to avoid paying her retirement benefits. The trial court
did not categorically rule that the acts imputed to Capor did not occur. It did not find petitioners version
of the event as fabricated, baseless, or unreliable. It merely acknowledged that seeds of doubt
have been planted in the jurors mind which, in a criminal case, is enough to acquit an accused based on
reasonable doubt. The pertinent portion of the trial courts Decision reads:
During the cross examination of the accused, she was confronted with a
document that must be related to a labor dispute. x x x The Court noted very clearly from
the transcript of stenographic notes that it must have been submitted to the NLRC. This
is indicative of a labor dispute which, although not claimed directly by the accused, could
be one of the reasons why she insinuated that evidence was planted against her in order
to deprive her of the substantial benefits she will be receiving when she retires from the
company. Incidentally, this document was never included in the written offer of evidence
of the prosecution.
Doubt has, therefore, crept into the mind of the Court concerning the guilt of
accused Nenita Capor which in this jurisdiction is mandated to be resolved in favor of her
innocence.
Pertinent to the foregoing doubt being entertained by this Court, the Court of
Appeals citing People v. Bacus, G.R. No. 60388, November 21, 1991: the phrase beyond
reasonable doubt means not a single iota of doubt remains present in the mind of a
reasonable and unprejudiced man that a person is guilty of a crime. Where doubt exists,
even if only a shred, the Court must and should set the accused free.(People v. Felix, CA-
G.R. No. 10871, November 24, 1992)
WHEREFORE, premises considered, judgment is hereby rendered acquitting

accused Nenita Capor of the crime charged against her in this case on the ground of
reasonable doubt, with costs de oficio.
SO ORDERED.[17]
In Nicolas v. National Labor Relations Commission,[18] we held that a criminal conviction is not
necessary to find just cause for employment termination. Otherwise stated, an employees acquittal in a
criminal case, especially one that is grounded on the existence of reasonable doubt, will not preclude a
determination in a labor case that he is guilty of acts inimical to the employers interests.[19]
Criminal cases require proof beyond reasonable doubt while labor
disputes require only substantial evidence, which means such relevant evidence as a
reasonable mind might accept as adequate to justify a conclusion.[20] The evidence in this case was
reviewed by the appellate court and two labor tribunals endowed with expertise on the matter the Labor
Arbiter and the NLRC. They all found substantial evidence to conclude that Capor had been validly
dismissed for dishonesty or serious misconduct. It is settled that factual findings of quasi-judicial agencies
are generally accorded respect and finality so long as these are supported by substantial evidence. In the
instant case, we find no compelling reason to doubt the common findings of the three reviewing bodies.
The award of separation pay is not warranted

under the law and jurisprudence.
We find no justification for the award of separation pay to Capor. This award is a deviation from
established law and jurisprudence. [21]
The law is clear. Separation pay is only warranted when the cause for termination is not attributable to
the employees fault, such as those provided in Articles 283 and 284 of the Labor Code, as well as in cases
of illegal dismissal in which reinstatement is no longer feasible.[22] It is not allowed when an employee is
dismissed for just cause,[23] such as serious misconduct.
Jurisprudence has classified theft of company property as a serious misconduct and denied the
award of separation pay to the erring employee.[24] We see no reason why the same should not be similarly
applied in the case of Capor. She attempted to steal the property of her long-time employer. For
committing such misconduct, she is definitely not entitled to an award of separation pay.
It is true that there have been instances when the Court awarded financial assistance to employees who
were terminated for just causes, on grounds of equity and social justice. The same, however, has been
curbed and rationalized in Philippine Long Distance Telephone Company v. National Labor Relations
Commission.[25] In that case, we recognized the harsh realities faced by employees that forced them,
despite their good intentions, to violate company policies, for which the employer can rightfully terminate
their employment. For these instances, the award of financial assistance was allowed. But, in clear and
unmistakable language, we also held that the award of financial assistance shall not be given to validly
terminated employees, whose offenses are iniquitous or reflective of some depravity in their moral
character. When the employee commits an act of dishonesty, depravity, or iniquity, the grant of financial
assistance is misplaced compassion. It is tantamount not only to condoning a patently illegal or dishonest
act, but an endorsement thereof. It will be an insult to all the laborers who, despite their economic
difficulties, strive to maintain good values and moral conduct.
In fact, in the recent case of Toyota Motors Philippines, Corp. Workers Association (TMPCWA) v. National
Labor Relations Commission,[26] we ruled that separation pay shall not be granted to all employees who
are dismissed on any of the four grounds provided in Article 282 of the Labor Code. Such ruling was
reiterated and further explained in Central Philippines Bandag Retreaders, Inc. v. Diasnes:[27]
To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the
award of separation pay based on social justice when an employees dismissal is based on
serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or
willful breach of trust; or commission of a crime against the person of the employer or his
immediate family grounds under Art. 282 of the Labor Code that sanction dismissals of
employees. They must be most judicious and circumspect in awarding separation pay or
financial assistance as the constitutional policy to provide full protection to labor is not
meant to be an instrument to oppress the employers. The commitment of the Court to
the cause of labor should not embarrass us from sustaining the employers when they are
right, as here. In fine, we should be more cautious in awarding financial assistance to the
undeserving and those who are unworthy of the liberality of the law.
We are not persuaded by Capors argument that despite the finding of theft, she should still be granted
separation pay in light of her long years of service with petitioners. We held in Central Pangasinan Electric
Cooperative, Inc. v. National Labor Relations Commission[28] that:
Although long years of service might generally be considered for the award of separation
benefits or some form of financial assistance to mitigate the effects of termination, this
case is not the appropriate instance for generosity x x x. The fact that private respondent
served petitioner for more than twenty years with no negative record prior to his dismissal,
in our view of this case, does not call for such award of benefits, since his violation reflects
a regrettable lack of loyalty and worse, betrayal of the company. If an employees length
of service is to be regarded as justification for moderating the penalty of dismissal, such
gesture will actually become a prize for disloyalty, distorting the meaning of social justice
and undermining the efforts of labor to clean its ranks of undesirables.
Indeed, length of service and a previously clean employment record cannot simply erase the gravity of
the betrayal exhibited by a malfeasant employee.[29] Length of service is not a bargaining chip that can
simply be stacked against the employer. After all, an employer-employee relationship is symbiotic where
both parties benefit from mutual loyalty and dedicated service. If an employer had treated his employee
well, has accorded him fairness and adequate compensation as determined by law, it is only fair to expect
a long-time employee to return such fairness with at least some respect and honesty. Thus, it may be
said that betrayal by a long-time employee is more insulting and odious for a fair employer. As stated in
another case:
x x x The fact that [the employer] did not suffer pecuniary damage will not obliterate
respondents betrayal of trust and confidence reposed by petitioner. Neither would his
length of service justify his dishonesty or mitigate his liability. His length of service even
aggravates his offense. He should have been more loyal to petitioner company from
which he derived his family bread and butter for seventeen years.[30]
While we sympathize with Capors plight, being of retirement age and having served petitioners for 39
years, we cannot award any financial assistance in her favor because it is not only against the law but also
a retrogressive public policy. We have already explained the folly of granting financial assistance in the
guise of compassion in the following pronouncements:
x x x Certainly, a dishonest employee cannot be rewarded with separation pay or any
financial benefit after his culpability is established in two decisions by competent labor
tribunals, which decisions appear to be well-supported by evidence. To hold otherwise,
even in the name of compassion, would be to send a wrong signal not only that crime
pays but also that one can enrich himself at the expense of another in the name of social
justice. And courts as well as quasi-judicial entities will be overrun by petitioners mouthing
dubious pleas for misplaced social justice. Indeed, before there can be an occasion for
compassion and mercy, there must first be justice for all. Otherwise, employees will be
encouraged to steal and misappropriate in the expectation that eventually, in the name
of social justice and compassion, they will not be penalized but instead financially
rewarded. Verily, a contrary holding will merely encourage lawlessness, dishonesty, and
duplicity. These are not the values that society cherishes; these are the habits that it
abhors.[31]
WHEREFORE, the petition is GRANTED. The assailed June 3, 2004 Decision of the Court of Appeals in
CA-G.R. SP No. 76789 affirming the September 20, 2002 Decision of the National Labor Relations
Commission is ANNULLED and SET ASIDE. The November 16, 1999 Decision of the Labor Arbiter
is REINSTATED and AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice

CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 3-20.
[2]
Id. at 65-75; penned by Associate Justice Bienvenido L. Reyes and concurred in by Associate Justices
Rosalinda Asuncion-Vicente and Jose C. Reyes, Jr.
[3]
CA rollo, p. 60.
[4]
Id. at 27.
[5]
Rollo, pp. 21-37.
[6]
Id. at 29-36.
[7]
Rollo, pp. 38-44.
[8]
Id. at 43.
[9]
Id. at 45-61; CA rollo, pp. 169-185.
[10]
Rollo, pp. 62-63.
[11]
CA rollo, pp. 2-25.
[12]
G.R. No. L-80609, August 23, 1988, 164 SCRA 671, 679-680.
[13]
Id.
[14]
[15]
Supra note 12.
[16]
G.R. No. 111110, August 2, 1994, 234 SCRA 689.
[17]
Rollo, pp. 129-130.
[18]
327 Phil. 883, 886-887 (1996).
[19]
Vergara v. National Labor Relations Commission, 347 Phil. 161, 173-174 (1997); Chua v.
National Labor Relations Commission, G.R. No. 105775, February 8, 1993, 218 SCRA 545,
548; See MGG Marine Services, Inc. v. National Labor Relations Commission, 328 Phil. 1047,
1068 (1996).
[20]
See Patna-an v. National Labor Relations Commission, G.R. No. 92878, March 6, 1992, 207
SCRA 106; Iriga Telephone Co., Inc. v. National Labor Relations Commission, 350 Phil. 245,
253 (1998).
[21]
See Philippine Long Distance Telephone Company v. National Labor Relations
Commission, supra note 12; Zenco Sales, Inc. v. National Labor Relations
Commission, supra note 16; Philippine National Construction Corporation v. National Labor
Relations Commission, 252 Phil. 211 (1989).
[22]
Section 4(b), Rule I, Book VI of the Implementing Rules and Regulations of the Labor Code.
[23]
Article 282 of the Labor Code and Section 7, Rule I, Book VI of the Implementing Rules and
Regulations of the Labor Code.
[24]
Philippine Long Distance Telephone Company v. National Labor Relations Commission, supra
note 12; Zenco Sales, Inc. v. National Labor Relations Commission, supra note 16.
[25]
Supra note 12.
[26]
G.R. Nos. 158798-99, October 19, 2007, 537 SCRA 171, 219-223.
[27]
G.R. No. 163607, July 14, 2008, 558 SCRA 194, 207.
[28]
G.R. No. 163561, July 24, 2007, 528 SCRA 146, 151-152.
[29]
See Philippine Long Distance Telephone Company v. The Late Romeo F. Bolso, G.R. No.
159701, August 17, 2007, 530 SCRA 550, 563-564; Central Pangasinan Electric Cooperative, Inc.
v. National Labor Relations Commission, supra; Philippine Long Distance Telephone Company
v. National Labor Relations Commission, supra note 12; United South Dockhandlers, Inc. v.
National Labor Relations Commission, 335 Phil. 76, 81-82 (1997).
[30]
United South Dockhandlers, Inc. v. National Labor Relations Commission, supra note 29.
[31]
San Miguel Corporation v. National Labor Relations Commission, 325 Phil. 940, 952 (1996).

Supreme Court
Manila
SECOND DIVISION
JOEB M. ALIVIADO, ARTHUR G.R. No. 160506

CORPUZ, ERIC ALIVIADO,
MONCHITO AMPELOQUIO,
ABRAHAM BASMAYOR,
JONATHAN MATEO, LORENZO
PLATON, JOSE FERNANDO
GUTIERREZ, ESTANISLAO
BUENAVENTURA, LOPE SALONGA,
FRANZ DAVID, NESTOR IGNACIO,
JULIO REY, RUBEN MARQUEZ, JR.,
MAXIMINO PASCUAL, ERNESTO
CALANAO, ROLANDO
ROMASANTA, RHUEL AGOO,
BONIFACIO ORTEGA, ARSENIO
SORIANO, JR., ARNEL ENDAYA,
ROBERTO ENRIQUEZ, NESTOR
BAQUILA, EDGARDO QUIAMBAO,
SANTOS BACALSO, SAMSON BASCO,
ALADINO GREGORO, JR., EDWIN
GARCIA, ARMANDO VILLAR, EMIL
TAWAT, MARIO P. LIONGSON,
CRESENTE J. GARCIA, FERNANDO
MACABENTE, MELECIO CASAPAO,
REYNALDO JACABAN, FERDINAND
SALVO, ALSTANDO MONTOS,
RAINER N. SALVADOR, RAMIL
REYES, PEDRO G. ROY, LEONARDO
P. TALLEDO, ENRIQUE F. TALLEDO,
WILLIE ORTIZ, ERNESTO SOYOSA,
ROMEO VASQUEZ, JOEL BILLONES,
ALLAN BALTAZAR, NOLI GABUYO,
EMMANUEL E. LABAN, RAMIR E.
PIAT, RAUL DULAY, TADEO DURAN,
JOSEPH BANICO, ALBERT LEYNES,
ANTONIO DACUNA, RENATO DELA
CRUZ, ROMEO VIERNES, JR., ELAIS
BASEO, WILFREDO TORRES,
MELCHOR CARDANO, MARIANO
NARANIAN, JOHN SUMERGIDO,
ROBERTO ROSALES, GERRY C.
GATPO, GERMAN N. GUEVARRA, Present:
GILBERT Y. MIRANDA, RODOLFO C.
TOLEDO, ARNOLD D. LASTONA, CARPIO, J., Chairperson,
PHILIP M. LOZA, MARIO N. BRION,
CULDAYON, ORLANDO P. JIMENEZ, DEL CASTILLO,
FRED P. JIMENEZ, RESTITUTO C. ABAD, and
PAMINTUAN, JR., ROLANDO J. DE PEREZ, JJ.
ANDRES, ARTUZ BUSTENERA,
ROBERTO B. CRUZ, ROSEDY O.
YORDAN, DENNIS DACASIN,
ALEJANDRINO ABATON, and
ORLANDO S. BALANGUE,
Petitioners,
- versus -
PROCTER & GAMBLE PHILS., INC., Promulgated:

and PROMM-GEM INC., March 9, 2010
Respondents.
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Labor laws expressly prohibit labor-only contracting. To prevent its circumvention, the Labor
Code establishes an employer-employee relationship between the employer and the employees of the
labor-only contractor.
The instant petition for review assails the March 21, 2003 Decision[1] of the Court of Appeals (CA) in CA-
G.R. SP No. 52082 and its October 20, 2003 Resolution[2] denying the motions for reconsideration
separately filed by petitioners and respondent Procter & Gamble Phils. Inc. (P&G). The appellate court
affirmed the July 27, 1998 Decision of the National Labor Relations Commission (NLRC), which in turn
affirmed the November 29, 1996 Decision[3] of the Labor Arbiter. All these decisions found Promm-Gem,
Inc. (Promm-Gem) and Sales and Promotions Services (SAPS) to be legitimate independent contractors
and the employers of the petitioners.
Factual Antecedents
Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early as
1982 or as late as June 1991, to either May 5, 1992 or March 11, 1993, more specifically as follows:
Name Date Employed Date Dismissed

1. Joeb M. Aliviado November, 1985 May 5, 1992
2. Arthur Corpuz 1988 March 11, 1993
3. Eric Aliviado 1985 March 11, 1993
4. Monchito Ampeloquio September, 1988 March 11, 1993
5. Abraham Basmayor[, Jr.] 1987 March 11, 1993
6. Jonathan Mateo May, 1988 March 11, 1993
7. Lorenzo Platon 1985 March 11, 1993
8. Jose Fernando Gutierrez 1988 May 5, 1992
9. Estanislao Buenaventura June, 1988 March 11, 1993
10. Lope Salonga 1982 March 11, 1993
11. Franz David 1989 March 11, 1993
12. Nestor Ignacio 1982 March 11, 1993
13. Julio Rey 1989 May 5, 1992
14. Ruben [Vasquez], Jr. 1985 May 5, 1992
15. Maximino Pascual 1990 May 5, 1992
16. Ernesto Calanao[, Jr.] 1987 May 5, 1992
17. Rolando Romasanta 1983 March 11, 1993
18. [Roehl] Agoo 1988 March 11, 1993
19. Bonifacio Ortega 1988 March 11, 1993
20. Arsenio Soriano, Jr. 1985 March 11, 1993
21. Arnel Endaya 1983 March 11, 1993
22. Roberto Enriquez December, 1988 March 11, 1993
23. Nestor [Es]quila 1983 May 5, 1992
24. Ed[g]ardo Quiambao 1989 March 11, 1993
25. Santos Bacalso 1990 March 11, 1993
26. Samson Basco 1984 March 11, 1993
27. Aladino Gregor[e], Jr. 1980 May 5, 1992
28. Edwin Garcia 1987 May 5, 1992
29. Armando Villar 1990 May 5, 1992
30. Emil Tawat 1988 March 11, 1993
31. Mario P. Liongson 1991 May 5, 1992
32. Cresente J. Garcia 1984 March 11, 1993
33. Fernando Macabent[a] 1990 May 5, 1992
34. Melecio Casapao 1987 March 11, 1993
35. Reynaldo Jacaban 1990 May 5, 1992
36. Ferdinand Salvo 1985 May 5, 1992
37. Alstando Montos 1984 March 11, 1993
38. Rainer N. Salvador 1984 May 5, 1992
39. Ramil Reyes 1984 March 11, 1993
40. Pedro G. Roy 1987
41. Leonardo [F]. Talledo 1985 March 11, 1993
42. Enrique [F]. Talledo 1988 March 11, 1993
43. Willie Ortiz 1987 May 5, 1992
44. Ernesto Soyosa 1988 May 5, 1992
45. Romeo Vasquez 1985 March 11, 1993
46. Joel Billones 1987 March 11, 1993
47. Allan Baltazar 1989 March 11, 1993
48. Noli Gabuyo 1991 March 11, 1993
49. Emmanuel E. Laban 1987 May 5, 1992
50. Ramir[o] E. [Pita] 1990 May 5, 1992
51. Raul Dulay 1988 May 5, 1992
52. Tadeo Duran[o] 1988 May 5, 1992
53. Joseph Banico 1988 March 11, 1993
54. Albert Leynes 1990 May 5, 1992
55. Antonio Dacu[m]a 1990 May 5, 1992
56. Renato dela Cruz 1982
57. Romeo Viernes, Jr. 1986
58. El[ia]s Bas[c]o 1989
59. Wilfredo Torres 1986 May 5, 1992
60. Melchor Carda[]o 1991 May 5, 1992
61. [Marino] [Maranion] 1989 May 5, 1992
62. John Sumergido 1987 May 5, 1992
63. Roberto Rosales May, 1987 May 5, 1992
64. Gerry [G]. Gatpo November, 1990 March 11, 1993
65. German N. Guevara May, 1990 March 11, 1993
66. Gilbert Y. Miranda June, 1991 March 11, 1993
67. Rodolfo C. Toledo[, Jr.] May 14, 1991 March 11, 1993
68. Arnold D. [Laspoa] June 1991 March 11, 1993
69. Philip M. Loza March 5, 1992 March 11, 1993
70. Mario N. C[o]ldayon May 14, 1991 March 11, 1993
71. Orlando P. Jimenez November 6, 1992 March 11, 1993
72. Fred P. Jimenez September, 1991 March 11, 1993
73. Restituto C. Pamintuan, Jr. March 5, 1992 March 11, 1993
74. Rolando J. de Andres June, 1991 March 11, 1993
75. Artuz Bustenera[, Jr.] December, 1989 March 11, 1993
76. Roberto B. Cruz May 4, 1990 March 11, 1993
77. Rosedy O. Yordan June, 1991 May 5, 1992
78. Dennis Dacasin May. 1990 May 5, 1992
79. Alejandrino Abaton 1988 May 5, 1992
80. Orlando S. Balangue March, 1989 March 11, 1993[4]
They all individually signed employment contracts with either Promm-Gem or SAPS for periods of more or
less five months at a time.[5] They were assigned at different outlets, supermarkets and stores where they
handled all the products of P&G. They received their wages from Promm-Gem or SAPS.[6]
SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers for reasons such
as habitual absenteeism, dishonesty or changing day-off without prior notice.[7]
P&G is principally engaged in the manufacture and production of different consumer and health products,
which it sells on a wholesale basis to various supermarkets and distributors.[8] To enhance consumer
awareness and acceptance of the products, P&G entered into contracts with Promm-Gem and SAPS for
the promotion and merchandising of its products.[9]
In December 1991, petitioners filed a complaint[10] against P&G for regularization, service incentive
leave pay and other benefits with damages. The complaint was later amended[11]to include the matter of
their subsequent dismissal.

On November 29, 1996, the Labor Arbiter dismissed the complaint for lack of merit and ruled that
there was no employer-employee relationship between petitioners and P&G. He found that the selection
and engagement of the petitioners, the payment of their wages, the power of dismissal and control with
respect to the means and methods by which their work was accomplished, were all done and exercised
by Promm-Gem/SAPS. He further found that Promm-Gem and SAPS were legitimate independent job
contractors. The dispositive portion of his Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered Dismissing the above-

entitled cases against respondent Procter & Gamble (Phils.), Inc. for lack of merit.
SO ORDERED.[12]
Ruling of the NLRC
Appealing to the NLRC, petitioners disputed the Labor Arbiters findings. On July 27, 1998, the
NLRC rendered a Decision[13] disposing as follows:
WHEREFORE, premises considered, the appeal of complainants is hereby DISMISSED and

the decision appealed from AFFIRMED.
SO ORDERED.[14]
Petitioners filed a motion for reconsideration but the motion was denied in the November 19,
1998 Resolution.[15]
Petitioners then filed a petition for certiorari with the CA, alleging grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the Labor Arbiter and the NLRC.However, said
petition was also denied by the CA which disposed as follows:
WHEREFORE, the decision of the National Labor Relations Commission dated July 27,
1998 is AFFIRMED with the MODIFICATION that respondent Procter & Gamble Phils., Inc.
is ordered to pay service incentive leave pay to petitioners.
SO ORDERED.[16]
Petitioners filed a motion for reconsideration but the motion was also denied. Hence, this petition.
Issues
Petitioners now come before us raising the following issues:

I.
WHETHER X X X THE HONORABLE COURT OF APPEALS HAS COMMITTED [A]
REVERSIBLE ERROR WHEN IT DID NOT FIND THE PUBLIC RESPONDENTS TO HAVE
ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS
OF JURISDICTION IN RENDERING THE QUESTIONED JUDGMENT WHEN, OBVIOUSLY,
THE PETITIONERS WERE ABLE TO PROVE AND ESTABLISH THAT RESPONDENT
PROCTER & GAMBLE PHILS., INC. IS THEIR EMPLOYER AND THAT THEY WERE
ILLEGALLY DISMISSED BY THE FORMER.
II.
WHETHER X X X THE HONORABLE COURT OF APPEALS HAS COMMITTED [A]
REVERSIBLE ERROR WHEN IT DID NOT DECLARE THAT THE PUBLIC RESPONDENTS
HAD ACTED WITH GRAVE ABUSE OF DISCRETION WHEN THE LATTER DID NOT FIND
THE PRIVATE RESPONDENTS LIABLE TO THE PETITIONERS FOR PAYMENT OF ACTUAL,
MORAL AND EXEMPLARY DAMAGES AS WELL AS LITIGATION COSTS AND ATTORNEYS
FEES.[17]
Simply stated, the issues are: (1) whether P&G is the employer of petitioners; (2) whether
petitioners were illegally dismissed; and (3) whether petitioners are entitled for payment of actual, moral
and exemplary damages as well as litigation costs and attorneys fees.
Petitioners insist that they are employees of P&G. They claim that they were recruited by the
salesmen of P&G and were engaged to undertake merchandising chores for P&G long before the existence
of Promm-Gem and/or SAPS. They further claim that when the latter had its so-called re-alignment
program, petitioners were instructed to fill up application forms and report to the agencies which P&G
created.[18]
Petitioners further claim that P&G instigated their dismissal from work as can be gleaned from its
letter[19] to SAPS dated February 24, 1993, informing the latter that their Merchandising Services Contract
will no longer be renewed.
Petitioners further assert that Promm-Gem and SAPS are labor-only contractors providing services
of manpower to their client. They claim that the contractors have neither substantial capital nor tools and
equipment to undertake independent labor contracting. Petitioners insist that since they had been
engaged to perform activities which are necessary or desirable in the usual business or trade of P&G, then
they are its regular employees.[20]
On the other hand, P&G points out that the instant petition raises only questions of fact and should
thus be thrown out as the Court is not a trier of facts. It argues that findings of facts of the NLRC,
particularly where the NLRC and the Labor Arbiter are in agreement, are deemed binding and conclusive
on the Supreme Court.
P&G further argues that there is no employment relationship between it and petitioners. It was
Promm-Gem or SAPS that (1) selected petitioners and engaged their services; (2) paid their salaries; (3)
wielded the power of dismissal; and (4) had the power of control over their conduct of work.
P&G also contends that the Labor Code neither defines nor limits which services or activities may
be validly outsourced. Thus, an employer can farm out any of its activities to an independent contractor,
regardless of whether such activity is peripheral or core in nature. It insists that the determination of
whether to engage the services of a job contractor or to engage in direct hiring is within the ambit of
management prerogative.
At this juncture, it is worth mentioning that on January 29, 2007, we deemed as waived the filing
of the Comment of Promm-Gem on the petition.[21] Also, although SAPS was impleaded as a party in the
proceedings before the Labor Arbiter and the NLRC, it was no longer impleaded as a party in the
proceedings before the CA.[22] Hence, our pronouncements with regard to SAPS are only for the purpose
of determining the obligations of P&G, if any.
Our Ruling
As a rule, the Court refrains from reviewing factual assessments of lower courts and agencies
exercising adjudicative functions, such as the NLRC. Occasionally, however, the Court is constrained to
wade into factual matters when there is insufficient or insubstantial evidence on record to support those
factual findings; or when too much is concluded, inferred or deduced from the bare or incomplete facts
appearing on record.[23] In the present case, we find the need to review the records to ascertain the facts.
Labor-only contracting and job contracting
In order to resolve the issue of whether P&G is the employer of petitioners, it is necessary to first determine
whether Promm-Gem and SAPS are labor-only contractors or legitimate job contractors.
The pertinent Labor Code provision on the matter states:
ART. 106. Contractor or subcontractor. Whenever an employer enters into a

contract with another person for the performance of the formers work, the employees of
the contractor and of the latters subcontractor, if any, shall be paid in accordance with
the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and severally liable
with his contractor or subcontractor to such employees to the extent of the work
performed under the contract, in the same manner and extent that he is liable to
employees directly employed by him.
The Secretary of Labor may, by appropriate regulations, restrict or prohibit the

contracting out of labor to protect the rights of workers established under this Code. In
so prohibiting or restricting, he may make appropriate distinctions between labor-only
contracting and job contracting as well as differentiations within these types of contracting
and determine who among the parties involved shall be considered the employer for
purposes of this Code, to prevent any violation or circumvention of any provision of this
Code.
There is labor-only contracting where the person supplying workers to an

employer does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by such
person are performing activities which are directly related to the principal business of such
employer. In such cases, the person or intermediary shall be considered merely as an
agent of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him. (Emphasis and underscoring
supplied.)
Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code, as amended by
Department Order No. 18-02,[24] distinguishes between legitimate and labor-only contracting:
xxxx
Section 3. Trilateral Relationship in Contracting Arrangements. In legitimate

contracting, there exists a trilateral relationship under which there is a contract for a
specific job, work or service between the principal and the contractor or subcontractor,
and a contract of employment between the contractor or subcontractor and its
workers. Hence, there are three parties involved in these arrangements, the principal
which decides to farm out a job or service to a contractor or subcontractor, the contractor
or subcontractor which has the capacity to independently undertake the performance of
the job, work or service, and the contractual workers engaged by the contractor or
subcontractor to accomplish the job[,] work or service.
xxxx
Section 5. Prohibition against labor-only contracting. Labor-only contracting is
hereby declared prohibited. For this purpose, labor-only contracting shall refer to an
arrangement where the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal, and any of the following elements
are present:
i) The contractor or subcontractor does not have substantial capital or

investment which relates to the job, work or service to be performed and the employees
recruited, supplied or placed by such contractor or subcontractor are performing activities
which are directly related to the main business of the principal; or
ii) [T]he contractor does not exercise the right to control over the performance
of the work of the contractual employee.
The foregoing provisions shall be without prejudice to the application of Article

248 (c) of the Labor Code, as amended.
Substantial capital or investment refers to capital stocks and subscribed capitalization

in the case of corporations, tools, equipment, implements, machineries and work premises,
actually and directly used by the contractor or subcontractor in the performance or completion
of the job, work or service contracted out.
The right to control shall refer to the right reserved to the person for whom the
services of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner and means to be used in reaching that end.
x x x x (Underscoring supplied.)
Clearly, the law and its implementing rules allow contracting arrangements for the performance
of specific jobs, works or services. Indeed, it is management prerogative to farm out any of its activities,
regardless of whether such activity is peripheral or core in nature. However, in order for such outsourcing
to be valid, it must be made to an independent contractor because the current labor rules expressly
prohibit labor-only contracting.
To emphasize, there is labor-only contracting when the contractor or sub-contractor merely

recruits, supplies or places workers to perform a job, work or service for a principal[25] and any of the
following elements are present:
i) The contractor or subcontractor does not have substantial capital or investment

which relates to the job, work or service to be performed and the employees recruited,
supplied or placed by such contractor or subcontractor are performing activities which are
directly related to the main business of the principal; or
ii) The contractor does not exercise the right to control over the performance of
the work of the contractual employee. (Underscoring supplied)
In the instant case, the financial statements[26] of Promm-Gem show that it
has authorized capital stock of P1 million and a paid-in capital, or capital available for operations,
of P500,000.00 as of 1990.[27] It also has long term assets worth P432,895.28 and current assets
of P719,042.32. Promm-Gem has also proven that it maintained its own warehouse and office space with
a floor area of 870 square meters.[28] It also had under its name three registered vehicles which were used
for its promotional/merchandising business.[29] Promm-Gem also has other clients[30] aside from
P&G.[31] Under the circumstances, we find that Promm-Gem has substantial investment which relates to
the work to be performed. These factors negate the existence of the element specified in Section 5(i) of
DOLE Department Order No. 18-02.
The records also show that Promm-Gem supplied its complainant-workers with the relevant
materials, such as markers, tapes, liners and cutters, necessary for them to perform their work. Promm-
Gem also issued uniforms to them. It is also relevant to mention that Promm-Gem already considered the
complainants working under it as its regular, not merely contractual or project, employees.[32] This
circumstance negates the existence of element (ii) as stated in Section 5 of DOLE Department Order No.
18-02, which speaks of contractual employees. This, furthermore, negates on the part of Promm-Gem
bad faith and intent to circumvent labor laws which factors have often been tipping points that lead the
Court to strike down the employment practice or agreement concerned as contrary to public policy, morals,
good customs or public order.[33]
Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We find

that it is a legitimate independent contractor.
On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in capital of
only P31,250.00. There is no other evidence presented to show how much its working capital and assets
are. Furthermore, there is no showing of substantial investment in tools, equipment or other assets.
In Vinoya v. National Labor Relations Commission,[34] the Court held that [w]ith the current
economic atmosphere in the country, the paid-in capitalization of PMCI amounting to P75,000.00 cannot
be considered as substantial capital and, as such, PMCI cannot qualify as an independent
contractor.[35] Applying the same rationale to the present case, it is clear that SAPS having a paid-in capital
of only P31,250 - has no substantial capital. SAPS lack of substantial capital is underlined by the
records[36] which show that its payroll for its merchandisers alone for one month would already
total P44,561.00. It had 6-month contracts with P&G.[37] Yet SAPS failed to show that it could complete
the 6-month contracts using its own capital and investment. Its capital is not even sufficient for one
months payroll. SAPS failed to show that its paid-in capital of P31,250.00 is sufficient for the period
required for it to generate its needed revenue to sustain its operations independently. Substantial capital
refers to capitalization used in the performance or completion of the job, work or service contracted out. In
the present case, SAPS has failed to show substantial capital.
Furthermore, the petitioners have been charged with the merchandising and promotion of the
products of P&G, an activity that has already been considered by the Court as doubtlessly directly related
to the manufacturing business,[38] which is the principal business of P&G. Considering that SAPS has no
substantial capital or investment and the workers it recruited are performing activities which are directly
related to the principal business of P&G, we find that the former is engaged in labor-only contracting.
Where labor-only contracting exists, the Labor Code itself establishes an employer-employee
relationship between the employer and the employees of the labor-only contractor.[39] The statute
establishes this relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The
contractor is considered merely an agent of the principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees had been directly employed by the principal
employer.[40]
Consequently, the following petitioners, having been recruited and supplied

by SAPS[41] -- which engaged in labor-only contracting -- are considered as the employees of P&G: Arthur
Corpuz, Eric Aliviado, Monchito Ampeloquio, Abraham Basmayor, Jr., Jonathan Mateo, Lorenzo Platon,
Estanislao Buenaventura, Lope Salonga, Franz David, Nestor Ignacio, Jr., Rolando Romasanta, Roehl
Agoo, Bonifacio Ortega, Arsenio Soriano, Jr., Arnel Endaya, Roberto Enriquez, Edgardo Quiambao, Santos
Bacalso, Samson Basco, Alstando Montos, Rainer N. Salvador, Pedro G. Roy, Leonardo F. Talledo, Enrique
F. Talledo, Joel Billones, Allan Baltazar, Noli Gabuyo, Gerry Gatpo, German Guevara, Gilbert V. Miranda,
Rodolfo C. Toledo, Jr., Arnold D. Laspoa, Philip M. Loza, Mario N. Coldayon, Orlando P. Jimenez, Fred P.
Jimenez, Restituto C. Pamintuan, Jr., Rolando J. De Andres, Artuz Bustenera, Jr., Roberto B. Cruz, Rosedy
O. Yordan, Orlando S. Balangue, Emil Tawat, Cresente J. Garcia, Melencio Casapao, Romeo Vasquez,
Renato dela Cruz, Romeo Viernes, Jr., Elias Basco and Dennis Dacasin.
The following petitioners, having worked under, and been dismissed by Promm-Gem, are
considered the employees of Promm-Gem, not of P&G: Wilfredo Torres, John Sumergido, Edwin Garcia,
Mario P. Liongson, Jr., Ferdinand Salvo, Alejandrino Abaton, Emmanuel A. Laban, Ernesto Soyosa, Aladino
Gregore, Jr., Ramil Reyes, Ruben Vasquez, Jr., Maximino Pascual, Willie Ortiz, Armando Villar, Jose
Fernando Gutierrez, Ramiro Pita, Fernando Macabenta, Nestor Esquila, Julio Rey, Albert Leynes, Ernesto
Calanao, Roberto Rosales, Antonio Dacuma, Tadeo Durano, Raul Dulay, Marino Maranion, Joseph Banico,
Melchor Cardano, Reynaldo Jacaban, and Joeb Aliviado.[42]
Termination of services
We now discuss the issue of whether petitioners were illegally dismissed. In cases of regular
employment, the employer shall not terminate the services of an employee except for a just[43] or
authorized[44] cause.
In the instant case, the termination letters given by Promm-Gem to its employees uniformly specified the
cause of dismissal as grave misconduct and breach of trust, as follows:
xxxx
This informs you that effective May 5, 1992, your employment with our company,
Promm-Gem, Inc. has been terminated. We find your expressed admission, that you
considered yourself as an employee of Procter & Gamble Phils., Inc. and assailing the
integrity of the Company as legitimate and independent promotion firm, is deemed as an
act of disloyalty prejudicial to the interests of our Company: serious misconduct and
breach of trust reposed upon you as employee of our Company which [co]nstitute just
cause for the termination of your employment.
x x x x[45]
Misconduct has been defined as improper or wrong conduct; the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, unlawful in character implying wrongful intent
and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated
character and not merely trivial and unimportant.[46] To be a just cause for dismissal, such misconduct (a)
must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the
employee has become unfit to continue working for the employer.[47]
In other words, in order to constitute serious misconduct which will warrant the dismissal of an employee
under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained
of has violated some established rules or policies. It is equally important and required that the act or
conduct must have been performed with wrongful intent.[48] In the instant case, petitioners-employees of
Promm-Gem may have committed an error of judgment in claiming to be employees of P&G, but it cannot
be said that they were motivated by any wrongful intent in doing so. As such, we find them guilty of only
simple misconduct for assailing the integrity of Promm-Gem as a legitimate and independent promotion
firm. A misconduct which is not serious or grave, as that existing in the instant case, cannot be a valid
basis for dismissing an employee.
Meanwhile, loss of trust and confidence, as a ground for dismissal, must be based on the willful breach of
the trust reposed in the employee by his employer. Ordinary breach will not suffice.A breach of trust is
willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from
an act done carelessly, thoughtlessly, heedlessly or inadvertently.[49]
Loss of trust and confidence, as a cause for termination of employment, is premised on the fact
that the employee concerned holds a position of responsibility or of trust and confidence.As such, he must
be invested with confidence on delicate matters, such as custody, handling or care and protection of the
property and assets of the employer. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and must show that the employee is unfit to continue to work for the
employer.[50] In the instant case, the petitioners-employees of Promm-Gem have not been shown to be
occupying positions of responsibility or of trust and confidence. Neither is there any evidence to show that
they are unfit to continue to work as merchandisers for Promm-Gem.
All told, we find no valid cause for the dismissal of petitioners-employees of Promm-Gem.
While Promm-Gem had complied with the procedural aspect of due process in terminating the
employment of petitioners-employees, i.e., giving two notices and in between such notices, an opportunity
for the employees to answer and rebut the charges against them, it failed to comply with the substantive
aspect of due process as the acts complained of neither constitute serious misconduct nor breach of
trust. Hence, the dismissal is illegal.
With regard to the petitioners placed with P&G by SAPS, they were given no written notice of
dismissal. The records show that upon receipt by SAPS of P&Gs letter terminating their Merchandising
Services Contact effective March 11, 1993, they in turn verbally informed the concerned petitioners not to
report for work anymore. The concerned petitioners related their dismissal as follows:
xxxx
5. On March 11, 1993, we were called to a meeting at SAPS office. We were told by Mr.
Saturnino A. Ponce that we should already stop working immediately because that was
the order of Procter and Gamble.According to him he could not do otherwise because
Procter and Gamble was the one paying us. To prove that Procter and Gamble was the
one responsible in our dismissal, he showed to us the letter[51] dated February 24, 1993,
xxx
February 24, 1993
Sales and Promotions Services

Armons Bldg., 142 Kamias Road,
Quezon City
Attention: Mr. Saturnino A. Ponce
President & General Manager
Gentlemen:
Based on our discussions last 5 and 19 February 1993, this formally informs
you that we will not be renewing our Merchandising Services Contract
with your agency.
Please immediately undertake efforts to ensure that your services to the

Company will terminate effective close of business hours of 11 March
1993.
This is without prejudice to whatever obligations you may have to the

company under the abovementioned contract.
Very truly yours,
(Sgd.)
EMMANUEL M. NON
Sales Merchandising III
6. On March 12, 1993, we reported to our respective outlet assignments. But, we were
no longer allowed to work and we were refused entrance by the security guards
posted. According to the security guards, all merchandisers of Procter and Gamble under
S[APS] who filed a case in the Dept. of Labor are already dismissed as per letter of Procter
and Gamble dated February 25, 1993. x x x[52]
Neither SAPS nor P&G dispute the existence of these circumstances. Parenthetically, unlike
Promm-Gem which dismissed its employees for grave misconduct and breach of trust due to disloyalty,
SAPS dismissed its employees upon the initiation of P&G. It is evident that SAPS does not carry on its own
business because the termination of its contract with P&G automatically meant for it also the termination
of its employees services. It is obvious from its act that SAPS had no other clients and had no intention of
seeking other clients in order to further its merchandising business. From all indications SAPS, existed to
cater solely to the need of P&G for the supply of employees in the latters merchandising concerns
only. Under the circumstances prevailing in the instant case, we cannot consider SAPS as
an independent contractor.
Going back to the matter of dismissal, it must be emphasized that the onus probandi to prove the
lawfulness of the dismissal rests with the employer.[53] In termination cases, the burden of proof rests
upon the employer to show that the dismissal is for just and valid cause.[54] In the instant case, P&G failed
to discharge the burden of proving the legality and validity of the dismissals of those petitioners who are
considered its employees. Hence, the dismissals necessarily were not justified and are therefore illegal.
Damages
We now go to the issue of whether petitioners are entitled to damages. Moral

and exemplary damages are recoverable where the dismissal of an employee was attended by bad faith
or fraud or constituted an act oppressive to labor or was done in a manner contrary to morals, good
customs or public policy.[55]
With regard to the employees of Promm-Gem, there being no evidence of bad faith, fraud or any
oppressive act on the part of the latter, we find no support for the award of damages.
As for P&G, the records show that it dismissed its employees through SAPS in a manner oppressive to
labor. The sudden and peremptory barring of the concerned petitioners from work, and from admission
to the work place, after just a one-day verbal notice, and for no valid cause bellows oppression and utter
disregard of the right to due process of the concerned petitioners.Hence, an award of moral damages is
called for.
Attorneys fees may likewise be awarded to the concerned petitioners who

were illegally dismissed in bad faith and were compelled to litigate or incur expenses to protect their
rights by reason of the oppressive acts[56] of P&G.
Lastly, under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges, inclusive of allowances, and
other benefits or their monetary equivalent from the time the compensation was withheld up to the time
of actual reinstatement.[57] Hence, all the petitioners, having been illegally dismissed are entitled to
reinstatement without loss of seniority rights and with full back wages and other benefits from the time
of their illegal dismissal up to the time of their actual reinstatement.
WHEREFORE, the petition is GRANTED. The Decision dated March 21, 2003 of the Court of Appeals in
CA-G.R. SP No. 52082 and the Resolution dated October 20, 2003 are REVERSED and SET
ASIDE. Procter & Gamble Phils., Inc. and Promm-Gem, Inc. are ORDERED to reinstate their respective
employees immediately without loss of seniority rights and with full backwages and other benefits from
the time of their illegal dismissal up to the time of their actual reinstatement. Procter & Gamble Phils., Inc.
is further ORDERED to pay each of those petitioners considered as its employees, namely Arthur Corpuz,
Eric Aliviado, Monchito Ampeloquio, Abraham Basmayor, Jr., Jonathan Mateo, Lorenzo Platon, Estanislao
Buenaventura, Lope Salonga, Franz David, Nestor Ignacio, Rolando Romasanta, Roehl Agoo, Bonifacio
Ortega, Arsenio Soriano, Jr., Arnel Endaya, Roberto Enriquez, Edgardo Quiambao, Santos Bacalso,
Samson Basco, Alstando Montos, Rainer N. Salvador, Pedro G. Roy, Leonardo F. Talledo, Enrique F.
Talledo, Joel Billones, Allan Baltazar, Noli Gabuyo, Gerry Gatpo, German Guevara, Gilbert Y. Miranda,
Rodolfo C. Toledo, Jr., Arnold D. Laspoa, Philip M. Loza, Mario N. Coldayon, Orlando P. Jimenez, Fred P.
Jimenez, Restituto C. Pamintuan, Jr., Rolando J. De Andres, Artuz Bustenera, Jr., Roberto B. Cruz, Rosedy
O. Yordan, Orlando S. Balangue, Emil Tawat, Cresente J. Garcia, Melencio Casapao, Romeo Vasquez,
Renato dela Cruz, Romeo Viernes, Jr., Elias Basco and Dennis Dacasin, P25,000.00 as moral damages
plus ten percent of the total sum as and for attorneys fees.
Let this case be REMANDED to the Labor Arbiter for the computation, within 30 days from receipt of this
Decision, of petitioners backwages and other benefits; and ten percent of the total sum as and for
attorneys fees as stated above; and for immediate execution.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 86-95; penned by Associate Justice Edgardo P. Cruz and concurred in by Associate Justices
Salvador
J. Valdez, Jr. and Mario L. Guaria III.
[2]
Id. at 97-98.
[3]
Id. at 298-312.
[4]
Id. at 30-31.
[5]
Id. at 434-435.
[6]
Id. at 438-440.
[7]
Id. at 441-442.
[8]
Id. at 105.
[9]
Id. at 406-414.
[10]
Id. at 158-164.
[11]
Records, Vol. I, pp. 345-346, 373-392; Records, Vol. II, pp. 396-412.
[12]
Rollo, pp. 112-113.
[13]
Id. at 115-135.
[14]
Id. at 135.
[15]
Id. at 137-157.
[16]
Id. at 94-95.
[17]
Id. at 668.
[18]
Id. at 679.
[19]
Id. at 192.
[20]
Id. at 693-697.
[21]
Id. at 652.
[22]
Id. at 89.
[23]
Pascua v. National Labor Relations Commission (Third Division), 351 Phil 48, 61 (1998).
[24]
RULES IMPLEMENTING ARTICLES 106 TO 109 OF THE LABOR CODE, AS AMENDED,
approved February 21, 2002.
[25]
Escario v. National Labor Relations Commission, 388 Phil. 929, 938 (2000).
[26]
[27]
Id. at 211.
[28]
Rollo, p. 453; TSN, February 22, 1994, p. 9.
[29]
Rollo, pp 580-582.
[30]
a. Adidas Division, Rubberworld Phil., Inc.; b. CFC Corporation; c. Focus Enterprise, Inc., d.
Procter & Gamble Phil., Inc., e. Roche Phil., Inc.; f. Sterling Products Intl., Inc.; g. Southeast
Asia Foods, Inc.; h. Pepsi Co., Inc.; i. Kraft General Foods Phil., Inc.; j. Universal Robina Corp.;
k. Wrigley Phil., Inc.; l. Asia Brewery, Inc.; m. Ayala Land, Inc.; n. Citibank, N.A.; o. S.C.
Johnson, Inc.; p. Glaxo Phil., Inc.; q. Bank of the Phil. Island-Loyola Branch; r. Republic
Chemical, Inc.; s. Metrolab, Inc.; and, t. First Pacific Metro Corp. Records, Vol. I, p. 192.
[31]
Id.
[32]
[33]
The act of hiring and re-hiring workers over a period of time without considering them as regular
employees evinces bad faith on the part of the employer. San Miguel Corporation v. National Labor
Relations Commission, G.R. No. 147566, December 6, 2006, 510 SCRA 181, 189; Bustamante v.
National Labor Relations Commission, G. R. No. 111651, March 15, 1996, 255 SCRA 145, 150.
[34]
381 Phil. 460 (2000). This case involved an employee who was dismissed and filed a labor case in
1991, about the same time frame as that involved in this case for purposes of taking judicial notice of
the economic atmosphere in the country.
[35]
Id. at 476.
[36]
[37]
Rollo, p. 412.
[38]
Tabas v. California Manufacturing Co., Inc., 251 Phil. 448, 454 (1989).
[39]
Neri v. National Labor Relations Commission, G.R. Nos. 97008-09, July 23, 1993, 224 SCRA 717, 720,
citing Philippine Bank of Communications v. National Labor Relations Commission, 230 Phil. 430, 440
(1986).
[40]
San Miguel Corporation v. Aballa, G.R. No. 149011, June 28, 2005, 461 SCRA 392, 422.
[41]
Records, Vol. I, p. 340. SAPS has admitted that the complainants are its employees.
[42]
Records, Vol. I, p. 193; Vol. II, pp. 666-692.
[43]
LABOR CODE OF THE PHILIPPINES,
ART. 282. Termination by employer. - An employer may terminate an employment for any of the
following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
[44]
ART. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at
least one (1) month before the intended date thereof x x x
ART. 284. Disease as ground for termination. An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his co-employees: x x x
[45]
Records, Vol. II, p. 447.
[46]
National Labor Relations Commission v. Salgarino, G.R. No. 164376, July 31, 2006, 497 SCRA 361,
375; Molina v. Pacific Plans, Inc., G.R. No.165476, March 10, 2006, 484 SCRA 498, 518; Samson v.
National Labor Relations Commission, 386 Phil. 669, 682 (2000).
[47]
Baez v. De La Salle University, G.R. No. 167177, September 27, 2006, 503 SCRA 691, 700; Phil. Aeolus
Automotive United Corp. v. National Labor Relations Commission, 387 Phil. 250, 261 (2000).
[48]
National Labor Relations Commission v. Salgarino, supra at 376.
[49]
Velez v. Shangri-Las Edsa Plaza Hotel, G.R. No. 148261, October 9, 2006, 504 SCRA 13, 25.
[50]
Id. at 26.
[51]
Rollo, p. 192.
[52]
[53]
National Labor Relations Commission v. Salgarino, supra note 46 at 383.
[54]
Royal Crown Internationale v. National Labor Relations Commission, G.R. No. 78085, October 16,
1989, 178 SCRA 569, 578.
LABOR CODE OF THE PHILIPPINES,
ART. 279. Security of Tenure. − In cases of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An employee
who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights
and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was withheld from him up to
the time of his actual reinstatement.
[55]
Pascua v. National Labor Relations Commission (Third Division), supra note 23 at 72; Acua v. Court of
Appeals, G.R. No.159832, May 5, 2006, 489 SCRA 658, 668; Quadra v. Court of Appeals, G.R. No.
147593, July 31, 2006, 497 SCRA 221, 227.
[56]
See Pascua v. National Labor Relations Commission (Third Division), supra note 23 at 74. In the instant
case, P&Gs act of taking an unconscionable and unscrupulous advantage of the utter powerlessness
of the individual concerned petitioners to prevent the trampling of their rights to due process and
security of tenure constitutes bad faith.
[57]
Premier Development Bank v. Mantal, G.R. No. 167716, March 23, 2006, 485 SCRA 234, 242-
243; Philippine Amusement and Gaming Corporation v. Angara, G.R. No. 142937, July 25, 2006, 496
SCRA 453, 457.

Supreme Court
Manila
SECOND DIVISION
SPOUSES NORMAN K. CERTEZA, JR. G.R. No. 190078

and MA. ROSANILA V. CERTEZA,
AND AMADA P. VILLAMAYOR and Present:
HERMINIO VILLAMAYOR, JR.,
Petitioners, CARPIO, J., Chairperson,
BRION,
DEL CASTILLO,
- versus - ABAD, and
PEREZ, JJ.
PHILIPPINE SAVINGS BANK, Promulgated:

x-------------------------------------------------------------------x
RESOLUTION
DEL CASTILLO, J.:
In this Petition for Review on Certiorari,[1] petitioners contend that the auction sale conducted by
virtue of the extrajudicial foreclosure of the mortgage should be declared null and void for failure to comply
with the two-bidder rule.
Factual Antecedents
Petitioners obtained a P1,255,000.00 loan from respondent Philippine Savings Bank (PS
Bank),[2] secured by two parcels of land, with all the buildings and improvements existing thereon, covered
by Transfer Certificate of Title Nos. N-208706 and N-208770.[3]
Petitioners failed to pay their outstanding obligation despite demands hence PS Bank instituted
on May 8, 2002, an action for Extrajudicial Foreclosure of the Real Estate Mortgage pursuant to Act No.
3135,[4] as amended.
During the auction sale conducted on February 18, 2003, PS Bank emerged as the sole and
highest bidder.[5] A corresponding Certificate of Sale dated February 20, 2003 was issued in favor of PS
Bank, which was registered with the Registry of Deeds of Quezon City on March 25, 2003.[6]
During the period of redemption, on December 1, 2003, PS Bank filed an Ex-parte Petition[7] for
Writ of Possession with the Regional Trial Court (RTC) of Quezon City, which was granted in an
Order[8] dated September 21, 2004, after the period of redemption for the foreclosed property had already
expired.
On January 20, 2005, petitioners filed an Omnibus Motion for Leave to Intervene and to Stay
Issuance or Implementation of Writ of Possession,[9] attaching therein their Petition-in-
Intervention[10] pursuant to Sec. 8 of Act No. 3135. They sought the nullification of the extrajudicial
foreclosure sale for allegedly having been conducted in contravention of the procedural requirements
prescribed in A.M. No. 99-10-05-0 (Re: Procedure in Extrajudicial Foreclosure of Real Estate Mortgages)
and in violation of herein petitioners right to due process.
PS Bank opposed[11] the motion citing Manalo v. Court of Appeals[12] where we held that (T)he
issuance of an order granting the writ of possession is in essence a rendition of judgment within the
purview of Section 2, Rule 19 of the Rules of Court. PS Bank also argued that with the issuance of the trial
courts Order on September 21, 2004, the Motion for Leave to Intervene can no longer be entertained.[13]
The petitioners filed their Reply[14] arguing that the filing of their petition before the court where
possession was requested was pursuant to Sec. 8 of Act No. 3135.
On March 3, 2005, the RTC of Quezon City, Branch 217, issued an Order[15] denying the motion
for intervention and to stay the implementation of the writ, to wit:[16]
The issuance of writ of possession being ministerial in character, the implementation of

such writ by the sheriff is likewise ministerial. In PNB vs. Adil, 118 SCRA 116 (1982), the
Supreme Court held that once the writ of possession has been issued, the trial court has
no alternative but to enforce the writ without delay. The Court found it gross error for the
judge to have suspended the implementation of the writ of possession on a very dubious
ground as humanitarian reason.
WHEREFORE, premises considered, the motion to intervene and to stay the
implementation of the writ of possession is hereby denied.
Petitioners filed a motion for reconsideration[17] but the motion was denied in the Order dated May
9, 2005.
Petitioners filed a Petition for Certiorari with the Court of Appeals (CA) on June 8, 2005 imputing
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the trial court in denying
their motion to intervene and to stay the implementation of the writ.[18] The CA, in its
Decision[19] dated May 8, 2009, found that (1) the issuance of a writ of possession is a ministerial function;
(2) there was no irregularity in the foreclosure sale; (3) the denial of the motion to intervene is proper;
and (4) certiorari is not the proper remedy. The dispositive portion of the said Decision reads:[20]
IN VIEW OF ALL THE FOREGOING, the petition is ordered DISMISSED. The Orders
dated March 3, 2005 and May 9, 2005 in LR Case No. Q-17376 (03) are affirmed.
Petitioners filed a timely Motion for Reconsideration, which was denied by the CA in its Resolution
dated October 20, 2009.[21]
Issues
Petitioners advance the following issues:
I. WHETHER X X X THE COURT OF APPEALS ERRED IN RULING THAT CERTIORARI

IS NOT THE PROPER REMEDY OF A PARTY IN A WRIT OF POSSESSION CASE.
II. WHETHER X X X THE COURT OF APPEALS ERRED IN RULING THAT THE DENIAL
OF PETITIONERS MOTION TO INTERVENE IS PROPER.
III. WHETHER X X X THE COURT OF APPEALS ERRED IN RULING THAT THERE

MAY BE ONLY ONE BIDDER IN A FORECLOSURE SALE.
Petitioners allege that the contents of their Omnibus Motion together with the Petition-in-
Intervention, although entitled as such, sought the nullification of the February 18, 2003extrajudicial
foreclosure sale and the cancellation of both the certificate of sale and the writ of possession issued in
favor of PS Bank.[22] They further submit that the writ of possession is null and void because of patent
irregularities in the conduct of the foreclosure sale.[23] In support of their contention, petitioners argue that
A.M. No. 99-10-05-0 which took effect on January 15, 2000, requires that there must be at least two
participating bidders in an auction sale.[24] Thus:
5. No auction sale shall be held unless there are at least two (2) participating
bidders, otherwise the sale shall be postponed to another date. If on the new date
set for the sale there shall not be at least two bidders, the sale shall then
proceed. The names of the bidders shall be reported by the sheriff or the notary
public who conducted the sale to the Clerk of Court before the issuance of the
certificate of sale.
Our Ruling
The law governing cases of extrajudicial foreclosure of mortgage is Act No. 3135. It provides:
Section 1. When a sale is made under a special power inserted in or attached to any real
estate mortgage hereafter made as security for the payment of money or the fulfillment
of any other obligation, the provisions of the following sections shall govern as to the
manner in which the sale and redemption shall be effected, whether or not provision for
the same is made in the power.
xxxx
Sec. 4. The sale shall be made at public auction, between the hours of nine in the morning
and four in the afternoon; and shall be under the direction of the sheriff of the province,
the justice or auxiliary justice of peace of the municipality in which such sale has to be
made, or a notary public of said municipality, who shall be entitled to collect a fee of five
pesos for each day of actual work performed, in addition to his expenses.
Sec. 5. At any sale, the creditor, trustee, or other person authorized to act for the creditor,
may participate in the bidding and purchase under the same conditions as any other
bidder, unless the contrary has been expressly provided in the mortgage or trust deed
under which the sale is made.
Sec. 6. In all cases in which an extrajudicial sale is made under the special power
hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or
judgment creditor of said debtor, or any person having a lien on the property subsequent
to the mortgage or deed of trust under which the property is sold, may redeem the same
at any time within the term of one year from and after the date of sale; and such
redemption shall be governed by the provisions of sections four hundred and sixty-four
to four hundred and sixty-six, inclusive, of the Code of Civil Procedure,[25] in so far as these
are not inconsistent with the provisions of this Act.
The requirement for at least two participating bidders provided in the original version of paragraph
5 of A.M. No. 99-10-05-0 is not found in Act No. 3135. Hence, in the Resolution[26]of the Supreme Court
en banc dated January 30, 2001, we made the following pronouncements:
It is contended that this requirement is now found in Act No. 3135 and that it is impractical
and burdensome, considering that not all auction sales are commercially attractive to
prospective bidders.
The observation is well taken. Neither Act No. 3135 nor the previous circulars issued by
the Court governing extrajudicial foreclosures provide for a similar requirement. The two-
bidder rule is provided under P.D. No. 1594 and its implementing rules with respect to
contracts for government infrastructure projects because of the public interest
involved. Although there is a public interest in the regularity of extrajudicial foreclosure of
mortgages, the private interest is predominant. The reason, therefore, for the
requirement that there must be at least two bidders is not as exigent as in the case of
contracts for government infrastructure projects.
On the other hand, the new requirement will necessitate republication of the notice of
auction sale in case only one bidder appears at the scheduled auction sale. This is not
only costly but, more importantly, it would render naught the binding effect of the
publication of the originally scheduled sale. x x x
Thus, as amended by the January 30, 2001 Resolution, paragraph 5 of A.M. No. 99-10-05-0 now
reads:
5. The name/s of the bidder/s shall be reported by the sheriff or the notary public who
conducted the sale to the Clerk of Court before the issuance of the certificate of sale.[27]
Hence, the CA correctly ruled that it is no longer required to have at least two bidders in an
extrajudicial foreclosure of mortgage.[28]
Subsequently, on August 7, 2001, we further resolved other matters relating to A.M. No. 99-10-
05-0, specifically on: (1) period of redemption of properties with respect to the change introduced by
Republic Act No. 8791 (The General Banking Law of 2000) to Act No. 3135; (2) ceiling on sheriffs fees;
and (3) payment of filing fees prescribed in the Rules of Court in addition to sheriffs fees.[29]
Pursuant to A.M. No. 99-10-05-0, as amended by the Resolutions of January 30, 2001 and August
7, 2001, the then Court Administrator (now Associate Justice of this Court) Presbitero J. Velasco, Jr., issued
Circular No. 7-2002[30] dated January 22, 2002 which became effective on April 22, 2002.[31] Section 5(a)
of the said circular states:
Sec. 5. Conduct of the extra-judicial foreclosure sale

a. The bidding shall be made through sealed bids which must be submitted to the Sheriff
who shall conduct the sale between the hours of 9 a.m. and 4 p.m. of the date of the
auction (Act 3135, Sec. 4). The property mortgaged shall be awarded to the party
submitting the highest bid and in case of a tie, an open bidding shall be conducted
between the highest bidders. Payment of the winning bid shall be made either in cash or
in managers check, in Philippine currency, within five (5) days from notice.
The use of the word bids (in plural form) does not make it a mandatory requirement to have more
than one bidder for an auction sale to be valid. A.M. No. 99-10-05-0, as amended, no longer prescribes
the requirement of at least two bidders for a valid auction sale. We further held that Except for errors or
omissions in the notice of sale which are calculated to deter or mislead bidders, to depreciate the value of
the property, or to prevent it from bringing a fair price, simple mistakes or omissions are not considered
fatal to the validity of the notice and the sale made pursuant thereto.[32]
In view of the foregoing, the extra-judicial foreclosure sale conducted in this case is regular and
valid. Consequently, the subsequent issuance of the writ of possession is likewise regular and valid.
Hence, it is no longer necessary for this Court to rule on the other issues presented by the
petitioners, which are also grounded on the supposed irregularity in the auction.
WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals
dated May 8, 2009 and its Resolution dated October 20, 2009 are hereby AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 10-29.
[2]
Id. at 31-32.
[3]
Id. at 32.
[4]
An Act to Regulate the Sale of Property under Special Powers Inserted In or Annexed To Real Estate
Mortgages, (1924).
[5]
Rollo, p. 34.
[6]
Id. at 34.
[7]
Id. at 80-85; docketed as LRC No. Q-17376 (03).
[8]
Id. at 87-88; penned by Judge Lydia Querubin Layosa.
[9]
Id. at 89-92.
[10]
Id. at 93-102.
[11]
Id. at 103-107.
[12]
419 Phil. 215, 235 (2001).
[13]
Rollo, p. 104.
[14]
Id. at 108-112.
[15]
Id. at 113-115; penned by Judge Lydia Querubin Layosa.
[16]
Id. at 115.
[17]
Id. at 116-121.
[18]
Id. at 36.
[19]
Id. at 30-44; penned by Associate Justice Teresita Dy-Liacco Flores and concurred in by Associate Justices
Rosmari D. Carandang and Ramon R. Garcia.
[20]
Id. at 43-44.
[21]
Id. at 45-46.
[22]
Id. at 20.
[23]
Id. at 9.
[24]
Id. at 21.
[25]
RULES OF COURT, now Rule 39, Sections 29, 30 and 34.
[26]
A.M. No. 99-10-05-0 dated January 30, 2001, p. 2.
[27]
A.M. No. 99-10-05-0 (as further amended, August 7, 2001), p. 4. This Resolution took effect
on September 1, 2001.
[28]
Rollo, p. 39.
[29]
A.M. No. 99-10-05-0 dated August 7, 2001.
[30]
Guidelines for the Enforcement of Supreme Court Resolution of December 14, 1999 in Administrative
Matter No. 99-10-05-0 (Re: Procedure in Extra-judicial Foreclosure of Mortgage), as amended by the
Resolutions dated January 30, 2001 and August 7, 2001.
[31]
Section 11 of Circular No. 7-2002.
[32]
Supra note 26.

Supreme Court
Manila
SECOND DIVISION

Appellee,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
VICTOR VILLARINO y MABUTE, Promulgated:

x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In this special complex crime of rape with homicide, the unsolicited and spontaneous confession of guilt
by the appellant to the police officer is admissible in evidence. The circumstantial evidence is also sufficient
to sustain the conviction of the appellant even if no spermatozoa was found in the victims body during an
autopsy.
Factual Antecedents
On August 3, 1995, an Information[1] was filed charging appellant Victor Villarino y Mabute with
the special complex crime of rape with homicide. The Information contained the following accusatory
allegations:
That on or about the 29th day of April, 1995, at about 5:00 oclock in the afternoon, at
Barangay D1, Municipality of Almagro, Province of Samar, Philippines, and within the
jurisdiction of this Honorable Court, the above named accused, with lewd design, by
means of force, violence and intimidation, did then and there, willfully, unlawfully and
feloniously have carnal knowledge against a minor ten (10) years [sic], AAA,[2] without
the latters consent and against her will, and thereafter, with deliberate intent to kill, did
then and there willfully, unlawfully and feloniously inflict upon the said AAA mortal wounds
on x x x different parts of her body, which caused her untimely death.
CONTRARY TO LAW.
Appellant pleaded not guilty to the crime charged. After the termination of the pre-trial conference, trial
ensued.
The case against the appellant, as culled from the evidence presented by the prosecution, is as follows:
On April 28, 1995, BBB, together with her 10-year old daughter AAA and her younger son CCC went to
the house of their relative in Barangay D to attend the fiesta to be held the next day.[3]
On even date, from 7:00 oclock to 9:00 oclock in the evening, SPO4 Jesus Genoguin (SPO4 Genoguin)
was in his house in Barangay D entertaining his guests, one of whom was appellant.While personally
serving food and drinks to appellant, SP04 Genoguin noticed that the latter was wearing a bracelet and a
necklace with pendant. Appellant even allowed SPO4 Genoguin to put on the bracelet.[4]
On April 29, 1995, at around 9:00 oclock in the morning, the appellant who was on his way to Barangay D,
passed by the house of Rodrigo Olaje (Rodrigo). At that time, Rodrigo noticed appellant wearing a bracelet
and a necklace with pendant. He was also wearing a white sleeveless t-shirt (sando).[5]
At 11:00 oclock in the morning, appellant was at the house of BBBs aunt. BBB offered him
food. BBB also noticed that he was dressed in a white sando and that he wore jewelry consisting of a
bracelet and a necklace with pendant.[6] At 1:00 oclock in the afternoon, he was seen wearing the
same sando and jewelry while drinking at the basketball court in Barangay D.[7]
At around 3:00 oclock in the afternoon, BBB told AAA to go home to Barangay D1 to get a t-shirt for her
brother. AAA obeyed. However, she no longer returned. While BBB was anxiously waiting for AAA in the
house of her aunt in Barangay D,[8] she received information that a dead child had been found
in Barangay D1. She proceeded to the area where she identified the childs body as that of her daughter,
AAA.[9]
At around 4:00 oclock in the afternoon, Rodrigo, who was the barangay captain of Barangay D1 received
information that a dead child was found in their barangay. He instructed a barangaytanod to inform the
police about the incident. Thereafter, Rodrigo proceeded to the specified area together with
other barangay tanods.[10]
SPO4 Genoguin also went to the crime scene after being informed by his commander.[11] Upon arrival, he
saw the corpse of a little girl behind a big boulder that was about 10 meters away from the trail junction
of the barangays.[12] People had gathered seven to 10 meters away from the dead body, but no one dared
to approach.[13]
AAAs lifeless body lay face up with her buttocks on top of a small rock. Her body was slanted downward
with her legs spread apart and dangling on the sides of the small boulder. She was no longer wearing
short pants and panty, and blood oozed from her vagina. Wrapped around her right hand, which was
positioned near her right ear, was a white sando.[14]
AAAs panty was found a meter away from her body, while her short pants was about two meters farther.
A bracelet and a pendant were also recovered from the crime scene. Rodrigo and BBB identified these
pieces of jewelry as those seen on the appellant. They also identified the sando on AAAs arm as the
appellants.[15] Thus, the hunt for appellant began.[16]
On the same day, the appellant was found in the house of Aurelia Susmena near the seashore
of Barangay D1. He was drunk and violent. He resisted arrest and had to be bodily carried to the
motorboat that would take him to the municipal building in Almagro, Samar. The arresting team made
the appellant take off his clothes since they were wet. When he complied, his briefs revealed
bloodstains.[17]
AAAs corpse was taken to Calbayog District Hospital for autopsy. The Medico Legal Necropsy Report
indicated the following injuries sustained by AAA:
- Lacerated wounds:
# 1 2 cm. in length forehead
# 2 2 cm. in length globella
# 3 2.5 cm. in length, left lateral supraorbital region
# 4 3 cm. in length, left infraorbital region with fracture of underlying bone
# 5 4 cm. in left occiput with linear fracture of underlying bone
- Hematoma, confluent abrasion, 3 cm. in diameter, sacrum
- Genitalia grossly female, pre-pubertal
- Vaginal orifice admits two fingers with ease
- Laceration, posterior vagina wall 3 cm.
- Laceration, anterior vaginal wall (12 oclock) 1.5 cm.
CAUSE OF DEATH: Cardiorespiratory Arrest secondary to:

Cerebral hemorrhage and concussion secondary to multiple lacerated wounds to skull
fissure
Hypovolomic shock secondary to Massive Hemorrhage, secondary to third degree
vaginal laceration.[18]
Dr. Arleen P. Lim, Medical Officer III, testified that four of the five lacerated wounds could have
been caused by a hard irregular or blunt object, like a rock or stone.[19] While the fifth lacerated wound
could have been the result of a strong force, as when the head is forcibly banged.[20] AAAs hematoma
was just above her buttocks.[21] She further testified that the ease with which two fingers entered AAAs
vaginal orifice could have been caused by sexual intercourse. The lacerations in her vaginal wall could also
have been the result of sexual intercourse or by the forcible entry of an object into the vaginal canal, such
as a penis.[22] Dr. Lim confirmed that the cause of death of AAA was cardio-respiratory arrest secondary
to multiple lacerated wounds and skull fracture.[23]
Due to the death of AAA, BBB incurred (1) P2,200.00 for the embalming and for the coffin
(2) P700.00 for transportation and (3) P4,000.00 for the wake and construction of the tomb.
On May 2, 1995, the police brought appellant to Calbayog City for medical examination since he
had scratches and abrasions on his body. While waiting for a boat ride at 4:00 oclock in the morning, the
police team took a coffee break. SPO4 Genoguin was momentarily left alone to guard the
appellant. During this short period, the appellant voluntarily admitted to SPO4 Genoguin that he
committed the crime charged. He also told SPO4 Genoguin that he could keep the pendant and bracelet
if he would retrieve the t-shirt and throw it into the sea. SPO4 Genoguin rejected the appellants offer and
reminded him of his right to a counsel and that everything the appellant said could be used against him
in court. Unperturbed, the appellant reiterated his offer.[24]
When they boarded the motorboat, the appellant repeatedly offered to give SPO4
Genoguin P20,000.00 if he would throw the sando into the sea. However, the police officer ignored the
offer and instead reported the matter to the Chief of Police of Almagro, SPO4 Basilio M. Yabao.[25] Later,
the appellants mother, Felicidad Mabute y Legaspi, asked him not to testify against her son.[26]
At the Calbayog District Hospital, Senior Resident Physician Dr. Jose V. Ong, found that appellants
body had 10 healed abrasions and two linear abrasions or scratches, particularly, on his breast, knees, as
well as right and left ears, that could have been caused by fingernails.[27]
The Version of the Appellant
In the afternoon of April 29, 1995, the appellant and his mother were at the residence of Aurelia
Susmena. The appellant was sleeping in a hammock when he was abruptly awakened by Rodrigo, SPO4
Genoguin, and several policemen and barangay tanods. They tied his hands and feet with a nylon rope,
and dragged him towards the seashore. Rodrigo hit the nape of the appellant with a gun then poked it at
the appellants mother, who wanted to help him. The appellant was then forcibly loaded in a motorboat.[28]
The appellant denied owning the bracelet, the pendant, and the sando found at the scene of the
crime. He claimed it was impossible for him to buy these pieces of jewelry since he was only a cook in the
fishing venture managed by Rodrigo. He maintained that he was not even paid for his services, for which
reason he abandoned his work. This resulted in the failure of the fishing venture to operate for a day,
which allegedly angered Rodrigo making him testify against him.[29]
The Decision of the Regional Trial Court
On May 19, 1999, the Regional Trial Court of Calbayog City, Branch 32 rendered a Decision[30] finding the
appellant guilty beyond reasonable doubt of the complex crime of rape with homicide. It disposed as
follows:
WHEREFORE, judgment is hereby rendered, finding the accused, VICTOR

VILLARINO y Mabute, guilty beyond reasonable doubt of the crime of rape with Homicide
of a ten-year old minor, for which he is hereby sentenced to suffer the supreme penalty
of DEATH, as provided for under R.A. No. 7659, to pay the complainant, BBB, the sum
of P50,000.00 and P6,900.00 for actual expenses, plus all the accessory penalties
provided by law, without subsidiary imprisonment in case of insolvency and to pay the
costs.
IT IS SO ORDERED.
The Verdict of the Court of Appeals
The Court of Appeals (CA) found the appellant guilty only of homicide. The dispositive portion of
its Decision[31] reads as follows:
WHEREFORE, the Decision dated May 19, 1999, of the RTC of Calbayog City, in
Criminal Case No. 2069 is MODIFIED. As modified, accused-appellant VICTOR VILLARINO
y MABUTE is found GUILTY of HOMICIDE and he is hereby sentenced to suffer an
indeterminate penalty ranging from twelve (12) years of prision mayor in its maximum
period, as minimum, to seventeen (17) years and four (4) months of reclusion temporal
in its medium period, as maximum. The appealed Decision is AFFIRMED in all other
respects.
SO ORDERED.[32]
Still unsatisfied, the appellant comes to us raising the following assignment of errors:
Issues
I
THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF RAPE WITH
HOMICIDE SOLELY ON THE BASIS OF CIRCUMSTANTIAL EVIDENCE.
II.
THE TRIAL COURT ERRED IN RENDERING A VERDICT OF CONVICTION DESPITE THE
FACT THAT THE GUILT OF ACCUSED-APPELLANT WAS NOT PROVEN BEYOND
REASONABLE DOUBT.[33]
Our Ruling
In the special complex crime of rape with homicide, the following elements
must concur: (1) the appellant had carnal knowledge of a woman; (2) carnal knowledge of a woman was
achieved by means of force, threat or intimidation; and (3) by reason or on occasion of such carnal
knowledge by means of force, threat or intimidation, the appellant killed a woman.[34] When the victim is
a minor, however, it is sufficient that the evidence proves that the appellant had sexual intercourse or
sexual bodily connections with the victim.[35]
In the instant case, appellant voluntarily confessed to raping and killing AAA to SPO4 Genoguin. He
even offered to give the pieces of jewelry to the latter if his sando is thrown into the sea. The appellant
did not deny this accusation nor assail its truthfulness.
When appellant confessed to the crime, he was alone with SPO4 Genoguin, and no force or
intimidation was employed against him. The confession was spontaneously made and not elicited through
questioning. The trial court did not, therefore, err in holding that compliance with the constitutional
procedure on custodial interrogation is not applicable in the instant case.[36]
In People v. Dy,[37] we held that:
Contrary to the defense contention, the oral confession made by the Accused to
Pat. Padilla that he had shot a tourist and that the gun he had used in shooting the victim
was in his bar which he wanted surrendered to the Chief of Police (t.s.n., October 17,
1984, pp. 6-9), is competent evidence against him. The declaration of an accused
acknowledging his guilt of the offense charged may be given in evidence against him
(Sec. 29, Rule 130, Rules of Court). It may in a sense be also regarded as part of the res
gestae. The rule is that, any person, otherwise competent as a witness, who heard the
confession, is competent to testify as to the substance of what he heard if he heard and
understood all of it. An oral confession need not be repeated verbatim, but in such a case
it must be given in substance (23 C.J.S. 196, cited in People v. Tawat, G.R. No. 62871,
May 25, 1985, 129 SCRA 431).
What was told by the Accused to Pat. Padilla was a spontaneous statement not
elicited through questioning, but given in an ordinary manner. No written confession was
sought to be presented in evidence as a result of formal custodial investigation. (People
v. Taylaran, G.R. No. L-19149, October 31, 1981, 108 SCRA 373). The Trial Court,
therefore, cannot be held to have erred in holding that compliance with the constitutional
procedure on custodial interrogation is not applicable in the instant case, as the defense
alleges in its Error VII.[38]
At any rate, even without his confession, appellant could still be convicted of the complex crime of rape
with homicide. The prosecution established his complicity in the crime through circumstantial evidence
which were credible and sufficient, and led to the inescapable conclusion that the appellant committed
the complex crime of rape with homicide. When considered together, the circumstances point to the
appellant as the culprit.
First. Prior to the incident, three witnesses saw the appellant wearing the white sleeveless t-shirt, a
necklace with pendant and a bracelet. Rodrigo saw the appellant wearing the same sando and pieces of
jewelry when the latter was working in his fishing venture. He again saw the appellant wearing the same
apparel and jewelry on the day the victim was raped and murdered. SPO4 Genoguin recalled that he saw
appellant wearing the necklace with pendant and the bracelet on the eve of the commission of the
crime. On that fateful day, he noticed that the appellant was wearing the white sleeveless t-shirt and the
same pieces of jewelry in a drinking spree a kilometer away from the crime scene. BBB also testified that
on the day of her daughters death, she saw the appellant wearing a white sleeveless t-shirt, a necklace
with pendant, and a bracelet.
Second. The pendant and bracelet were later recovered a few meters away from the lifeless body of
AAA. The white sando was also found clasped in the right hand of the victim.
Third. The appellant could no longer produce the sando and pieces of jewelry after his arrest.
Fourth. The physical examination on the appellant revealed 10 healed abrasions and two linear abrasions
or scratches on his breast, knees and ears which could have been caused by the fingernails of the
victim. Appellant offered no plausible explanation on how he sustained said injuries.
Fifth. The victim had blood oozing from her vaginal orifice, while the appellant had human blood-stains
on his briefs.
Sixth. The appellant attempted to bribe SPO4 Genoguin and the policemen who were escorting him
to Calbayog City, by offering them P20,000.00 in exchange for the disposal of his white sleeveless t-shirt
found in the crime scene.
Seventh. The appellants mother requested SPO4 Genoguin not to testify against her son.
The appellant argues that the trial court erred in giving credence to the testimonies of the
prosecution witnesses which were replete with contradictions and improbabilities. According to him,
Rodrigos declaration that it was around 2:00 oclock in the afternoon of April 29, 1995 when he was told
of the discovery of a dead body contradicts BBBs testimony that she instructed the victim to go home
to Barangay D1 at around 3:00 oclock in the afternoon of the same day. Moreover, Rodrigos claim that
the appellant, a fisherman, always wore the pieces of jewelry in question while at work, is contrary to
human experience. Lastly, SPO4 Genoguins contention that he saw appellant wearing the pieces of
jewelry on separate occasions prior to the commission of the crime is inconsistent with his subsequent
testimony that he was not even sure of the ownership of the said jewelry.
Appellants contentions are not worthy of credence. A perusal of the transcript of stenographic
notes reveals that it was Prosecutor Feliciano Aguilar who supplied the time of 2:00 oclock in the afternoon
when Rodrigo was informed that a dead body of a child was found, thus:
Q On April 29, 1995 at around 4:00 oclock in the afternoon where were you?
A I was in the house.
Q Your house in what barangay or what place?

A In Barangay D1, Almagro, Samar.
Q While you were in your house in Barangay D1, Almagro, Samar was there any unusual
incident that happened that you came to know [of] on April 29, 1995 in the
afternoon at around 2:00 oclock?
A Yes, there was.[39]
Moreover, the time when Rodrigo was informed of the incident and the time stated by BBB when
she sent AAA on an errand to Barangay D1, were mere approximations, which cannot impair their
credibility. An error in the estimation of time does not discredit the testimony of a witness when time is
not an essential element.[40]
The inconsistencies indicated by the appellant are likewise inconsequential since they do not
detract from the fact that BBB sent AAA on an errand in Barangay D1 where her dead body was later
discovered. Far from being badges of fraud and fabrication, the discrepancies in the testimonies of
witnesses may be justifiably considered as indicative of the truthfulness on material points of the facts
testified to. These minor deviations also confirm that the witnesses had not been rehearsed.[41]
The credibility of SPO4 Genoguin is not adversely affected by his inability to immediately identify
the ownership of the jewelry found near the dead body of the victim despite his testimony that he saw
the appellant wearing the same jewelry on previous occasions. The workings of a human mind placed
under emotional stress are unpredictable leading people to act differently.[42] There is simply no standard
form of behavioral response that can be expected from anyone when confronted with a startling or frightful
occurrence.[43] SPO4 Genoguin, despite being a policeman since 1977,[44] was affected by the gruesome
crime. His years in the police service did not prepare him to witness the lifeless body of a 10-year old girl
who had been brutally raped and murdered.
In sum, the inconsistencies raised by the appellant are too inconsequential to warrant a reversal
of the trial courts ruling. The decisive factor in the prosecution for rape with homicide is whether the
commission of the crime has been sufficiently proven. For a discrepancy or inconsistency in the testimony
of a witness to serve as a basis for acquittal, it must establish beyond doubt the innocence of the appellant
for the crime charged.[45] As the contradictions alleged by the appellant had nothing to do with the
elements of the crime of rape with homicide, they cannot be used as ground for his acquittal.[46]
The appellant imputes improper motive to witness Rodrigo who, allegedly, had an axe to grind
against him because Rodrigos fishing venture incurred huge losses after appellant abandoned his job as
a cook. Such imputation, however, deserves scant consideration. Other than appellants self-serving
allegation, there is no proof that his sudden departure from work adversely affected the operations of the
fishing venture.
Against the prosecutions evidence, the appellant could only offer a mere denial and alibi. However,
denial and alibi are intrinsically weak defenses and must be supported by strong evidence of non-
culpability in order to be credible. Courts likewise view the defense of alibi with suspicion and caution, not
only because it is inherently weak and unreliable, but also because it can be fabricated easily.[47] Also, the
testimonies of appellants mother and Aurelia Susmena, a close family friend, deserve no probative
weight. In People v. Sumalinog, Jr.,[48] we held that when a defense witness is a family member, relative
or close friend, courts should view such testimony with skepticism.
Besides, in order for alibi to prosper, it is not enough to prove that the appellant was somewhere
else during the commission of the crime; it must also be shown that it would have been impossible for
him to be anywhere within the vicinity of the crime scene.[49] In the case at bench, the appellant was in
the house of Aurelia Susmena which is located in the same barangaywhere the body of the victim was
discovered. Thus, it was not at all impossible for the appellant to be at the scene of the crime during its
commission.
Hence, the appellants twin defenses of denial and alibi pale in the light of the array of
circumstantial evidence presented by the prosecution.[50] The positive assertions of the prosecution
witnesses deserve more credence and evidentiary weight than the negative averments of the appellant
and his witnesses.
The CA ruled that the evidence adduced by the prosecution are sufficient to produce a conviction
for homicide but not for the crime of rape. In so ruling, the CA ratiocinated that while there were
lacerations in the vaginal orifice of the victim, the absence of spermatozoa, however, belied that she was
raped.
We disagree. The absence of spermatozoa does not necessarily result in the conclusion that rape
was not committed.[51] Convictions for rape with homicide have been sustained on purely circumstantial
evidence.[52] In those cases, the prosecution presented other tell-tale signs of rape such as the laceration
and description of the victims pieces of clothing, especially her undergarments, the position of the body
when found and the like.[53]
Here, we reiterate that there is an unbroken chain of circumstantial evidence from which we can
infer that the appellant raped AAA. In a secluded area, her undisturbed corpse was discovered lying face-
up and slanting downward with her buttocks on top of a small boulder. Her 10-year old lifeless body was
naked from waist down with legs spread apart and dangling from the rock. Blood oozed from the vaginal
orifice. Wrapped around her right hand was the appellants sando. Her shorts were found a few meters
away, just like the appellants pendant and bracelet. Moreover, the appellant confessed to having raped
AAA. These circumstances lead to one fair and reasonable conclusion that appellant raped and murdered
AAA.
The Penalty
Article 335 of the Revised Penal Code in relation to RA 7659[54] provides that when by reason or
on the occasion of the rape a homicide is committed, the penalty shall be death.However, in view of the
passage on June 24, 2006 of RA 9346, entitled An Act Prohibiting the Imposition of the Death Penalty in
the Philippines we are mandated to impose on the appellant the penalty of reclusion perpetua without
eligibility for parole.[55]
The Damages
In line with current jurisprudence,[56] the heirs of the victim are entitled to an award of P100,000.00 as
civil indemnity, which is commensurate with the gravity of the complex crime committed. As actual
damages, the heirs of AAA are entitled to an award of P6,900.00 only since this was the amount of
expenses incurred for AAAs burial. Moral damages in the amount of P75,000.00 must also be
awarded.[57] Lastly, the heirs are entitled to an award of exemplary damages in the sum
of P50,000.00.[58] Article 229 of the Civil Code allows the award of exemplary damages in order to deter
the commission of similar acts and to allow the courts to forestall behavior that would pose grave and
deleterious consequences to society.[59]
WHEREFORE, the appeal is DISMISSED. The Decision of the Court of Appeals in CA-G.R. CR-H.C. No.
00065 is MODIFIED. Appellant Victor Villarino y Mabute is found guilty beyond reasonable doubt of the
complex crime of rape with homicide and is hereby sentenced to suffer the penalty of reclusion
perpetua without eligibility for parole and to pay the heirs of AAA the amounts of P100,000.00 as civil
indemnity, P6,900.00 as actual damages, P75,000.00 as moral damages, and P50,000.00 as exemplary
damages. No costs.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Records, p. 1.
[2]
Implementing RA 9262, the real name of the child-victim is withheld to protect his/her
privacy. Fictitious initials are used instead to represent him/her. Likewise, the personal circumstances
or any other information tending to establish or compromise his/her identity, as well as those of his/her
[3]
TSN, June 19, 1996, pp. 6-7, 9 and 28.
[4]
TSN, March 7, 1996, pp. 27-28.
[5]
TSN, November 13, 1995, p. 72
[6]
TSN, June 19, 1996, pp. 8-9 and 25-26.
[7]
TSN, March 8, 1996, p. 13.
[8]
Id. at 29-30.
[9]
Id. at 10-11, 30.
[10]
TSN, November 13, 1995, pp. 18, 20-22.
[11]
TSN, March 7, 1996, pp. 26-27.
[12]
Id. at 27-28; TSN, March 8, 1996, pp. 18-19.
[13]
Id. at 28 and 34; TSN, March 7, 1996, p. 28.
[14]
Id. at 34-35; TSN, March 8, 1996, pp. 9-11; TSN, November 13, 1995, pp. 23-24.
[15]
TSN, November 13, 1995, pp. 69-72; TSN, June 19, 1996, pp. 10, 14-17; March 7, 1996, pp. 30-32
and 38-39.
[16]
TSN, March 7, 1996, pp. 35-36.
[17]
TSN, November 13, 1995, pp. 29-30, 36-37.
[18]
Records, p. 8.
[19]
TSN, November 15, 1995, pp. 9-13.
[20]
Id. at 13-14.
[21]
TSN, November 14, 1995, p. 15.
[22]
Id. at 20-21.
[23]
Id. at 21-22.
[24]
TSN, March 7, 1996, pp. 56-61; TSN, March 8, 1996, pp. 7-8.
[25]
Id.; id. at 18-19 and 32-35.
[26]
Id. at 63-65.
[27]
TSN, June 20, 1996, pp. 2 and 5-20.
[28]
TSN, June 2, 1997, pp. 6-10; TSN, June 3, 1997, pp. 9-17; TSN, February 18, 1998, pp. 13-20.
[29]
TSN, March 18, 1998, pp. 10-11, 14.
[30]
Records, pp. 242-250; penned by Judge Renato G. Navidad.
[31]
Rollo, pp. 4-21; penned by Associate Justice Francisco P. Acosta and concurred in by Associate Justices
Pampio A. Abarintos and Amy C. Lazaro-Javier.
[32]
Id. at 21.
[33]
Id. at 65.
[34]
People v. Yatar, G.R. No. 150224, May 19, 2004, 428 SCRA 504, 521.
[35]
People v. Domantay, 366 Phil. 459, 478 (1999)
[36]
People v. Dy, 241 Phil. 904, 917 (1988).
[37]
Id.
[38]
Id. at 916-917.
[39]
TSN, November 13, 1995, pp. 20-21.
[40]
People v. Baniego, 427 Phil. 405, 415 (2002).
[41]
People v. Empleo, G.R. No. 96009, September 15, 1993, 226 SCRA 454, 470-471.
[42]
People v. Peero, 342 Phil. 531, 536 (1997).
[43]
People v. Dulay, G.R. No. 174775, October 11, 2007, 535 SCRA 656, 661.
[44]
TSN, March 7, 1996, p. 22.
[45]
People v. Masapol, 463 Phil. 25, 33 (20003).
[46]
People v. Bang-ayan, G.R. No. 172870, September 22, 2006, 502 SCRA 658, 669.
[47]
People v. Pascual, G.R. No. 172326, January 19, 2009, 576 SCRA 242, 259.
[48]
466 Phil. 637, 650-651 (2004).
[49]
People v. Espino, Jr., G.R. No. 176742, June 17, 2008, 554 SCRA 682, 702.
[50]
See People v. Pascual, supra note 47.
[51]
People v. Magana, 328 Phil. 721, 745 (1996).
[52]
People v. Domantay, 366 Phil. 459, 481-482 (1999).
[53]
See People v. Develles, G.R. No. 97434, April 10, 1992, 208 SCRA 101; People v. Magana, supra.
[54]
The prevailing law at the time of the commission of the crime in 1995.
[55]
People v. Pascual, supra note 47 at 260; People v. Bascugin, G.R. No. 184704, June 30, 2009.
[56]
Id at 261.
[57]
Id.
[58]
Id.
[59]
Id.

Supreme Court
Manila
SECOND DIVISION
LNS INTERNATIONAL G.R. No. 179792

MANPOWER SERVICES,

BRION,
ABAD, and
PEREZ, JJ.
ARMANDO C. PADUA, JR., Promulgated:

x-------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Bare and unsubstantiated allegations do not constitute substantial evidence and have no probative value.
This petition for review on certiorari[1] assails the Decision[2] dated November 30, 2006 of the Court
of Appeals (CA) in CA-G.R. SP No. 90526, which affirmed the Order[3] dated October 16, 2004 of the
Department of Labor and Employment (DOLE), which in turn affirmed the Order[4] dated April 28, 2004
of the Philippine Overseas Employment Administration (POEA), which held petitioner LNS International
Manpower Services (LNS) liable for misrepresentation and non-issuance of official receipt. Also assailed is
the CA Resolution dated September 12, 2007[5] which denied the motion for reconsideration.
Factual Antecedents
On January 6, 2003, respondent Armando C. Padua, Jr. (Padua) filed a Sworn Statement[6] before the
Adjudication Office of the POEA against LNS and Sharikat Al Saedi International Manpower (Sharikat) for
violation of Section 2(b), (d), and (e) of Rule I, Part VI of the 2002 POEA Rules and Regulations Governing
the Recruitment and Employment of Land-based Overseas Workers which provides:
Section 2. Grounds for imposition of administrative sanctions:
xxxx
b. Charging or accepting directly or indirectly any amount greater than that of
specified in the schedule of allowable fees prescribed by the Secretary, or making
a worker pay any amount greater than that actually received by him as a loan or
advance;
xxxx
d. Collecting any fee from a worker without issuing the appropriate receipt clearly
showing the amount paid and the purpose for which payment was made;
e. Engaging in act/s of misrepresentation in connection with recruitment and

placement of workers, such as furnishing or publishing any false notice,
information or document in relation to recruitment or employment;
xxxx
Padua alleged that on July 12, 2002, he applied as auto electrician with petitioner LNS and was
assured of a job in Saudi Arabia. He paid LNS the amounts of P15,000.00 as processing fees, P6,000.00
for medical expenses, and P1,000.00 for trade test, but he was not issued the corresponding receipts. He
further alleged that he signed an employment contract with LNS as a body builder with a monthly salary
of US$370.00.
Padua further alleged that it was another agency, Sharikat, which processed his papers and
eventually deployed him on September 29, 2002 to Saudi Arabia. However, he returned to
the Philippines on December 23, 2002 because he was not allegedly paid his salaries and also because of
violations in the terms and conditions of his employment contract.
LNS and Sharikat filed their respective Answers.
In its Verified Answer,[7] LNS averred that it is a sole proprietorship owned and managed by
Ludevina E. Casabuena. It admitted that Padua applied for employment abroad but he withdrew all the
documents he submitted to LNS on July 27, 2002. As proof, LNS attached the withdrawal letter duly signed
by Padua.
LNS alleged that it did not know that Padua applied with Sharikat or that he was eventually
deployed by the latter to Saudi Arabia. LNS denied that it endorsed Paduas application papers to
Sharikat. LNS claimed that after Padua withdrew his documents, it no longer had any knowledge whether
he applied with another employment agency. LNS insisted that the contract of employment submitted
by Padua to the POEA clearly indicated that the same was only between him and Sharikat and not LNS.
Thus, LNS claimed that it could not be held liable for non-issuance of receipt or misrepresentation.
For its part, Sharikat admitted that it processed Paduas papers for
employment in Saudi Arabia.[8] However, it argued that it cannot be held liable for any alleged violation of
labor standards because its principal in Saudi Arabia faithfully complied with the terms and conditions
of Paduas employment.[9] Sharikat also argued that Paduas contentions are vague and unsubstantiated
and deserve no probative weight at all. Aside from his bare allegations, Padua did not present evidence
to show that he was not paid his salaries or that he was illegally dismissed.[10]
In his Reply to Answer of LNS,[11] Padua admitted signing the withdrawal letter but alleged that
he did not actually receive the documents because he was made to understand that the same would be
endorsed to Sharikat.
Ruling of POEA
On April 28, 2004, the POEA issued its Order finding LNS liable for non-issuance of receipt and
misrepresentation. As to Sharikat, the POEA found no sufficient evidence to hold it liable for the violations
charged. The dispositive portion of the said Order reads:
WHEREFORE, premises considered, We find and so hold respondent LNS

International liable for violation of Section 2(d) Rule 1, part VI of the 2002 POEA Rules
and Regulations and the penalty of Four (4) months suspension or fine of P40,000.00 is
hereby imposed, being its first offense and for violation of Section 2(e) Rule 1, part VI of
the 2002 POEA Rules and Regulations, the penalty of Eight (8) months suspension or fine
of P80,000.00 is hereby imposed, being its second offense.
The charges against SHARIKAT AL SAIDI INTERNATIONAL MANPOWER are
hereby dismissed for insufficiency of evidence.
SO ORDERED.[12]
Ruling of the Secretary of DOLE
Only LNS filed its Appeal Memorandum with the DOLE.[13] Padua did not appeal from the said POEA Order
absolving Sharikat from any liability. Hence, the same is already deemed final as against Sharikat.
On December 16, 2004, the DOLE dismissed the appeal of petitioner and affirmed the ruling of
the POEA. The decretal portion of the Order reads:
WHEREFORE, the Appeal, herein treated as Petition for Review, filed by L.N.S.
International Manpower Services is hereby DISMISSED for lack of merit. The Order
dated April 28, 2004 of the POEA Administrator, finding petitioner liable for violation of
Section 2 (d) and (e), Rule I, Part VI of the POEA Rules and Regulations, and imposing
upon it the penalty of suspension of license for a period of twelve (12) months or, in lieu
thereof, the payment of fine in the amount of One Hundred Twenty Thousand Pesos
(P120,000.00), is AFFIRMED.
SO ORDERED.[14]
Petitioner moved for reconsideration, but the motion was denied for lack of merit in an Order dated May
12, 2005.[15]
Aggrieved, petitioner filed with the CA a petition for certiorari but it was dismissed in its November 30,
2006 Decision. The CA opined that the affirmative assertion of respondent that he paid petitioner a
placement fee is entitled to great weight than the bare denials of petitioner; and, that respondent was
made to believe that petitioner would be solely responsible for the processing of his employment abroad.
Petitioner filed a Motion for Reconsideration which was denied by the CA in its Resolution dated September
12, 2007.
Issue
The lone issue in this petition for review on certiorari is whether petitioner is liable for non-issuance of
receipt and misrepresentation.
Petitioner contends that the CA gravely abused its discretion in giving credence to respondents claims
which were all anchored on bare allegations. According to petitioner, the CA erred in ruling that its defense
is purely denial since the same was corroborated by a document indubitably showing respondents
withdrawal of his application for overseas employment. Considering such withdrawal, petitioner is naturally
not bound to issue any receipt and could not as well be responsible for the recruitment of
respondent. Petitioner likewise asserts that it never asked or received any payment from the respondent.
Our Ruling
As a general rule, factual findings of administrative and quasi-judicial agencies specializing in their
respective fields, especially when affirmed by the CA, must be accorded high respect, if not
finality.[16] However, we are not bound to adhere to the general rule if we find that the factual findings do
not conform to the evidence on record or are not supported by substantial evidence,[17] as in the instant
case.
The self-serving and unsubstantiated allegations of respondent cannot defeat the concrete
evidence submitted by petitioner. We note that respondent did not deny the due execution of the
withdrawal form as well as the genuineness of his signature and thumb mark affixed therein. On the
contrary, he admitted signing the same. When he voluntarily signed the document, respondent is bound
by the terms stipulated therein.[18]
We are not persuaded by respondents contention that he signed the withdrawal form upon
representations by LNS that it would endorse his papers to Sharikat. This really makes no sense at all. Why
would LNS allow Padua to withdraw his application papers, and even go through the process of making
him execute a withdrawal form, if its ultimate intention is to endorse the said papers to Sharikat? If
respondents allegation is to be believed, why then would LNS relinquish its possession over said
documents if it will refer them anyway to Sharikat?
Moreover, we are inclined to give more evidentiary weight to the allegation of petitioner that it did not
receive any amount from the respondent. This conclusion is more logical considering that it has been duly
established that respondent had withdrawn all his documents from LNS. Having withdrawn said
documents, there is no more reason for him to pay any fees to LNS. In his Sworn Statement filed before
the POEA, respondent alleged that he paid the P15,000.00 processing fees and P6,000.00 medical fees
to LNS sometime in August, 2002. This self-serving and unsubstantiated allegation deserves no credence
at all considering that even before August, 2002, respondent had already withdrawn his documents from
LNS. It has not escaped our notice that the withdrawal form was dated and signed by respondent on July
27, 2002. As such, after said date, there is no more reason for respondent to pay any fees to LNS. Hence,
we are not convinced or persuaded by respondents allegation that he still paid LNS in August 2002 after
having withdrawn his documents on July 27, 2002.
There is likewise no basis for the POEA, DOLE, and the CAs conclusion that it was petitioner that endorsed
respondents documents to Sharikat. Other than respondents self-serving claim, there is no proof
whatsoever that petitioner endorsed respondents application papers to Sharikat. Bare allegations which
are not supported by any evidence, documentary or otherwise, sufficient to support a claim, fall short to
satisfy the degree of proof needed.[19] On the other hand, petitioners denial of these allegations was
corroborated by the withdrawal form proffered as evidence, the existence and due execution of which
were not disputed by respondent. In addition, if respondents allegations were to be believed, we find it
rather odd that LNS would require him to fill up the withdrawal form if the intention of LNS was to endorse
the papers to Sharikat. If LNS allowed respondent to withdraw all his documents, then there is nothing
left for LNS to endorse to Sharikat.
No evidence whatsoever was adduced that LNS was acting as a conduit of Sharikat. Likewise, there is no
evidence, other than respondents unsubstantiated claim, that petitioner endorsed his application to
Sharikat. On the contrary, this was belied by the withdrawal letter the existence of which was not even
denied by the respondent. In fact, he admitted its due execution and his signature which appeared
thereon. There is also no denying that respondent was deployed to Saudi Arabia. In fact, Sharikat
admitted in its Answer that it was the one responsible for respondents deployment to Saudi Arabia. From
the foregoing, it is more logical that it was Sharikat to whom respondent eventually paid the corresponding
fees. However, for failure to interpose any appeal from the judgment of the POEA insofar as it absolved
Sharikat, respondent is thereby bound by it and is considered final as to him.[20]
In fine, for failure to adduce any shred of evidence of payment made to petitioner, or that
petitioner referred or endorsed respondent for employment abroad to another agency, the charges of
non-issuance of receipt and misrepresentation against petitioner could not possibly prosper. By the
voluntary withdrawal of respondents application from petitioner, the latter could not have been involved
in the recruitment and placement of respondent and consequently could not be held liable for any violation.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
No. 90526 dated November 30, 2006, and its Resolution dated September 12, 2007,
are REVERSED and SET ASIDE. The complaint against petitioner LNS International Manpower Services
is hereby DISMISSED for lack of merit. Accordingly, the amounts of P40,000.00 and P80,000.00
representing petitioners appeal bond are ordered REFUNDED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 8-25.
[2]
Id. at 29-39; penned by Associate Justice Portia Alio-Hormachuelos and concurred in by Associate
Justices Amelita G. Tolentino and Arcangelita Romilla-Lontok.
[3]
CA rollo, pp.55-58.
[4]
Id. at 37-41.
[5]
Rollo, p. 41.
[6]
[7]
Id. at 21-25.
[8]
Id. at 27.
[9]
Id. at 28.
[10]
Id.
[11]
Id. at 30-32.
[12]
Id. at 41.
[13]
Id. at 42-52.
[14]
Id. at 58.
[15]
Id. at 66-68.
[16]
V.V. Aldaba Engineering v. Ministry of Labor and Employment, G.R. No. 76925, September 26, 1994,
237 SCRA 31, 38-39.
[17]
Pleyto v. Philippine National Police Criminal Investigation and Detection Group (PNP-CIDG), G.R. No.
169982, November 23, 2007, 538 SCRA 534, 554-555.
[18]
Camacho v. Court of Appeals, G.R. No. 127520, February 9, 2007, 515 SCRA 242, 261.
[19]
Cuizon v. Court of Appeals, 329 Phil. 456, 483 (1996).
[20]
Pison-Arceo Agricultural and Development Corp. v. National Labor Relations Commission, 344 Phil.
723, 736 (1997).

Supreme Court
Manila
SECOND DIVISION

Appellee,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
MARITESS MARTINEZ y DULAY, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:

No less than the Constitution ordains that labor local and overseas, organized and unorganized shall be
given full protection. Further it mandates the promotion of full employment and equality of employment
opportunities. Thus, if an individual illegally recruits another for employment abroad, he shall be meted
the penalty of life imprisonment and fined. The same individual could also be held liable for the crime of
Estafa.[1]
This appeal assails the December 11, 2002 Decision[2] of the Court of Appeals (CA) in CA-G.R. CR No.
24144 which affirmed with modifications the October 12, 1999 Decision[3] of the Regional Trial Court (RTC)
of Manila, Branch 3, finding appellant guilty of the crimes of Illegal Recruitment in large scale and four
counts of Estafa.
Factual Antecedents
On June 21, 1995, herein appellant Maritess Martinez and her daughter, Jenilyn Martinez, were
charged with seven counts of Estafa before the RTC of Manila. The cases were docketed as Criminal Case
Nos. 95-143311,[4] 95-143312,[5] 95-143313,[6] 95-143314,[7] 95-143315,[8] 95-143316,[9] and 95-
143317. [10]
Except for the dates of commission of the crimes, the amounts defrauded, and the names of the
complainants, the Informations for Estafa were similarly worded as follows:
That in or about and during the period comprised between

__________,[11] inclusive, in the City of Manila, Philippines, the said accused, conspiring
and confederating and helping with one Julius Martinez who was previously charged
[with] the same offense before the Regional Trial Court of Manila, Branch ___, docketed
under Criminal Case No[s]. 94-139797 to 139803 did then and there willfully and
feloniously defraud __________[12] in the following manner, to wit: the said accused, by
means of false manifestations and fraudulent representations which she/he/they made to
said __________[13] to the effect that he had the power and capacity to recruit and employ
as factory worker in Korea and could facilitate the processing of the pertinent papers if
given the necessary amount to meet the requirements thereof, and by means of other
similar deceits, induced and succeeded in inducing said __________[14] to give and
deliver, as in fact he/she/they gave and delivered to said accused the amount of
__________[15] on the strength of said manifestations and representations, said accused
well knowing that the same were false and fraudulent and were made solely to obtain, as
in fact she/he/they did obtain the amount of __________[16] which amount once in
her/his/their possession, with intent to defraud, willfully, unlawfully and feloniously
misappropriated, misapplied and converted to her/his/their own personal use and benefit,
to the damage and prejudice of said __________[17] in the aforesaid amount of
__________[18] Philippine Currency.
Contrary to law.
On even date, appellant together with her children Jenilyn Martinez and Julius Martinez, were also
charged with the crime of Illegal Recruitment in large scale which was docketed as Criminal Case No. 95-
143318.[19] The accusatory portion of the Information reads:
That in or about and during the period comprised between February 1993 and
July, 1994, in the City of Manila, Philippines, the said accused, conspiring and
confederating together and helping one another, representing themselves to have the
capacity to contract, enlist and transport Filipino workers for employment abroad, did then
and there willfully and unlawfully for a fee recruit and promise employment/job placement
abroad to the following persons, to wit: NELSON LAPLANO, CRIZALDO FERNANDEZ Y
MARTINEZ, WALTER ISUAN Y ORTIZ, NECITO SERQUINA[20] Y TUVERA, DOMINADOR
ILASIN[21], ARNULFO SUYAT Y LOYOLA, and VIVENCIO[22] MARTINEZ Y CORNELIO
without first having secured the necessary license or authority from the Department of
Labor and Employment (POEA).
Contrary to law.[23]
The cases were raffled to Branch 3 of the RTC of Manila. Thereafter, warrants of arrest[24] were
issued against the three accused. However, the same were served only against appellant[25] and Julius
Martinez[26] whereas accused Jenilyn Martinez remains at large.
During his arraignment on August 18, 1995, Julius Martinez pleaded not guilty to the charge of
Illegal Recruitment.[27] Meanwhile, appellant was arraigned on September 6, 1995where she entered a
plea of not guilty to the charges of Estafa and Illegal Recruitment in large scale.[28]
The cases were consolidated upon motion of the prosecution.[29] Trial on the merits thereafter
ensued.
The following complainants were presented by the prosecution as witnesses, to wit: Dominador
Ilacin, Necito Serquia, Vivencio Martinez, and Arnulfo Suyat. However, complainants Walter Isuan, Nelson
Laplano, and Crizaldo Fernandez failed to testify despite being given several opportunities.[30] Thus,
on February 14, 1996, the trial court issued an Order viz:
For failure of the complaining witnesses, Nelson Laplano y Malapit, Crizaldo

Fernandez y Martinez, and Walter Isuan y Ortiz, to appear at todays trial, despite personal
service of notice of this setting, as prayed for by the accused counsel and without
objection from the public prosecutor, insofar as Crim. Case No. 95-143312, 95-143314,
and 95-143316 are concerned, the same are hereby PROVISIONALLY DISMISSED, with
the express consent of accused Maritess Martinez y Dulay only. With costs de oficio.
SO ORDERED.[31]
On October 12, 1999, the trial court issued its Decision acquitting Julius
Martinez of the crime of Illegal Recruitment in large scale while finding appellant guilty of Illegal
Recruitment and four counts of Estafa.
The trial court found that appellant was not a holder of a license or authority to deploy workers
abroad; that appellant falsely represented herself to have the capacity to send complainants as factory
workers in South Korea; that she asked from complainants various amounts allegedly as placement and
processing fees; that based on said false representations, complainants parted with their money and gave
the same to appellant; that appellant appropriated for herself the amounts given her to the damage and
prejudice of the complainants; and that she failed to deploy complainants for work abroad.
The trial court did not lend credence to appellants allegation that she merely assisted complainants
in their applications with JH Imperial Organization Placement Corp. Instead, it held that complainants
directly applied with the appellant, viz:
x x x Maritess was not licensed to recruit workers for overseas employment by

the POEA. She is directly accountable to complainants as the recipient of the
money. Besides, no one from Imperial Agency was even presented to show that it was
the entity handling the recruitment. They relied on her representations that she could
send them abroad to work. x x x[32]
The dispositive portion of the trial courts Decision reads:
WHEREFORE, accused Julius Martinez is acquitted while accused Maritess

Martinez is FOUND GUILTY of estafa on 4 counts and illegal recruitment. She is hereby
sentenced to an imprisonment of from 10 years, 8 months and 21 days to 11 years, 11
months and 10 days of prision mayor for 4 counts of estafa. Further, she shall suffer an
imprisonment of from 5 years, 5 months and 11 days to 6 years, 8 months and 20 days
of prision correccional for illegal recruitment.
Accused shall also indemnify private complainants for actual damages, as

follows: P40,000.00 to Dominador Ilacin, P40,000.00 to Necito Serquia, P55,000.00 to
Vivencio Martinez, and P45,000.00 to Arnulfo Suyat; and to pay the costs.
SO ORDERED.[33]
Appellant appealed to the CA arguing that no evidence was presented to show that she falsely
represented herself as having the capacity to send complainants as factory workers in South Korea.[34] She
alleged that there was no proof that she personally undertook to deploy them for work abroad.[35] She
maintained that she merely assisted complainants in their applications with JH Imperial Organization
Placement Corp. and that she was merely an agent of the latter.[36] She claimed that there is no truth to
the claim of the complainants that she was holding office in her residence considering its very limited
space and that the same is occupied by her six family members.[37]
On December 11, 2002, the CA rendered its assailed Decision denying the appeal for lack of
merit. It found appellant guilty of Illegal Recruitment in large scale for having committed acts of
recruitment such as making promises of profitable overseas employment to complainants[38] and of
collecting from the complainants payment for their passports, placement fees and other sundry
expenses.[39] It likewise found that appellant did not have the authority to recruit workers for overseas
employment.[40] The appellate court disregarded appellants argument that she merely assisted
complainants in their applications with JH Imperial Organization Placement Corp. The CA likewise affirmed
appellants conviction for four counts of Estafa.
The dispositive portion of the CA Decision reads:

Accordingly, the Court modifies the penalties imposed by the trial court, viz:
In Criminal Case No. 95-143311, the amount involved is P30,000.00 ([appellant]

having returned to complainant Dominador Ilacin the amount of P10,000.00). The
minimum term of the indeterminate sentence should be four (4) years and two (2)
months of prision correccional and the maximum term should be eight (8) years of prision
mayor.
In Criminal Case No. 95-143313, the amount involved is P40,000.00. The
months of prision correccional and the maximum term should at least be eight (8) years
of prision mayor plus a period of one (1) year [one (1) year for each
additional P10,000.00] or a total maximum period of nine (9) years of prision mayor.

having returned to complainant Vivencio Martinez the amount of P16,000.00). The
months of prision correccional and the maximum term should be at least eight (8) years
of prision mayor plus a period of one (1) year [one (1) year for each
additional P10,000.00] for a total maximum period of nine (9) years of prision mayor.

having returned to complainant Arnulfo Suyat the amount of P16,000.00). The minimum
term of the indeterminate sentence should be four (4) years and two (2) months of prision
correccional and the maximum term should be eight (8) [years] of prision mayor.
In Criminal Case No. 95-143318, large scale illegal recruitment is punishable with
life imprisonment and a fine of One Hundred Thousand Pesos (Article 39, Labor Code).
The amount of actual damages awarded to the three complainants is modified

there being partial payments made by the appellant, viz:
1) Dominador Ilacin - P30,000.00

2) Vivencio Martinez - P39,000.00
3) Arnulfo Suyat - P29,000.00
WHEREFORE, considering that the imposable penalty in Criminal Case No. 95-
143318 (Illegal Recruitment in Large Scale) is life imprisonment consistent with Section
13, paragraph (b), Rule 124 of the 2000 Revised Rules on Criminal Procedure, the Court
hereby certifies this case and elevates the entire records to the Honorable Supreme Court
for the mandated review.
SO ORDERED.[41]
Hence, this appeal filed by appellant raising the following assignment of errors:
Issues
I.
THE COURT OF APPEALS COMMITTED PALPABLE ERROR IN NOT FINDING [THAT] THE
PROSECUTION EVIDENCE IS INSUFFICIENT TO PROVE THE GUILT OF THE
[APPELLANT].
II.
THE COURT OF APPEALS DECIDED [THE CASE] IN A WAY PROBABLY NOT IN ACCORD
WITH LAW OR WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT.[42]
Appellants Arguments
As regards the crime of Illegal Recruitment in large scale, appellant maintains that she could not
be convicted of the same because she merely assisted complainants in their applications with the
recruitment agency. She likewise insists that she turned over the amounts she received from the
complainants to JH Imperial Organization Placement Corp.[43]
Appellant insists that the courts below erred in finding her guilty of the crime of Estafa because
there is no proof that she falsely represented to have the capacity to send complainants as factory workers
in South Korea. She also avers that there is no evidence presented to show that she personally undertook
to deploy complainants for work abroad.[44]
Appellees Arguments
Appellee argues that the trial court and the CA correctly convicted
appellant of the crime of Illegal Recruitment in large scale. There is proof beyond reasonable doubt that
she impressed upon the complainants that she had the authority to deploy them for employment
abroad. She even received money from the complainants and issued corresponding receipts. There was
also proof that she was not a licensee or holder of authority to deploy workers abroad. In fact, her
admission that she merely referred the complainants to JH Imperial Organization Placement Corp. was
already an act of recruitment under Article 13(b) of the Labor Code. Appellee also argues that all the
elements of Estafa were satisfactorily proven by the prosecution.
Our Ruling

Article 13(b) of the Labor Code defines recruitment and placement viz:
(b) Recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit or
not: Provided, That any person or entity which, in any manner, offers or promises for a
fee employment to two or more persons shall be deemed engaged in recruitment and
placement.
In this case, all the four complainants unanimously declared that appellant offered and promised them
employment abroad. They also testified that they gave various amounts to appellant as payment for
placement and processing fees. Notwithstanding said promises and payments, they were not able to leave
for abroad to work. These testimonies, as well as the documentary evidence they submitted consisting of
the receipts issued them by the appellant, all prove that the latter was engaged in recruitment and
placement activities.
Even conceding that appellant merely referred the complainants to JH Imperial Organization Placement
Corp., the same still constituted an act of recruitment. As explicitly enumerated in Article 13(b) of the
Labor Code, recruitment and placement includes the act of making referrals, whether for profit or
not. Thus, the CA correctly held that:
x x x Even if [appellant] did no more that suggest to complainants where they

could apply for overseas employment, her act constituted referral within the meaning of
Article 13(b) of the Labor Code (People v. Ong, 322 SCRA 38). Referral is the act of
passing along or forwarding of an applicant for employment after an initial interview of a
selected applicant for employment to a selected employer, placement officer or bureau.
(People v. Goce, 247 SCRA 780).[45]
Having already established that appellant was engaged in recruitment and placement, the issue that must
be resolved next is whether such activities may be considered illegal and whether the acts were committed
in large scale.
Article 38 of the Labor Code defines illegal recruitment as:
ART. 38. ILLEGAL RECRUITMENT. (a) Any recruitment activities, including the prohibited
practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or
non-holders of authority[46] shall be deemed illegal and punishable under Article 39 of this
Code. x x x
(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered
an offense involving economic sabotage and shall be penalized in accordance with Article
39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three

(3) or more persons conspiring and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale if committed against three
(3) or more persons individually or as a group.
In the instant case, the prosecution satisfactorily established that appellant was not a licensee or
holder of authority to deploy workers abroad. By this fact alone, she is deemed to have engaged in illegal
recruitment and the same was committed in large scale because it was carried out against the four
complainants.
The fact that JH Imperial Organization Placement Corp. was a holder of a valid license to deploy
workers abroad did not serve to benefit herein appellant. There was no evidence at all that said
recruitment agency authorized herein appellant to act as its agent. As aptly noted by the appellate court:
From the testimonies of the complainants, it is clearly shown that [appellant] did
more than just make referrals. It was [appellant] whom they approached regarding their
plans of working overseas. It was [appellant] who collected the fees and receipts
[therefor] were issued in her name. It was x x x [appellant] from whom they learned what
papers or documents to submit. Despite the denial, [appellant], nevertheless, failed to
explain why recruitment activities were done in her residence. Likewise, she failed to
present Milagros Lopez, one of the staff of Imperial, to whom she allegedly turned over
the money she collected from the complainants or any officer from the recruitment agency
to prove that she was merely a conduit thereof. x x x[47]
The three elements of the crime of illegal recruitment, to wit: a) the offender has no valid license or
authority required by law to enable him to lawfully engage in recruitment and placement of workers; b)
the offender undertakes any of the activities within the meaning of recruitment and placement under
Article 13(b) of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the said
Code (now Section 6 of RA 8042); and c) the offender committed the same against three or more persons,
individually or as a group,[48] are present in the instant case. Consequently, we rule that the trial court and
the CA correctly found appellant guilty of Illegal Recruitment in large scale.
In the instant case, the applicable law at the time of the commission of the crime of Illegal
Recruitment in large scale was Article 39 of the Labor Code. Under said law, the imposable penalty is life
imprisonment and a fine of P100,000.00. The CA therefore correctly imposed upon herein appellant the
penalty of life imprisonment and a fine of P100,000.00 in Criminal Case No. 95-143318.
We also affirm the findings of the trial court and the CA that appellant is guilty of four counts of
Estafa, the elements of which are: a) the accused defrauded another by abuse of confidence or by means
of deceit; and b) the offended party suffered damage or prejudice capable of pecuniary estimation.[49] In
the instant case, we agree with the observations of the CA that:
In this case, [appellant] misrepresented herself to the complainants as one who

can make arrangements for job placements in South Korea as factory workers. By reason
of her misrepresentations, false assurances, and deceit, complainants were induced to
part with their money. The recruits waited for at least a year, only to realize that they
were hoodwinked, as no jobs were waiting for them abroad.
Criminal liability for estafa already committed is not affected by the fact that
[appellant] returned a portion of their money. Compromise or novation of contract
pertains and affects only the civil aspect of the case. Estafa is a public offense that must
be prosecuted and punished by the Court in its motion even though complete reparation
should have been made of the damage suffered by the offended party. x x x [50]
Anent the penalties for the four counts of Estafa, we held in People v. Temporada[51] that:
The prescribed penalty for estafa under Article 315, par. 2(d) of the RPC, when
the amount defrauded exceeds P22,000.00, is prision correccional maximum to prision
mayor minimum. The minimum term is taken from the penalty next lower or anywhere
within prision correccional minimum and medium (i.e., from 6 months and 1 day to 4
years and 2 months). Consequently, the RTC correctly fixed the minimum term for the
five estafa cases at 4 years and 2 months of prision correccional since this is within the
range of prision correccional minimum and medium.
On the other hand, the maximum term is taken from the prescribed penalty
of prision correccional maximum to prision mayor minimum in its maximum period,
adding 1 year of imprisonment for every P10,000.00 in excess of P22,000,00, provided
that the total penalty shall not exceed 20 years. However, the maximum period of the
prescribed penalty of prision correccional maximum to prision mayorminimum is
not prision mayor minimum as apparently assumed by the RTC. To compute the
maximum period of the prescribed penalty, prision correccional maximum to prision
mayor minimum should be divided into three equal portions of time each of which portion
shall be deemed to form one period in accordance with Article 65 of the RPC. Following
this procedure, the maximum period of prision correccional maximum to prision
mayor minimum is from 6 years, 8 months and 21 days to 8 years. The incremental
penalty, when proper, shall thus be added to anywhere from 6 years, 8 months and 21
days to 8 years, at the discretion of the court.
In computing the incremental penalty, the amount defrauded shall be subtracted

by P22,000.00, and the difference shall be divided by P10,000.00. Any fraction of a year
shall be discarded as was done starting with the case of People v. Pabalan in consonance
with the settled rule that penal laws shall be construed liberally in favor of the accused. x
x x[52]
Following the aforementioned procedure, we find that the penalties imposed by the appellate court are
proper.
WHEREFORE, the December 11, 2002 Decision of the Court of Appeals in CA-G.R. CR No. 24144
which affirmed with modifications the October 12, 1999 Decision of the Regional Trial Court of Manila,
Branch 3, finding appellant Maritess Martinez guilty of the crimes of Illegal Recruitment in large scale and
four counts of Estafa is AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
People v. Africa, G.R. No. 176638, December 2, 2009. (Unsigned Resolution)
[2]
CA rollo, pp. 101-113; penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by
Associate Justices Bernardo P. Abesamis and Edgardo F. Sundiam.
[3]
Records, pp. 378-381; penned by Judge Antonio I. De Castro.
[4]
Id. at 2-3.
[5]
Id. at 8-9.
[6]
Id. at 14-15.
[7]
Id. at 18-19.
[8]
Id. at 45-46.
[9]
Id. at 50-51.
[10]
Id. at 57-58.
[11]
February 9, 1993 and February 24, 1993 for Criminal Case No. 95-143311, id. at 2; February
5, 1993 for Criminal Case No. 95-143312, id. at 8; November 29, 1993 and February 8,
1994 for Criminal Case No. 95-143313, id. at 14; October 26, 1993 for Criminal Case No. 95-
143314, id. at 18; February 4, 1993 and August 14, 1994 for Criminal Case No. 95-143315,
id. at 45; February 8, 1993 for Criminal Case No. 95-143316, id. at 50; and November 1993
and July 1994 for Criminal Case No. 95-143317, id. at 57.
[12]
Dominador Ilacin y Pascua for Criminal Case No. 95-143311, id. at 2; Nelson Laplano y Malapit
for Criminal Case No. 95-143312, id. at 8; Necito Serquina y Tuvera for Criminal Case No. 95-
143313, id. at 14; Crizaldo Fernandez y Martinezfor Criminal Case No. 95-143314, id. at 18;
Vevencio Martinez y Cornelio for Criminal Case No. 95-143315, id. at 45; Walter Isuan y Ortiz
for Criminal Case No. 95-143316, id. at 50; and Arnulfo Suyat y Loyola for Criminal Case No.
95-143317, id. at 57.
[13]
Id.
[14]
Id.
[15]
P40,000.00 in Criminal Case No. 95-143311, id. at 2; P25,000.00 in Criminal Case No. 95-
143312, id. at 8; P40,000.00 95-143313, id. at 14; P40,000.00 in Criminal Case No. 95-
143314, id. at 18; P55,000.00 in Criminal Case No. 95-143315, id. at 45; P23,000.00 in
Criminal Case No. 95-143316, id. at 50; and P45,000.00 in Criminal Case No. 95-143317, id.
at 57.
[16]
Id.
[17]
Supra note 12.
[18]
Supra note 15.
[19]
Records, pp. 61-62.
[20]
Sometimes spelled as Serquia in the records.
[21]
Sometimes spelled as Ilacin in the records.
[22]
Sometimes spelled as Vevencio in the records.
[23]
Records, p. 61.
[24]
Id. at 78-79.
[25]
Id. at 89.
[26]
Id. at 92.
[27]
Id. at 110.
[28]
Id. at 124.
[29]
Id. at 1.
[30]
Id. at 182, 186, 191, 195.
[31]
Id. at 203; penned by Judge Antonio I. De Castro.
[32]
Id. at 380.
[33]
Id. at 381. Underscoring in the original text.
[34]
CA rollo, p. 54.
[35]
Id.
[36]
Id.
[37]
Id. at 55.
[38]
Id. at 110.
[39]
Id.
[40]
Id.
[41]
Id. at 112-113.
[42]
Rollo, p. 14.
[43]
Id. at 16.
[44]
Id. at 15.
[45]
CA rollo, p. 110.
[46]
This has been amended by Republic Act (RA) No. 8042 or the Migrant Workers and Overseas
Filipinos Act of 1995, which considers as illegal recruiter even a licensee or holder of authority
who commits acts prohibited under Article 34 of the Labor Code. Moreover, the failure to
deploy recruits is also considered as illegal recruitment under Section 6 of RA 8042.
[47]
CA rollo, p. 110.
[48]
See People v. Temporada, G.R. No. 173473, December 17, 2008, 574 SCRA 258, 279.
[49]
Id. at 282-283.
[50]
CA rollo, p. 111.
[51]
Supra note 48.
[52]
Id. at 283-284.

Supreme Court
Manila
SECOND DIVISION
THE PARENTS-TEACHERS G.R. No. 176518

ASSOCIATION (PTA) OF ST.
MATHEW CHRISTIAN ACADEMY,
GREGORIO INALVEZ, JR.,
ROWENA LAYUG, MALOU
MALVAR, MARILOU BARAQUIO,
GARY SINLAO, LUZVIMINDA Present:
OCAMPO,MARIFE FERNANDEZ,
FERNANDO VICTORIO, ERNESTO CARPIO, J., Chairperson,
AGANON and RIZALINO BRION,
MANGLICMOT, represented by their DEL CASTILLO,
Attorney-in-Fact, GREGORIO ABAD, and
INALVEZ, JR., PEREZ, JJ.
Petitioners,
- versus -
THE METROPOLITAN BANK and

TRUST CO., Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
As a general rule, the issuance of a writ of possession after the foreclosure sale and during the period of
redemption is ministerial. As an exception, it ceases to be ministerial if there is a third party holding the
property adversely to the judgment debtor.
In this case, we find that petitioners right over the foreclosed property is not adverse to that of
the judgment debtor or mortgagor. As such, they cannot seek the quashal or prevent the implementation
of the writ of possession.
Factual Antecedents
The facts of this case as summarized by the Court of Appeals (CA) in its assailed
Decision[1] dated November 29, 2006 are as follows:
Sometime in 2001, the spouses Denivin Ilagan and Josefina Ilagan (spouses
Ilagan) applied for and were granted a loan by the [Metropolitan Bank and Trust Co.] in
the amount of x x x (P4,790,000.00) [secured by] x x x a Real Estate Mortgage over the
parcels of land covered by Transfer Certificates of Title with Nos. 300203, 285299,
278042, 300181, 300184, 300191, 300194, and 300202, respectively.
Upon default, an extrajudicial foreclosure was conducted with [Metropolitan Bank

and Trust Co.] being the highest bidder x x x and for which a Certificate of Sale was issued
in its favor.
During the period of redemption, the respondent Bank filed an Ex-Parte Petition
for Issuance of a Writ of Possession docketed as LRC Case No. 6438 by posting x x x the
required bond which was subsequently approved. x x x
[On June 30, 2005], the St. Mathew Christian Academy of Tarlac, Inc. filed a
Petition for Injunction with Prayer for Restraining Order docketed as Special Civil Action
No. 9793 against the respondent Bank and the Provincial Sheriff of Tarlac.
On August 16, 2005, the x x x Judge issued a Joint Decision in LRC Case No. 6438
and Special Civil Action No. 9793, the contents of which are x x x as follows:
JOINT DECISION
Metropolitan Bank x x x is now entitled to a writ of possession, it

being mandatory even during the period of redemption.
The school, St. Mathew Christian [Academy] filed the petition for
injunction on the ground that it cannot be ejected being a third party.
x x x St. Mathew Christian Academy is practically owned by the
mortgagors, spouses Denivin and Josefina Ilagan. Firstly, the lease to St.
Mathew by the Ilagans, as lessor, was for a period of one year from the
execution of the lease contract in 1998. Therefore, the lease should have
expired in 1999. However, since the lease continued after 1999, the lease
is now with a definite period, or monthly, since the payment of lease
rental is monthly. (Articles 1670 and 1687, Civil Code). Therefore, the
lease expires at the end of each month.
Secondly, the lease was not registered and annotated at the back
of the title, and therefore, not binding on third persons. (Article 1648, Civil
Code)
Thirdly, the spouses are the owners or practically the owners of

St. Mathew. Even if it has a separate personality, nevertheless, piercing
the veil of corporate entity is resorted to for the spouses should not be
allowed to commit fraud under the separate entity/personality of St.
Mathew.
In connection with the allegation of the spouses Ilagans that the

mortgage contract contains provision which is pactum commisorium, the
Court does not agree. What is prohibited is the automatic appropriation
without the public sale of the mortgaged properties.
The interest charges may be exorbitant, but it does not of itself

cause the nullity of the entire contract of mortgage.
There is also no violation on the proscription on forum

shopping. What is important is that, there is really no other case between
the parties involving the same subject matter.
In fine, St. Mathew is not really a third person. It is bound by the

writ of possession issued by this Court.
WHEREFORE, the writ of possession issued by this Court

dated April 22, 2005 is hereby affirmed, Civil Case No. 9793 is
dismissed. No costs.
SO ORDERED.[2]
Pending resolution of the motion for reconsideration of the said Joint Decision, herein petitioners
Parents-Teachers Association (PTA) of St. Mathew Christian Academy (SMCA) and Gregorio Inalvez, Jr.,
Rowena Layug, Malou Malvar, Marilou Baraquio, Gary Sinlao, Luzviminda Ocampo, Marife Fernandez,
Fernando Victorio, Ernesto Aganon, and Rizalino Manglicmot who are teachers and students of SMCA,
filed a Motion for Leave to file Petition in Intervention[3] in Special Civil Action No. 9793, which was granted
by the trial court in an Order dated November 10, 2005.[4] However, in a subsequent Order
dated December 7, 2005, the trial court reversed its earlier Order by ruling that petitioners intervention
would have no bearing on the issuance and implementation of the writ of possession. Thus, it directed
that the writ be implemented by placing respondent Metropolitan Bank and Trust Company (MBTC) in
physical possession of the property.[5]
Without filing a motion for reconsideration, petitioners assailed the trial courts Order through a
Petition for Certiorari and Prohibition before the CA. However, said petition was dismissed by the CA for
lack of merit in its assailed Decision dated November 29, 2006. It held thus:
Considering that in this case the writ of possession had already been issued x x x
petitioners remedy was to file x x x a petition that the sale be set aside and the writ of
possession cancelled. Instead, petitioners filed the instant Petition for Certiorari.
Moreover, no motion for reconsideration of the said Order directing the issuance
of a writ of possession was filed neither was there any motion for reconsideration of the
assailed Order of 7 December 2005 prior to the institution of the instant Petition
for Certiorari to afford the respondent Court an opportunity to correct its alleged
error. The rule is that certiorari as a special civil action will not lie unless a motion for
reconsideration is filed before the respondent tribunal to allow it to correct its imputed
error. While there are exceptions to the rule, none has been invoked by petitioners.
WHEREFORE, premises considered, the instant Petition is hereby DISMISSED for

lack of merit.
SO ORDERED.[6]
Petitioners filed a Motion for Reconsideration but the motion was denied in a Resolution
Hence, petitioners filed this Petition for Review on Certiorari.
Issues
1. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR

WHEN IT FAILED AND REFUSED TO CONSIDER THE GROUNDS RELIED UPON IN
THE PETITION BEFORE IT WHEN THE SAME ARE CLEARLY MERITORIOUS AND ARE
BASED ON THE LAW AND JUSTICE;
2. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR

WHEN IT FAILED AND REFUSED TO CONSIDER THAT THE REMEDY AVAILABLE TO
HEREIN PETITIONERS IS THE SPECIAL CIVIL ACTION OF CERTIORARI AND NOT A
PETITION TO SET ASIDE THE FORECLOSURE SALE IN LRC CASE No. 6438;
3. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR IN
RULING THAT A MOTION FOR RECONSIDERATION IS STILL NEEDED BEFORE THE
PETITIONERS COULD FILE A SPECIAL CIVIL ACTION OF CERTIORARI; and
4. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR IN

NOT HOLDING THAT CONSIDERATIONS OF JUSTICE AND EQUITY, AND NOT
TECHNICALITY, SHOULD BE THE BASES FOR THE RESOLUTION OF THE PETITION
BEFORE IT.[7]
Our Ruling
Petitioners are not Third Parties against whom the writ of

possession cannot be issued and implemented.
As a rule, it is ministerial upon the court to issue a writ of possession after the foreclosure sale
and during the period of redemption.[8] Section 7 of Act No. 3135 explicitly authorizes the purchaser in a
foreclosure sale to apply for a writ of possession during the redemption period by filing an ex parte motion
under oath for that purpose in the registration or cadastral proceedings if the property is registered, or in
special proceedings in the case of property registered under the Mortgage Law with the Regional Trial
Court of the province or place where the real property or any part thereof is situated, in the case of
mortgages duly registered with the Registry of Deeds. Upon filing of such motion and the approval of the
corresponding bond, the law also directs in express terms the said court to issue the order for a writ of
possession.[9]
However, this rule is not without exception. In Barican v. Intermediate

Appellate Court,[10] we held that the obligation of a court to issue an ex parte writ of possession in favor
of the purchaser in an extrajudicial foreclosure sale ceases to be ministerial once it appears that there is
a third party in possession of the property who is claiming a right adverse to that of the
debtor/mortgagor. This ruling was reiterated in Policarpio v. Active Bank[11] where we held that:
Ordinarily, a purchaser of property in an extrajudicial foreclosure sale is entitled

to possession of the property. Thus, whenever the purchaser prays for a writ of
possession, the trial court has to issue it as a matter of course. However, the obligation
of the trial court to issue a writ of possession ceases to be ministerial once it appears that
there is a third party in possession of the property claiming a right adverse to that of
the debtor/mortgagor. Where such third party exists, the trial court should conduct a
hearing to determine the nature of his adverse possession. (Emphasis supplied)
In this case, we find that petitioners cannot be considered as third parties because they are not
claiming a right adverse to the judgment debtor. Petitioner-teachers and students did not claim ownership
of the properties, but merely averred actual physical possession of the subject school
premises.[12] Petitioner-teachers possession of the said premises was based on the employment contracts
they have with the school. As regards the petitioner-students, Alcuaz v. Philippine School of Business
Administration[13] and Non v. Dames II[14] characterized the school-student relationship as contractual in
nature. As such, it would be specious to conclude that the teachers and students hold the subject
premises independent of or adverse to SMCA. In fact, their interest over the school premises is necessarily
inferior to that of the school. Besides, their contracts are with the school and do not attach to the school
premises. Moreover, the foreclosure of the current school premises does not prevent the SMCA from
continuing its operations elsewhere.
At this point, it is relevant to note that in the Joint Decision dated August 16, 2005, the trial court
found that SMCA was not a third party and was therefore bound by the said writ of
possession.[15] Consequently, it affirmed the issuance of the writ of possession.
MBTC thus correctly argued that petitioners did not have superior rights to that of SMCA over the
subject property because their supposed possession of the same emanated only from the latter. Since
petitioners possession of the subject school premises stemmed from their employment or enrollment
contracts with the school, as the case may be, necessarily, their right to possess the subject school
premises cannot be adverse to that of the school and of its owners. As such, the petitioners cannot be
deemed third parties as contemplated in Act No. 3135, as amended.
The lack of authority to sign the certificate of non-forum
shopping attached to the Petition for Issuance of Writ of
Possession was an insignificant lapse.
Petitioners further claim that the lack of authority to sign the certificate on non-forum shopping
attached to the Petition for the Issuance of the Writ of Possession rendered the same worthless and should
be deemed as non-existent.[16] MBTC asserts otherwise, citing Spouses Arquiza v. Court of
Appeals[17] where we held that an application for a writ of possession is a mere incident in the registration
proceeding which is in substance merely a motion,[18] and therefore does not require such a certification.
Petitioners contention lacks basis. In Green Asia Construction and Development Corporation v.
Court of Appeals,[19] where the issue of validity of the Certificate of Non-Forum Shopping was questioned
in an application for the issuance of a Writ of Possession, we held that:
x x x it bears stressing that a certification on non-forum shopping is

required only in a complaint or a petition which is an initiatory pleading. In this
case, the subject petition for the issuance of a writ of possession filed by private
respondent is not an initiatory pleading. Although private respondent denominated
its pleading as a petition, it is more properly a motion. What distinguishes a
motion from a petition or other pleading is not its form or the title given by the party
executing it, but its purpose. The purpose of a motion is not to initiate litigation, but to
bring up a matter arising in the progress of the case where the motion is
filed.[20] (Emphasis supplied)
It is not necessary to initiate an original action in order for the purchaser at an extrajudicial
foreclosure of real property to acquire possession.[21] Even if the application for the writ of possession was
denominated as a petition, it was in substance merely a motion.[22] Indeed, any insignificant lapse in the
certification on non-forum shopping filed by the MBTC did not render the writ irregular. After all, no
verification and certification on non-forum shopping need be attached to the motion.[23]
Hence, it is immaterial that the certification on non-forum shopping in the MBTCs petition was
signed by its branch head. Such inconsequential oversight did not render the said petition defective in
form.
The trial courts Order did not violate the petitioner-

students right to quality education and academic
freedom.
We disagree with petitioners assertion that the students right to quality education and academic
freedom was violated. The constitutional mandate to protect and promote the right of all citizens to quality
education at all levels[24] is directed to the State and not to the school.[25] On this basis, the petitioner-
students cannot prevent the MBTC from acquiring possession of the school premises by virtue of a validly
issued writ of possession.
There is likewise no violation of the so-called academic freedom. Article XIV, Section 5(2) of the
Constitution mandates "that academic freedom shall be enjoyed in all institutions of higher
learning." Academic freedom did not go beyond the concept of freedom of intellectual inquiry,[26] which
includes the freedom of professionally qualified persons to inquire, discover, publish and teach the truth
as they see it in the field of their competence subject to no control or authority except of rational methods
by which truths and conclusions are sought and established in these disciplines. It also pertains to the
right of the school or college to decide for itself, its aims and objectives, and how best to attain them - the
grant being given to institutions of higher learning - free from outside coercion or interference save possibly
when the overriding public welfare calls for some restraint.[27] In Garcia v. The Faculty Admission
Committee, Loyola School of Theology,[28] we held that:
[I]t is to be noted that the reference is to the 'institutions of higher learning' as

the recipients of this boon. It would follow then that the school or college itself is
possessed of such a right. It decides for itself its aims and objectives and how best to
attain them. It is free from outside coercion or interference save possibly when the
overriding public welfare calls for some restraint. It has a wide sphere of autonomy
certainly extending to the choice of students. This constitutional provision is not to be
construed in a niggardly manner or in a grudging fashion. That would be to frustrate its
purpose, nullify its intent. x x x It is the business of a university to provide that atmosphere
which is most conducive to speculation, experiment and creation. It is an atmosphere in
which there prevail the 'four essential freedoms' of a university - to determine for itself on
academic grounds who may teach, what may be taught, how it shall be taught, and who
may be admitted to study.
In this case, except for their bare allegation that if the school will be ejected because of the writ
of possession, the students will necessarily be ejected also[29] and thereby their learning process and other
educational activities shall have been disrupted,[30] petitioners miserably failed to show the relevance of
the right to quality education and academic freedom to their case or how they were violated by the Order
granting the writ of possession to the winning bidder in the extrajudicial foreclosure sale.
The petitioners were accorded due process.
The petitioners argue that the court below did not conduct trial for the presentation of evidence
to support its conclusion that the intervention would have no bearing on the issuance and implementation
of the writ of possession,[31] thereby depriving them of due process.
Petitioners contention is without merit. It is settled that the issuance of a writ of possession is a
ministerial duty of the court.[32] The purchaser of the foreclosed property, upon ex parte application and
the posting of the required bond, has the right to acquire possession of the foreclosed property during the
12-month redemption period.[33]
This ex parte petition for the issuance of a writ of possession under Section 7 of Act No. 3135 is
not, strictly speaking, a "judicial process" as contemplated in Article 433[34] of the Civil Code.[35] As a judicial
proceeding for the enforcement of one's right of possession as purchaser in a foreclosure sale, it is not an
ordinary suit by which one party sues another for the enforcement of a wrong or protection of a right, or
the prevention or redress of a wrong.[36]
In Idolor v. Court of Appeals,[37] we described the nature of the ex parte petition for issuance of
possessory writ under Act No. 3135 to be a non-litigious proceeding and summary in nature. As an ex
parte proceeding, it is brought for the benefit of one party only, and without notice to, or consent by any
person adversely interested.[38] It is a proceeding where the relief is granted without requiring an
opportunity for the person against whom the relief is sought to be heard.[39] It does not matter even if the
herein petitioners were not specifically named in the writ of possession nor notified of such
proceedings.[40] In Sagarbarria v. Philippine Business Bank,[41] we rejected therein petitioner's contention
that he was denied due process when the trial court issued the writ of possession without notice.
Here in the present case, we similarly reject petitioners contention that the trial court should have
conducted a trial prior to issuing the Order denying their motion to intervene.[42] As it is, the law does not
require that a petition for a writ of possession may be granted only after documentary and testimonial
evidence shall have been offered to and admitted by the court.[43] As long as a verified petition states the
facts sufficient to entitle the petitioner to the relief requested, the court shall issue the writ prayed
for. There is no need for petitioners to offer any documentary or testimonial evidence for the court to
grant the petition.[44]
The proper remedy for the petitioners is a separate,

distinct and independent suit, provided for under Act No.
3135.
Petitioners assert that Section 8 of Act No. 3135 specifically refers to the debtor as the party who
is required to file a petition for the cancellation of the writ of possession in the same proceeding in which
possession was requested.[45] As they are not the debtors referred to in the said law, petitioners argue
that the filing of a petition for the cancellation of the writ of possession in the same proceeding in which
possession was requested, does not apply to them.[46] Hence, they allege that it was improper for the CA
to conclude that the Petition for Certiorari was the wrong remedy in the case where the writ of possession
was issued.[47]
Respondent, on the other hand, avers that certiorari is available only when there is grave abuse
of discretion amounting to lack or excess of jurisdiction and there is no appeal, or any plain, speedy and
adequate remedy in the ordinary course of law.[48] In the instant case, the respondent argues that the
court merely granted the Writ of Possession in accordance with settled jurisprudence[49] and that the
remedy of certiorari does not lie because there is an available remedy which is an appeal.[50]
We hold that the CA correctly held that the proper remedy is a separate, distinct and independent
suit provided for in Section 8 of Act No. 3135[51] viz:
SEC. 8. The debtor may, in the proceedings in which possession was requested,
but not later than thirty days after the purchaser was given possession, petition that the
sale be set aside and the writ of possession canceled, specifying the damages suffered by
him, because the mortgage was not violated or the sale was not made in accordance with
the provisions hereof, and the court shall take cognizance of this petition in accordance
with the summary procedure provided for in section one hundred and twelve of Act
Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified,
it shall dispose in his favor of all or part of the bond furnished by the person who obtained
possession. Either of the parties may appeal from the order of the judge in accordance
with section fourteen of Act Numbered Four hundred and ninety-six; but the order of
possession shall continue in effect during the pendency of the appeal.
In De Gracia v. San Jose,,[52] we held that:
x x x the order for a writ of possession issues as a matter of course upon the filing
of the proper motion and the approval of the corresponding bond. No discretion is left to
the court. And any question regarding the regularity and validity of the sale
(and the consequent cancellation of the writ) is left to be determined in a
subsequent proceeding as outlined in section 8. Such question is not to be
raised as a justification for opposing the issuance of the writ of possession,
since, under the Act, the proceeding for this is ex parte. (Emphasis supplied)
Since the writ of possession had already been issued in LRC Case No. 6438 per Order dated
November 29, 2005, the proper remedy is an appeal and not a petition for certiorari,[53] in accordance
with our ruling in Metropolitan Bank and Trust Company v. Tan[54] and Government Service Insurance
System v. Court of Appeals.[55] As long as the court acts within its jurisdiction, any alleged errors committed
in the exercise of its discretion will amount to nothing more than mere errors of judgment, correctable by
an appeal if the aggrieved party raised factual and legal issues; or a petition for review under Rule 45 of
the Rules of Court if only questions of law are involved.
As a general rule, a motion for reconsideration must be

filed before resort to the special civil action of certiorari is
made.
As a general rule, a motion for reconsideration should precede recourse to certiorari in order to
give the trial court an opportunity to correct the error that it may have committed. The said rule is not
absolute and may be dispensed with in instances where the filing of a motion for reconsideration would
serve no useful purpose, such as when the motion for reconsideration would raise the same point stated
in the motion[56] or where the error is patent for the order is void[57] or where the relief is extremely urgent,
as in cases where execution had already been ordered where the issue raised is one purely of law.[58]
In the case at bar, the petitioners stated in their Petition for Certiorari and Prohibition before the
CA as follows:[59]
18. Respondent sheriff and his deputies are now set to implement the said writ of
possession and are now poised to evict the students and teachers from their classrooms,
grounds and school facilities;
19. Petitioners did not anymore file a motion for reconsideration of said order x x x and is
proceeding directly to this Honorable Court because the filing of a motion for
reconsideration would serve no useful purpose x x x Besides the relief sought is extremely
urgent as the respondent sheriff is set to implement the questioned orders x x x and the
circumstances herein clearly indicate the urgency of judicial intervention x x x hence, this
petition.
Plainly, the petitioners have the burden to substantiate that their immediate resort to the appellate
court is based on any of the exceptions to the general rule. They have to show the urgent and compelling
reasons for such recourse. The afore-cited allegations of the petitioners in their petition before the CA did
not dispense with the burden of establishing that their case falls under any of the exceptions to the general
rule. Unlike the case of Ronquillo v. Court of Appeals[60] cited by the petitioners, where not only was a writ
of execution issued but petitioners properties were already scheduled to be sold at public auction on April
2, 1980 at 10:00 a.m., the herein petitioners failed to show the specificity and imminence of the urgency
confronting their immediate recourse to the appellate court.
We therefore hold that the CA correctly found the necessity for a prior resort to a motion for
reconsideration prior to the institution of the Petition for Certiorari.
Considerations of equity do not apply in the instant case.
The petitioners claim that the challenged decision of the CA would show that the petition was
decided on the basis of pure technicality and that the appellate court did not pass upon the merits of the
petition.[61] They further assert that considerations of justice and equity and not technicality, should be the
bases for the resolution of the petition.[62] MBTC, on the other hand, argues that equity may not apply if
there is applicable law and jurisprudence.
In San Luis v. San Luis,[63] we expounded on the concept of justice by holding that:
More than twenty centuries ago, Justinian defined justice as the constant and
perpetual wish to render everyone his due. That wish continues to motivate this Court
when it assesses the facts and the law in every case brought to it for decision. Justice is
always an essential ingredient of its decisions. Thus when the facts warrant, we interpret
the law in a way that will render justice, presuming that it was the intention of the
lawmaker, to begin with, that the law be dispensed with justice.
While equity which has been aptly described as "justice outside legality" is applied only in the
absence of, and never against, statutory law or judicial rules of procedure.[64] Positive rules prevail over all
abstract arguments based on equity contra legem.[65] For all its conceded merit, equity is available only in
the absence of law and not as its replacement.[66]
In this case, justice demands that we conform to the positive mandate of the law as expressed in
Act No. 3135, as amended. Equity has no application as to do so would be tantamount to overruling or
supplanting the express provisions of the law.
In our Resolution[67] dated June 4, 2007, we issued a Temporary Restraining Order enjoining
respondent to desist from implementing the Writ of Possession. We also required petitioners to post a
cash or surety bond in the amount of P50,000.00 within five days from notice, otherwise the temporary
restraining order shall be automatically lifted. The petitioners posted a cash bond in the amount
of P50,000.00 on June 27, 2007 pursuant to our June 4, 2007 Resolution.[68]
WHEREFORE, premises considered, the Petition for Review on Certiorari is DENIED for lack of
merit. The temporary restraining order heretofore issued is hereby LIFTED and SET ASIDE. The
Decision of the Court of Appeals dated November 29, 2006 and its Resolution dated January 29,
2007 are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
CA rollo, pp. 190-197; penned by Associate Justice Arturo G. Tayag and concurred in by Associate
Justices Remedios A. Salazar-Fernando and Noel G. Tijam.
[2]
Id. at 191-194.
[3]
Id. at 65-66.
[4]
Id. at 74.
[5]
Id. at 75.
[6]
Id. at 195-196.
[7]
Rollo, p. 14.
[8]
Development Bank of the Philippines v. Prime Neighborhood Association, G.R. Nos. 175728 & 178914,
May 8, 2009, 587 SCRA 582.
[9]
Sulit v. Court of Appeals, 335 Phil. 914, 924 (1997).
[10]
G.R. No. L-79906, June 20, 1988, 162 SCRA 358, 363, citing IFC Service Leasing and Acceptance
Corporation v. Nera, 125 Phil. 595, 598 (1967); Tan Soo Huat v. Ongwico, 63 Phil. 746 (1936).
[11]
G.R. No. 157125, September 19, 2008, 566 SCRA 27, 32.
[12]
Rollo, p. 123.
[13]
244 Phil. 8, 20 (1988).
[14]
G.R. No. 89317, May 20, 1990, 185 SCRA 523.
[15]
CA rollo, p. 133
[16]
Rollo, pp. 125-126.
[17]
498 Phil 793, 802-803 (2005).
[18]
Rollo, pp. 146-147.
[19]
G.R. No. 163735, November 24, 2006, 508 SCRA 79.
[20]
Id. at 84.
[21]
Id.
[22]
Id.
[23]
Metropolitan Bank and Trust Company v. Bance, G.R. No. 167280, April 30, 2008, 553 SCRA 507, 519.
[24]
CONSTITUTION, Article XIV, Section 1.
[25]
University of the Philippines v. Judge Ayson, 257 Phil. 580, 587 (1989).
[26]
Joaquin G. Bernas, S.J., The 1987 Constitution of the Republic of the Philippines: A Commentary 2003
edition, p. 1253.
[27]
Tangonan v. Judge Pao, 221 Phil. 601, 612 (1985).
[28]
160-A Phil. 929, 943-944 (1975). Citations omitted.
[29]
Rollo, p. 126
[30]
Id.
[31]
Id.
[32]
Rayo v. Metropolitan Bank and Trust Company, G.R. No. 165142, December 10, 2007, 539 SCRA
571, 579.
[33]
ACT NO. 3135, Section 7.
[34]
Art. 433. Actual possession under claim of ownership raises a disputable presumption of
ownership. The true owner must resort to judicial process for the recovery of the property.
[35]
Rayo v. Metropolitan Bank and Trust Company, supra at 579-580.
[36]
Id.
[37]
490 Phil 808, 816 (2005).
[38]
Sagarbarria v. Philippine Business Bank, G.R. No. 178330, July 23, 2009.
[39]
Spouses Santiago v. Merchants Rural Bank of Talavera, Inc., 493 Phil 862, 869 (2005).
[40]
Rayo v. Metropolitan Bank and Trust Company, supra note 32 at 581.
[41]
Supra.
[42]
CA rollo, p. 75.
[43]
Oliveros v. Presiding Judge, RTC, Br. 24, Bian, Laguna, G.R. No. 165963, September 3, 2007, 532
SCRA 109, 120.
[44]
Spouses Santiago v. Merchants Rural Bank of Talavera, Inc., supra at 870.
[45]
Rollo, p. 129.
[46]
Id. at 130.
[47]
Id. at 129
[48]
Id. at 149.
[49]
Id.
[50]
Id
[51]
CA rollo, p. 196.
[52]
94 Phil 623, 625-626 (1954).
[53]
Rollo, pp. 31-32.
[54]
G.R. No. 159934, June 26, 2008, 555 SCRA 502, 512.
[55]
251 Phil. 222 (1989).
[56]
Fortich-Celdran v. Celdran, 125 Phil 903, 908 (1967).
[57]
Vigan Electric Light Co., Inc. v. Public Service Commission, 119 Phil 304, 313-314 (1964).
[58]
Central Bank of the Philippines v. Hon. Cloribel, 150-A Phil. 86, 100 (1972).
[59]
CA rollo, p. 18.
[60]
217 Phil. 269, 277-278 (1984).
[61]
Rollo, p. 131.
[62]
Id.
[63]
G.R. No. 133743 & 134029, February 6, 2007, 514 SCRA 294, 313, citing Alonzo v. Intermediate
Appellate Court, 234 Phil. 267, 276 (1987).
[64]
Zabat, Jr. v. Court of Appeals, 226 Phil. 489, 495 (1986).
[65]
Id.
[66]
Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.), G.R. No. 169712, January 20, 2009, 576
SCRA 625, 626.
[67]
Rollo, p. 71.
[68]
Id. at 77.

Supreme Court
Manila
SECOND DIVISION

REVENUE,

- versus - BRION,
DEL CASTILLO,
ABAD, and
SM PRIME HOLDINGS, INC. PEREZ, JJ.
and FIRST ASIA REALTY
DEVELOPMENT CORPORATION, Promulgated:
Respondents. February 26, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
When the intent of the law is not apparent as worded, or when the application of the law would
lead to absurdity or injustice, legislative history is all important. In such cases, courts may take judicial
notice of the origin and history of the law,[1] the deliberations during the enactment,[2] as well as prior laws
on the same subject matter[3] to ascertain the true intent or spirit of the law.
This Petition for Review on Certiorari under Rule 45 of the Rules of Court, in relation to Republic
Act (RA) No. 9282,[4] seeks to set aside the April 30, 2008 Decision[5] and the June 24, 2008 Resolution[6] of
the Court of Tax Appeals (CTA).
Factual Antecedents
Respondents SM Prime Holdings, Inc. (SM Prime) and First Asia Realty Development Corporation
(First Asia) are domestic corporations duly organized and existing under the laws of the Republic of
the Philippines. Both are engaged in the business of operating cinema houses, among others.[7]
CTA Case No. 7079
On September 26, 2003, the Bureau of Internal Revenue (BIR) sent SM Prime a Preliminary
Assessment Notice (PAN) for value added tax (VAT) deficiency on cinema ticket sales in the amount
of P119,276,047.40 for taxable year 2000.[8] In response, SM Prime filed a letter-protest dated December
15, 2003.[9]
On December 12, 2003, the BIR sent SM Prime a Formal Letter of Demand for the alleged VAT
deficiency, which the latter protested in a letter dated January 14, 2004.[10]
On September 6, 2004, the BIR denied the protest filed by SM Prime and ordered it to pay the
VAT deficiency for taxable year 2000 in the amount of P124,035,874.12.[11]
On October 15, 2004, SM Prime filed a Petition for Review before the CTA docketed as CTA Case
No. 7079.[12]
CTA Case No. 7085
On May 15, 2002, the BIR sent First Asia a PAN for VAT deficiency on
cinema ticket sales for taxable year 1999 in the total amount of P35,823,680.93.[13] First Asia protested
the PAN in a letter dated July 9, 2002.[14]
Subsequently, the BIR issued a Formal Letter of Demand for the alleged VAT deficiency which
was protested by First Asia in a letter dated December 12, 2002.[15]
On September 6, 2004, the BIR rendered a Decision denying the protest and ordering First Asia
to pay the amount of P35,823,680.93 for VAT deficiency for taxable year 1999.[16]
Accordingly, on October 20, 2004, First Asia filed a Petition for Review before the CTA, docketed
as CTA Case No. 7085.[17]
CTA Case No. 7111
On April 16, 2004, the BIR sent a PAN to First Asia for VAT deficiency on cinema ticket sales for
taxable year 2000 in the amount of P35,840,895.78. First Asia protested the PAN through a letter
dated April 22, 2004.[18]
Thereafter, the BIR issued a Formal Letter of Demand for alleged VAT
deficiency.[19] First Asia protested the same in a letter dated July 9, 2004.[20]
On October 5, 2004, the BIR denied the protest and ordered First Asia to pay the VAT deficiency
in the amount of P35,840,895.78 for taxable year 2000.[21]
This prompted First Asia to file a Petition for Review before the CTA on December 16, 2004. The
case was docketed as CTA Case No. 7111.[22]
CTA Case No. 7272
Re: Assessment Notice No. 008-02

A PAN for VAT deficiency on cinema ticket sales for the taxable year 2002 in the total amount
of P32,802,912.21 was issued against First Asia by the BIR. In response, First Asia filed a protest-letter
dated November 11, 2004. The BIR then sent a Formal Letter of Demand, which was protested by First
Asia on December 14, 2004.[23]
Re: Assessment Notice No. 003-03
A PAN for VAT deficiency on cinema ticket sales in the total amount of P28,196,376.46 for the
taxable year 2003 was issued by the BIR against First Asia. In a letter dated September 23, 2004, First
Asia protested the PAN. A Formal Letter of Demand was thereafter issued by the BIR to First Asia, which
the latter protested through a letter dated November 11, 2004. [24]
On May 11, 2005, the BIR rendered a Decision denying the protests. It ordered First Asia to pay
the amounts of P33,610,202.91 and P28,590,826.50 for VAT deficiency for taxable years 2002 and 2003,
respectively.[25]
Thus, on June 22, 2005, First Asia filed a Petition for Review before the CTA, docketed as CTA
Case No. 7272.[26]
Consolidated Petitions
The Commissioner of Internal Revenue (CIR) filed his Answers to the Petitions filed by SM Prime
and First Asia.[27]
On July 1, 2005, SM Prime filed a Motion to Consolidate CTA Case Nos. 7085, 7111 and 7272 with
CTA Case No. 7079 on the grounds that the issues raised therein are identical and that SM Prime is a
majority shareholder of First Asia. The motion was granted.[28]
Upon submission of the parties respective memoranda, the consolidated cases were submitted
for decision on the sole issue of whether gross receipts derived from admission tickets by cinema/theater
operators or proprietors are subject to VAT.[29]
Ruling of the CTA First Division

On September 22, 2006, the First Division of the CTA rendered a Decision granting the Petition
for Review. Resorting to the language used and the legislative history of the law, it ruled that the activity
of showing cinematographic films is not a service covered by VAT under the National Internal Revenue
Code (NIRC) of 1997, as amended, but an activity subject to amusement tax under RA 7160, otherwise
known as the Local Government Code (LGC) of 1991. Citing House Joint Resolution No. 13, entitled Joint
Resolution Expressing the True Intent of Congress with Respect to the Prevailing Tax Regime in the
Theater and Local Film Industry Consistent with the States Policy to Have a Viable, Sustainable and
Competitive Theater and Film Industry as One of its Partners in National Development,[30] the CTA First
Division held that the House of Representatives resolved that there should only be one business tax
applicable to theaters and movie houses, which is the 30% amusement tax imposed by cities and
provinces under the LGC of 1991. Further, it held that consistent with the States policy to have a viable,
sustainable and competitive theater and film industry, the national government should be precluded from
imposing its own business tax in addition to that already imposed and collected by local government units.
The CTA First Division likewise found that Revenue Memorandum Circular (RMC) No. 28-2001, which
imposes VAT on gross receipts from admission to cinema houses, cannot be given force and effect
because it failed to comply with the procedural due process for tax issuances under RMC No. 20-
86.[31] Thus, it disposed of the case as follows:
IN VIEW OF ALL THE FOREGOING, this Court hereby GRANTS the Petitions
for Review. Respondents Decisions denying petitioners protests against deficiency value-
added taxes are hereby REVERSED. Accordingly, Assessment Notices Nos. VT-00-
000098, VT-99-000057, VT-00-000122, 003-03 and 008-02 are ORDERED cancelled
and set aside.
SO ORDERED.[32]
Aggrieved, the CIR moved for reconsideration which was denied by the First Division in its
Resolution dated December 14, 2006.[33]
Ruling of the CTA En Banc
Thus, the CIR appealed to the CTA En Banc.[34] The case was docketed as CTA EB No. 244.[35] The
CTA En Banc however denied[36] the Petition for Review and dismissed[37] as well petitioners Motion for
Reconsideration.
The CTA En Banc held that Section 108 of the NIRC actually sets forth an exhaustive enumeration
of what services are intended to be subject to VAT. And since the showing or exhibition of motion pictures,
films or movies by cinema operators or proprietors is not among the enumerated activities contemplated
in the phrase sale or exchange of services, then gross receipts derived by cinema/ theater operators or
proprietors from admission tickets in showing motion pictures, film or movie are not subject to VAT. It
reiterated that the exhibition or showing of motion pictures, films, or movies is instead subject to
amusement tax under the LGC of 1991. As regards the validity of RMC No. 28-2001, the CTA En
Banc agreed with its First Division that the same cannot be given force and effect for failure to comply
with RMC No. 20-86.
Issue
Hence, the present recourse, where petitioner alleges that the CTA En Banc seriously erred:
(1) In not finding/holding that the gross receipts derived by

operators/proprietors of cinema houses from admission tickets [are] subject to
the 10% VAT because:
(a) THE EXHIBITION OF MOVIES BY CINEMA

OPERATORS/PROPRIETORS TO THE PAYING PUBLIC IS A SALE OF
SERVICE;
(b) UNLESS EXEMPTED BY LAW, ALL SALES OF SERVICES ARE

EXPRESSLY SUBJECT TO VAT UNDER SECTION 108 OF THE NIRC
OF 1997;
(c) SECTION 108 OF THE NIRC OF 1997 IS A CLEAR PROVISION

OF LAW AND THE APPLICATION OF RULES OF STATUTORY
CONSTRUCTION AND EXTRINSIC AIDS IS UNWARRANTED;
(d) GRANTING WITHOUT CONCEDING THAT RULES OF

CONSTRUCTION ARE APPLICABLE HEREIN, STILL THE HONORABLE
COURT ERRONEOUSLY APPLIED THE SAME AND PROMULGATED
DANGEROUS PRECEDENTS;
(e) THERE IS NO VALID, EXISTING PROVISION OF LAW

EXEMPTING RESPONDENTS SERVICES FROM THE VAT IMPOSED
UNDER SECTION 108 OF THE NIRC OF 1997;
(f) QUESTIONS ON THE WISDOM OF THE LAW ARE NOT

PROPER ISSUES TO BE TRIED BY THE HONORABLE COURT; and
(g) RESPONDENTS WERE TAXED BASED ON THE PROVISION OF

SECTION 108 OF THE NIRC.
(2) In ruling that the enumeration in Section 108 of the NIRC of

1997 is exhaustive in coverage;
(3) In misconstruing the NIRC of 1997 to conclude that the showing
of motion pictures is merely subject to the amusement tax imposed by the Local
Government Code; and
(4) In invalidating Revenue Memorandum Circular (RMC) No. 28-2001.[38]
Simply put, the issue in this case is whether the gross receipts derived by operators or proprietors
of cinema/theater houses from admission tickets are subject to VAT.
Petitioner argues that the enumeration of services subject to VAT in Section 108 of the NIRC is
not exhaustive because it covers all sales of services unless exempted by law. He claims that the CTA
erred in applying the rules on statutory construction and in using extrinsic aids in interpreting Section 108
because the provision is clear and unambiguous. Thus, he maintains that the exhibition of movies by
cinema operators or proprietors to the paying public, being a sale of service, is subject to VAT.
Respondents, on the other hand, argue that a plain reading of Section 108 of the NIRC of 1997
shows that the gross receipts of proprietors or operators of cinemas/theaters derived from public
admission are not among the services subject to VAT. Respondents insist that gross receipts from
cinema/theater admission tickets were never intended to be subject to any tax imposed by the national
government. According to them, the absence of gross receipts from cinema/theater admission tickets
from the list of services which are subject to the national amusement tax under Section 125 of the NIRC
of 1997 reinforces this legislative intent. Respondents also highlight the fact that RMC No. 28-2001 on
which the deficiency assessments were based is an unpublished administrative ruling.
Our Ruling
The enumeration of services subject to VAT under

Section 108 of the NIRC is not exhaustive
Section 108 of the NIRC of the 1997 reads:

SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.
(A) Rate and Base of Tax. There shall be levied, assessed and collected, a value-added
tax equivalent to ten percent (10%) of gross receipts derived from the sale or exchange
of services, including the use or lease of properties.
The phrase sale or exchange of services means the performance of all kinds of
services in the Philippines for others for a fee, remuneration or
consideration, including those performed or rendered by construction and service
contractors; stock, real estate, commercial, customs and immigration brokers; lessors of
property, whether personal or real; warehousing services; lessors or distributors of
cinematographic films; persons engaged in milling, processing, manufacturing or
repacking goods for others; proprietors, operators or keepers of hotels, motels, rest
houses, pension houses, inns, resorts; proprietors or operators of restaurants,
refreshment parlors, cafes and other eating places, including clubs and caterers; dealers
in securities; lending investors; transportation contractors on their transport of goods or
cargoes, including persons who transport goods or cargoes for hire and other domestic
common carriers by land, air and water relative to their transport of goods or cargoes;
services of franchise grantees of telephone and telegraph, radio and television
broadcasting and all other franchise grantees except those under Section 119 of this Code;
services of banks, non-bank financial intermediaries and finance companies; and non-life
insurance companies (except their crop insurances), including surety, fidelity, indemnity
and bonding companies; and similar services regardless of whether or not the
performance thereof calls for the exercise or use of the physical or mental faculties. The
phrase sale or exchange of services shall likewise include:
(1) The lease or the use of or the right or privilege to use any copyright, patent, design
or model, plan, secret formula or process, goodwill, trademark, trade brand or other like
property or right;
xxxx
(7) The lease of motion picture films, films, tapes and discs; and
(8) The lease or the use of or the right to use radio, television, satellite transmission and
cable television time.
x x x x (Emphasis supplied)
A cursory reading of the foregoing provision clearly shows that the enumeration of the sale or exchange
of services subject to VAT is not exhaustive. The words, including, similar services, and shall likewise
include, indicate that the enumeration is by way of example only.[39]
Among those included in the enumeration is the lease of motion picture films, films, tapes and
discs. This, however, is not the same as the showing or exhibition of motion pictures or films. As pointed
out by the CTA En Banc:
Exhibition in Blacks Law Dictionary is defined as To show or display. x x x To produce
anything in public so that it may be taken into possession (6th ed., p. 573). While the
word lease is defined as a contract by which one owning such property grants to another
the right to possess, use and enjoy it on specified period of time in exchange for periodic
payment of a stipulated price, referred to as rent (Blacks Law Dictionary, 6th ed., p. 889).
x x x[40]
Since the activity of showing motion pictures, films or movies by cinema/ theater operators or
proprietors is not included in the enumeration, it is incumbent upon the court to the determine whether
such activity falls under the phrase similar services. The intent of the legislature must therefore be
ascertained.
The legislature never intended operators

or proprietors of cinema/theater houses to be covered by
VAT
Under the NIRC of 1939,[41] the national government imposed amusement tax on proprietors,
lessees, or operators of theaters, cinematographs, concert halls, circuses, boxing exhibitions, and other
places of amusement, including cockpits, race tracks, and cabaret.[42] In the case of theaters or
cinematographs, the taxes were first deducted, withheld, and paid by the proprietors, lessees, or operators
of such theaters or cinematographs before the gross receipts were divided between the proprietors,
lessees, or operators of the theaters or cinematographs and the distributors of the cinematographic
films. Section 11[43] of the Local Tax Code,[44] however, amended this provision by transferring the power
to impose amusement tax[45] on admission from theaters, cinematographs, concert halls, circuses and
other places of amusements exclusively to the local government. Thus, when the NIRC of 1977[46] was
enacted, the national government imposed amusement tax only on proprietors, lessees or operators of
cabarets, day and night clubs, Jai-Alai and race tracks.[47]
On January 1, 1988, the VAT Law[48] was promulgated. It amended certain provisions of the NIRC
of 1977 by imposing a multi-stage VAT to replace the tax on original and subsequent sales tax and
percentage tax on certain services. It imposed VAT on sales of services under Section 102 thereof, which
provides:
SECTION 102. Value-added tax on sale of services. (a) Rate and base of tax.
There shall be levied, assessed and collected, a value-added tax equivalent to 10%
percent of gross receipts derived by any person engaged in the sale of services. The
phrase sale of services means the performance of all kinds of services for others for a fee,
remuneration or consideration, including those performed or rendered by construction
and service contractors; stock, real estate, commercial, customs and immigration brokers;
lessors of personal property; lessors or distributors of cinematographic
films; persons engaged in milling, processing, manufacturing or repacking goods for
others; and similar services regardless of whether or not the performance thereof calls for
the exercise or use of the physical or mental faculties: Provided That the following services
performed in the Philippines by VAT-registered persons shall be subject to 0%:
(1) Processing manufacturing or repacking goods for other persons doing

business outside the Philippines which goods are subsequently exported, x x x
xxxx
Gross receipts means the total amount of money or its equivalent representing
the contract price, compensation or service fee, including the amount charged for
materials supplied with the services and deposits or advance payments actually or
constructively received during the taxable quarter for the service performed or to be
performed for another person, excluding value-added tax.
(b) Determination of the tax. (1) Tax billed as a separate item in the invoice. If
the tax is billed as a separate item in the invoice, the tax shall be based on the gross
receipts, excluding the tax.
(2) Tax not billed separately or is billed erroneously in the invoice. If the tax is not
billed separately or is billed erroneously in the invoice, the tax shall be determined by
multiplying the gross receipts (including the amount intended to cover the tax or the tax
billed erroneously) by 1/11. (Emphasis supplied)
Persons subject to amusement tax under the NIRC of 1977, as amended, however, were exempted from
the coverage of VAT.[49]
On February 19, 1988, then Commissioner Bienvenido A. Tan, Jr. issued RMC 8-88, which clarified
that the power to impose amusement tax on gross receipts derived from admission tickets was exclusive
with the local government units and that only the gross receipts of amusement places derived from
sources other than from admission tickets were subject to amusement tax under the NIRC of 1977, as
amended. Pertinent portions of RMC 8-88 read:
Under the Local Tax Code (P.D. 231, as amended), the jurisdiction to levy
amusement tax on gross receipts arising from admission to places of amusement has
been transferred to the local governments to the exclusion of the national government.
xxxx
Since the promulgation of the Local Tax Code which took effect on June 28, 1973
none of the amendatory laws which amended the National Internal Revenue Code,
including the value added tax law under Executive Order No. 273, has amended the
provisions of Section 11 of the Local Tax Code. Accordingly, the sole jurisdiction for
collection of amusement tax on admission receipts in places of amusement rests
exclusively on the local government, to the exclusion of the national government. Since
the Bureau of Internal Revenue is an agency of the national government, then it follows
that it has no legal mandate to levy amusement tax on admission receipts in the said
places of amusement.
Considering the foregoing legal background, the provisions under Section 123 of
the National Internal Revenue Code as renumbered by Executive Order No. 273 (Sec.
228, old NIRC) pertaining to amusement taxes on places of amusement shall be
implemented in accordance with BIR RULING, dated December 4, 1973 and BIR RULING
NO. 231-86 dated November 5, 1986 to wit:
x x x Accordingly, only the gross receipts of the amusement places

derived from sources other than from admission tickets shall be subject to x
x x amusement tax prescribed under Section 228 of the Tax Code, as
amended (now Section 123, NIRC, as amended by E.O. 273). The tax on gross
receipts derived from admission tickets shall be levied and collected by the
city government pursuant to Section 23 of Presidential Decree No. 231, as
amended x x x or by the provincial government, pursuant to Section 11 of P.D.
231, otherwise known as the Local Tax Code. (Emphasis supplied)
On October 10, 1991, the LGC of 1991 was passed into law. The local government retained the
power to impose amusement tax on proprietors, lessees, or operators of theaters, cinemas, concert halls,
circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%)
of the gross receipts from admission fees under Section 140 thereof.[50] In the case of theaters or cinemas,
the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the local
government before the gross receipts are divided between said proprietors, lessees, or operators and the
distributors of the cinematographic films. However, the provision in the Local Tax Code expressly excluding
the national government from collecting tax from the proprietors, lessees, or operators of theaters,
cinematographs, concert halls, circuses and other places of amusements was no longer included.
In 1994, RA 7716 restructured the VAT system by widening its tax base and enhancing its
administration. Three years later, RA 7716 was amended by RA 8241. Shortly thereafter, the NIRC of
1997[51] was signed into law. Several amendments[52] were made to expand the coverage of
VAT. However, none pertain to cinema/theater operators or proprietors. At present, only lessors or
distributors of cinematographic films are subject to VAT. While persons subject to amusement tax[53] under
the NIRC of 1997 are exempt from the coverage of VAT.[54]
Based on the foregoing, the following facts can be established:
(1) Historically, the activity of showing motion pictures, films or movies by

cinema/theater operators or proprietors has always been considered as a form of
entertainment subject to amusement tax.
(2) Prior to the Local Tax Code, all forms of amusement tax were imposed by
the national government.
(3) When the Local Tax Code was enacted, amusement tax on admission
tickets from theaters, cinematographs, concert halls, circuses and other places of
amusements were transferred to the local government.
(4) Under the NIRC of 1977, the national government imposed amusement
tax only on proprietors, lessees or operators of cabarets, day and night clubs, Jai-
Alai and race tracks.
(5) The VAT law was enacted to replace the tax on original and subsequent
sales tax and percentage tax on certain services.
(6) When the VAT law was implemented, it exempted persons subject to
amusement tax under the NIRC from the coverage of VAT.
(7) When the Local Tax Code was repealed by the LGC of 1991, the local
government continued to impose amusement tax on admission tickets from
theaters, cinematographs, concert halls, circuses and other places of amusements.
(8) Amendments to the VAT law have been consistent in exempting persons
subject to amusement tax under the NIRC from the coverage of VAT.
(9) Only lessors or distributors of cinematographic films are included in the

coverage of VAT.
These reveal the legislative intent not to impose VAT on persons already covered by the
amusement tax. This holds true even in the case of cinema/theater operators taxed under the LGC of
1991 precisely because the VAT law was intended to replace the percentage tax on certain services. The
mere fact that they are taxed by the local government unit and not by the national government is
immaterial. The Local Tax Code, in transferring the power to tax gross receipts derived by cinema/theater
operators or proprietor from admission tickets to the local government, did not intend to treat
cinema/theater houses as a separate class. No distinction must, therefore, be made between the places
of amusement taxed by the national government and those taxed by the local government.
To hold otherwise would impose an unreasonable burden on cinema/theater houses operators or
proprietors, who would be paying an additional 10%[55] VAT on top of the 30% amusement tax imposed
by Section 140 of the LGC of 1991, or a total of 40% tax. Such imposition would result in injustice, as
persons taxed under the NIRC of 1997 would be in a better position than those taxed under the LGC of
1991. We need not belabor that a literal application of a law must be rejected if it will operate unjustly or
lead to absurd results.[56] Thus, we are convinced that the legislature never intended to include
cinema/theater operators or proprietors in the coverage of VAT.
On this point, it is apropos to quote the case of Roxas v. Court of Tax Appeals,[57] to wit:
The power of taxation is sometimes called also the power to destroy. Therefore,
it should be exercised with caution to minimize injury to the proprietary rights of a
taxpayer. It must be exercised fairly, equally and uniformly, lest the tax collector kill the
hen that lays the golden egg. And, in order to maintain the general public's trust and
confidence in the Government this power must be used justly and not treacherously.
The repeal of the Local Tax Code by the LGC of 1991 is

not a legal basis for the imposition of VAT
Petitioner, in issuing the assessment notices for deficiency VAT against respondents, ratiocinated
that:
Basically, it was acknowledged that a cinema/theater operator was then subject

to amusement tax under Section 260 of Commonwealth Act No. 466, otherwise known
as the National Internal Revenue Code of 1939, computed on the amount paid for
admission. With the enactment of the Local Tax Code under Presidential Decree (PD) No.
231, dated June 28, 1973, the power of imposing taxes on gross receipts from admission
of persons to cinema/theater and other places of amusement had, thereafter, been
transferred to the provincial government, to the exclusion of the national or municipal
government (Sections 11 & 13, Local Tax Code). However, the said provision containing
the exclusive power of the provincial government to impose amusement tax, had also
been repealed and/or deleted by Republic Act (RA) No. 7160, otherwise known as the
Local Government Code of 1991, enacted into law on October 10, 1991. Accordingly, the
enactment of RA No. 7160, thus, eliminating the statutory prohibition on the
national government to impose business tax on gross receipts from admission
of persons to places of amusement, led the way to the valid imposition of the
VAT pursuant to Section 102 (now Section 108) of the old Tax Code, as
amended by the Expanded VAT Law (RA No. 7716) and which was
implemented beginning January 1, 1996.[58] (Emphasis supplied)
We disagree.
The repeal of the Local Tax Code by the LGC of 1991 is not a legal basis for the imposition of VAT
on the gross receipts of cinema/theater operators or proprietors derived from admission tickets. The
removal of the prohibition under the Local Tax Code did not grant nor restore to the national government
the power to impose amusement tax on cinema/theater operators or proprietors. Neither did it expand
the coverage of VAT. Since the imposition of a tax is a burden on the taxpayer, it cannot be presumed
nor can it be extended by implication. A law will not be construed as imposing a tax unless it does so
clearly, expressly, and unambiguously.[59] As it is, the power to impose amusement tax on cinema/theater
operators or proprietors remains with the local government.
Revenue Memorandum Circular No. 28-2001 is invalid
Considering that there is no provision of law imposing VAT on the gross receipts of cinema/theater
operators or proprietors derived from admission tickets, RMC No. 28-2001 which imposes VAT on the
gross receipts from admission to cinema houses must be struck down. We cannot overemphasize that
RMCs must not override, supplant, or modify the law, but must remain consistent and in harmony with,
the law they seek to apply and implement.[60]
In view of the foregoing, there is no need to discuss whether RMC No. 28-2001 complied with the
procedural due process for tax issuances as prescribed under RMC No. 20-86.
Rule on tax exemption does not apply
Moreover, contrary to the view of petitioner, respondents need not prove their entitlement to an
exemption from the coverage of VAT. The rule that tax exemptions should be construed strictly against
the taxpayer presupposes that the taxpayer is clearly subject to the tax being levied against him.[61] The
reason is obvious: it is both illogical and impractical to determine who are exempted without first
determining who are covered by the provision.[62] Thus, unless a statute imposes a tax clearly, expressly
and unambiguously, what applies is the equally well-settled rule that the imposition of a tax cannot be
presumed.[63] In fact, in case of doubt, tax laws must be construed strictly against the government and in
favor of the taxpayer.[64]
WHEREFORE, the Petition is hereby DENIED. The assailed April 30, 2008 Decision of the Court
of Tax Appeals En Banc holding that gross receipts derived by respondents from admission tickets in
showing motion pictures, films or movies are not subject to value-added tax under Section 108 of the
National Internal Revenue Code of 1997, as amended, and its June 24, 2008 Resolution denying the
motion for reconsideration are AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
United States v. De Guzman, 30 Phil. 416, 419-420 (1915).
[2]
People v. Degamo, 450 Phil. 159, 179 (2003).
[3]
Celestial Nickel Mining Exploration Corporation v. Macroasia Corporation, G.R. Nos. 169080, 172936,
176226 & 176319, December 19, 2007, 541 SCRA 166, 195.
[4]
An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the Level of
a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending for the Purpose
Certain Sections of Republic Act No. 1125, As Amended, otherwise known as the Law Creating the
[5]
Rollo, pp. 98-120; penned by Associate Justice Olga Palanca-Enriquez and concurred in by Presiding
Justice Ernesto D. Acosta and Associate Justices Juanito C. Castaeda, Jr., Lovell R. Bautista, and Caesar
A. Casanova. Associate Justice Erlinda P. Uy was on official business.
[6]
Id. at 121-123; penned by Associate Justice Olga Palanca-Enriquez and concurred in by Presiding
Justice Ernesto D. Acosta and Associate Justices Juanito C. Castaeda, Jr., Lovell R. Bautista, Erlinda P.
Uy, and Caesar A. Casanova.
[7]
Id. at 772.
[8]
Id. at 100.
[9]
Id.
[10]
Id. at 101.
[11]
Id.
[12]
Id.
[13]
Id.
[14]
Id.
[15]
Id.
[16]
Id. at 102.
[17]
Id.
[18]
Id.
[19]
Id.
[20]
Id.
[21]
Id. at 25-26.
[22]
Id. at 103.
[23]
Id.
[24]
Id. at 104.
[25]
Id. at 700.
[26]
Id. at 104.
[27]
Id. at 28.
[28]
Id. at 104-105.
[29]
Id. at 29.
[30]
Approved by the House on the Third Reading on November 15, 2005. Its counterpart in the Senate,
Senate Joint Resolution No. 6, entitled Joint Resolution Expressing the True Intent of Congress
Regarding the Imposition of the Value-Added Tax Particularly on the Theater Industry, is pending in
the Committee.
[31]
Notice, Publication and Effectivity of Internal Revenue Tax Rules and Regulations, issued by then
Commissioner Bienvenido A. Tan, Jr. on July 24, 1986.
[32]
Rollo, p. 247.
[33]
Id. at 249-257.
[34]
Id. at 32.
[35]
Id.
[36]
Id. at 119.
[37]
Id. at 122.
[38]
Id. at 35-36.
[39]
See Binay v. Sandiganbayan, 374 Phil. 413, 440 (1999).
[40]
Rollo, p. 420.
[41]
Commonwealth Act No. 466.
[42]
SECTION 260. Amusement taxes. There shall be collected from the proprietor, lessee, or operator of
theaters, cinematographs, concert halls, circuses, boxing exhibitions, and other places of amusement
the following taxes:
(a) When the amount paid for admission exceeds twenty centavos but does not exceed twenty-nine
centavos, two centavos on each admission.
xxxx
(i) When the amount paid for admission exceeds ninety-nine centavos, ten centavos on each
admission.
In the case of theaters or cinematographs, the taxes herein prescribed shall first be deducted and
withheld by the proprietors, lessees, or operators of such theaters or cinematographs and paid to the
Collector of Internal Revenue before the gross receipts are divided between the proprietors, lessees,
or operators of the theaters or cinematographs and the distributors of the cinematographic films.
In the case of cockpits, race tracks, and cabarets, x x x. For the purpose of the amusement tax, the
term gross receipts embraces all the receipts of the proprietor, lessee, or operator of the amusement
place, excluding the receipts derived by him from the sale of liquors, beverages, or other articles
subject to specific tax, or from any business subject to tax under this Code.
xxxx
[43]
SECTION 11. Taxes transferred. The imposition of the taxes provided in Sections 12, 13, 14, 15, and
16 of this Code heretofore exercised by the national government or the municipal government, shall
henceforth be exercised by the provincial government, to the exclusion of the national or municipal
government. To avoid any revenue loss, the province shall levy and collect such taxes as provided in
said Sections 12, 13 and 14.
[44]
Presidential Decree No. 231 (1973).
[45]
SECTION 13. Amusement tax on admission. The province shall impose a tax on admission to be
collected from the proprietors, lessees, or operators of theaters, cinematographs, concert halls,
circuses and other places of amusements at the following rates:
(a) When the amount paid for admission is one peso or less, twenty per cent; and
(b) When the amount paid for admission exceeds one peso, thirty per cent.
In the case of theaters or cinematographs, the taxes herein prescribed shall first be deducted and
withheld by the proprietors, lessees, or operators of the theaters or cinematographs and paid to the
provincial treasurer concerned thru the municipal treasurer before the gross receipts are divided
between the proprietors, lessees, or operators of the theaters or cinematographs and the distributors
of the cinematographic films.
xxxx
[46]
Presidential Decree No. 1158.
[47]
SECTION 268. Amusement taxes. There shall be collected from the proprietor, lessee or operator of
cabarets, day and night clubs, Jai-Alai and race tracks, a tax equivalent to x x x x
[48]
Executive Order No. 273.
[49]
SECTION 103. Exempt Transactions. The following shall be exempt from the value-added tax:
(a) Sale of nonfood agricultural; marine and forest products in their original state by the primary
producer or the owner of the land where the same are produced.
xxxx
(j) Services rendered by persons subject to percentage tax under Title V;
xxxx
[50]
SECTION 140. Amusement Tax. (a) The province may levy an amusement tax to be collected from
the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and
other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from
admission fees.
(b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors,
lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between
said proprietors, lessees, or operators and the distributors of the cinematographic films.
xxxx
[51]
Republic Act No. 8424.
[52]
See Republic Act No. 8761, Republic Act No. 9010, Republic Act No. 9238 and Republic Act No. 9337.
[53]
SECTION 125. Amusement Taxes. There shall be collected from the proprietor, lessee or operator of
cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai and
racetracks, a tax equivalent to:
(a) Eighteen percent (18%) in the case of cockpits;
(b) Eighteen percent (18%) in the case of cabarets, night or day clubs;
(c) Ten percent (10%) in the case of boxing exhibitions: Provided, however, That boxing exhibitions
wherein World or Oriental Championships in any division is at stake shall be exempt from amusement
tax: Provided, further, That at least one of the contenders for World or Oriental Championship is a
citizen of the Philippines and said exhibitions are promoted by a citizen/s of the Philippines or by a
corporation or association at least sixty percent (60%) of the capital of which is owned by such citizens;
(d) Fifteen percent (15%) in the case of professional basketball games as envisioned in Presidential Decree
No. 871: Provided, however, That the tax herein shall be in lieu of all other percentage taxes of
whatever nature and description; and
(e) Thirty percent (30%) in the case of Jai-Alai and racetracks of their gross receipts, irrespective of
whether or not any amount is charged for admission.
For the purpose of the amusement tax, the term 'gross receipts' embraces all the receipts of the
proprietor, lessee or operator of the amusement place. Said gross receipts also include income from
television, radio and motion picture rights, if any. A person or entity or association conducting any
activity subject to the tax herein imposed shall be similarly liable for said tax with respect to such
portion of the receipts derived by him or it.
The taxes imposed herein shall be payable at the end of each quarter and it shall be the duty of the
proprietor, lessee or operator concerned, as well as any party liable, within twenty (20) days after the
end of each quarter, to make a true and complete return of the amount of the gross receipts derived
during the preceding quarter and pay the tax due thereon.
[54]
SECTION 109. Exempt Transactions. The following shall be exempt from the value-added tax:
(a) Sale of nonfood agricultural products; marine and forest products in their original state by the primary
producer or the owner of the land where the same are produced;
xxxx
(j) Services subject to percentage tax under Title V;
[55]
Now 12%.
[56]
Commissioner of Internal Revenue v. Solidbank Corp., 462 Phil. 96, 130 (2003).
[57]
131 Phil. 773, 780-781 (1968).
[58]
Rollo, pp. 671-672; 681 and 693.
[59]
Commissioner of Internal Revenue v. Court of Appeals, 338 Phil. 322, 330 (1997).
[60]
Commissioner of Internal Revenue v. Court of Appeals, 310 Phil. 392, 397 (1995).
[61]
Commissioner of Internal Revenue v. The Phil. American Accident Insurance Company, Inc., 493 Phil.
785, 793 (2005).
[62]
Commissioner of Internal Revenue v. Court of Appeals, supra note 59.
[63]
Commissioner of Internal Revenue v. The Phil. American Accident Insurance Company, Inc., supra.
[64]
Id.

Supreme Court
Manila
SECOND DIVISION
ATTY. MANGONTAWAR M. GUBAT, G.R. No. 167415

Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
NATIONAL POWER CORPORATION, Promulgated:

Respondent. February 26, 2010
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Truly, there is no doubt that the rights of others cannot be prejudiced by private
agreements. However, before this Court can act and decide to protect the one apparently
prejudiced, we should remember what Aesop taught in one of his fables: Every truth has
two sides; it is well to look at both, before we commit ourselves to either.
A lawyer asserts his right to his contingent fees after his clients, allegedly behind his back, had entered
into an out-of-court settlement with the National Power Corporation (NPC). The trial court granted his
claim by way of summary judgment. However, this was reversed by the Court of Appeals (CA) because
the counsel was allegedly enforcing a decision that was already vacated. In this petition, petitioner Atty.
Mangontawar M. Gubat (Atty. Gubat) attempts to persuade us that the compensation due him is
independent of the vacated decision, his entitlement thereto being based on another reason: the bad faith
of his clients and of the respondent NPC.
Factual Antecedents
In August 1990, plaintiffs Ala Mambuay, Norma Maba, and Acur Macarampat separately filed civil suits for
damages against the NPC before the Regional Trial Court of Lanao del Sur in Marawi City (RTC),
respectively docketed as Civil Case Nos. 294-90, 295-90, and 296-90. In the said complaint, plaintiffs were
represented by Atty. Linang Mandangan (Atty. Mandangan) and petitioner herein, whose services were
engaged at an agreed attorneys fees of P30,000.00 for each case and P600.00 for every
appearance. Petitioner was the one who signed the complaints on behalf of himself and Atty.
Mandangan.[1]
During the course of the proceedings, the three complaints were consolidated because the
plaintiffs causes of action are similar. They all arose from NPCs refusal to pay the amounts demanded by
the plaintiffs for the cost of the improvements on their respective lands which were destroyed when the
NPC constructed the Marawi-Malabang Transmission Line.
On the day of the initial hearing on the merits, NPC and its counsel failed to appear. Consequently,
respondent was declared in default. Despite the plea of NPC for the lifting of the default order, the RTC of
Marawi City, Branch 8, rendered its Decision[2] on April 24, 1991, the dispositive portion of which provides:
PREMISES CONSIDERED, judgment is hereby rendered in favor of the herein

plaintiffs and against the defendant National Power Corporation as represented by its
President Ernesto Aboitiz, P.M. Durias and Rodrigo P. Falcon, ordering the latter jointly
and severally:
(1) In Civil Case No. 204-90 to pay plaintiff Ala Mambuay the sum
of P103,000.00 representing the value of the improvements and the occupied portion of
the land, P32,000.00 as attorneys fees, P20,000.00 as moral and/or exemplary
damages, P50,000.00 as actual damages and the costs;
(2) In Civil Case No. 295-90 to pay plaintiff Norma Maba represented by
Capt. Ali B. Hadji Ali the sum of P146,700.00 representing the value of the improvements
and the occupied portion of the land, P32,000.00 as attorneys fees, P20,000.00 as moral
and/or exemplary damages, P50,000.00 as actual damages and the costs;
(3) In Civil Case No. 296-90 to pay plaintiff Acur Macarampat the sum
of P94,100.00 representing the value of the improvements and the occupied portion of
the land, P32,000.00 as attorneys fees, P20,000.00 as moral and/or exemplary
damages, P50,000.00 as actual damages and the costs.[3]
NPC appealed to the CA which was docketed as CA-G.R. CV No. 33000. During the pendency of
the appeal, Atty. Gubat filed an Entry and Notice of Charging Lien[4] to impose his attorneys lien
of P30,000.00 and appearance fees of P2,000.00 on each of the three civil cases he handled,
totalling P96,000.00.
On August 19, 1992, NPC moved to dismiss its appeal[5] alleging that the parties had arrived at a
settlement. Attached to the motion were acknowledgment receipts[6] dated April 2, 1992 signed by
plaintiffs Acur Macarampat, Ala Mambuay, and Norma Maba, who received P90,060.00, P90,000.00,
and P90,050.00 respectively, in full satisfaction of their claims against the NPC. The motion stated that
copies were furnished to Atty. Mandangan and herein petitioner,
although it was only Atty. Mandangans signature which appeared therein.[7]
On January 24, 1996, the CA rendered its Decision[8] disposing thus:
WHEREFORE, the Order of Default dated December 11, 1990; the Order denying
the Motion for Reconsideration to Lift Order of Default dated January 25, 1991; and the
Decision dated April 24, 1991, are hereby ANNULLED and SET ASIDE and the records of
Civil Case Nos. 294-90, 295-90 and 296-90 are hereby ordered remanded to the court of
origin for new trial.[9]
After the cases were remanded to the RTC, petitioner filed a Motion for Partial Summary
Judgment[10] on his attorneys fees. He claimed that the plaintiffs and the NPC deliberately did not inform
him about the execution of the compromise agreement, and that said parties connived with each other in
entering into the compromise agreement in order to unjustly deprive him of his attorneys
fees. Furthermore, he alleged:
xxxx
12. That, in view of such settlement, there are no more genuine issues between the
parties in the above-entitled cases except as to the attorneys fees; As such, this Honorable
Court may validly render a partial summary judgment on the claim for attorneys fees; and
13. That the undersigned counsel hereby MOVES for a partial summary
judgment on his lawful attorneys fees based on the pleadings and documents on file with
the records of this case.[11]
xxxx
Petitioner thus prayed that a partial summary judgment be rendered on his attorneys fess and
that NPC be ordered to pay him directly his lawful attorneys fees of P32,000.00 in each of the above cases,
for a total of P96,000.00.
NPC opposed the motion for partial summary of judgment. It alleged that a client may
compromise a suit without the intervention of the lawyer and that petitioners claim for attorneys fees
should be made against the plaintiffs. NPC likewise claimed that it settled the case in good faith and that
plaintiffs were paid in full satisfaction of their claims which included attorneys fees.
On March 15, 2000, the trial court issued an Order[12] granting petitioners motion for summary
judgment. It found that the parties to the compromise agreement connived to petitioners prejudice which
amounts to a violation of the provisions of the Civil Code on Human Relations.[13] It ruled that:
xxxx
There is no dispute that the Compromise Agreement was executed during the
pendency of these cases with the Honorable Court of Appeals. Despite the knowledge of
the defendant that the services of the movant was on a contingent basis, defendant
proceeded with the Compromise Agreement without the knowledge of Atty. Gubat. The
actuation of the defendant is fraudulently designed to deprive the movant of his lawful
attorneys fees which was earlier determined and awarded by the Court. Had defendant
been in good faith in terminating these cases, Atty. Gubat could have been easily
contacted.
x x x x[14]
The dispositive portion of the Order reads:
WHEREFORE, premises considered, plaintiffs Ala Mambuay, Norma Maba and

Acur Macarampat as well as defendant National Power Corporation are hereby ordered
to pay jointly and solidarily Atty. Mangontawar M. Gubat the sum of P96,000.00.[15]
NPC filed a Motion for Reconsideration[16] but the motion was denied by the
trial court in its June 27, 2000 Order.[17] Thus, NPC filed a Petition for Certiorari[18] before the CA docketed
as CA-G.R. SP No. 60722, imputing grave abuse of discretion on the court a quo for granting petitioners
Motion for Partial Summary Judgment. It prayed that the subject order be set aside insofar as NPC is
concerned.
NPC maintained that it acted in good faith in the execution of the compromise settlement. It
likewise averred that the lower courts award of attorneys fees amounting to P96,000.00 was clearly based
on the award of attorneys fees in the April 24, 1991 Decision of the trial court which had already been
reversed and set aside by the CA in CA-G.R. CV No. 33000. Moreover, NPC contended that petitioner
cannot enforce his charging lien because it presupposes that he has secured a favorable money judgment
for his clients. At any rate, since petitioner is obviously pursuing the compensation for the services he
rendered to his clients, thus, recourse should only be against them, the payment being their personal
obligation and not of respondent. NPC further alleged that even assuming that the subject attorneys fees
are those that fall under Article 2208 of the Civil Code[19] which is in the concept of indemnity for damages
to be paid to the winning party in a litigation, such fees belong to the clients and not to the lawyer, and
this form of damages has already been paid directly to the plaintiffs.
On the other hand, petitioner claimed that he was not informed of the compromise agreement or
furnished a copy of NPCs Motion to Dismiss Appeal. He alleged that the same was received only by Atty.
Mandangan who neither signed any of the pleadings nor appeared in any of the hearings before the
RTC. Petitioner clarified that his motion for a partial summary judgment was neither a request for the
revival of the vacated April 24, 1991 Decision nor an enforcement of the lien, but a grant of his contingent
fees by the trial court as indemnity for damages resulting from the fraudulent act of NPC and of his clients
who conspired to deprive him of the fees due him. He asserted that NPC cannot claim good faith because
it knew of the existence of his charging lien when it entered into a compromise with the plaintiffs.
Petitioner also alleged that NPCs remedy should have been an ordinary appeal and not a petition
for certiorari because the compromise agreement had settled the civil suits. Thus, when the trial court
granted the motion for partial summary judgment on his fees, it was a final disposition of the entire
case. He also argued that the issue of bad faith is factual which cannot be a subject of
a certiorari petition. He also insisted that NPCs petition was defective for lack of a board resolution
authorizing Special Attorney Comie Doromal (Atty. Doromal) of the Office of the Solicitor General (OSG)
to sign on NPCs behalf.
On September 9, 2002, the CA rendered the herein assailed Decision[20] ruling that:
The reasoning of Atty. Gubat is a crude palusot (a sneaky fallacious reasoning)

for how can one enforce a part of a decision which has been declared void and vacated. In
legal contemplation, there is no more decision because, precisely, the case was remanded
to the court a quo for further proceeding.
It was bad enough that Atty. Gubat tried to pull a fast [one] but it was [worse]
that respondent Judge fell for it resulting in a plainly erroneous resolution.
Like his predecessor Judge Adiong, Judge Macarambon committed basic errors
unquestionably rising to the level of grave abuse of discretion amounting to lack or excess
of jurisdiction.
WHEREFORE, finding merit in the petition, the Court issues the writ of certiorari
and strikes down as void the Order dated March 15, 2000 granting Atty. Mangontawar M.
Gubats Motion for Partial Summary Judgment as well as the Order dated June 27, 2000
denying petitioner National Power Corporations Motion for Reconsideration.
SO ORDERED.[21]
Petitioner filed a motion for reconsideration but the motion was denied by the CA in its January
19, 2005 Resolution,[22] Hence, this petition.
Petitioner insists on the propriety of the trial courts order of summary judgment on his attorneys
fees. At the same time, he imputes grave abuse of discretion amounting to lack or excess of jurisdiction
on the CA for entertaining respondents Petition for Certiorari. He maintains that the petition should have
been dismissed outright for being the wrong mode of appeal.
Our Ruling
Petitioners resort to Rule 65 is not proper.
At the outset, the petition should have been dismissed outright because petitioner resorted to the wrong
mode of appeal by filing the instant petition for certiorari under Rule 65. Section 1 of the said Rule explicitly
provides that a petition for certiorari is available only when there is no appeal or any plain, speedy, and
adequate remedy in the ordinary course of law. In this case, the remedy of appeal by way of a petition
for review on certiorari under Rule 45 is not only available but also the proper mode of appeal. For all
intents and purposes, we find that petitioner filed the instant petition for certiorari under Rule 65 as a
substitute for a lost appeal. We note that petitioner received a copy of the January 19, 2005 Resolution of
the CA denying his motion for reconsideration on January 28, 2005. Under Section 2 of Rule 45, petitioner
has 15 days from notice of the said Resolution within which to file his petition for review on certiorari. As
such, he should have filed his appeal on or before February 12, 2005. However, records show that the
petition was posted on March 1, 2005, or long after the period to file the appeal has lapsed.
At any rate, even if we treat the instant petition as one filed under Rule 45, the same should still be denied
for failure on the part of the petitioner to show that the CA committed a reversible error warranting the
exercise of our discretionary appellate jurisdiction.
Petitioners resort to summary judgment is not proper; he
is not entitled to an immediate relief as a matter of law,
for the existence of bad faith is a genuine issue of fact to
be tried.
A summary judgment is allowed only if, after hearing, the court finds that except as to the amount of
damages, the pleadings, affidavits, depositions and admissions show no genuine issue as to any material
fact and that the movant is entitled to a judgment as a matter of law.[23] The purpose of a summary
judgment is to avoid drawn out litigations and useless delays because the facts appear undisputed to the
mind of the court. Such judgment is generally based on the facts proven summarily by affidavits,
depositions, pleadings, or admissions of the parties.[24] For a full-blown trial to be dispensed with, the party
who moves for summary judgment has the burden of demonstrating clearly the absence of genuine issues
of fact, or that the issue posed is patently insubstantial as to constitute a genuine issue.[25] Genuine issue
means an issue of fact which calls for the presentation of evidence as distinguished from an issue which
is fictitious or contrived.[26]
Petitioner pleaded for a summary judgment on his fees on the claim that the parties intentionally
did not inform him of the settlement. He alleged that he never received a copy of NPCs Motion to Withdraw
Appeal before the CA and that instead, it was another lawyer who was furnished and who acknowledged
receipt of the motion. When he confronted his clients, he was allegedly told that the NPC deceived them
into believing that what they received was only a partial payment exclusive of the attorneys fees. NPC
contested these averments. It claimed good faith in the execution of the compromise agreement. It
stressed that the attorneys fees were already deemed included in the monetary consideration given to
the plaintiffs for the compromise.
The above averments clearly pose factual issues which make the rendition of summary judgment
not proper. Bad faith imports a dishonest purpose or some moral obliquity and conscious doing of a
wrong. It is synonymous with fraud, in that it involves a design to mislead or deceive another.[27] The trial
court should have exercised prudence by requiring the presentation of evidence in a formal trial to
determine the veracity of the parties respective assertions. Whether NPC and the plaintiffs connived and
acted in bad faith is a question of fact and is evidentiary. Bad faith has to be established by the claimant
with clear and convincing evidence, and this necessitates an examination of the evidence of all the
parties. As certain facts pleaded were being contested by the opposing parties, such would not warrant a
rendition of summary judgment.
Moreover, the validity or the correct interpretation of the alleged compromise agreements is still
in issue in view of the diverse interpretations of the parties thereto. In fact, in the Decision of the CA
dated January 24, 1996, the appellate court ordered the case to be remanded to the trial court for new
trial, thereby ignoring completely NPCs motion to dismiss appeal based on the alleged compromise
agreements it executed with the plaintiffs. Even in its assailed Decision of September 9, 2002, the CA did
not rule on the validity of the alleged compromise agreements. This is only to be expected in view of its
earlier ruling dated January 24, 1996 which directed the remand of the case to the court of origin for new
trial.
Considering the above disquisition, there is still a factual issue on whether the NPC and the
plaintiffs had already validly entered into a compromise agreement. Clearly, the NPC and the plaintiffs
have diverse interpretations as regards the stipulations of the compromise agreement which must be
resolved. According to the NPC, the amounts it paid to the plaintiffs were in full satisfaction of their
claims. Plaintiffs claim otherwise. They insist that the amounts they received were exclusive of attorneys
claim. They also assert that NPC undertook to pay the said attorneys fees to herein petitioner.
A client may enter into a compromise agreement without

the intervention of the lawyer, but the terms of the
agreement should not deprive the counsel of his
compensation for the professional services he had
rendered. If so, the compromise shall be subjected to
said fees. If the client and the adverse party who
assented to the compromise are found to have
intentionally deprived the lawyer of his fees, the terms of
the compromise, insofar as they prejudice the lawyer,
will be set aside, making both parties accountable to pay
the lawyers fees. But in all cases, it is the client who is
bound to pay his lawyer for his legal representation.
A compromise is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put
an end to one already commenced.[28] It is a consensual contract, binding upon the signatories/privies,
and it has the effect of res judicata.[29] This cannot however affect third persons who are not parties to
the agreement.[30]
Contrary to petitioners contention, a client has an undoubted right to settle a suit without the
intervention of his lawyer,[31] for he is generally conceded to have the exclusive control over the subject-
matter of the litigation and may, at any time before judgment, if acting in good faith, compromise, settle,
and adjust his cause of action out of court without his attorneys intervention, knowledge, or consent, even
though he has agreed with his attorney not to do so.[32] Hence, a claim for attorneys fees does not void
the compromise agreement and is no obstacle to a court approval.[33]
However, counsel is not without remedy. As the validity of a compromise agreement cannot be
prejudiced, so should not be the payment of a lawyers adequate and reasonable compensation for his
services should the suit end by reason of the settlement. The terms of the compromise subscribed to by
the client should not be such that will amount to an entire deprivation of his lawyers fees, especially when
the contract is on a contingent fee basis. In this sense, the compromise settlement cannot bind the lawyer
as a third party. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud
on the part of his client as the client is against abuse on the part of his counsel. The duty of the court is
not only to ensure that a lawyer acts in a proper and lawful manner, but also to see to it that a lawyer is
paid his just fees.[34]
Even if the compensation of a counsel is dependent only upon winning a case he himself secured
for his client, the subsequent withdrawal of the case on the clients own volition should never completely
deprive counsel of any legitimate compensation for his professional services.[35] In all cases, a client is
bound to pay his lawyer for his services. The determination of bad faith only becomes significant and
relevant if the adverse party will likewise be held liable in shouldering the attorneys fees.[36]
Petitioners compensation is a personal obligation of his clients who have benefited from his legal
services prior to their execution of the compromise agreement. This is strictly a contract between
them. NPC would only be made liable if it was shown that it has connived with the petitioners clients or
acted in bad faith in the execution of the compromise agreement for the purpose of depriving petitioner
of his lawful claims for attorneys fees. In each case, NPC should be held solidarily liable for the payment
of the counsels compensation. However, as we have already discussed, petitioners resort to summary
judgment is not proper. Besides, it is interesting to note that petitioner is the only one claiming for his
attorneys fees notwithstanding that plaintiffs counsels of record were petitioner herein and Atty.
Mandangan. Nevertheless, this is not at issue here. As we have previously discussed, this is for the trial
court to resolve.
The CA soundly exercised its discretion in resorting to a

liberal application of the rules. There are no vested right
to technicalities.
Concededly, the NPC may have pursued the wrong remedy when it filed a petition for certiorari instead
of an appeal since the ruling on attorneys fees is already a ruling on the merits.However, we find that the
trial court gravely abused its discretion amounting to lack or excess of jurisdiction when it ordered NPC
solidarily liable with the plaintiffs for the payment of the attorneys fees. The rule that a petition for certiorari
is dismissible when the mode of appeal is available admits of exceptions, to wit: (a) when the writs issued
are null; and, (b) when the questioned order amounts to an oppressive exercise of judicial
authority.[37] Clearly, respondent has shown its entitlement to the exceptions.
The same liberal application should also apply to the question of the alleged lack of authority of Atty.
Doromal to execute the certification of non-forum shopping for lack of a board resolution from the
NPC. True, only individuals vested with authority by a valid board resolution may sign the certificate of
non-forum shopping in behalf of the corporation, and proof of such authority must be attached to the
petition,[38] the failure of which will be sufficient cause for dismissal. Nevertheless, it cannot be said that
Atty. Doromal does not enjoy the presumption that he is authorized to represent respondent in filing the
Petition for Certiorari before the CA. As Special Attorney, he is one of the counsels of NPC in the
proceedings before the trial court, and the NPC never questioned his authority to sign the petition for its
behalf.
In any case, the substantive issues we have already discussed are justifiable reasons to relax the
rules of procedure. We cannot allow a patently wrong judgment to be implemented because of technical
lapses. This ratiocination is in keeping with the policy to secure a just, speedy and inexpensive disposition
of every action or proceeding.[39] As we have explained inAlonso v. Villamor:[40]
There is nothing sacred about processes or pleadings, their forms or contents.
Their sole purpose is to facilitate the application of justice to the rival claims of contending
parties. They were created, not to hinder and delay, but to facilitate and promote, the
administration of justice. They do not constitute the thing itself, which courts are always
striving to secure to litigants. They are designed as the means best adopted to obtain that
thing. In other words, they are a means to an end. When they lose the character of the
one and become the other, the administration of justice is at fault and courts are
correspondingly remiss in the performance of their obvious duty.
The error in this case is purely technical. To take advantage of it for other
purposes than to cure it, does not appeal to a fair sense of justice. Its presentation as
fatal to the plaintiff's case smacks of skill rather than right. A litigation is not a game of
technicalities in which one more deeply schooled and skilled in the subtle art of movement
and position, entraps and destroys the other. It is rather, a contest in which each
contending party fully and fairly lays before the court the facts in issue and then, brushing
aside as wholly trivial and indecisive all imperfections of form and technicalities of
procedure, asks that justice be done upon the merits. Law-suits, unlike duels, are not to
be won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to
justice and becomes its great hindrance and chief enemy, deserves scant consideration
from courts. There should be no vested rights in technicalities. No litigant should be
permitted to challenge a record of a court of these Islands for defect of form when his
substantial rights have not been prejudiced thereby.
WHEREFORE, the Petition is hereby DISMISSED for lack of merit. The September 9,
2002 Decision of the Court of Appeals and its January 19, 2005 Resolution are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 132, 135, and 138.
[2]
CA rollo, pp. 48-56; penned by Judge Santos B. Adiong.
[3]
Id. at 55.
[4]
Rollo, p. 34.
[5]
Id. at 38-40.
[6]
Id. at 35-37. Except as to the amount, name of plaintiff, and the Civil Case No., the
Acknowledgment Receipts signed by each plaintiff were similarly worded in this manner:
This is to acknowledge receipt from the NATIONAL POWER CORPORATION (NPC) the sum
of (amount) as full and complete settlement of the cases entitled in (name of case) in (civil
case no.) which is now pending appeal before the Court of Appeals.
With the execution of this Acknowledgment Receipt, it is understood that I and my heirs and
assigns have no further claim against NPC with respect to the damage to improvements over
my parcel of land which was affected by the 69 KV Transmission Line.
Iligan City, Philippines, 2 April 1992.
Sgd.
(name of claimant)
Representing NPC:
(Sgd.)
CANDIDATO RAMOS
(Sgd.)
ATTY. ARTHUR L. ABUNDIENTE
Counsel for Defendant-NPC
[7]
Id. at 40.
[8]
CA rollo, pp 62-73; penned by Associate Justice Cancio C. Garcia and concurred in by Associate
Justices Eugenio S. Labitoria and Portia Alio-Hormachuelos.
[9]
Id. at 72.
[10]
Id. at 74-77.
[11]
Id. at 76.
[12]
Id. at 81-82; penned by Acting Presiding Judge Moslemen T. Macarambon.
[13]
Article 19. 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.
Article 20. Every person who, contrary to law, willfully or negligently causes damage to another,
shall indemnify the latter for the same.
Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.
[14]
[15]
Id. at 82.
[16]
Id. at 83-86.
[17]
Id. at 87; penned by Judge Santos B. Adiong.
[18]
Id. at 2-24.
[19]
In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial
costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and
expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
[20]
Rollo, pp. 26-31; penned by Associate Justice Hilarion L. Aquino and concurred in by Associate
Justices Salvador J. Valdez, Jr. and Jose L. Sabio, Jr.
[21]
Id at 30-31.
[22]
Id. at 32-33; penned by Associate Justice Jose Sabio, Jr. and concurred in by Associate Justices
Godardo A. Jacinto and Salvador J. Valdez.
[23]
[24]
Nocom v. Camerino, G.R. No. 182984, February 10, 2009, 578 SCRA 390, 410.
[25]
Philippine Countryside Rural Bank v. Toring, G.R. No. 157862, April 16, 2009.
[26]
Manufacturers Hanover Trust Co. and/or Chemical Bank v. Guerrero, 445 Phil. 770, 776 (2003).
[27]
Solidbank Corporation v. Mindanao Ferroalloy Corporation, G.R. No. 153535, July 28, 2005,
464 SCRA 409, 426.
[28]
CIVIL CODE, Article 2028.
[29]
CIVIL CODE, Article 2037.
[30]
University of the East v. Secretary of Labor and Employment, G.R. Nos. 93310-12, November
21 1991, 204 SCRA 254, 262.
[31]
Rustia v. Judge of First Instance of Batangas, 44 Phil 62, 65 (1922).
[32]
Samonte v. Samonte, 159-A Phil. 777, 791-792 (1975).
[33]
Cabildo v. Hon. Navarro, 153 Phil. 310, 314 (1973).
[34]
Masmud v. National Labor Relations Commission, G.R. No. 183385, February 13, 2009, 579 SCRA
509, 520.
[35]
National Power Corporation v. National Power Corporation Employees and Workers
Association, 178 Phil. 1, 10-11 (1979).
[36]
See Aro v. Hon. Naawa, 137 Phil. 745 (1969).
[37]
Jan-Dec Construction Corporation v. Court of Appeals, G.R. No. 146818, February 6, 2006,
481 SCRA 556, 564.
[38]
Philippine Airlines, Inc. v. Flight Attendants and Stewards Association of the Philippines, G.R.
No. 143088, January 24, 2006, 479 SCRA 605, 608.
[39]
[40]
16 Phil 315, 321-322 (1910).
Supreme Court
Manila
SECOND DIVISION
TIGER CONSTRUCTION AND G.R. No. 164141
DEVELOPMENT CORPORATION,
Petitioner,
- versus -
REYNALDO ABAY, RODOLFO
ARCENAL, ROLANDO ARCENAL,

PEDRO BALANA, JESUS DEL
AYRE, ARNEL EBALE, ARNEL
FRAGA, ANGEL MARAO,
METHODEO SOTERIO, MANUEL
TAROMA, PIO ZETA, ISAIAS
JAMILIANO, ARNALDO RIVERO,
NOEL JAMILIANO JOEL ARTITA,
DANIEL DECENA, ZENAIDA
LAZALA, RONNIE RIVERO,
RAMON ABAY, JOSE ABAY,
HECTOR ABAY, EDISON ABAIS,
DIOGENES ARTITA, FLORENTINO
B. ARTITA, ROLANDO ANTONIO,
JERRY ARAA, MAXIMENO M.
BARRA, ARMANDO BAJAMUNDI,
DANIEL BARRION, RENANTE Present:
BOALOY, ROLANDO BONOAN,
FRANCISCO BAUTISTA, NOEL CARPIO, J., Chairperson,
BENAUAN, EDGARDO BOALOY, BRION,
REYNALDO BONOAN, DIONISIO DEL CASTILLO,
BOSQUILLOS, ROGELIO B. ABAD, and
COPINO, JR., RONNIE DELOS PEREZ, JJ.
SANTOS, FELIX DE SILVA,
REYNALDO LASALA, LARRY
LEVANTINO, DOMINGO LOLINO,
ROSALIO LOLINO, PERFECTO
MACARIO, ROLANDO MALLANTA,
ANASTACIO MARAVILLA,
ROSARIO MARBELLA, GILBERTO

MATUBIS, RODEL MORILLO,
LORENZO PAGLINAWAN, JOSE
PANES, RUBEN PANES, MATEO
PANTELA, SANTOS SALIRE,
GERMAN TALAGTAG, HILARIO
TONAMOR, JESUS TAMAYO, JOSE
TRANQUILO, EDISON VATERO, and Promulgated:
ROBERTO VERGARA,
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
While the general rule is that any decision rendered without jurisdiction is a total nullity and may be struck
down at any time, the party that asserts it must be in good faith and not evidently availing thereof simply
to thwart the execution of an award that has long become final and executory.
This Petition for Review on Certiorari[1] filed by petitioner Tiger Construction and Development
Corporation (TCDC) assails the February 27, 2004[2] Resolution of the Court of Appeals (CA) in CA-G.R.
SP No. 82344 which dismissed its petition for certiorari as well as the June 29, 2004[3] Resolution of the
same court which denied its motion for reconsideration.The June 29, 2004 Resolution disposed as follows:
This petition was dismissed on February 27, 2004 as follows:
Considering that the Certification against forum-shopping is

signed by the manager of petitioner-corporation, unaccompanied by
proof that he is authorized to represent the latter in this case, the Court
resolves to DISMISS the petition.
In its Motion for Reconsideration to the Resolution, petitioner attached Annex A which is
the certification of the Board Resolution of TCDC authorizing Mr. Robert Kho to represent
the corporation in filing the petition in this case.
Unfortunately, the Board met for the grant of such authority only on February 24, 2004 or
four (4) days after the petition was filed on February 20, 2004. In other words, the Board
Resolution was a mere afterthought and thus will not serve to cure the fatal omission.
WHEREFORE, the Motion for Reconsideration is DENIED for lack of merit.
SO ORDERED.[4]
Factual Antecedents
On the basis of a complaint filed by respondents Reynaldo Abay and fifty-nine (59) others before the
Regional Office of the Department of Labor and Employment (DOLE), an inspection was conducted by
DOLE officials at the premises of petitioner TCDC. Several labor standard violations were noted, such as
deficiencies in record keeping, non-compliance with various wage orders, non-payment of holiday pay,
and underpayment of 13th month pay. The case was then set for summary hearing.
However, before the hearing could take place, the Director of Regional Office No. V, Ma. Glenda A. Manalo
(Director Manalo), issued an Order on July 25, 2002, which reads:
Consistent with Article 129 of the Labor Code of the Philippines in relation to Article
217 of the same Code, this instant case should be referred back to the National Labor
Relations Commission (NLRC) Sub-Arbitration Branch V, Naga City, on the ground that
the aggregate money claim of each worker exceeds the jurisdictional amount of this Office
[which] is (sic) Five Thousand Pesos Only (P5,000.00).
WHEREFORE, in view of the foregoing, this case falls under the original and
exclusive jurisdiction of the National Labor Relations Commission as provided under Article
217 of the Labor Code of the Philippines.[5]
Before the NLRC could take any action, DOLE Secretary Patricia A. Sto. Tomas (Secretary Sto. Tomas), in
an apparent reversal of Director Manalos endorsement, issued another inspection authority on August 2,
2002 in the same case. Pursuant to such authority, DOLE officials conducted another investigation of
petitioners premises and the same violations were discovered.
The DOLE officials issued a Notice of Inspection Results to petitioner directing it to rectify the violations
within five days from notice. For failure to comply with the directive, the case was set for summary hearing
on August 19, 2002. On even date, petitioner allegedly questioned the inspectors findings and argued that
the proceedings before the regional office had been rendered moot by the issuance of the July 25,
2002 Order endorsing the case to the NLRC. According to petitioner, this July 25, 2002 Order was
tantamount to a dismissal on the ground of lack of jurisdiction, which dismissal had attained finality; hence,
all proceedings before the DOLE regional office after July 25, 2002 were null and void for want of
jurisdiction.
On September 30, 2002, Director Manalo issued an Order directing TCDC to pay P2,123,235.90 to its
employees representing underpayment of salaries, 13th month pay, and underpayment of service
incentive leave pay and regular holiday pay. TCDC filed a Motion for Reconsideration on October 17,
2002 and a Supplemental Pleading to the Motion for Reconsideration on November 21, 2002, reiterating
the argument that Director Manalo had lost jurisdiction over the matter.
Apparently convinced by petitioners arguments, Director Manalo again endorsed the case to the NLRC
Regional Arbitration Branch V (Legaspi City). On January 27, 2003, the NLRC returned the entire records
of the case to Director Manalo on the ground that the NLRC does not have jurisdiction over the complaint.
Having the case in her office once more, Director Manalo finally issued an Order dated January 29,
2003 denying petitioners motion for reconsideration for lack of merit.
Since TCDC did not interpose an appeal within the prescribed period, Director Manalo issued forthwith a
Writ of Execution on February 12, 2003.
On May 14, 2003, while the sheriff was in the process of enforcing the Writ of Execution, and more than
three months after the denial of its motion for reconsideration, TCDC filed an admittedly belated appeal
with the DOLE Secretary. There it reiterated its argument that, subsequent to the July 25, 2002 Order, all
of Director Manalos actions concerning the case are null and void for having been issued without
jurisdiction.
Acting on the ill-timed appeal, Secretary Sto. Tomas issued an Order[6] dated January 19, 2004 dismissing
petitioners appeal for lack of merit. Citing Guico v. Quisumbing,[7] Secretary Sto. Tomas held that
jurisdiction over the case properly belongs with the regional director; hence, Director Manalos
endorsement to the NLRC was a clear error. Such mistakes of its agents cannot bind the State, thus
Director Manalo was not prevented from continuing to exercise jurisdiction over the case.
Petitioner then filed a petition for certiorari[8] before the CA but the petition was dismissed for failure to
certify against non-forum shopping. Petitioners motion for reconsideration was likewise denied because
the board resolution submitted was found to be a mere after-thought.
Petitioner thus filed the instant petition, which we initially denied on September 15, 2004[9] on the ground
that the petition did not show any reversible error in the assailed Resolutions of the CA. Undaunted, TCDC
filed a Motion for Reconsideration[10] insisting that the CA erred in dismissing its petition for certiorari on a
mere technicality. Petitioner argues that the strict application of the rule on verification and certification of
non-forum shopping will result in a patent denial of substantial justice.
Since respondents did not[11] file a comment on the motion for reconsideration, we resolved[12] to grant
the same and to reinstate the petition.[13]
Issue
The issue in the case is whether petitioner can still assail the January 29, 2003 Order of Director Manalo
allegedly on the ground of lack of jurisdiction, after said Order has attained finality and is already in the
execution stage.
Our Ruling
Petitioner admits that it failed to appeal the January 29, 2003 Order within the period prescribed by law. It
likewise admits that the case was already in the execution process when it resorted to a belated appeal
to the DOLE Secretary. Petitioner, however, excuses itself from the effects of the finality of the Order by
arguing that it was allegedly issued without jurisdiction and may be assailed at any time.
While it is true that orders issued without jurisdiction are considered null and void and, as a general rule,
may be assailed at any time, the fact of the matter is that in this case, Director Manalo acted within her
jurisdiction. Under Article
128 (b) of the Labor Code,[14] as amended by Republic Act (RA) No. 7730,[15] the DOLE Secretary and her
representatives, the regional directors, have jurisdiction over labor standards violations based on findings
made in the course of inspection of an employers premises. The said jurisdiction is not affected by the
amount of claim involved, as RA 7730 had effectively removed the jurisdictional limitations found in Articles
129 and 217 of the Labor Code insofar as inspection cases, pursuant to the visitorial and enforcement
powers of the DOLE Secretary, are concerned.[16] The last sentence of Article 128(b) of the Labor Code
recognizes an exception[17] to the jurisdiction of the DOLE Secretary and her representatives, but such
exception is neither an issue nor applicable here.
Director Manalos initial endorsement of the case to the NLRC, on the mistaken opinion that the claim was
within the latters jurisdiction, did not oust or deprive her of jurisdiction over the case.She therefore retained
the jurisdiction to decide the case when it was eventually returned to her office by the DOLE
Secretary. Jurisdiction or authority to try a certain case is conferred by law and not by the interested
parties, much less by one of them, and should be exercised precisely by the person in authority or body
in whose hands it has been placed by the law.[18]
We also cannot accept petitioners theory that Director Manalos initial endorsement of the case to the
NLRC served as a dismissal of the case, which prevented her from subsequently assuming jurisdiction
over the same. The said endorsement was evidently not meant as a final disposition of the case; it was a
mere referral to another agency, the NLRC, on the mistaken belief that jurisdiction was lodged with the
latter. It cannot preclude the regional director from subsequently deciding the case after the mistake was
rectified and the case was returned to her by the DOLE Secretary, particularly since it was a labor case
where procedural lapses may be disregarded in the interest of substantial justice.[19]
Procedural due process as understood in administrative proceedings follows a more flexible standard as
long as the proceedings were undertaken in an atmosphere of fairness and justice.[20]Although Director
Manalos endorsement of the complaint to the NLRC turned out to be ill-advised (because the regional
director actually had jurisdiction), we note that no right of the parties was prejudiced by such
action. Petitioner was properly investigated, received a Notice of Inspection Results, participated fully in
the summary hearings, filed a Motion for Reconsideration, and even a Supplemental Pleading to the
Motion for Reconsideration.
There is also reason to doubt the good faith of petitioner in raising the alleged lack of jurisdiction. If, in all
honesty and earnestness, petitioner believed that Director Manalo was acting without jurisdiction, it could
have filed a petition for certiorari under Rule 65 within the proper period prescribed, which is 60 days from
notice of the order.[21] Its failure to do so, without any explanation for such failure, belies its good faith. In
such circumstances, it becomes apparent that petitioner is merely using the alleged lack of jurisdiction in
a belated attempt to reverse or modify an order or judgment that had already become final and
executory. This cannot be done. In Estoesta, Sr. v. Court of Appeals,[22] cited by petitioner itself (albeit
out of context), we ruled that when a decision has already become final and executory, an appellate court
loses jurisdiction to entertain an appeal much less to alter, modify or reverse the final and executory
judgment. Thus:
Well-settled is the rule that perfection of an appeal in the manner and within the
reglementary period allowed by law is not only mandatory but also jurisdictional. Thus, if
no appeal is perfected on time, the decision becomes final and executory by operation of
law after the lapse of the reglementary period of appeal. Being final and executory the
decision in question can no longer be altered, modified, or reversed by the trial court nor
by the appellate court. Accordingly, the prevailing party is entitled as a matter of right to
a writ of execution the issuance of which is a ministerial duty compelled by mandamus.[23]
It is actually within this context that the Court ruled that the appellate court, in reviewing a judgment that
is already final and executory, acts without jurisdiction, and its decision is thus void and can be assailed at
any time.
In view of our ruling above that the January 29, 2003 Order was rendered with jurisdiction and
can no longer be questioned (as it is final and executory), we can no longer entertain petitioners half-
hearted and unsubstantiated arguments that the said Order was allegedly based on erroneous
computation and included non-employees. Likewise, we find no more need to address petitioners
contention that the CA erred in dismissing its petition on the ground of its belated compliance with the
requirement of certification against forum-shopping.
WHEREFORE, the instant petition is DENIED. The assailed February 27, 2004 Resolution as well as the
June 29, 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 82344 are AFFIRMED insofar as it
dismisses Tiger Construction and Development Corporations petition and motion for
reconsideration. Costs against petitioner.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE P. PEREZ
Associate Justice
ATTESTATION

ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 9-26.
[2]
Id. at 28; penned by Associate Justice Romeo A. Brawner and concurred in by Associate Justices
Rebecca De Guia-Salvador and Jose C. Reyes, Jr.
[3]
Id. at 30.
[4]
Assailed Resolution, id. at 30.
[5]
Id. at 12.
[6]
[7]
359 Phil. 197, 207 (1998).
[8]
CA rollo, pp. 1-18.
[9]
Rollo, p. 76.
[10]
Id. at 77-80.
[11]
Id. at 81, 98.
[12]
Id. at 102-103.
[13]
In light of the parties failure to file their respective memoranda within the fixed periods, the Court
resolved on November 12, 2008 (id. at 115) to deem waived the filing of memoranda for both parties.
[14]
Article 128 of the Labor Code provides:
Article 128. VISITORIAL AND ENFORCEMENT POWER. x x x
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where
the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the
appropriate authority for the enforcement of their orders, except in cases where the employer contests
the findings of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection.
[15]
Entitled AN ACT FURTHER STRENGTHENING THE VISITORIAL AND ENFORCEMENT POWERS OF THE
SECRETARY OF LABOR AND EMPLOYMENT, AMENDING FOR THE PURPOSE ARTICLE 128 OF P.D.
442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES, dated June
2, 1994.
[16]
Ex-Bataan Veterans Security Agency, Inc. v. Laguesma, G.R. No. 152396, November 20, 2007, 537
SCRA 651, 659; V.L. Enterprises v. Court of Appeals, G.R. No. 167512, March 12, 2007, 518 SCRA
174, 175; EJR Crafts Corporation v. Court of Appeals, G.R. No. 154101, March 10, 2006, 484 SCRA
340, 350; Guico v. Quisumbing, supra note 7.
[17]
As explained in Ex-Bataan Veterans Security Agency, Inc. v. Laguesma, supra note 16, if the labor
standards case is covered by the exception clause in Article 128(b) of the Labor Code, then the
Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC. In
order to divest the Regional Director or his representatives of jurisdiction, the following elements must
be present: (a) that the employer contests the findings of the labor regulations officer and raises
issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters;
and (c) that such matters are not verifiable in the normal course of inspection. The rules also provide
that the employer shall raise such objections during the hearing of the case or at any time after receipt
of the notice of inspection results.
[18]
Tolentino v. Quirino, 64 Phil. 873, 874 (1937).
[19]
Pamplona Plantation Company, Inc. v. Tinghil, 491 Phil. 15, 30 (2005); Ranara v. National Labor
Relations Commission, G.R. No. 100969, August 14, 1992, 212 SCRA 631, 634.
[20]
T.H. Valderrama and Sons, Inc. v. Drilon, G.R. No. 78212, January 22, 1990, 181 SCRA 308.
[21]
See National Federation of Labor v. Hon. Laguesma, 364 Phil. 405, 411 (1999).
[22]
G.R. No. 74817, November 8, 1989, 179 SCRA 203, 211-212.
[23]
Id.
Supreme Court
Manila
SECOND DIVISION

Appellee,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
WILSON SUAN y JOLONGON, Promulgated:

Appellant. February 22, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Once again we find occasion to reiterate the most echoed constitutional guarantee that an accused in
criminal prosecutions is presumed innocent until his guilt is proven beyond reasonable doubt.[1] To
overcome the presumption of innocence and arrive at a finding of guilt, the prosecution is duty bound to
establish with moral certainty the elemental acts constituting the offense.In prosecutions involving
narcotics, the narcotic substance itself constitutes the corpus delicti of the offense and the fact of its
existence is vital to sustain a judgment of conviction beyond reasonable doubt.[2] The identity of the
narcotic substance must therefore be established beyond reasonable doubt.[3]
We are compelled to acquit appellant in this case because the prosecution miserably failed to establish
the identity of the substance allegedly seized from him. In addition, we find that there was a break in the
chain of custody thereby casting doubt on the integrity and evidentiary value of the substance allegedly
seized from the appellant.
This is an appeal from the Decision[4] dated March 25, 2008 of the Court of Appeals (CA) in CA-G.R. CR
No. 00054. The CA affirmed in toto the Decision[5] dated November 17, 2004 of the Regional Trial Court
(RTC) of Lanao del Norte, Branch 01, Iligan City finding appellant Wilson Suan y Jolongon guilty of
violation of Section 11, Article II of Republic Act (RA) No. 9165, the Comprehensive Dangerous Drugs Act
of 2002.
Factual Antecedents
On August 12, 2003, an Information was filed with the RTC of Lanao del Norte, Branch 6 against appellant
for violation of Section 5, Article II of RA 9165. The case was docketed as Criminal Case No.
10315. Subsequent to his arraignment on September 6, 2003 wherein he pleaded not guilty and before
the pre-trial, appellant filed an Urgent Motion for Re-Investigation[6]which the trial court granted
on September 19, 2003.[7] As a result of the re-investigation, an Amended Information[8] was filed
charging appellant with violation of Section 11, Article II of RA 9165. The accusatory portion of the
Amended Information reads:
The undersigned Prosecutor III of Iligan City accuses WILSON SUAN y Jolongon for
VIOLATION OF REPUBLIC ACT NO. 9165, committed as follows:
That on or about August 12, 2003, in the City of Iligan, Philippines, and
within the jurisdiction of this Honorable Court, the said accused, without
being authorized by law, did then and there willfully, unlawfully and
feloniously have in his possession, custody and control one (1) sachet of
methamphetamine hydrochloride, a dangerous drug commonly known
as shabu, weighing more or less 0.01 gram.
Contrary to and in violation of Republic Act No. 9165, Article II, Section 11, thereof.
City of Iligan, October 13, 2003.
The Amended Information was raffled to Branch 01 wherein appellant was arraigned and to which offense
he pleaded not guilty.
The evidence for the prosecution, as culled from the testimonies of PO2 Allan Labasano (PO2 Labasano),
PO1 Samsodim Gondol (PO1 Gondol),[9] and Forensic Chemist Police Senior Inspector April
Carvajal[10] (Forensic Chemist Carvajal), is as follows:
On August 12, 2003 at about 3:30 a.m., PO2 Labasano and PO1 Gondol conducted a buy-bust operation
at Purok 4, Saray, Iligan City. PO1 Gondol, who was provided with two pieces of P50.00[11] bills, acted as
the buyer while PO2 Labasano served as back-up. Upon reaching the target area, the two saw appellant
sitting outside the house. PO1 Gondol approached appellant and the latter asked the former if he wanted
to buy a narcotic substance. PO1 Gondol replied I will buy Piso, meaning P100.00. After a brief exchange
of the money and the stuff, appellant was informed of his constitutional rights and thereafter was
arrested. Appellant was brought to the police headquarters and presented before the investigator. At the
police headquarters, PO2 Labasano prepared a Certificate of Inventory. The buy-bust money and the
plastic sachet containing the stuff they recovered were turned over to the evidence custodian as related
by PO1 Gondol, and to the Team Leader, as testified to by PO2 Labasano. Upon request, the plastic sachet
was sent to the PNP Regional Crime Laboratory for examination.[12]
Forensic Chemist Carvajal received the written request for laboratory examination of one sachet containing
white crystalline substance submitted to their office.[13] She conducted the test and the result showed that
it contained methamphetamine hydrochloride or shabu, a dangerous drug. She then prepared Chemistry
Report No. D-500-2003[14] on her finding on the tests.
Appellant denied the charge against him. He claimed that while he was sleeping on a bench beside the
road, PO2 Labasano suddenly held his arm and handcuffed him. PO2 Labasano inserted his hand into
appellants pocket, frisked him and shabu was later shown to him. He was brought to Tipanoy for a drug
test and detained in jail for violation of the anti-drugs law.
Giving full faith and credence to the prosecutions version, the trial court found the test-buy and buy-bust
operation established. In its Decision dated November 17, 2004, the trial court found appellant guilty
beyond reasonable doubt of the crime charged and disposed as follows:
WHEREFORE, premises considered, the Court find[s] the guilt of the accused WILSON
SUAN y JOLONGON beyond reasonable doubt of the crime charged against him in the
information and hereby sentences him to suffer the penalty of imprisonment from 12
years and 1 day to 20 years and to pay a fine of P100,000.00.
The shabu taken from him is hereby confiscated in favor of the government.
SO ORDERED.[15]
Appellant appealed the trial courts Decision to the CA. Finding no error
committed by the trial court in convicting appellant of the offense of illegal possession of dangerous drug,
the CA affirmed the trial courts decision.
Undaunted, appellant seeks a final recourse before this Court via the instant appeal.
In the Resolution dated November 24, 2008, we accepted the appeal and notified the parties that they
may file their respective supplemental briefs if they so desire. However, both parties manifested that they
are adopting their respective briefs earlier submitted with the CA.
In support of his prayer for a reversal of the verdict of his conviction, appellant contends: a) that the
testimonies of the police operatives contained material inconsistencies and contradictions as to (i) whether
a surveillance was made prior to the buy-bust operation, (ii) whether there was marked money used in
the operation, and, (iii) the amount of the shabu sold; b) there was no proper identification of the illegal
drug; c) the prosecution witnesses failed to testify on matters regarding the possession of the illegal drug;
and, d) the defense of alibi was not properly appreciated.
Our Ruling
The appeal is meritorious.
The inconsistencies in the testimonies of the

police operatives as regards prior surveillance
and use of marked money are immaterial.
While it may be conceded that there are a number of inconsistencies in the testimonies of the prosecutions
principal witnesses as alluded to above, they are not, in our view, substantial enough to impair the veracity
of the prosecutions evidence that a buy-bust operation resulting in the arrest of appellant, was indeed
conducted. The maxim falsus in unus, falsus in omnibus does not lay down a categorical test of
credibility. While witnesses may differ in their recollection of an incident, it does not necessarily follow from
their disagreements that both or all of them are not credible and their testimonies completely discarded
as worthless.
A prior surveillance much less a lengthy one, is not necessary during an entrapment as in the case at
bench. To be sure, there is no textbook method of conducting buy-bust operations. The Court has left to
the discretion of police authorities the selection of effective means to apprehend drug dealers. In this case,
the buy-bust operation was set up precisely to test the veracity of the informants tip and to arrest the
malefactor if the report proved to be true. Thus in one case[16] we emphasized our refusal to establish
on a priori basis what detailed acts the police authorities might credibly undertake in their entrapment
operations.
The doubt cast by the appellant on whether marked money was used in the operation did not in any way
shatter the factuality of the transaction. Neither law nor jurisprudence requires the presentation of any of
the money used in a buy-bust operation.[17] Much less is it required that the money be marked. In fact,
not even the absence or non-presentation of the marked money would weaken the evidence for the
prosecution.[18] The elements necessary to show that the crime had indeed been committed are proof that
the illicit transaction took place coupled with the presentation in court of the corpus delicti or the illicit
drug.[19]
It is a fundamental rule that the trial courts findings that are factual in nature and that involve credibility
are accorded respect when no glaring errors; gross misapprehension of facts; or speculative, arbitrary and
unsupported conclusions can be gathered from such findings.[20] The rule finds an even more stringent
application where said findings are sustained by the CA.[21]However, this rule will not apply in this case. As
will be discussed shortly, the courts below overlooked two significant and substantial facts which if
considered, as we do now consider, will affect the outcome of the case.
The prosecution failed to establish beyond

reasonable doubt the identity of the substance
recovered from the appellant
The main issue in the case at bench is whether the prosecution witnesses were able to properly identify
the dangerous drug taken from appellant. For while the drug may be admitted in evidence it does not
necessarily follow that the same should be given evidentiary weight. It must be stressed that admissibility
should not be equated with its probative value in proving the corpus delicti.
Appellant submits that the shabu alleged to have been sold was not properly identified by the police
officers thus rendering doubtful and open to suspicion if the shabu submitted for examination is indeed
the same substance sold by him.
We agree. As we have stated at the outset, the prosecution miserably failed to establish the identity of
the substance allegedly recovered from the appellant. Records show that while the police officers were
able to prove the factuality of the buy-bust operation, the prosecution dismally failed to prove the identity
of the substance taken from appellant.
The Certificate of Inventory[22] prepared by PO2 Labasano merely stated that a sachet of a substance
weighing 0.01 gram was seized from the appellant. PO2 Labasano made no mention that he placed some
markings on the sachet for purposes of future identification. Thus:
TO WHOM IT MAY CONCERN:

THIS IS TO CERTIFY that an inventory was conducted in connection with the following
operation:
Persons Arrested : Wilson Suan Y Jolongon

Date/Time of Arrest : 3:30 AM of 12 August 2003
Place of Arrest : Purok 4, Barangay Saray, Iligan City
This is to certify further that the following items were seized during the said operation:
One [1] sachet of suspected shabu weighing more or less .01 gram
Two [2] pieces Php 50.00 peso bill marked money
However, we find it rather odd that in the Request for Laboratory Examination/Urine Test[23] prepared by
Police Chief Inspector Jesus Atchico Rebua and addressed to the Provincial Chief of Police, Lanao del
Norte, the item allegedly seized from the appellant was already marked as Exhibit A. Thus:
xxxx
2. Request the conduct of laboratory examination of evidence to determine the

presence of Dangerous Drugs or controlled precursors and essential chemicals:
EXHIBITS
Exh. A one small heat-sealed, plastic transparent sachet containing white
crystalline granules suspected to be shabu weighing
more or less 0.01 grams marked as Exh. A placed in a
stapled transparent plastic bag.
Still, in the Memorandum[24] for the Regional Chief of the Philippine National Police (PNP) Crime Laboratory
Office prepared by the Provincial Chief, the item subject of the request for laboratory examination was
already referred to as with markings. Thus:
xxxx
2. In connection with the above reference, request conduct laboratory examination on
the specimen described below to determine the presence of dangerous drugs.
EXH. A One (1) small heat-sealed transparent plastic sachet marked as Exhibit
A containing white crystalline substance suspected to be SHABU placed inside
a big staple-sealed transparent plastic pack with markings.
Thus, when the Certificate of Inventory was prepared by P02 Labasano, the item allegedly seized from
the appellant bore no markings. However, in the Request for Laboratory Examination/Urine Test prepared
by the Provincial Chief of Police, the item being subjected for laboratory examination was already referred
to as Exhibit A. Next, in the Memorandum of the Regional Chief of PNP, the item that was referred to the
Forensic Chemist already had other markings. From the foregoing, there is already doubt as to the identity
of the substance being subjected for laboratory examination. At this time, we are no longer sure whether
the item allegedly seized by PO2 Labasano from the appellant was the same item referred to by the
Provincial Chief and then the Regional Chief of PNP to the Forensic Chemist for laboratory examination.
Worse, in the Certificate of Inventory prepared by PO2 Labasano, the Memorandum prepared by the
Provincial Chief, and the transmittal letter prepared by the Regional Chief, the substance supposedly
weighed 0.01 gram. However, in the Chemistry Report No. D-500-2003[25] prepared by Forensic Chemist
Carvajal, the substance was indicated as weighing 0.1 gram. Thus:
xxxx
SPECIMEN SUBMITTED:
A = One (1) heat-sealed transparent plastic sachet with markings EXHIBIT A
containing 0.1 gram of white crystalline substance, placed in a transparent plastic bag
with markings EXHIBIT A.
xxxx
Indeed there is absolutely nothing in the evidence on record that tends to show identification of the
drug. For sure, the difference particularly in the weight of the substance is fatal to the case of the
prosecution.
Sale or possession of a dangerous drug can never be proven without seizure and identification of the
prohibited drug. In People v. Magat,[26] we held that the existence of dangerous drugs is a condition sine
qua non for conviction for the illegal sale and possession of dangerous drugs, it being the very corpus
delicti of the crime. In prosecutions involving narcotics, the narcotic substance itself constitutes the corpus
delicti of the offense and the fact of its existence is vital to sustain a judgment of conviction beyond
reasonable doubt. Of paramount importance therefore in these cases is that the identity of the dangerous
drug be likewise established beyond reasonable doubt.[27]
It is lamentable that the trial court and even the appellate court overlooked the significance of the absence
of this glaring detail in the records of the case but instead focused their deliberation on the warrantless
arrest of appellant in arriving at their conclusions.
The prosecution failed to establish the unbroken

chain of custody of the confiscated substance.
Not only did the prosecution fail to identify the substance that was allegedly seized from the appellant; it
also failed to establish that the chain of custody of the substance was unbroken.
In his direct testimony, PO2 Labasano testified that:
Q. After arresting the accused, what transpired thereafter?

A. We brought him in our office and we filed a case against him.
Q. By the way, who brought the sachet which you bought from the accused to the
crime laboratory for examination?
A. We, I with Gundol.
Q. And who received that sachet?

A. A certain person who was on duty at that time but I do not know him.[28]
In contrast, PO2 Labasano stated during his cross-examination that he entrusted the substance recovered
from the appellant to their team leader. Thus:
Q. Who was in possession of that sachet of shabu?

A. When they approached the accused, I saw the accused taking the sachet of
shabu from his pocket and putting it on his hand and I did not see what had happened
already.
Q. You did not see who received the sachet of shabu coming from the suspect?
A. I was able to take of that but it was really Gundol who bought that shabu from
him.
Q. And who recovered the marked money from the accused?

A. It was Gundol also.
Q. So, it was PO1 Gundol who was in possession of this marked money and one
(1) sachet of shabu from the time the suspect was arrested, is it not?
A. Yes, sir.
Q. And what did you do with that marked money [or] that alleged shabu being
confiscated from the accused?
A. We turned it over to our team leader.
Q. Are you referring to SPO2 Caonero?

A. Yes, sir.[29]
The foregoing testimonies of PO2 Labasano are contradictory. At first, he testified that the substance
recovered from the appellant was delivered to the crime laboratory but he did not know who received the
same. On cross-examination, however, he claimed that the substance was delivered to their team leader,
SPO2 Caonero.
Notably, the prosecution failed to put on the witness stand SPO2 Caonero or the person from the crime
laboratory who allegedly received the substance. Consequently, there was a break in the chain of custody
because no mention is made as regards what happened to the substance from the time SPO2 Caonero
received it to the time the transmittal letter was prepared by Police Chief Inspector Jesus Atchico Rebua
addressed to the Provincial Chief of Police, Lanao del Norte requesting for laboratory examination/urine
test. We do not know how or from whom Police Chief Inspector Jesus Atchico Rebua received the
substance.
There is no dispute that in the Chemistry Report[30] it was established that the object examined was found
positive for methamphetamine hydrochloride or shabu, a dangerous drug. While the Forensic Chemist
showed the contents of the sachet as the substance she examined and confirmed to be shabu,
nonetheless, it is not positively and convincingly clear from her testimony that what was submitted for
laboratory examination and later presented in court as evidence was the same shabu actually recovered
from the appellant. The Forensic Chemist did not testify at all as to the identity of the person from whom
she received the specimen for examination.
Verily, there is a break in the chain of custody of the seized substance. The standard operating procedure
on the seizure and custody of the drug as mandated in Section 21, Article II of RA 9165 and its
Implementing Rules and Regulations was not complied with. As we observed, the chain of custody of the
drug from the time the same was turned over to the Team Leader, as testified by PO2 Labasano or the
Records Custodian as related by PO1 Gondol, to the time of submission to the crime laboratory was not
clearly shown. There is no indication whether the Team Leader and the Records Custodian were one and
the same person. Neither was there reference to the person who submitted it to the crime laboratory. The
prosecution needs to establish that the Team Leader or Records Custodian indeed submitted such
particular drug to the crime laboratory for examination. The failure on the part of the Team Leader or
Records Custodian as the case may be, to testify on what he did with the drug while he was in possession
resulted in a break in the chain of custody of the drug. There is obviously a missing link from the point
when the drug was in his hands to the point when the same was submitted for examination. The failure
to establish the evidences chain of custody is fatal to the prosecutions case. Under no circumstance can
we consider or even safely assume that the integrity and evidentiary value of the drug was properly
preserved by the apprehending officers. There can be no crime of illegal possession of a prohibited drug
when nagging doubts persist on whether the item confiscated was the same specimen examined and
established to be the prohibited drug.[31]
Jurisprudence abounds with cases where deviation from the standard procedure in an anti-narcotics
operation produces doubts as to the identity and origin of the drug which inevitably results to the acquittal
of the accused. In People v. Mapa,[32] we acquitted the appellant after the prosecution failed to clarify
whether the specimen submitted to the National Bureau of Investigation for laboratory examination was
the same one allegedly taken from the appellant. Also in People v. Dimuske,[33] we ruled that the failure
to prove that the specimen of marijuana examined by the forensic chemist was that seized from the
accused was fatal to the prosecutions case. The same holds true in People v. Casimiro[34] and in Zarraga
v. People[35] where the appellant was acquitted for failure of the prosecution to establish the identity of
the prohibited drug which constitutes the corpus delicti. Recently in Catuiran v. People,[36] we acquitted
the petitioner for failure of the prosecution witnesses to observe the standard procedure regarding the
authentication of the evidence.
In the light of the above disquisition, we find no further need to discuss the
other remaining argument regarding the propriety of appellants conviction for violation of Section 11,
Article II of RA 9165 when the evidence adduced and proved during the trial consists mainly of acts
pertaining to a sale of dangerous drugs under Section 5, Article II of the said law. From whatever angle
we look at it, whether it was a sale or merely possession of the dangerous drug, we arrive at the same
conclusion that the prosecution has not proven the indispensable element of corpus delicti of the crime. To
repeat, the existence of dangerous drugs is a condition sine qua non for conviction for the illegal sale and
possession of dangerous drugs, it being the very corpus delicti of the crime.
Based on these findings and following our precedents in the afore-mentioned cases, we are compelled to
reverse the judgment of conviction in this case. Consequently, we need not pass upon the merits of
appellants defense of denial and frame-up. It is a well-entrenched rule in criminal law that the conviction
of an accused must be based on the strength of the prosecutions evidence and not on the weakness or
absence of evidence of the defense.[37]
WHEREFORE, on ground of reasonable doubt, the instant appeal is GRANTED and the challenged
Decision of the Court of Appeals in CA-G.R. CR No. 00054 affirming the Decision of the Regional Trial
Court of Lanao del Norte, Branch 01, in Criminal Case No. 10315 is hereby REVERSED.
Appellant WILSON SUAN y JOLONGON is hereby ACQUITTED and ordered released from detention
unless his further confinement is warranted for some other lawful cause or ground.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
CONSTITUTION, Article III, Section 14(12).
[2]
People v. Simbahon, 449 Phil. 74, 83 (2003); Corino v. People, G.R. No. 178757, March 13,
2009.
[3]
Malillin v. People, G.R. No. 172953, April 30, 2008, 553 SCRA 619, 632.
[4]
CA rollo, pp. 129-145; penned by Associate Justice Romulo V. Borja and concurred in by
Associate Justices Mario V. Lopez and Elihu Y. Ybaez.
[5]
Records, pp. 62-67; penned by Judge Mamindiara P. Mangotara.
[6]
Id. at 18.
[7]
Id. at 20.
[8]
Id. at 21.
[9]
Spelled as Gundol in the TSN.
[10]
Sometimes spelled as Carbajal in the records.
[11]
Exhibit A and A-1, records, p. 53.
[12]
Exhibit D, id. at 56.
[13]
Exhibit E, id. at 56 (posterior part).
[14]
Exhibit F, id. at 57.
[15]
Id. at 67.
[16]
People v. Gonzales, 430 Phil. 504, 514 (2002).
[17]
People v. Fabro, 382 Phil. 166, 177 (2000).
[18]
People v. Simbulan, G.R. No. 100754, October 13, 1992, 214 SCRA 537, 546.
[19]
People v. Chang, 382 Phil. 669, 684 (2000).
[20]
People v. Julian-Fernandez, 423 Phil. 895, 911-912 (2001).
[21]
People v. Cabugatan, G.R. No. 172019, February 12, 2007, 515 SCRA 537, 547.
[22]
Exhibit 2, records, p. 6.
[23]
Exhibit B, id. at 54.
[24]
Supra note 12.
[25]
Supra note 14.
[26]
[27]
Catuiran v. People, G.R. No. 175647, May 8, 2009, 587 SCRA 567.
[28]
TSN, April 12, 2004, pp. 5-6.
[29]
Id. at 14-15.
[30]
Supra note 14.
[31]
Valdez v. People, G.R. No. 170180, November 23, 2007, 538 SCRA 611, 628-629.
[32]
G.R. No. 91014, March 31, 1993, 220 SCRA 670, 679.
[33]
G.R. No. 108453, July 11, 1994, 234 SCRA 51, 61.
[34]
432 Phil. 966, 979 (2002).
[35]
G.R. No. 162064, March 14, 2006, 484 SCRA 639, 647.
[36]
G.R. No. 175647, May 8, 2009, 587 SCRA 567.
[37]
People v. Teves, 408 Phil. 82, 102 (2001).

Supreme Court
Manila
SECOND DIVISION
REPUBLIC OF THE PHILIPPINES, G.R. No. 169481

Petitioner,
- versus - Present:
HEIRS OF JULIO RAMOS, CARPIO, J., Chairperson,

represented by Reynaldo Ramos LEONARDO-DE CASTRO,*
Medina, Zenaida Ramos Medina, DEL CASTILLO,
Dolores Ramos Medina, Romeo Ramos ABAD, and
Medina, Virgie Ramos Medina, PEREZ, JJ.
Herminia Ramos Medina, Cesar
Ramos Medina and Remedios Ramos
Medina, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In petitions for reconstitution of a lost or destroyed Torrens certificate of title, trial courts are duty-bound
to examine the records of the case to determine whether the jurisdictional requirements have
been strictly complied with. They must also exercise extreme caution in granting the petition, lest they
become unwitting accomplices in the reconstitution of questionable titles instead of being instruments in
promoting the stability of our land registration system.[1]
This petition[2] for review on certiorari seeks to reverse the August 31, 2005 Decision[3] of the Court of
Appeals (CA) in CA-G.R. CV No. 75345. The CAs assailed Decision affirmed the February 19, 2002
Order[4] of the Regional Trial Court (RTC), Branch 3, Balanga City, Bataan, which in turn granted
respondents Petition[5] for Reconstitution of Original Certificate of Title (OCT) No. 3613.
Proceedings before the Regional Trial Court
On February 23, 2001, respondents filed a Petition for Reconstitution of OCT No. 3613, before the RTC of
Balanga City containing the following material averments:
That the late Julio Ramos is being represented by herein petitioners who are all of legal
age, married, Filipinos and residents of Kaparangan, Orani, Bataan;
That the late Julio Ramos, grandfather of herein petitioners, is the original claimant of Lot
No. 54 of the Cadastral Survey of Orani, Bataan, as evidenced by a Relocation Plan of said
lot duly approved by the Chief, Regional Surveys Division, Ruperto P. Sawal, and the
Regional Technical Director Eriberto V. Almazan, the plan hereto attached as Annex A and
the technical descriptions as Annex B;
That the Land Registration Authority issued a Certification to the effect that Lot No. 54 of
Orani Cadastre, Bataan was issued Decree No. 190622 on September 29, 1925, hereto
attached as Annex C;
That the Acting Registrar of Deeds of Bataan likewise issued a Certification to the effect
that OCT No. 3613 covering Lot No. 54 of Orani Cadastre is not among the salvaged
records of the said Registry, copy hereto attached as Annex D;
That the owners copy of OCT No. 3613 was lost and all efforts exerted to locate the same
are in vain;
That petitioners secured a Lot Data Computation from the Bureau of Lands wherein it is
shown that Julio Ramos is the claimant of Lot No. 54 of Orani Cadastre, certified machine
copy hereto attached as Annex E;
That the adjoining owners of said Lot No. 54 are:
NE by Lot 58 & 49 Jose Pea, et al., Orani, Bataan;

SE by Lot 51 Pedro de Leon, Orani, Bataan;
SW by Jose Zulueta Street;
NW by Lot 55 Jose Sioson, Orani, Bataan;
That OCT No. 3613 may be reconstituted on the basis of the approved plan and technical
descriptions and the Lot Data Computation;
That said Lot No. 54 is declared for taxation purposes in the name of Julio Ramos and
taxes due thereon are fully paid up to the current year;
That the title is necessary to enable petitioners [to] partition said lot among themselves;
That there is no document pending registration with the Registry of Deeds of Bataan
affecting said Lot 54.[6]
Respondents prayed for the issuance of an order directing the Registrar of Deeds to reconstitute OCT No.
3613 on the basis of the approved plan and technical description.
On February 28, 2001, the trial court issued a Notice[7] setting the case for initial hearing on August 30,
2001, which was reset to September 27, 2001.[8] During the said hearing, respondents presented several
pieces of documentary evidence[9] purportedly to establish compliance with the jurisdictional
requirements. Thereafter, trial ensued.
Respondent Reynaldo Ramos Medina (Reynaldo), a 62-year old watch technician, testified on the
material allegations of the petition, as well as on the appended annexes. He likewise declared on the
witness stand that his mother used to keep the owners copy of OCT No. 3613. During the Japanese
occupation, however, it was buried in a foxhole and since then it could no longer be found. Reynaldo
further testified that he and his co-heirs are the present occupants of Lot 54. He was not cross-examined
by the public prosecutor, who was then representing the petitioner.
On February 19, 2002, the trial court issued an Order[10] granting

respondents petition and disposing as follows:
WHEREFORE, the Petition, being in order, is hereby GRANTED.
The Acting Registrar of Deeds of Bataan is directed, upon payment by petitioners of the
corresponding legal fees, to reconstitute Original Certificate of Title No. T-3613 covering
Lot No. 54 of the Orani Cadastre based on the approved Relocation Plan and Technical
Description.
SO ORDERED.[11]
Proceedings before the Court of Appeals
Believing that the court a quo erred in granting the petition for reconstitution, petitioner Republic of
the Philippines appealed to the CA ascribing upon the court a quo the following errors:
THE TRIAL COURT ERRED IN GRANTING THE PETITION FOR RECONSTITUTION OF
OCT NO. 3613 DESPITE PETITIONERS-APPELLEES [sic] FAILURE TO ESTABLISH THAT
AT THE TIME OF ITS ALLEGED LOSS, SUBJECT OCT WAS VALID AND SUBSISTING.
THE TRIAL COURT ERRED IN GRANTING THE PETITION FOR RECONSTITUTION OF

OCT NO. 3613 DESPITE PETITIONERS-APPELLEES [sic] FAILURE TO ADDUCE
ADEQUATE BASIS OR SOURCE FOR RECONSTITUTION.[12]
On August 31, 2005, the CA rendered the assailed Decision dismissing the appeal. The appellate
court found that the pieces of documentary evidence presented by the respondents are sufficient to grant
reconstitution of OCT No. 3613. Besides, the respondents had been paying realty taxes. Moreover, the
adjacent lot owners did not oppose the petition despite due notice. The dispositive portion of the CAs
Decision reads:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for

lack of merit. The appealed Order dated February 19, 2002 of the Regional Trial Court of
Bataan is AFFIRMED.
SO ORDERED.[13]
Issues
Petitioner interposed the present recourse anchored on the following grounds:
I.
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS ORDER
GRANTING RECONSTITUTION OF ORIGINAL CERTIFICATE OF TITLE NO. 3613.
II.
THE COURT OF APPEALS ERRED IN ITS APPLICATION OF PARAGRAPH F, SECTION 2
OF REPUBLIC ACT NO. 26.[14]
Petitioners Allegations
Petitioner contends that the CA erred in affirming the Order of the trial court granting respondents petition
for reconstitution considering that respondents failed to present competent proof to establish their
claim. First, respondents anchor their claim on the Certification[15] issued by the Land Registration
Authority (LRA) to prove that Decree No. 190622 was issued for Lot 54. However, said Certification did
not state that Decree No. 190622 was issued in the name Julio Ramos. Second, when reconstitution is
anchored on Section 2(f) of Republic Act (RA) No. 26,[16] just like in this case, the Relocation Survey Plan
and Technical Description are mere supporting evidence to the other document which, in the judgment
of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title. Thus,
the court a quo erred in ordering reconstitution based on the Relocation Survey Plan and Technical
Description presented by the respondents.
Lastly, petitioner insists that respondents failed to present competent proof of loss of OCT No.
3613. It maintains that the non-execution of an affidavit of loss by the grandparents of the heirs of Julio
Ramos who, allegedly, were in possession of OCT No. 3613 at the time of its loss, and the failure of the
respondents to inform immediately the Registrar of Deeds of such loss, cast doubt on respondents claim
that there existed OCT No. 3613.
Respondents, on the other hand, assert that in a petition for review on certiorari, the only issues
that can be raised are limited to pure questions of law. Here, both the trial court and the appellate court
found factual bases to grant the reconstitution they prayed for. Hence, the present petition should be
denied.
Petitioner counter argues that this case falls under the numerous exceptions to the rule cited by
the respondents.
Our Ruling
The petition is meritorious. Before delving into the arguments advanced by the petitioner, we shall
first tackle some procedural and jurisdictional matters involved in this case.
The instant petition falls under the exceptions to the

general rule that factual findings of the appellate court
are binding on this Court.
Ordinarily, this Court will not review, much less reverse, the factual findings of the CA, especially
where such findings coincide with those of the trial court.[17] The findings of facts of the CA are, as a
general rule, conclusive and binding upon this Court, since this Court is not a trier of facts and does not
routinely undertake the re-examination of the evidence presented by the contending parties during the
trial of the case.[18]
The above rule, however, is subject to a number of exceptions, such as (1) when the inference
made is manifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3) when
the finding is grounded entirely on speculations, surmises, or conjectures; (4) when the judgment of the
CA is based on misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the CA,
in making its findings, went beyond the issues of the case and the same is contrary to the admissions of
both parties; (7) when the findings of the CA are contrary to those of the trial court; (8) when the findings
of fact are conclusions without citation of specific evidence on which they are based; (9) when the CA
manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered,
would justify a different conclusion; and (10) when the findings of fact of the CA are premised on the
absence of evidence and are contradicted by the evidence on record.
As will be discussed later, this case falls under the last three exceptions and, hence, we opt to
take cognizance of the questions brought to us by petitioner. But first, we shall address a jurisdictional
question although not raised in the petition.
The trial court did not acquire jurisdiction over the

petition for reconstitution.
RA 26 lays down the specific procedure for the reconstitution of lost or

destroyed Torrens certificates of title. It confers jurisdiction upon trial courts to hear and decide petitions
for judicial reconstitution. However, before said courts can assume jurisdiction over the petition and grant
the reconstitution prayed for, the petitioner must observe certain special requirements and mode of
procedure prescribed by law. Some of these requirements are enumerated in Sections 12 and 13 of RA
26, viz:
SEC. 12. Petitions for reconstitution from sources enumerated in Sections 2(c), 2(d), 2(e),
2(f), 3(c), 3(d), 3(e), and/or 3(f) of this Act, shall be filed with the [Regional Trial Court],
by the registered owner, his assigns, or any person having an interest in the property. The
petition shall state or contain, among other things, the following: (a) that the
owners duplicate of the certificate of title had been lost or destroyed; (b) that no co-
owners, mortgagees, or lessees duplicate had been issued, or, if any had been
issued, the same had been lost or destroyed; (c) the location area and boundaries
of the property (d) the nature and description of the building or improvements, if any,
which do not belong to the owner of the land, and the names and addresses of the owners
of such buildings or improvements; (e) the names and addresses of the occupants
or persons in possession of the property, of the owners of the adjoining properties
and of all persons who may have any interest in the property; (f) a detailed description of
the encumbrances, if any, affecting the property; and (g) a statement that no deeds or
other instruments affecting the property have been presented for registration, or if there
be any, the registration thereof has not been accomplished, as yet. All the documents, or
authenticated copies thereof, to be introduced in evidence in support of the petition for
reconstitution shall be attached thereto and filed with the same: Provided, That in case
the reconstitution is to be made exclusively from sources enumerated in
Section 2(f) or 3(f) of this Act, the petition shall be further accompanied with
a plan and technical description of the property duly approved by the Chief of
the General Land Registration Office or with a certified copy of the description
taken from a prior certificate of title covering the same property.
SEC. 13. The court shall cause a notice of the petition, filed under the preceding section,
to be published, at the expense of the petitioner, twice in successive issues of the Official
Gazette, and to be posted on the main entrance of the provincial building and of the
municipal building of the municipality or city in which the land is situated, at least thirty
days prior to the date of hearing. The court shall likewise cause a copy of the notice to be
sent, by registered mail or otherwise, at the expense of the petitioner, to every person
named therein whose address is known, at least thirty days prior to the date of
hearing. Said notice shall state, among other things, the number of the lost or
destroyed certificate of title, if known, the name of the registered owner, the
names of the occupants or persons in possession of the property, the owners of
the adjoining properties and all other interested parties, the location area and boundaries
of the property, and the date on which all persons having any interest therein must appear
and file their claim or objections to the petition. The petitioner shall, at the hearing, submit
proof of the publication, posting and service of the notice as directed by the
court. (Emphasis supplied)
Perusal of respondents Petition for Reconstitution, for the purpose of verifying whether the strict
and mandatory requirements of RA 26, particularly Section 12 (b) and (e) thereof, have been faithfully
complied with, would reveal that it did not contain an allegation that no co-owners, mortgagees or lessees
duplicate had been issued or, if any had been issued, the same had been lost or destroyed. The petition
also failed to state the names and addresses of the present occupants of Lot 54. Correspondingly, the
Notice of Hearing issued by the court a quo did not also indicate the names of the occupants or persons
in possession of Lot 54, in gross violation of Section 13 of RA 26. Because of these fatal omissions, the
trial court never acquired jurisdiction over respondents petition. Consequently, the proceedings it
conducted, as well as those of the CA, are null and void.
It is unfortunate that despite the mandatory nature of the above requirements[19] and our constant
reminder to courts to scrutinize and verify carefully all supporting documents in petitions for
reconstitution,[20] the same still escaped the attention of the trial court and the CA. And while petitioner
also overlooked those jurisdictional infirmities and failed to incorporate them as additional issues in its
petition, this Court has sufficient authority to pass upon and resolve the same since they affect
jurisdiction.[21]
Respondents failed to present competent source of

reconstitution.
Our disquisition could end here. Briefly though, and to explain why this case falls under the
exceptions to the general rule that this Court will not review the CAs finding of facts, we shall examine the
probative weight of the pieces of evidence presented by the respondents in support of their Petition for
Reconstitution.
Section 2 of RA 26 enumerates in the following order the sources from which reconstitution of lost
or destroyed original certificates of title may be based:
SEC. 2. Original certificates of title shall be reconstituted from such of the sources
hereunder enumerated as may be available in the following order:
(a) The owners duplicate of the certificate of title;
(b) The co-owners, mortgagees, or lessees duplicate of the certificate of

title;
(c) A certified copy of the certificate of title, previously issued by the register
of deeds or by a legal custodian thereof;
(d) An authenticated copy of the decree of registration or patent, as the case

may be, pursuant to which the original certificate of title was issued;
(e) A document, on file in the Registry of Deeds by which the property, the
description of which is given in said document, is mortgaged, leased or encumbered, or
an authenticated copy of said document showing that its original has been registered;
and
(f) Any other document which, in the judgment of the court, is sufficient
and proper basis for reconstituting the lost or destroyed certificate of title.
Respondents predicate their Petition for Reconstitution on Section 2(f) of RA 26. And to avail of its benefits,
respondents presented survey plan,[22] technical description,[23] Certification issued by the Land
Registration Authority,[24] Lot Data Computation,[25] and tax declarations.[26] Unfortunately, these pieces of
documentary evidence are not similar to those mentioned in subparagraphs (a) to (e) of Section 2 of RA
26, which all pertain to documents issued or are on file with the Registry of Deeds. Hence, respondents
documentary evidence cannot be considered to fall under subparagraph (f). Under the principle
of ejusdem generis, where general words follow an enumeration of persons or things by words of a
particular and specific meaning, such general words are not to be construed in their widest extent, but
are to be held as applying only to persons or things of the same kind or class as those specifically
mentioned.[27] Thus, in Republic of the Philippines v. Santua,[28] we held that when Section 2(f) of RA 26
speaks of any other document, the same must refer to similar documents previously enumerated therein,
that is, those mentioned in Sections 2(a), (b), (c), (d), and (e).
Also, the survey plan and technical description are not competent and sufficient sources of
reconstitution when the petition is based on Section 2(f) of RA 26. They are mere additional documentary
requirements.[29] This is the clear import of the last sentence of Section 12, RA 26 earlier quoted. Thus,
in Lee v. Republic of the Philippines,[30] where the trial court ordered reconstitution on the basis of the
survey plan and technical description, we declared the order of reconstitution void for want of factual
support.
Moreover, the Certification[31] issued by the LRA stating that Decree No. 190622 was issued
for Lot 54 means nothing. The Land Registration Act expressly recognizes two classes of decrees in land
registration proceedings, namely, (i) decrees dismissing the application and (ii) decrees of confirmation
and registration.[32] In the case at bench, we cannot ascertain from said Certification whether the decree
alluded to by the respondents granted or denied Julio Ramos claim. Moreover, the LRAs Certification did
not state to whom Lot 54 was decreed. Thus, assuming that Decree No. 190622 is a decree of
confirmation, it would be too presumptuous to further assume that the same was issued in the name and
in favor of Julio Ramos. Furthermore, said Certification did not indicate the number of the original
certificate of title and the date said title was issued. In Tahanan Development Corporation v. Court of
Appeals,[33] we held that the absence of any document, private or official, mentioning the number of the
certificate of title and date when the certificate of title was issued, does not warrant the granting of such
petition.
With regard to the other Certification[34] issued by the Registry of Deeds of Balanga City, it cannot
be deduced therefrom that OCT No. 3613 was actually issued and kept on file with said office. The
Certification of said Registry of Deeds that said title is not among those salvaged records of this Registry
as a consequence of the last World War, did not necessarily mean that OCT No. 3613 once formed part
of its records.
Anent the tax declaration submitted, the same covered only taxable year 1998. Obviously, it had
no bearing with what occurred before or during the last world war. Besides, a tax declaration is not a
reliable source of reconstitution of a certificate of title. As we held in Republic of the Philippines v.
Santua,[35] a tax declaration can only be prima facie evidence of claim of ownership, which, however, is
not the issue in a reconstitution proceeding. A reconstitution of title does not pass upon the ownership of
land covered by the lost or destroyed title but merely determines whether a re-issuance of such title is
proper.
We also share the observation of petitioner that the non-submission of an affidavit of loss by the
person who was allegedly in actual possession of OCT No. 3613 at the time of its loss, casts doubt on
respondents claim that OCT No. 3613 once existed and subsequently got lost. Under Section 109[36] of
Presidential Decree No. 1529,[37] the owner must file with the proper Registry of Deeds a notice of loss
executed under oath. Here, despite the lapse of a considerable length of time, the alleged owners of Lot
54 or the persons who were in possession of the same, i.e., respondents grandparents, never executed
an affidavit relative to the loss of OCT No. 3613.
The presentation of such affidavit becomes even more important considering the doubtful
testimony of Reynaldo. When he testified on November 29, 2001, he was only 62 years old and, therefore,
he was barely six years old during the Japanese occupation until the Liberation. Also, his testimony
consisted only of his declaration that his unnamed grandmother used to keep said copy of OCT No. 3613;
that it was buried in a foxhole during the Japanese occupation; and, subsequently, got lost. He did not
testify on how he obtained knowledge of the alleged facts and circumstances surrounding the loss of the
owners copy of OCT No. 3613. In fact, he neither named the person responsible for the burying or hiding
of the title in a foxhole nor mentioned the place where that foxhole was located. Reynaldos testimony was
also lacking in details as to how he participated in searching for the titles whereabouts. Indeed, Reynaldos
testimony is highly suspect and cannot be given the expected probative weight.
In fine, we are not convinced that respondents had adduced competent evidence to warrant
reconstitution of the allegedly lost original certificate of title.
WHEREFORE, the instant petition is hereby GRANTED. The August 31, 2005 Decision of the
Court of Appeals in CA-G.R. CV No. 75345 is hereby REVERSED and SET ASIDE. The Petition for
Reconstitution filed by the respondents is DISMISSED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO ROBERTO A. ABAD

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
Per Raffle dated September 8, 2009.
[1]
Republic v. Planes, 430 Phil. 848, 851, 869 (2002).
[2]
Rollo, pp. 18-42.
[3]
CA rollo, pp 50-55; penned by Associate Justice Eliezer R. De Los Santos and concurred in by Associate
Justices Eugenio S. Labitoria and Arturo D. Brion.
[4]
Records, pp. 41-43; penned by Judge Remigio M. Escalada, Jr.
[5]
Id. at 2-4.
[6]
Id. at 2-3.
[7]
Id. at 15-16.
[8]
See Order dated August 30, 2001, id. at 19.
[9]
Exhibit A, Notice dated February 28, 2001, id. at 15; Exhibit B, Certificate of Publication dated April 18,
2001 issued by the National Printing Office, id. at 18; Exhibit C, Certificate of Posting dated March 1,
2001, id. at 17; Exhibit D, Relocation Plan, id. at 4; Exhibit E, Technical Description, id. at 5; Exhibit F,
Certification dated February 17, 1997 issued by the Land Registration Authority, id. at 8; Exhibit G,
Certification dated July 21, 1997 issued by the Registry of Deeds of Balanga, Bataan, id. at 9; Exhibit
H, Lot Data Computation, id. at 10; Exhibit I, Tax Declaration of Real Property, id. at 11.
[10]
Id. at 41-43.
[11]
Id. at 43.
[12]
[13]
Id. at 54.
[14]
Rollo, p. 25.
[15]
Records, p. 8.
[16]
AN ACT PROVIDING A SPECIAL PROCEDURE FOR THE RECONSTITUTION
OF TORRENS CERTIFICATE OF TITLE LOST OR DESTROYED.
[17]
Ledonio v. Capitol Development Corporation, G.R. No. 149040, July 4, 2007, 526 SCRA 379, 392.
[18]
Cosmos Bottling Corporation v. Nagrama, Jr., G.R. No. 164403, March 4, 2008, 547 SCRA 571, 584-
585.
[19]
Supra note 1.
[20]
Republic of the Philippines v. El Gobierno de las Islas Filipinas, 498 Phil. 570, 585 (2005).
[21]
Hi-Tone Marketing Corporation v. Baikal Realty Corporation, 480 Phil. 545, 561 (2004).
[22]
Exhibit D, Records, p. 5.
[23]
Exhibit E, id. at 6.
[24]
Exhibit F, id. at 8.
[25]
Exhibit H, id. at 10.
[26]
Exhibit I, id. at 11.
[27]
Parayno v. Jovellanos, G.R. No. 148408, July 14, 2006, 495 SCRA 85, 92.
[28]
G.R. No. 155703, September 8, 2008, 564 SCRA 331, 338-339; see also Heirs of Felicidad Dizon v.
Hon. Discaya, 362 Phil. 536, 545 (1999).
[29]
Supra note 27.
[30]
418 Phil. 793, 802-803 (2001).
[31]
Records, p. 8. It reads:
This is to certify that after due verification of our Record Book of Cadastral Lots, it was found that Lot No.
54 of the Cadastral Survey of Orani, Province of Bataan, Cadastral Case No. 10, LRC Cadastral Record
No. 315, was issued Decree No. 190622, on Sept. 29, 1925 pursuant to the decision rendered
thereon. Said lot is subject of annotation to quote: RA 26, Sec. 12, (LRC) PR-6581.
This certification is issued upon the request of Felix S. Pea (of) Tapulao, Orani, Bataan.
[32]
De los Reyes v. De Villa, 48 Phil. 227, 231 (1925).
[33]
203 Phil. 652 (1982).
[34]
Records, p. 9.
[35]
[36]
SECTION 109. Notice and replacement of lost duplicate certificate. In case of loss or theft of an owners
duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his
behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft
is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying
for the entry of a new certificate to him or for the registration of any instrument, a sworn statement
of the fact of such loss or destruction may be filed by the registered owner or other person in interest
and registered.
[37]
AMENDING AND CODIFYING THE LAWS RELATIVE TO REGISTRATION OF PROPERTY AND FOR
OTHER PURPOSES

Supreme Court
Manila
EN BANC
ROSE MARIE D. DOROMAL, G.R. No. 181809

Petitioner,
Present:
PUNO, C. J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ, and
MENDOZA, JJ.
HERNAN G. BIRON and
COMMISSION ON ELECTIONS, Promulgated:
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
We reiterate settled rulings on the appreciation of election returns in this case, to wit, (1) before
a certificate of votes may be used to prove tampering, alteration, falsification or any other anomaly
committed in the election returns, it must comply with Sections 16 and 17 of Republic Act (RA) No.
6646,[1] (2) the exclusion of election returns on the ground of tampering must be approached with extreme
caution and must be based on clear and convincing evidence, and (3) in case of discrepancy in the other
authentic copies of an election return, the procedure in Section 236 of the Omnibus Election Code[2] (OEC)
should be followed. For failure to comply with these rules and principles, we hold that the Commission on
Elections (COMELEC) acted with grave abuse of discretion amounting to lack or excess of jurisdiction and
accordingly order it to rectify the unjustified disenfranchisement of voters in this case.
This Petition for Certiorari under Rules 64 and 65 of the Rules of Court seeks to annul and set
aside the COMELEC En Bancs February 1, 2008 Resolution.[3] The COMELEC En Banc affirmed its Second
Divisions September 12, 2007 Resolution[4] in SPC No. 07-147 which ordered the exclusion of 11 election
returns in the canvassing of votes for the position of vice mayor in the Municipality of Dumangas, Iloilo.
Factual Antecedents
Petitioner Rose Marie D. Doromal (Doromal) and private respondent Hernan G. Biron (Biron) were
the vice mayoralty candidates for the Municipality of Dumangas, Iloilo in the May 14, 2007 elections.
During the canvassing of votes, Biron orally objected to the inclusion of 25[5] election returns. Biron
anchored his objections to the inclusion of the 21 returns on the alleged missing taras[6] in Copy 4 of the
contested returns, which he obtained as the standard bearer of LAKAS-CMD, the recognized dominant
majority party in said elections.[7] As regards the remaining four contested returns, Biron opposed their
inclusion allegedly because there was a discrepancy between the number of votes stated in the said
returns and those stated in the certificate of votes issued by the Board of Election Inspectors (BEI). In
view thereof, the Municipal Board of Canvassers (MBC) deferred the canvassing of the said
returns. Thereafter, Biron filed his written objections and supporting evidence.
On May 18, 2007, the MBC denied[8] the petitions for exclusion. It found that there was no
tampering on the number of taras for Doromal in the copy of the election return for the MBC. It also held
that the copy of the election return of the MBC was complete with no material defect and duly signed and
thumbmarked by the BEIs.[9]
Aggrieved, Biron appealed to the COMELEC. The case was docketed as SPC No. 07-147[10] and
raffled to the Second Division. Pending the resolution of the appeal, the proclamation of the winning vice
mayoralty candidate was ordered suspended.
Ruling of the COMELEC Second Division

On September 12, 2007, the COMELEC Second Division, voting 2-1, issued a Resolution partially
granting Birons appeal. It ordered the exclusion of only 11 contested election returns while at the same
time ordered the inclusion of the remaining 14 election returns in the canvassing of votes, viz:
WHEREFORE, foregoing premises considered, the instant appeal is PARTIALLY

GRANTED. The election returns in Precinct Nos. 17A/18A, 20A, 21A/21B, 30A/31A,
59A/60A, 122A/122B, 162A/163A, 169A, 173A/173B, 174A/174B, 192A, 202A, 204A and
207A, are hereby ordered INCLUDED in the canvass of returns for the vice-mayoralty
position in Dumangas, Iloilo. The Municipal Board of Canvassers of Dumangas, Iloilo is
hereby ordered to RECONVENE and PROCEED with the canvass of the said election
returns and PROCLAIM the candidate who garners the most number of votes.
The election returns in Precinct Nos. 107-A, 114-A, 6A/6B, 55-A, 67A/67B,
116A/116B, 130A, 42A/43A, 90A/90B, 7A/7B and 208A/208B are hereby ordered
EXCLUDED in the canvass of returns by the Municipal Board of Canvassers of Dumangas,
Iloilo.
SO ORDERED.[11]
The COMELEC Second Division ordered the exclusion of the 11 election returns (subject returns) because
the same were allegedly tampered or falsified. It held that eight of the 11 subject returns showed that
the taras were either closed on the third or fourth vote, instead of on the fifth vote, resulting in a
discrepancy between the number of taras vis--vis the written figures and words in the said returns. With
regard to the remaining three returns, the Second Division noted a glaring dissimilarity between the votes
stated in the said returns and those stated in the certificate of votes. Further, it lent credence to the
affidavits of Birons poll watchers stating that numerous irregularities attended the tallying of the votes at
the precinct level. According to the Second Division, these irregularities pointed to a scheme to increase
the votes of Doromal, thus, necessitating the exclusion of the
subject returns.
Commissioner Rene V. Sarmiento (Commissioner Sarmiento) registered a dissent. He reasoned

that the missing taras did not, by themselves, conclusively establish that the subject returns were altered
or tampered. Also, the affidavits of Birons poll watchers should not have been given weight for being self-
serving. In his view, the proper recourse was not to exclude the subject returns but to order the correction
of manifest errors so that the number of votes in figures and words would conform to the number
of taras in the subject returns.
Thus, on September 24, 2007, the MBC reconvened and proceeded to canvass the abovementioned 14
returns. As a result, Biron emerged as the winning candidate with 12,497 votes while Doromal received
12,319 votes, or a winning margin of 178 votes. On even date, Biron was proclaimed as the duly elected
vice mayor of the Municipality of Dumangas, Iloilo.
Ruling of the COMELEC En Banc
On February 1, 2008, the COMELEC En Banc affirmed the ruling of the Second Division. It held
that the Second Division properly appreciated the affidavits of Birons poll watchers given the serious
allegations of irregularities that attended the tallying of votes; that the use of the certificate of votes to
establish tampering in the subject returns was proper in a pre-proclamation controversy; and that an
examination of the records of this case supported the Second Divisions findings that the subject returns
were tampered or falsified.
Commissioner Sarmiento maintained his previous dissent that the exclusion of the subject returns
was improper. He further noted that in case correction of manifest errors was not viable, votes may be
recounted pursuant to Section 236 of the OEC.
Issues
The issues raised by petitioner may be summarized as follows:

1. The COMELEC gravely abused its discretion when it failed to compare the contested
returns with the other authentic copies thereof before ruling that there was tampering or
falsification of the said returns.
2. The COMELEC gravely abused its discretion when it used the certificate of votes to
exclude the three contested election returns considering that it cannot go beyond the face of
the returns in establishing that there was tampering or falsification and considering further
that said certificates did not comply with Section 17 of RA 6646.
3. The COMELEC gravely abused its discretion when it gave credence to the self-serving
affidavits of private respondents poll watchers.
4. The COMELEC gravely abused its discretion when it ordered the exclusion of the subject
returns because, in case of falsification or tampering, the procedure under Sections 235 and
236 of the OEC should have been followed in order not to disenfranchise the voters.[12]
Doromal advances several possible reasons for the missing taras in Copy 4 (i.e., copy of the
dominant majority party) of the subject returns, to wit, (1) the pressure exerted by the poll clerk in
accomplishing duplicate originals of the subject returns was not sufficient as to leave its mark on the
succeeding pages, (2) the carbon paper had poor quality, (3) the election return papers were misaligned
relative to the carbon paper, or (4) the erasures were deliberately made by Biron on Copy 4 to pave the
way for the subject pre-proclamation controversy.
Further, while the instant petition was pending resolution before this Court, Doromal requested
the COMELEC to open the ballot boxes where the COMELECs copy of the subject returns (i.e., Copy 3)
was safekept. On April 21, 2008, the COMELEC granted the request and ordered the opening of the ballot
boxes. It thereafter allowed Doromal to photocopy Copy 3 of the subject returns found therein. On June
17, 2008, petitioner filed a Motion for Leave to File Manifestation[13] with attached Manifestation[14] before
this Court summarizing her observations with respect to Copy 3 of the subject returns. She noted that
some of the missing taras in Copy 4 were not found in Copy 3. With respect to the missing taras in Copy
3 just as in Copy 4, petitioner reiterated that the cause thereof was the insufficient pressure exerted by
the poll clerk in accomplishing the election returns or the misalignment of the election return copies while
the duplicate originals were being accomplished using carbon paper. Thus, there was no basis for the
COMELEC to rule that the subject returns were falsified or tampered.
Petitioner also claims that the COMELEC never compared Copy 4 of the subject returns with the
other authentic copies of the said returns as required under Section 235 of the OEC. Assuming that the
COMELEC made such comparison with the other authentic copies, this was not done in the presence of
petitioner in violation of her due process rights.
Anent the exclusion of the three subject returns, petitioner asserts that the COMELEC erred in
using the certificate of votes to establish falsification or tampering because the COMELEC cannot go
beyond the face of the returns in a pre-proclamation controversy. Assuming arguendo that the COMELEC
may use the certificate of votes, the requirement set by Section 17 of RA 6646 was not complied with.
Thus, the certificate of votes is inadmissible in evidence.
Petitioner faults the COMELEC for relying on the affidavits of private respondents poll watchers in
concluding that irregularities attended the preparation of the subject returns. Evidently, these affidavits
are self-serving and of no probative value.
Lastly, petitioner argues that assuming that the subject returns were falsified or tampered, the
proper recourse would be to follow the procedure outlined in Sections 235 and 236 of the OEC and not to
summarily exclude said returns. Under the aforesaid provisions, the COMELEC should have authorized the
opening of the ballot boxes and thereafter ordered the BEI to recount the votes of the candidates affected
and prepare a new return which shall then be used by the MBOC as the basis of the new canvass.
Private Respondents Arguments
Private respondent contends that the points raised by petitioner are factual in nature, thus, not
proper in a petition for certiorari under Rule 65 which is limited to questions of jurisdiction. He claims that
the findings of the COMELEC with respect to the falsification and tampering of the subject returns must
be accorded respect and even finality by this Court. Biron also points out that in making such a finding,
the COMELEC Second Division compared the subject returns with the other authentic copies thereof which
was affirmed by the COMELEC En Banc after the latter made its own independent examination of the
records of this case.
Biron also claims that there was no denial of due process. Since a pre-proclamation controversy
is summary in nature, Biron posits that the COMELEC properly appreciated the evidence in this case
consisting of the pleadings and documentary evidence of the respective parties without the need of
holding a formal or trial-type hearing.
He also avers that the COMELEC properly gave credence to the affidavits of his poll watchers. He
emphasizes that the subject returns appear to be tampered and falsified on their face so that the affidavits
were merely used to buttress or substantiate the cause of these irregularities.
Finally, Biron claims that the procedure under Sections 235 and 236 of the OEC is not applicable
to this case because the same refers to the board of canvassers and not the COMELEC. Also, these
provisions do not allow the COMELEC to motu proprio order the opening of the ballot boxes.
Our Ruling
An act done contrary to the Constitution, the law or jurisprudence; or executed whimsically,
capriciously or arbitrarily out of malice, ill will or personal bias constitutes grave abuse of discretion.[15] In
the instant case, we find that the COMELEC gravely abused its discretion amounting to lack or excess of
jurisdiction in ordering the exclusion of the subject returns. The ruling contravenes clear legal provisions
as well as long standing jurisprudence on the admissibility of the certificate of votes and the appreciation
of election returns. Lamentably, the refusal of the COMELEC to heed this Courts repeated pronouncements
has again led to the disenfranchisement of voters in this case. The writ, therefore, lies to correct this
grossly abusive exercise of discretion.
The certificates of votes are inadmissible to prove
tampering, alteration or falsification for failure to
comply with Sections 16 and 17 of RA 6646.
In excluding three of the 11 subject returns, specifically, those coming from Precinct Nos.
90A/90B, 7A/7B and 208A, the COMELEC relied on the alleged glaring dissimilarity between the votes
stated in the said returns and those stated in the certificates of votes. Hence, it concluded that the subject
returns were falsified and thereafter ordered their exclusion.
The certificate of votes, which contains the number of votes obtained by each candidate, is issued
by the BEI upon the request of a duly accredited watcher pursuant to Section 16 of RA 6646. Relative to
its evidentiary value, Section 17 of said law provides
Sec. 17. Certificate of Votes as Evidence. - The provisions of Sections 235 and 236 of
Batas Pambansa Blg. 881 notwithstanding, the certificate of votes shall be admissible in
evidence to prove tampering, alteration, falsification or any anomaly committed in the
election returns concerned, when duly authenticated by testimonial or documentary
evidence presented to the board of canvassers by at least two members of the board of
election inspectors who issued the certificate: Provided, That failure to present any
certificate of votes shall not be a bar to the presentation of other evidence to impugn the
authenticity of the election returns.
While the above-quoted provision authorizes the COMELEC to make use of the certificate of votes to prove
tampering, alteration, falsification or any anomaly committed in the election returns, this presupposes that
the certificate of votes was accomplished in accordance with Section 16, viz:
Sec. 16. Certificates of Votes. - After the counting of the votes cast in the precinct and
announcement of the results of the election, and before leaving the polling place, the
board of election inspectors shall issue a certificate of votes upon request of the duly
accredited watchers. The certificate shall contain the number of votes obtained by
each candidate written in words and figures, the number of the precinct, the
name of the city or municipality and province, the total number of voters who
voted in the precinct and the date and time issued, and shall be signed and
thumbmarked by each member of the board. (Emphasis supplied)
Thus, in Patoray v Commission on Elections,[16] we ruled that the certificate of votes is inadmissible to
prove tampering because it was signed only by the chairperson of the BEI, whereas Section 16 required
that the same be signed and thumbmarked by each member of the BEI which issued the
certificate.[17] Similarly, in Recabo, Jr. v. Commission of Elections,[18] we rejected the certificate of votes
because it did not state (1) the number of votes obtained in words, (2) the number of the precinct, (3)
the total number of voters who voted in the precinct, and (4) the time of issuance. Further, the certificate
was merely certified true and correct by an acting election officer.[19]
In the instant case, the certificates of votes from Precinct Nos. 90A/90B[20] and 7A/7B[21] are defective, for
they do not contain (1) the thumbmarks of the members of the BEI, (2) the total number of voters who
voted in the precinct, and (3) the time of the issuance of the certificates. Likewise, the certificate of votes
from Precinct 208A[22] is defective because it does not contain (1) the names, signatures and thumbmarks
of the members of the BEI, (2) the total number of voters who voted in the precinct, and (3) the time of
the issuance of the certificate. Aida Pineda, private respondents poll watcher in said precinct, claims that
she prepared a certificate of votes reflective of the true tally in the election return, but the members of
the BEI refused to affix their signatures thereto. Even if we were to concede that the BEI members
unjustifiedly refused to sign, this would not validate the said certificate. Private respondents remedy was
to compel the BEI to issue the certificate of votes under pain of prosecution for an election offense.[23] At
any rate, we cannot admit the defective certificate because, by Pinedas own admission, she was the one
who prepared the entries in the said certificate and not the BEI as required by Section 16 of RA 6646,
thus raising grave doubts as to its accuracy.[24]
Moreover, before the certificate of votes may be admitted as evidence of tampering, Section 17 requires
that the certificate be duly authenticated by testimonial or documentary evidence presented to the board
of canvassers by at least two members of the board of election inspectors who issued the certificate. This
requirement originated from Section 11[25] of House Bill (HB) No. 805 and was later consolidated, with
minor revisions, in Section 17[26] of HB 4046 the precursor of RA 6646. During the period of interpellations,
Representative Zarraga proposed that the aforesaid authentication requirement be dispensed with, viz:
MR. ZARRAGA. [I]n connection with Sections 16 and 17, on House Bill No. 4046,
only insofar as it concerns the admissibility in evidence of the certificate of votes.
MR. PALACOL. Yes, Mr. Speaker.
MR. ZARRAGA. Under Section 17, the certificate of votes shall be admissible in
evidence only when duly authenticated by testimonial or documentary evidence
presented to the Board of Canvassers by at least two members of the Board of Election
Inspectors who issued the certificate.
The presentation of the certificate of votes is, of course, during the

proceedings. And said proceedings may be one, two or three months,
probably even more, after the voting has taken place.
And under Section 16, will the certificate of votes be signed and thumbmarked by
each member of the Board of Inspectors?
MR. PALACOL. Yes, Mr. Speaker.
MR. ZARRAGA. This Representation feels that this should be sufficient to consider
the certificate of votes as duly authenticated, especially because at that time the members
have just prepared said certificate and therefore, there should be no need to further
require two members of the board subsequently because they may no longer
be available to authenticate the certificate of votes.
This Representation would like to inquire from the Gentlemen if the distinguished
sponsor will be willing to also amend Section 16 in such a way that the certificate of votes,
when already signed and thumbmarked by each member of the board, shall be
considered as duly authenticated and admissible in evidence in any subsequent
proceedings.
In other words, we should already dispense with requiring two other

members at a subsequent time, when they may no longer be present to
authenticate a document which, in the first place, has already been signed
and thumbmarked by each member of the board in accordance with the
proposed Section 16 of House Bill No. 4046.
MR. PALACOL. The Gentlemen [are] assured that we are going to consider all
these amendments during the period of amendments. And I always grant that the
Gentlemen from Bohol will submit valuable amendments in order to ensure a clean and
honest election.
MR. ZARRAGA. Thank you very much, Mr. Speaker. x x x[27] (Emphasis supplied)
It appears, however, that Representative Zarragas proposal was no longer pursued during the period of
amendments as Section 17 of HB 4046 was passed on third reading without any change in its wording as
now found in Section 17 of RA 6646. The clear legislative intent was, thus, to impose the additional
condition under Section 17 before the certificate of votes may be admitted in evidence to prove tampering.
The rationale of the law is perceptible. By requiring that the certificate of votes be duly
authenticated by at least two members of the BEI who issued the same, the law seeks to safeguard the
integrity of the certificate from the time it is issued by the BEI to the watcher after the counting of votes
at the precinct level up to the time that it is presented to the board of canvassers to prove tampering. The
legislature may have reasonably foreseen that the certificate may be easily altered while in the hands of
the watcher in order to orchestrate a sham pre-proclamation controversy. To counterbalance this
possibility, the law imposes the condition that the certificate, aside from complying with Section 16, must
be subsequently authenticated at the time of its presentment to the board of canvassers in the event that
it shall be used to prove tampering. This way the COMELEC may be assured that the certificate of votes
issued by the BEI to the watcher of a protesting candidate contains the same entries as the one thereafter
presented before the MBC to prove tampering. The procedure is consistent with the over-all policy of the
law to place a premium on an election return, which appears regular on its face, by imposing stringent
requirements before the certificate of votes may be used to controvert the election returns authenticity
and operate as an exception to the general rule that in a pre-proclamation controversy, the inquiry is
limited to the four corners of the election return.
In the instant case, the records indicate that Biron failed to comply with the requirements set by
Section 17 with respect to the certificates of votes from Precinct Nos. 208A, 90A/90B and 7A/7B which he
submitted in evidence before the MBC. This should have provided an added reason for the COMELEC to
refuse the admission of said certificates had the COMELEC carefully examined the certificates of votes
appearing in the records of this case.
In sum, the COMELEC gravely abused its discretion in admitting in evidence the aforementioned
certificates of votes which did not comply with Sections 16 and 17 of RA 6646. To make matters worse,
the COMELEC excluded the subject election returns on the basis of these defective certificates thereby
leading to the disenfranchisement of 467 voters as per the records of this case.[28] These votes can
materially affect the outcome of the elections considering that private respondent won by only 178
votes. Accordingly, the COMELEC is ordered to include the election returns from Precincts 208A, 90A/90B
and 7A/7B in the canvass of the votes in this case.
The affidavits of private respondents poll

watchers are self-serving and grossly inadequate
to establish the tampering of the subject returns.
Similarly, the one, or, at most, two missing taras
in each of the eight subject returns, without
more, does not establish tampering.
In excluding eight of the 11 subject returns, specifically, those coming from Precinct Nos. 107A,
114A, 6A/6B, 55A, 67A/67B, 116A/116B, 130A and 42A/ 43A, the COMELEC ruled that the said returns
were tampered or falsified based on the missing taras in the other authentic copies of the said returns, viz:
[A]fter a careful inspection of the contested election returns and other authentic copies of
the same, this Commission finds sufficient basis for the exclusion of some of these returns
for being tampered or falsified. The exclusion of the said returns is based on the following
findings:
a. In the election return for Precinct No. 107-A, an examination of the same
shows that the tallies or taras for the fourth box or square for Respondent-
Appellee Doromal [were] closed on the fourth vote;
b. In the election return for Precinct No. 114-A, an examination of the same
shows that the tallies or taras for the twelfth box or square for Respondent-
Appellee Doromal [were] closed on the fourth vote;
c. In the election return for Precinct No. 130-A, an examination of the same
shows that the tallies or taras for the fifth and seventh boxes or squares for
Respondent-Appellee Doromal were closed on the fourth vote;
d. In the election return for clustered Precinct Nos. 6-A and 6-B, an
examination of the same shows that the tallies or taras for the seventh box or
square for Respondent-Appellee Doromal [were] closed on the fourth vote;
e. In the election return for Precinct No. 55-A, an examination of the same
shows that the tallies or taras for the sixth box or square for Respondent-Appellee
Doromal [were] closed on the fourth vote;
f. In the election return for clustered Precinct Nos. 67-A and 67-B, an
examination of the same shows that the tallies or taras for the fifth box or square
for Respondent-Appellee Doromal [were] closed on the fourth vote;
g. In the election return for clustered Precinct Nos. 116-A and 116-B, an
examination of the same shows that the tallies or taras for the eighteenth and
nineteenth boxes or squares for Respondent-Appellee Doromal were closed on
the fourth vote;
h. In the election return for clustered Precinct Nos. 42-A and 43-A, an
examination of the same shows that the tallies or taras for the twenty-first box or
square for Respondent-Appellee Doromal [were] closed on the fourth vote;
Considering that a substantial number of these election returns have the same type of
discrepancy, i.e., the taras were not closed on the fifth vote, the said election returns cannot be
relied upon to determine the votes in the said precincts. Evidently, the methodical tampering of
these returns permanently put in doubt their authenticity as valid bases for the results of the
elections. Thus, they should be excluded from the canvass.[29]
The COMELEC also gave credence to the affidavits of private respondents poll watchers, who stated that
numerous irregularities allegedly occurred during the tallying of the votes at the precinct level.
We find the manner in which the COMELEC excluded the subject returns to be fatally flawed. In
the absence of clearly convincing evidence, the validity of election returns must be upheld.[30] A conclusion
that an election return is obviously manufactured or false and consequently should be disregarded in the
canvass must be approached with extreme caution and only upon the most convincing
proof.[31] Corrolarily, any plausible explanation, one which is acceptable to a reasonable man in the light
of experience and of the probabilities of the situation, should suffice to avoid outright nullification, which
results in disenfranchisement of those who exercised their right of suffrage.[32] As will be discussed shortly,
there is a patent lack of basis for the COMELECs findings that the subject returns were tampered. In
disregard of the principle requiring extreme caution before rejecting election returns, the COMELEC
proceeded with undue haste in concluding that the subject returns were tampered. This is grave abuse
of discretion amounting to lack or excess of jurisdiction.
At the outset, we find that the COMELEC placed undue reliance on the affidavits of Birons poll watchers
to establish the irregularities and fraud allegedly committed during the counting of votes. These affidavits
are evidently self-serving. Thus, we have ruled that reliance should not be placed on affidavits of this
nature for purposes of setting aside the validity of election returns.[33]
Furthermore, the contents of these affidavits are grossly inadequate to establish tampering.
Private respondents poll watchers, namely, Michelle Duhina and Cirilo Demadante,[34] Mary Grace Jiz-
Deseo and Lito Duller,[35] Victoria Develos and Joy May De La Gante,[36] Rizal Artoro Deza III and Reno
Demonteverde,[37] Cecile Alcanzarin and Horte May Dimzon,[38]Rosie Ventura,[39] and Babylyn Dedoroy and
Sarah Dondoy Ano[40] stated, in substance, that: (1) some of them were not so situated in the precinct to
see clearly the tallying of the votes in the election returns, (2) there was a 30 minute brownout in some
of the precincts (i.e., Precinct Nos. 107A and 114A), (3) some of them were asked to affix their signatures
and thumb marks ahead of the members of the BEI, (4) some of them were not given Copy 4 of the
subject returns after the counting, and (5) they noticed the discrepancy between the taras and written
figures only later on when they were shown Copy 4 of the election returns.
While these statements suggest that the watchers failed to assert their rights or to perform their
duties under the OEC,[41] we fail to see how they established that the election returns were tampered. On
the contrary, these affidavits reveal that the watchers failed to detect any anomaly during the actual
tallying of the votes at the precinct level because the missing taras were discovered only later on when
Copy 4 was shown to them.
Neither can we deduce from the missing taras the fraud that allegedly marred the tallying of votes therein.
We have examined Copy 4 and Copy 5[42] of the subject returns as appearing in the records of this case,
and we note that the said returns are regular on their face save for one or, at most, two missing taras in
each of the eight contested election returns.[43] We find it significant that in some of these returns (i.e.,
those from Precinct Nos. 114A,[44] 55A[45] and 42A/43A),[46] while one tara is indeed missing in Copy 4, no
such missing tara exists in Copy 5, although the supposed missing tara in Copy 4 is located very near the
border, if not on the border, of the box in Copy 5 of the election returns. This suggests that in making the
duplicate originals, the forms for Copies 2 to 7 of the election returns were not perfectly aligned with Copy
1 (i.e., the MBCs copy), resulting in the misalignment of the taras in the carbon copies of the said
returns. This may explain why there appears to be a missing tara in Copy 4 of these returns. It should
also be noted that the number of votes in written figures and words is not disputed as they appear to be
uniform in Copies 4 and 5 of the subject returns. The discrepancy is, thus, limited to the number of taras
vis--vis the number of votes in written figures and words. In view thereof and in the absence of clear and
convincing proof, the evidence on record fails to establish the tampering or falsification of the subject
returns. At most, there are minor discrepancies in Copies 4 and 5 of the subject returns consisting of one
or two missing taras.
In case of discrepancy in the other authentic

copies of an election return, the procedure in
Section 236 of the Omnibus Election Code should
be followed.
In Patoray, we ordered the COMELEC to proceed in accordance with Section 236 of the OEC after it was
determined that there was a discrepancy between the taras vis--vis the written figures and words in the
election return.[47] With the above finding that there are minor discrepancies in the other authentic copies
of the subject returns, specifically Copies 4 and 5, the proper procedure then is not to exclude the said
returns but to follow Section 236, viz:
SECTION 236. Discrepancies in election returns. In case it appears to the board of

canvassers that there exists discrepancies in the other authentic copies of the
election returns from a polling place or discrepancies in the votes of any candidate
in words and figures in the same return, and in either case the difference affects
the results of the election, the Commission, upon motion of the board of canvassers
or any candidate affected and after due notice to all candidates concerned, shall proceed
summarily to determine whether the integrity of the ballot box had been preserved, and
once satisfied thereof shall order the opening of the ballot box to recount the votes cast
in the polling place solely for the purpose of determining the true result of the count of
votes of the candidates concerned. (Emphasis supplied)
The COMELEC should, thus, order the canvass of the election returns from Precinct Nos. 107A,
114A, 6A/6B, 55A, 67A/67B, 116A/116B, 130A and 42A/ 43A. After canvassing, it should determine
whether the total number of missing taras will affect the result of the elections. If it will not affect the
result, the COMELEC should proclaim as winner the vice mayoralty candidate with the highest number of
votes. On the other hand, if the total number of missing taras will affect the results of the election, the
COMELEC, after due notice to all candidates concerned, should proceed summarily to determine whether
the integrity of the ballot boxes (where the election returns with missing tara/s were tallied) have been
preserved. Once satisfied therewith, the COMELEC should order the opening of the ballot boxes to recount
the votes cast in the polling place solely for the purpose of determining the true result of the count of
votes of the candidates concerned.[48] However, if the integrity of the ballots has been violated, the
COMELEC need not recount the ballots but should seal the ballot box and order its safekeeping in
accordance with Section 237 of the OEC, thus:
Sec. 237. When integrity of ballots is violated. If upon the opening of the ballot
box as ordered by the Commission under Sections 234, 235 and 236, hereof, it should
appear that there are evidence or signs of replacement, tampering or violation of the
integrity of the ballots, the Commission shall not recount the ballots but shall forthwith
seal the ballot box and order its safekeeping.
In sum, it was highly irregular for the COMELEC to outrightly exclude the subject returns resulting
in the disenfranchisement of some 1,127 voters as per the records of this case.[49]The proper procedure
in case of discrepancy in the other authentic copies of the election returns is clearly spelled out in Section
236 of the OEC. For contravening this legal provision, the COMELEC acted with grave abuse of discretion
amounting to lack or excess of jurisdiction.
We end with some observations. Had there been sufficient evidence of tampering in this case, it would
still be highly improper for the COMELEC to outrightly exclude the subject election returns. In such a case,
the COMELEC should proceed in accordance with Section 235[50] of the OEC which is similar to Section
236 in that the COMELEC is authorized to open the ballot box as a measure of last resort. This has been
our consistent ruling as early as in the 1995 case of Patoray followed by Lee v. Commission on
Elections,[51] Balindong v. Commission on Elections,[52] Dagloc v. Commission on Elections,[53] and Cambe
v. Commission on Elections.[54] It is quite disquieting, therefore, that despite these repeated
pronouncements, the COMELEC persists in summarily excluding the election returns without undertaking
the requisite steps to determine the true will of the electorate as provided in the pertinent provisions of
the OEC. The paramount consideration has always been to protect the sanctity of the ballot; not to
haphazardly disenfranchise voters, especially where, as here, the election is closely contested. The
COMELECs constitutional duty is to give effect to the will of the electorate; not to becloud their choice by
defying the methods in the OEC designed to ascertain as far as practicable the true will of the sovereign
people. Verily, the strength and stability of our democracy depends to a large extent on the faith and
confidence of our people in the integrity of the electoral process where they participate as a particle of
democracy. That is the polestar that should have guided the COMELECs actions in this case.
WHEREFORE, the petition is GRANTED. The COMELEC En Bancs February 1, 2008 Resolution
is NULLIFIED.
The COMELEC is ORDERED to raffle SPC No. 07-147 to one of its divisions which is directed to
resolve the same with deliberate dispatch in accordance with this Decision by:
(1) Including the election returns from Precinct Nos. 90A/90B, 7A/7B and 208A in the
canvassing of votes for the position of vice mayor of the Municipality of Dumangas, Iloilo;
(2) Proceeding in accordance with Section 236 of the Omnibus Election Code, as
outlined in this Decision, with respect to the canvassing of the election returns from Precinct
Nos. 107A, 114A, 6A/6B, 55A, 67A/67B, 116A/116B, 130A and 42A/43A for the position of
vice mayor of the Municipality of Dumangas, Iloilo;
(3) Proclaiming the winning candidate for the position of vice mayor of the Municipality
of Dumangas, Iloilo in the May 14, 2007 elections after the canvassing of the
aforementioned election returns.
SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice





JOSE C. MENDOZA
Associate Justice
CERTIFICATION
of the Court.
REYNATO S. PUNO
Chief Justice
[1]
An Act Introducing Additional Reforms in the Electoral System and For Other Purposes. Effective:
January 5, 1988.
[2]
Batas Pambansa Blg. 881, effective: December 3, 1985.
[3]
Rollo, pp. 68-72. The Resolution was adopted by Acting Chairman Resurreccion Z. Borra,
Commissioners Florentino A. Tuason, Jr., Romeo A. Brawner, Nicodemo T. Ferrer and Moslemen T.
Macarambon. Commissioner Rene V. Sarmiento dissented.
[4]
Id. at 33-42; penned by Commissioner Nicodemo T. Ferrer. Presiding Commissioner Florentino A.
Tuason, Jr. concurred in a separate opinion. Commissioner Rene V. Sarmiento dissented.
[5]
These were the election returns from Precinct Nos. 204-A, 207-A, 202-A, 107-A, 169-A. 114-A, 20-A,
130-A, 174-A/174-B, 6-A/6-B, 55-A, 162-A/163-A, 67-A/67-B, 90-A/90-B, 21-A/21-B, 7-A/7-B, 208-
A/208-B, 173-A/173-B, 116-A/116-B, 59-A/60-A, 42-A/43-A, 192-A, 112-A/112-B, and 30-A/30-B.
[6]
The term tara refers to the lines representing one vote in the counting of votes at the precinct level as
provided in Section 210 of the OEC, viz:
Sec. 210. Manner of counting votes x x x
Each vote shall be recorded by a vertical line, except every fifth vote which shall be
recorded by a diagonal line crossing the previous four vertical lines. x x x
In Patoray v. Commission on Elections, [319 Phil. 564, 569 (1995)], we used the
term taras thus:
We hold that the COMELECs Second Division correctly ordered the exclusion of Election
Return No. 661290 (Precinct No. 16), it appearing that it contained a discrepancy
between the taras and the written figures. In addition, however, the COMELECs
Second Division should have ordered a recount of the ballots or used the Certificate
of Votes cast in the precinct in question to determine the votes for each of the parties
in this case. (Emphasis supplied)
[7]
There were seven (7) copies of the election returns prepared by the BEI. These were distributed in
accordance with Section 1 of RA 8173:
SECTION 1. Section 27 of Republic Act No. 7166, as amended by Republic Act No. 8045, is hereby further
amended to read as follows:
SEC. 27. Number of Copies of Election Returns and their Distribution. The Board of
Election Inspectors shall prepare in handwriting the election returns in their respective
polling places, in the number of copies herein provided and in the form to be prescribed
and provided by the Commission.
The copies of the election returns shall be distributed as follows: x x x
(b) In the election of local officials:
(1) The first copy shall be delivered to the city or municipal board of canvassers;
(2) The second copy, to the Commission;
(3) The third copy, to the provincial board of canvassers;
(4) The fourth copy, to the dominant majority party as determined by the
Commission in accordance with law;
(5) The fifth copy, to the dominant minority party as determined by the
Commission in accordance with law;
(6) The sixth copy, to a citizens' arm authorized by the Commission to conduct
an unofficial count:
Provided, however, That the accreditation of the citizens' arm shall be subject to
the provisions of Section 52(k) of Batas Pambansa Blg. 881; and
(7) The seventh copy shall be deposited inside the compartment of the ballot box
for valid ballots.
[8]
Records, vol. I, pp. 180-208.
[9]
Id.
[10]
Entitled In the Matter of the Appeal from the Rulings of the Board of Canvassers of Dumangas, Iloilo,
In BOC Case Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24
and 25.
[11]
Rollo, p. 42.
[12]
Id. at 258-262.
[13]
Id. at 127-129.
[14]
Id. at 130-183.
[15]
Information Technology Foundation of the Philippines v. Commission on Elections, 464 Phil. 173, 190
(2004).
[16]
Supra note 6 at 568-569.
[17]
Id. at 571.
[18]
368 Phil. 277, 290 (1999).
[19]
Id.
[20]
Records, vol. I, p. 64.
[21]
Id. at 68.
[22]
Id. at 70.
[23]
The unjustified refusal of the BEI to issue a certificate of votes is an election offense under Section
27(c) of RA 6646:
Sec. 27. Election Offenses. - In addition to the prohibited acts and election offenses enumerated in
Sections 261 and 262 of Batas Pambansa Blg. 881, as amended, the following shall be guilty of an
election offense: x x x
(c) Any member of the board of election inspectors who refuses to issue to duly accredited watchers the
certificate of votes provided in Section 16 hereof.
[24]
Pineda stated in her affidavit, thus:
That after the counting of votes, I, Aida Pineda personally indicated with my handwriting the votes of
candidates for the position of, among others, Vice-Mayor and made the members of the Board of
Election Inspectors (BEI) sign the same. The votes are as follows:
c. Vice-Mayor
1. Hernan Biron, Jr. thirty one 31
2. Rose Doromal one hundred eight 108
Attached is a copy of the Certificate of Votes that I (Aida Pineda) personally prepared for clustered precinct
208A as Annex A and made an integral part of our affidavit.
That I, Aida Pineda, presented the Certificate of Votes that I prepared to the Chairman of BEI, Matias
Eugenio Piosca but he refused to sign the said Certificate despite my insistence that he is obliged to
do so under the law.
That we were surprised when we learned that the votes for Vice-Mayor Candidate Rose Doromal increased
to 118 from 108 votes or was padded with ten votes in the Election Return prepared by member of
BEI Darwin B. Lico.
That before I presented the Certificate of Votes (Annex A) to the Chairman of the BEI, Matias Eugenio
Piosca I, Aida Pineda double-checked the Certificate of Votes that I prepared and I determined that
the votes especially for Vice-Mayor Candidate Rose Doromal was accurate at 108 votes.
That despite my presentation of the authority given by the party to get its copy of the Election Returns,
the BEI did not give me the copy of the Election Returns intended for the Dominant Majority Party.
(COMELEC records, vol. I, p. 299)
[25]
Section 16. Certificates of Votes. - After the counting of the votes cast in the precinct and
announcement of the results of the election, and before leaving the polling place, the board of election
inspectors shall issue a certificate of votes upon request of the duly accredited watchers. The certificate
shall contain the number of votes obtained by each candidate written in words and figures, the number
of the precinct, the name of the city or municipality and province, the total number of voters who
voted in the precinct and the date and time issued, and shall be signed and thumbmarked by each
member of the board. The certificate shall be accomplished in duplicate with the use of carbon paper.
The original copy shall be issued to the watcher and the duplicate shall be kept in the custody of the
chairman of the board. Refusal on the part of the board of inspectors to issue such certificate shall
constitute an election offense punishable under the Omnibus Election Code.
[26]
Section 17 of HB 4046 is of the same wording as Section 17 of RA 6646.
[27]
Records, HOUSE 8TH CONGRESS (December 7, 1987).
[28]
Records, vol. II, pp. 57, 59-60.
[29]
Rollo, pp. 36-37.
[30]
Casimiro v. Commission on Elections, 253 Phil. 461, 471 (1989).
[31]
Aratuc v. Commission on Elections, 177 Phil. 205, 235 (1979); Pimentel, Jr. v. Commission on Elections,
224 Phil. 260, 283 (1985).
[32]
Aratuc v. Commission on Elections, id.
[33]
Casimiro v. Commission on Elections, supra note 30.
[34]
Duhina and Demadante stated in their joint affidavit, thus:
That before the members of the Board of Election Inspectors (BEI) finished the preparation of the Election
Returns on May 14, 2007, there was a brownout in the precinct (Precinct No. 107A) for not less than
thirty (30) minutes.
That we cannot clearly see the making of the tallies on the Election Returns for Local positions and only
relied on the figures contained in the total number of votes and were surprised when we were shown
copies of the Election Returns for our party, LAKAS-CMD with missing tallies in the votes for candidate
Rose Marie D. Doromal (less than five lines for one box); records, vol. I, p. 285.
[35]
Jiz-Deseo and Duller stated in their joint affidavit, thus:
That while the BEI was counting the votes, there was a brownout in the precinct (Precinct No. 114A) for
not less than thirty (30) minutes.
That after the counting of votes was completed, we were requested to sign and thumb mark the original
copy and all the other copies of the Election Returns even before the BEI affixed their signatures and
thumb marks. However, since we were already tired and in a hurry to leave, we were not able to
check and verify the tallies appearing on the other copies of the Election Returns.
That although we had the necessary authority, the BEI did not give us the copy of the Election Returns
intended for the Dominant Majority Party.
That it was only later when we were shown a copy of the Election Returns for the Dominant Majority Party
that we noticed that there were missing tallies (less than five lines per box) in the votes for Candidate
Rose Marie D. Doromal in said copy; id. at 287.
[36]
Develos and De La Gante stated in their joint affidavit, thus:
That during the counting of votes [in Precinct No. 130A], the official (brown) tally sheet was not placed
on the board for the public to see but was placed on a table.
That the third member of the Board of Election Inspector (BEI) was a municipal employee and not a
teacher.
That we did not witness the making of the tallies on the Election Returns for Local Positions and only relied
on the figures contained in the total number of votes and we were surprised when we were shown
copies of the Election Returns for our party, LAKAS-CMD with missing tallies (less than five lines for
one box) in the votes for candidate Rose Marie D. Doromal; id. at 288.
[37]
Deza III and Demonteverde stated in their joint affidavit, thus:
That during the counting of votes we were assigned to watch the member of the Board of Election
Inspectors (BEI) putting the official tallies on the Election Returns for Local Positions.
After the counting of votes was completed, we were requested to sign and thumb mark the original copy
and all the other copies of the Election Returns intended for the Dominant Majority Party.
It was only later when we were shown a copy of the Election Returns for the Dominant Majority Party
that we noticed that the tallies appearing in said copy the same were different from the tallies in the
copy for the Dominant Majority Party were irregularly placed and there were missing tallies (less than
five lines in the box) for candidate Rose Marie D. Doromal in said copy; id. at 290.
[38]
Alcanzarin and Dimzon stated in their joint affidavit, thus:
That I, Cecile Alcanzarin was assigned to watch the member of the BEI making the official tallies on the
Election Returns for Local Positions. I was positioned in front of that member of the BEI making the
official tallies since I was not allowed to position myself at the back of the BEI making it difficult for
me to see the tallies on the Election Returns being made by the said members of the BEI.
That I, Cecile Alcanzarin, brought to the BEIs attention a discrepancy between the figures with votes for
Vice-Mayoral candidate Hernan Biron, Jr. appearing in the tally sheet and in the Election Returns,
which the BEI then corrected.
That after the counting of the votes were completed, the BEI asked us to sign and our thumb marks
before the BEI even signed and thumb marked the Election Returns. The BEI also told us that the
watchers could already leave the precinct.
That the member of the BEI making the official tallies on the Election Returns was positioned in a poorly
lit place making it doubly difficult for me to see the tallies that he was making.
It was only later when we were shown a copy of the Election Returns for the Dominant Majority Party
that we noticed that there were missing tallies (less than five lines in the box) for candidate Rose
Marie D. Doromal in said copy; id. at 291.
[39]
Ventura stated in her affidavit, thus:
That during the counting I was assigned to watch the member of the Board of Election Inspector (BEI)
writing the official tallies on the Election Returns for the Local Elections. However, I was not able to
closely monitor the conduct of the tally and just relied on the total number of votes reflected in the
Election Returns without scrutinizing the individual tallies.
That after the counting of votes was complete, the BEI requested the watchers to sign and thumb mark
ahead of them.
The BEI did not give the copy of the Election Returns intended for the Dominant Majority Party to the
partys authorized representatives.
That it was only later when I was shown a copy of the Election Returns for the Dominant Majority Party
that I noticed that there were missing tallies (less than five lines per box) for the candidate Rose Marie
D. Doromal; id. at 294.
[40]
Dedoroy and Ano stated in their joint affidavit, thus:
That after the counting of votes was completed, we were requested to sign and thumb mark the original
copy and all the other copies of the Election Returns. However, we were not able to check and verify
the tallies appearing on the copies of the Election Returns.
That it was only later when we were shown a copy of the Election Returns for the Dominant Majority Party
that we noticed that there were missing tallies (less than five lines per box) in the votes for Candidate
Rose Marie D. Doromal in said copy; id. at 302.
[41]
Section 179 of the OEC provides:
Section 179. Rights and duties of watchers. - Upon entering the polling place, the watchers shall present
and deliver to the chairman of the board of election inspectors his appointment, and forthwith, his
name shall be recorded in the minutes with a notation under his signature that he is not disqualified
under the second paragraph of Section 178. The appointments of the watchers shall bear the personal
signature or the facsimile signature of the candidate or the duly authorized representatives of the
political party or coalition of political parties who appointed him or of organizations authorized by the
Commission under Section 180. The watchers shall have the right to stay in the space reserved for
them inside the polling place. They shall have the right to witness and inform themselves of the
proceedings of the board of election inspectors, including its proceedings during the registration of
voters, to take notes of what they may see or hear, to take photographs of the proceedings and
incidents, if any, during the counting of votes, as well as of election returns, tally boards and ballot
boxes, to file a protest against any irregularity or violation of law which they believe may have been
committed by the board of election inspectors or by any of its members or by any persons, to obtain
from the board of election inspectors a certificate as to the filing of such protest and/or of the resolution
thereon, to read the ballots after they shall have been read by the chairman, as well as the election
returns after they shall have been completed and signed by the members of the board of election
inspectors without touching them, but they shall not speak to any member of the board of election
inspectors, or to any voter, or among themselves, in such a manner as would distract the proceedings,
and to be furnished with a certificate of the number of votes in words and figures cast for each
candidate, duly signed and thumbmarked by the chairman and all the members of the board of
election inspectors. Refusal of the chairman and the members of the board of election inspectors to
sign and furnish such certificate shall constitute an election offense and shall be penalized under this
Code.
Section 12 of R.A. No. 6646 modified and expanded the rights and duties of the watchers, viz:
Sec. 12. Official Watchers. - Every registered political party, coalition of political parties, and every
candidate shall each be entitled to one watcher in every polling place: Provided, That candidates for
members of the Sangguniang Panlalawigan, Sangguniang Panlungsod or Sangguniang Bayan or for
city or municipal councilors belonging to the same slate or ticket shall collectively be entitled only to
one watcher.
There shall also be recognized two principal watchers, one representing the ruling coalition and the other
the dominant opposition coalition, who shall sit as observers in the proceedings of the board. The
principal watcher shall be designated on the basis of the recommendation of the ruling coalition,
represented by the political party of the incumbent elected district representative, and of the dominant
opposition coalition, represented by the political party which performed best or which polled at least
ten percent (10%) of the votes in the last national election.
A duly signed appointment of a watcher shall entitle him to recognition by the board of election inspectors
and the exercise of his rights and discharge of his duties as such: Provided, however, That only one
watcher of each of those authorized to appoint them can stay at any time inside the polling place.
The watchers shall be permitted full and unimpeded access to the proceedings so that they can read the
names of those written on the ballots being counted with unaided natural vision, consistent with good
order in the polling place.
In addition to their rights and duties under Section 179 of Batas Pambansa Blg. 881, the two principal
watchers representing the ruling coalition and the dominant opposition in a precinct shall, if available,
affix their signatures and thumbmarks on the election returns for that precinct. If both or either of
them is not available, unwilling or should they refuse to do so, any watcher present, preferably with
political affiliation or alignment compatible with that of the absent or unwilling watcher, may be
required by the board of election inspectors to do so.
[42]
Copy 5 (i.e., copy of the dominant minority party) was submitted in evidence by petitioner before the
MBC to controvert private respondents claim that the subject returns were tampered.
[43]
As stated earlier, petitioner endeavored to submit Copy 3 of the subject election returns while the
instant petition was pending resolution before this Court. However, this Court is not a trier of facts,
and we cannot receive such documentary evidence at this late stage in the proceedings. If it were
petitioners intention to show that Copy 3 of the subject returns did not contain missing taras, then
petitioner should have done so in the proceedings before the COMELEC itself. At any rate, even if we
were to assume that the Copy 3 belatedly submitted by petitioners before this Court is authentic, we
note that these copies are substantially of the same import as Copy 5 of the subject returns appearing
in the records of this case.
[44]
Records, vol. I, p. 47 (Copy 4); vol. II p. 49 (Copy 5).
[45]
Id. at 58 (Copy 4); id. at 54 (Copy 5).
[46]
Id. at 78 (Copy 4); id. at 64 (Copy 5).
[47]
Patoray v. Commission on Elections, supra note 6 at 569.
[48]
See Olondriz, Jr. v. Commission on Elections, 371 Phil. 867, 872 (1999), where we upheld the decision
of the COMELEC to open the ballot box pursuant to Section 236 of the OEC. The discrepancy between
the written words vis--vis figures in the contested election return was 10 votes while the winning
candidate won by a margin of 2 votes. Thus, it was necessary to open the ballot box to determine the
true will of the electorate.
[49]
Records, vol. I, pp. 44, 48, 52, 58, 56, 62, 74 and 78.
[50]
Section 235. When election returns appear to be tampered with or falsified. - If the election returns
submitted to the board of canvassers appear to be tampered with, altered or falsified after they have
left the hands of the board of election inspectors, or otherwise not authentic, or were prepared by the
board of election inspectors under duress, force, intimidation, or prepared by persons other than the
member of the board of election inspectors, the board of canvassers shall use the other copies of said
election returns and, if necessary, the copy inside the ballot box which upon previous authority given
by the Commission may be retrieved in accordance with Section 220 hereof. If the other copies of the
returns are likewise tampered with, altered, falsified, not authentic, prepared under duress, force,
intimidation, or prepared by persons other than the members of the board of election inspectors, the
board of canvassers or any candidate affected shall bring the matter to the attention of the
Commission. The Commission shall then, after giving notice to all candidates concerned and after
satisfying itself that nothing in the ballot box indicate that its identity and integrity have been violated,
order the opening of the ballot box and, likewise after satisfying itself that the integrity of the ballots
therein has been duly preserved shall order the board of election inspectors to recount the votes of
the candidates affected and prepare a new return which shall then be used by the board of canvassers
as basis of the canvass.
[51]
453 Phil. 277, 290 (2003). In Lee, we ruled:
The lack of merit of petitioner's arguments notwithstanding, the COMELEC, in ordering the exclusion of
the questioned return, should have determined the integrity of the ballot box, the ballot-
contents of which were tallied and reflected in the return, and if it was intact, it should have ordered
its opening for a recounting of the ballots if their integrity was similarly intact. (Emphasis
supplied)
[52]
459 Phil. 1055, 1070-1071 (2003). In Balindong, we stated:
[B]ased on Section 235 of the OEC which this Court elucidated on along with Section 236 in Patoray v.
COMELEC, in cases where the election returns appear to have been tampered with, altered or falsified,
the prescribed modality is for the COMELEC to examine the other copies of the questioned returns
and if the other copies are likewise tampered with, altered, falsified, or otherwise spurious, after having
given notice to all candidates and satisfied itself that the integrity of the ballot box and of the ballots
therein have been duly preserved, to order a recount of the votes cast, prepare a new return which
shall be used by the board of canvassers as basis for the canvass, and direct the proclamation of the
winner accordingly.
The COMELEC failed to observe the foregoing procedure. As admitted in its Order dated December 13,
2001, it examined only the election returns used by the MBC, omitting to take a look at the other
copies of the questioned returns or ordering a pre-proclamation recount of the votes of the candidates
affected. The failure to take either step renders the poll body's action consisting of the
outright exclusion of the return for Precinct 80A and the award of 88 votes in the return
for Precinct 47A/48A highly questionable.
The precipitate exclusion from canvass of the return for Precinct 80A resulted in the
unjustified disenfranchisement of the voters thereof. This could have been avoided had the
COMELEC availed of the other courses of action mentioned in the law, namely: the examination of
the other copies of the return and the recount of the votes by the BEI. (Emphasis supplied)
[53]
463 Phil. 263, 290-291 (2003). In Dagloc, we ruled:
Outright exclusion of election returns on the ground that they were fraudulently prepared
by some members or non-members of the BEI disenfranchises the voters. Hence, when
election returns are found to be spurious or falsified, Section 235 of the Omnibus Election Code
provides the procedure which enables the COMELEC to ascertain the will of the electorate.
The COMELEC, therefore, gravely abused its discretion when it excluded outright the subject election
returns after finding that they were fraudulent returns. Instead, the COMELEC should have followed
the procedure laid down in Section 235 of the Omnibus Election Code: x x x (Emphasis supplied)
[54]
G.R. No. 178456, January 30, 2008, 543 SCRA 157, 171-174. In Cambe, we reiterated:
In the instant case, Election Return No. 9601666 cannot be considered as regular or authentic on its face
inasmuch as the total votes cast for the vice-mayoralty position, which is 288, exceeded the total
number of the voters who actually voted (230) and the total number of registered voters (285). The
COMELEC therefore is clothed with ample authority to ascertain under the procedure outlined in the
Omnibus Election Code (OEC) the merits of the petition to exclude Election Return No. 9601666.
Sections 235 and 236 of the OEC read: x x x
xxxx
In the instant case, the MBC, without complying with Section 235 of the OEC, outrightly excluded Election
Return No. 9601666. Worse, the COMELEC found nothing irregular in the procedure taken by the
MBC. The precipitate exclusion from the canvass of the return for Precincts 66A and 68
resulted in the unjustified disenfranchisement of the voters thereof. (Emphasis supplied)

Supreme Court
Manila
EN BANC
LEONOR DANGAN-CORRAL, G.R. No. 190156

Petitioner,
Present:
PUNO, C. J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ, and
MENDOZA, JJ.
COMMISSION ON ELECTIONS and
ERNESTO ENERO FERNANDEZ, Promulgated:
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Does the allowance of execution pending appeal of a Decision of a Regional Trial Court (RTC) in an election
protest case constitute grave abuse of discretion amounting to lack or excess of jurisdiction when the said
RTC Decision does not contain the specific matters required by the Rules of Procedure in Election
Contests? This is the question directly involved in the present case.
In the present Petition for Certiorari, petitioner assails the December 17, 2008 and November 10, 2009
Resolutions of the Commission on Elections (Comelec) in Comelec Special Relief Case, SPR No. 51-2008
dismissing petitioner's petition for certiorari and denying her motion for reconsideration, respectively. The
Comelec found that the RTC substantially complied with the rules on execution pending appeal and did
not gravely abuse its discretion amounting to lack or excess of jurisdiction.
Antecedents
Petitioner Leonor Dangan-Corral (Corral) and private respondent Ernesto Enero Fernandez (Fernandez)
were candidates for the position of mayor of the Municipality of El Nido, Palawan during the May 14, 2007
elections. Corral was eventually proclaimed the winner with 5,113 votes as against Fernandez's 3,807. The
latter, thereafter, filed an election protest docketed as Special Proceedings Case No. 1870 which was
raffled to Branch 95 of the RTC of Puerto Princesa City, Palawan.
On February 22, 2008, the RTC promulgated its Decision,[1] the dispositive portion of which reads:
WHEREFORE, premises considered, the Court rules that, in view of the

invalidation of the ballots judicially declared as written by one (1) or two (2) persons, the
Protestant is hereby declared the duly elected Mayor of El Nido, Palawan by a vote of
1,701, x x x winning over protestee whose final tally of votes after above deduction is
1,236 votes, the Protestant winning by a margin of 465 votes.[2]
On the same day that the decision was promulgated, Corral filed her formal Notice of Appeal
simultaneously paying the required amount of docket/appeal fees. Fernandez, on the other hand, filed a
Motion for Execution Pending Appeal and set the same for hearing on February 27, 2008.
On the said date of hearing, Corral filed her written opposition to the motion; nevertheless, the hearing
was held. After the hearing, the RTC judge issued the Order[3] granting the motion for execution of his
Decision pending its appeal. The dispositive part of the Order states:
WHEREFORE, premises considered, in view of the circumstances cited above

surrounding the execution of the above questioned ballots, there exists a cloud of doubt
on the earlier pronouncement of the Board of Election Canvassers declaring Protestee as
winner of the election contest and should not continue in office as Protestee has no
mandate of the people of El Nido at this point in time and in lieu thereof, the Court hereby
GRANTS the execution pending appeal of its Decision dated February 22, 2008.
On March 5, 2008, Corral filed a Motion for Reconsideration of the said Order, but the motion was
denied. Thus, Corral filed on March 12, 2008 a petition for certiorari before the Comelec imputing grave
abuse of discretion to the RTC for granting Fernandezs motion for execution pending appeal despite the
absence of good and special reasons or superior circumstances as expressly required by existing rules.
Ruling of the Comelec First Division
The Comelec First Division issued a 60-day Temporary Restraining Order (TRO) on March 26, 2008
enjoining the enforcement and implementation of the February 27, 2008 Order of the RTC. Thereafter,
as the TRO was about to expire, it issued an order dated May 22, 2008 granting the preliminary injunction
prayed for by the petitioner. Then on December 17, 2008, it resolved the petition and issued the assailed
Resolution, the dispositive portion of which states:
WHEREFORE, premises considered, the instant petition for certiorari is hereby

DISMISSED. The orders of the respondent court dated February 27, 2008 and March 7,
2008 are consequently affirmed.
SO ORDERED.[5]
Ruling of the Comelec En Banc
Petitioner moved for a reconsideration before the Comelec En Banc which resolved the matter on
November 10, 2009 as follows:
WHEREFORE, premises considered, the Commission en banc RESOVLED, as it hereby

RESOLVES, to:
1. DISMISS petitioner LEONOR DANGAN-CORRAL'S Motion for Reconsideration

for lack of merit;
2. AFFIRM the dismissal of the herein Petition by the First Division of this
Commission, hereby giving way to the implementation of the execution pending appeal
issued by the court a quo in favor of private respondent Ernesto Enero Fernandez, and
hereby ordering petitioner Leonor Dangan-Corral to vacate the position of Municipal
Mayor of El Nido, Province of Palawan; and the Electoral Contests Adjudication
Department is hereby directed to furnish the Department of Interior and Local
Government a copy of this Resolution for proper implementation;
3. DENY public respondent RTC Judge Bienvenido Blancaflor's motion to dismiss

(addressed to his own court) the charge of contempt filed against him, and instead, he is
hereby found GUILTY of CONTEMPT OF THIS COMMISSION and sentenced to pay a fine
in the amount of ONE THOUSAND (P1,000.00) PESOS;
4. DIRECT private respondent Ernesto Enero Fernandez to explain within ten (10)
days from receipt of this Resolution why he should not be cited for contempt of this
Commission for assuming the herein controverted position of Municipal Mayor of El Nido,
Province of Palawan, while the Writ of Preliminary Injunction earlier issued was still in full
force and effect.
SO ORDERED.[6]
Issues
Hence, this petition, which alleges palpable grave abuse of discretion, to wit:
The respondent Comelec committed not only a reversible error but gravely abused its
discretion when it ignored the mandatory requirements of the SUPREME COURT duly
promulgated Rule on the matter of FORM of Decision of trial court in protest cases.
The respondent Comelec likewise committed grave abuse of discretion when it

disregarded the mandatory requirements of the SUPREME COURT duly promulgated Rule,
specifically Rule 14, Section 11 of the Rules of Procedure in Election Contests Before the
Courts Involving Elective Municipal and Barangay Officials by simplistically relying on the
dispositive portion of the decision of the trial court and refusing to examine the substantial
portion of the said grossly defective trial court decision so as to determine whether the
victory of the protestant and the defeat of protestee was clearly established.
The respondent Comelec committed grave abuse of discretion when it sustained the
validity of the Special Order granting private respondent's Motion for Execution Pending
Appeal notwithstanding the clear absence of the requisite two [2] good reasons to support
such grant.
The respondent Comelec committed grave abuse of discretion when it stubbornly insisted
on merely applying in this case the general principles of Certiorari Petitions and refused
to apply and correlate therewith the provisions of the New Rules on Protest Cases
Applicable to the Trial Courts most especially on the subject of Execution Pending Appeal.
In sum, the issue is whether the Comelec gravely abused its discretion amounting to lack or excess
of jurisdiction in affirming the execution pending appeal of the decision of the RTC.
Petitioner contends that the RTC Decision sought to be executed pending appeal violates the mandatory
required form of decisions in election cases and thus should not be executed. She further contends that
the determination of whether the victory of the protestant was clearly established should be made from
the entire decision and not, as what the Comelec did, merely from the dispositive portion. She insists that
the RTC Decision readily shows the inconclusive, defective and infirmed nature of protestant's alleged
victory. Petitioner also posits that there was no valid or good reason given for granting the execution
pending appeal. She also contends that the Comelec refused to apply the new rules on protest cases and
is thus guilty of grave abuse of discretion.
Private Respondent's Arguments

On the other hand, Fernandez contends that the Decision of the RTC is well grounded based on the
evidence presented and it clearly establishes his victory over Corral by a margin of 465 votes. Fernandez
also contends that there are good reasons to allow execution pending appeal, like giving substance to the
voice of the people of El Nido. Hence, he maintains that the decision may properly be the subject of a writ
of execution pending appeal.
Our Ruling
There are clear cut requirements on when RTC decisions may be executed pending appeal. Rule 14 of
the Rules of Procedure in Election Contests states:
Sec. 11. Execution pending appeal. - On motion of the prevailing party with notice to the
adverse party, the court, while still in possession of the original records, may, at its
discretion, order the execution of the decision in an election contest before the expiration
of the period to appeal, subject to the following rules:
(a) There must be a motion by the prevailing party with three-day notice to the
adverse party. Execution pending appeal shall not issue without prior notice and
hearing. There must be good reasons for the execution pending appeal. The court, in a
special order, must state the good or special reasons justifying the execution pending
appeal. Such reasons must:
(1) constitute superior circumstances demanding urgency that will

outweigh the injury or damage should the losing party secure a reversal
of the judgment on appeal; and
(2) be manifest, in the decision sought to be executed, that the

defeat of the protestee or the victory of the protestant has been
clearly established.
(b) If the court grants an execution pending appeal, an aggrieved party shall have twenty
working days from notice of the special order within which to secure a restraining order
or status quo order from the Supreme Court or the Commission on Elections. The
corresponding writ of execution shall issue after twenty days, if no restraining order or
status quo order is issued. During such period, the writ of execution pending appeal shall
be stayed. (Emphasis supplied)
A valid exercise of discretion to allow execution pending appeal requires that it must be manifest in the
decision sought to be executed that the defeat of the protestee and the victory of the protestant have
been clearly established.[7] The Rules of Procedure in Election Contests now embody this doctrine, which
the Comelec has in the past[8] given value to and used in resolving cases before it, and which has formed
part of our jurisprudence.
We have taken to heart the need to decide election contests with dispatch; hence, we promulgated A.M.
No. 07-4-15-SC[9] to address the matter. Noteworthy is the fact that particular attention has been given
to the decision itself in election contests. For comparison, in the Rules of Court, Section 1 of Rule 36 merely
states: A judgment or final order determining the merits of the case shall be in writing personally and
directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based,
signed by him, and filed with the clerk of court. In the Rules of Procedure in Election Contests, however,
Section 2 of Rule 14 states:
Section 2. Form of decision in election protests.-After termination of the revision of ballots

and before rendering its decision in an election protest that involved such revision, the
court shall examine and appreciate the original ballots. The court, in its appreciation of
the ballots and in rendering rulings on objections and claims to ballots of the parties, shall
observe the following rules:
(a) On Marked Ballots- The court must specify the entries in the ballots that clearly indicate
that the intention of the voter is to identify the ballot. The specific markings in the ballots
must be illustrated or indicated;
(b) On Fake or Spurious Ballots- The court must specify the COMELEC security markings
that are not found in the ballots that are considered fake or spurious;
(c) On Stray Ballots- The court must specify and state in detail why the ballots are
considered stray;
(d) On Pair or Group of Ballots Written by One or Individual Ballots Written by Two- When
ballots are invalidated on the ground of written by one person, the court must clearly and
distinctly specify why the pair or group of ballots has been written by only one
person. The specific strokes, figures or letters indicating that the ballots have been written
by one person must be specified. A simple ruling that a pair or group of ballots
has been written by one person would not suffice. The same is true when
ballots are excluded on the ground of having been written by two persons. The
court must likewise take into consideration the entries of the Minutes of Voting and
Counting relative to illiterate or disabled voters, if any, who cast their votes through
assistors, in determining the validity of the ballots found to be written by one person,
whether the ballots are in pairs or in groups; and
(e) On Claimed Ballots- The court must specify the exact basis for admitting or crediting
claimed votes to either party. (Emphasis supplied)
Notably, the word "must" is used in the above-quoted rule, thus, clearly indicating the mandatory -- not
merely directory -- nature of the requirement of what the decision should contain. The specific rules on
the contents of decisions in election contests were formulated so that the decision could, by itself, be
taken as a valuable aid in expeditiously deciding on appeal incidents peripheral to the main case. In the
present case, the contents of the decision become particularly relevant and useful in light of the need to
decide the case before us with utmost dispatch, based only on the documents submitted before us,
considering that the records and election materials are with another tribunal, as a matter of course.
For the limited purpose of determining whether the essential requisite of a clear showing in the decision
of the protestants victory and the protestees defeat is present, we have examined the RTC Decision
subject of the present case. It is glaring and unmistakable that the said Decision does not conform to the
requirements set forth in Section 2 of the Rules. It does not give the specifics of its findings. The general
statement invalidating 67% of the total votes cast on the ground that the ballots were written by one
person or written by two persons is grossly infirm. The Decision does not specify why the court considered
particular groups of ballots to have been written by one person, and other invalidated ballots to have been
written by two persons. Worse, the Decision does not state which and how many ballots were written by
one person; and which and how many ballots were written by two persons. The entire Decision, even the
lengthy part enumerating the exhibits offered by each party, fails to yield the exact number of and which
ballots were written by one person, and the exact number of and which ballots were written by two
persons. There is also no mention in the decision of whether or not the RTC took into consideration the
entries of the Minutes of Voting and Counting relative to illiterate or disabled voters, if any, who cast their
votes through assistors. The Decision merely states that [a] careful and cursory examination of these
ballots indubitably shows that these ballots are written either by one (1) or two (2) persons, given the
palpable similarity in the handwritings indicated in these ballots earlier declared by Protestant's revisors as
written by one (1) and two (2) persons."[10] It utterly violates the mandatory requirement that "the court
must clearly and distinctly specify why the pair or group of ballots has been written by only one
person. The specific figures or letters indicating that the ballots have been written by one person must be
specified."
In the present case, the victory of the protestant and the defeat of the protestee were not clearly
established in the Decision because of the RTCs failure to conform to the prescribed form of the
Decision. Because of said infirmity, there is no certainty, it not being mentioned in the Decision, on whether
the ballots of those who voted through assistors were also invalidated or not, in conjunction with the lack
of a specific number of ballots invalidated for being written by one person. The ballots of those who voted
through assistors, if any, could validly be written by one person. It being unclear from the Decision
whether these ballots, if any, were invalidated, it follows that the victory of the protestant and defeat of
the protestee are unclear and not manifest therein.
Consequently, to allow the execution of such a grossly infirm RTC Decision in disregard of established
jurisprudence and clear and straightforward rules is arbitrary and whimsical and constitutes grave abuse
of discretion amounting to lack or excess of jurisdiction.[11]
Considering that the execution pending appeal cannot be validly allowed without the above discussed
requisite, and having already found the presence of grave abuse of discretion, we find no necessity of
addressing the other matters raised by the petitioner and of still determining the presence or absence of
the other requisites for execution pending appeal.
WHEREFORE the petition is GRANTED. The December 17, 2008 Resolution of the First Division of the
Commission on Elections and November 10, 2009 Resolution of the Commission on Elections En Banc in
Special Relief Case, SPR No. 51-2008 are declared NULL and VOID.
SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice






JOSE C. MENDOZA
Associate Justice
CERTIFICATION
of the Court.
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 88-124; penned by Judge Bievenido C. Blancaflor.
[2]
Id. at 124.
[3]
Id. at 144-146.
[4]
Id. at 146.
[5]
Id. at 64.
[6]
Id. at 86-87.
[7]
Pecson v. Commission on Elections, G.R. No. 182856, December 24, 2008, 575 SCRA 634, 649.
[8]
Fermo v. Commission on Elections, 384 Phil. 584, 592 (2000); Istarul v. Commission on Elections, G.R.
No. 170702, June 16, 2006, 491 SCRA 300, 309.
[9]
Rules of Procedure in Election Contests Before the Courts Involving Elective Municipal and
Barangay Officials (Rules of Procedure in Election Contests).
[10]
RTC Decision, p. 37; rollo, p. 124.
[11]
Information Technology Foundation of the Philippines v. Commission on Elections, 464 Phil.
173, 323 (2004).

Supreme Court
Manila
SECOND DIVISION
CITY OF ILOILO represented by G.R. No. 168967

HON. JERRY P. TREAS,
City Mayor, Present:
Petitioner,
- versus - BRION,
DEL CASTILLO,
HON. LOLITA CONTRERAS- ABAD, and
BESANA, Presiding Judge, Regional PEREZ, JJ.
Trial Court, Branch 32, and
ELPIDIO JAVELLANA, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
It is arbitrary and capricious for the government to initiate expropriation proceedings, seize a
persons property, allow the order of expropriation to become final, but then fail to justly compensate the
owner for over 25 years. This is government at its most high-handed and irresponsible, and should be
condemned in the strongest possible terms. For its failure to properly compensate the landowner, the City
of Iloilo is liable for damages.
This Petition for Certiorari under Rule 65 of the Rules of Court with a prayer for the issuance of a
temporary restraining order seeks to overturn the three Orders issued by Regional Trial Court (RTC) of
Iloilo City, Branch 32 on the following dates: December 12, 2003 (the First Assailed Order),[1] June 15,
2004 (the Second Assailed Order),[2] and March 9, 2005 (the Third Assailed Order) (the three
aforementioned Orders are collectively referred to as the Assailed Orders).[3]
Factual Antecedents
The essential facts are not in dispute.
On September 18, 1981, petitioner filed a Complaint[4] for eminent domain against private
respondent Elpidio T. Javellana (Javellana) and Southern Negros Development Bank, the latter as
mortgagee. The complaint sought to expropriate two parcels of land known as Lot Nos. 3497-CC and
3497-DD registered in Javellanas name under Transfer Certificate of Title (TCT) No. T-44894 (the Subject
Property) to be used as a school site for Lapaz High School.[5] Petitioner alleged that the Subject Property
was declared for tax purposes in Tax Declaration No. 40080 to have a value of P60.00 per square meter,
or a total value of P43,560.00. The case was docketed as Civil Case No. 14052 and raffled to then Court
of First Instance of Iloilo, Branch 7.
On December 9, 1981, Javellana filed his Answer[6] where he admitted ownership of the Subject
Property but denied the petitioners avowed public purpose of the sought-for expropriation, since the City
of Iloilo already had an existing school site for Lapaz High School. Javellana also claimed that the true fair
market value of his property was no less than P220.00 per square meter. [7]
On May 11, 1982, petitioner filed a Motion for Issuance of Writ of Possession, alleging that it had
deposited the amount of P40,000.00 with the Philippine National Bank-Iloilo Branch.Petitioner claimed
that it was entitled to the immediate possession of the Subject Property, citing Section 1 of Presidential
Decree No. 1533,[8] after it had deposited an amount equivalent to 10% of the amount of
compensation. Petitioner attached to its motion a Certification issued by Estefanio C. Libutan, then Officer-
in-Charge of the Iloilo City Treasurers Office, stating that said deposit was made.[9]
Javellana filed an Opposition to the Motion for the Issuance of Writ of Possession[10] citing the
same grounds he raised in his Answer that the city already had a vast tract of land where its existing
school site was located, and the deposit of a mere 10% of the Subject Propertys tax valuation was grossly
inadequate.
On May 17, 1983, the trial court issued an Order[11] which granted petitioners Motion for Issuance
of Writ of Possession and authorized the petitioner to take immediate possession of the Subject
Property. The court ruled:
PREMISES CONSIDERED, the Motion for the Issuance of a Writ of Possession dated May
10, 1982, filed by plaintiff is hereby granted. Plaintiff is hereby allowed to take immediate
possession, control and disposition of the properties known as Lot Nos. 3497-CC and
3497-DD x x x.[12]
Thereafter, a Writ of Possession[13] was issued in petitioners favor, and petitioner was able to take
physical possession of the properties sometime in the middle of 1985. At no time has Javellana ever denied
that the Subject Property was actually used as the site of Lapaz National High School. Aside from the filing
by the private respondent of his Amended Answer on April 21, 1984,[14] the expropriation proceedings
remained dormant.
Sixteen years later, on April 17, 2000, Javellana filed an Ex Parte Motion/Manifestation, where he
alleged that when he finally sought to withdraw the P40,000.00 allegedly deposited by the petitioner, he
discovered that no such deposit was ever made. In support of this contention, private respondent
presented a Certification from the Philippine National Bank stating that no deposit was ever made for the
expropriation of the Subject Property.[15] Private respondent thus demanded his just compensation as well
as interest. Attempts at an amicable resolution and a negotiated sale were unsuccessful. It bears emphasis
that petitioner could not present any evidence whether documentary or testimonial to prove that any
payment was actually made to private respondent.
Thereafter, on April 2, 2003, private respondent filed a Complaint[16] against petitioner for
Recovery of Possession, Fixing and Recovery of Rental and Damages. The case was docketed as Civil
Case No. 03-27571, and raffled to Branch 28 of the Iloilo City Regional Trial Court. Private respondent
alleged that since he had not been compensated for the Subject Property, petitioners possession was
illegal, and he was entitled to recovery of possession of his lots. He prayed that petitioner be ordered to
vacate the Subject Property and pay rentals amounting to P15,000.00 per month together with moral,
exemplary, and actual damages, as well as attorneys fees.
On May 15, 2003, petitioner filed its Answer,[17] arguing that Javellana could no longer bring an
action for recovery since the Subject Property was already taken for public use. Rather, private respondent
could only demand for the payment of just compensation. Petitioner also maintained that the legality or
illegality of petitioners possession of the property should be determined in the eminent domain case and
not in a separate action for recovery of possession.
Both parties jointly moved to consolidate the expropriation case (Civil Case No. 14052) and the case for
recovery of possession (Civil Case No. 03-27571),[18] which motion was granted by the trial court in an
Order dated August 26, 2003.[19] On November 14, 2003, a commission was created to determine the just
compensation due to Javellana.[20]
On November 20, 2003, private respondent filed a Motion/Manifestation dated November 19,
2003 claiming that before a commission is created, the trial court should first order the condemnation of
the property, in accordance with the Rules of Court. Javellana likewise insisted that the fair market value
of the Subject Property should be reckoned from the date when the court orders the condemnation of the
property, and not the date of actual taking, since petitioners possession of the property was
questionable.[21] Before petitioner could file its Comment, the RTC issued an Order dated November 21,
2003 denying the Motion.[22]
Undeterred, Javellana filed on November 25, 2003, an Omnibus Motion to Declare Null and Void
the Order of May 17, 1983 and to Require Plaintiff to Deposit 10% or P254,000.00.Javellana claimed that
the amount is equivalent to the 10% of the fair market value of the Subject Property, as determined by
the Iloilo City Appraisal Committee in 2001, at the time when the parties were trying to negotiate a
settlement.[23]
First Assailed Order
On December 12, 2003, the RTC issued the First Assailed Order, which nullified the Order dated
May 17, 1983 (concerning the issuance of a writ of possession over the Subject Property). The trial court
ruled:
x x x the Order dated May 17, 1983 is hereby declared null and void and the plaintiff [is]
hereby ordered to immediately deposit with the PNB the 10% of the just
compensation after the Commission shall have rendered its report and have
determined the value of the property not at the time it was condemned but
at the time the complaint was filed in court.[24] (Emphasis ours)
Second Assailed Order
Neither party sought reconsideration of this Order.[25] Nonetheless, about six months later, the
RTC issued the Second Assailed Order, which it denominated as an Amended Order. The Second Assailed
Order was identical to the first, except that the reckoning point for just compensation was now the time
this order was issued, which is June 15, 2004.
x x x the Order dated May 17, 1983 is hereby declared null and void and the plaintiff [is]
hereby ordered to immediately deposit with the PNB the 10% of the just compensation
after the Commission shall have rendered its report and have determined the value of
the property not at the time it was condemned but at the time this order was
issued. (Underscoring in original text)
This time, petitioner filed a Motion for Reconsideration claiming that there was no legal basis for
the issuance of the Second Assailed Order.[26] Javellana opposed, arguing that since the May 17, 1983
Order and the Second Assailed Order were interlocutory in character, they were always subject to
modification and revision by the court anytime.[27]
Third Assailed Order
After the parties were able to fully ventilate their respective positions,[28] the public respondent
issued the Third Assailed Order, denying the Motion for Reconsideration, and ruling as follows:
The Order dated June 15, 2004 among other things stated that parties and counsels
must be bound by the Commissioners Report regarding the value of the property not
at the time it was condemned but at the time this order was issued.
This is true inasmuch as there was no deposit at the PNB and their taking was illegal.
The plaintiff thru [sic] Atty. Laurea alleged that this Court had a change of heart and
issued an Amended Order with the same wordings as the order of December 12, 2003
but this time stated not at the time it was condemned but at the time the order was
issued. Naturally, this Court in the interest of justice, can amend its order
because there was no deposit by plaintiff.
The jurisprudence cited by plaintiff that the just compensation must be determined as
of the date of the filing of the complaint is true if there was a deposit. Because there was
none the filing was not in accordance with law, hence, must be at the time the order
was issued.
The allegation of defendant thru [sic] counsel that the orders attacked by plaintiff thru
[sic] counsel saying it has become final and executory are interlocutory orders subject
to the control of the Judge until final judgment is correct. Furthermore, it is in the
interes[t] of justice to correct errors.[29]
In the meantime, on April 15, 2004, the Commission submitted its Report, providing the following
estimates of value, but without making a proper recommendation:[30]
Reckoning Point Value per square Fair Market Value Basis
meter
1981 - at the time the P110.00/sqm P79,860.00 based on three or more
complaint was filed recorded sales of similar types
of land in the vicinity in the
same year
1981 at the time the P686.81/sqm P498,625.22 Appraisal by Southern Negros
complaint was filed Development Bank based on
market value, zonal value,
appraised value of other banks,
recent selling price of
neighboring lots
2002 P3,500.00/sqm P2,541,000.00 Appraisal by the City Appraisal
Committee, Office of the City
Assessor
2004 P4,200.00/sqm PhP3,049,200.00 Private Appraisal Report (Atty.
Roberto Cal Catolico dated April
6, 2004)
Hence, the present petition.
Petitioner is before us claiming that (1) the trial court gravely abused its discretion amounting to
lack or excess of jurisdiction in overturning the Order dated May 17, 1983, which was already a final order;
and (2) just compensation for the expropriation should be based on the Subject Propertys fair market
value either at the time of taking or filing of the complaint.
Private Respondents Arguments
Private respondent filed his Comment on October 3, 2005,[31] arguing that (1) there was no error of
jurisdiction correctible by certiorari; and (2) that the Assailed Orders were interlocutory orders that were
subject to amendment and nullification at the discretion of the court.
Issues
There are only two questions we need answer, and they are not at all novel. First, does an order
of expropriation become final? Second, what is the correct reckoning point for the determination of just
compensation?
Our Ruling
Expropriation proceedings have two stages. The first phase ends with an order of dismissal, or a
determination that the property is to be acquired for a public purpose.[32] Either order will be a final order
that may be appealed by the aggrieved party.[33] The second phase consists of the determination of just
compensation. [34] It ends with an order fixing the amount to be paid to the landowner. Both orders, being
final, are appealable.[35]
An order of condemnation or dismissal is final, resolving the question of whether or not

the plaintiff has properly and legally exercised its power of eminent domain.[36] Once the
first order becomes final and no appeal thereto is taken, the authority to expropriate and
its public use can no longer be questioned.[37]
Javellana did not bother to file an appeal from the May 17, 1983 Order which granted
petitioners Motion for Issuance of Writ of Possession and which authorized petitioner to take immediate
possession of the Subject Property. Thus, it has become final, and the petitioners right to expropriate the
property for a public use is no longer subject to review. On the first question, therefore, we rule that the
trial court gravely erred in nullifying the May 17, 1983 Order.
We now turn to the reckoning date for the determination of just compensation. Petitioner claims
that the computation should be made as of September 18, 1981, the date when the expropriation
complaint was filed. We agree.
In a long line of cases, we have constantly affirmed that:
x x x just compensation is to be ascertained as of the time of the taking, which usually

coincides with the commencement of the expropriation proceedings. Where the institution
of the action precedes entry into the property, the just compensation is to be ascertained
as of the time of the filing of the complaint.[38]
When the taking of the property sought to be expropriated coincides with the commencement of
the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain,
the just compensation should be determined as of the date of the filing of the complaint.[39] Even
under Sec. 4, Rule 67 of the 1964 Rules of Procedure, under which the complaint for expropriation was
filed, just compensation is to be determined as of the date of the filing of the complaint. Here, there is no
reason to depart from the general rule that the point of reference for assessing the value of the Subject
Property is the time of the filing of the complaint for expropriation.[40]
Private respondent claims that the reckoning date should be in 2004 because of the clear injustice
to the private respondent who all these years has been deprived of the beneficial use of his properties.
We commiserate with the private respondent. The school was constructed and has been in
operation since 1985. Petitioner and the residents of Iloilo City have long reaped the benefits of the
property. However, non-payment of just compensation does not entitle the private landowners to recover
possession of their expropriated lot.[41]
Concededly, Javellana also slept on his rights for over 18 years and did not bother to check with
the PNB if a deposit was actually made by the petitioner. Evidently, from his inaction in failing to withdraw
or even verify the amounts purportedly deposited, private respondent not only accepted the valuation
made by the petitioner, but also was not interested enough to pursue the expropriation case until the
end. As such, private respondent may not recover possession of the Subject Property, but is entitled to
just compensation.[42] It is high time that private respondent be paid what was due him after almost 30
years.
We stress, however, that the City of Iloilo should be held liable for damages for taking private
respondents property without payment of just compensation. In Manila International Airport Authority v.
Rodriguez,[43] the Court held that a government agencys prolonged occupation of private property without
the benefit of expropriation proceedings undoubtedly entitled the landowner to damages:
Such pecuniary loss entitles him to adequate compensation in the form

of actual or compensatory damages, which in this case should be the legal
interest (6%) on the value of the land at the time of taking, from said point
up to full payment by the MIAA. This is based on the principle that interest runs as
a matter of law and follows from the right of the landowner to be placed in as good
position as money can accomplish, as of the date of the taking x x x.
xxxx
For more than twenty (20) years, the MIAA occupied the subject lot without the benefit
of expropriation proceedings and without the MIAA exerting efforts to ascertain ownership
of the lot and negotiating with any of the owners of the property. To our mind, these
are wanton and irresponsible acts which should be suppressed and
corrected. Hence, the award of exemplary damages and attorneys fees is in
order. x x x.[44] (Emphasis supplied)
WHEREFORE, the petition is GRANTED. The Orders of the Regional Trial Court of Iloilo City,
Branch 32 in Civil Case No. 14052 and Civil Case No. 03-27571 dated December 12, 2003, June 15, 2004,
and March 9, 2005 are hereby ANNULLED and SET ASIDE.
The Regional Trial Court of Iloilo City, Branch 32 is DIRECTED to immediately determine the just
compensation due to private respondent Elpidio T. Javellana based on the fair market value of the Subject
Property at the time Civil Case No. 14052 was filed, or on September 18, 1981 with interest at the legal
rate of six percent (6%) per annum from the time of filing until full payment is made.
The City of Iloilo is ORDERED to pay private respondent the amount of P200,000.00 as
exemplary damages.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 44-45.
[2]
Id. at 46-47.
[3]
Id. at 48-49.
[4]
Id. at 50-52.
[5]
The expropriation was authorized by Resolution No. 96 dated April 25, 1978 issued by the
Sangguiniang Panglungsod of Iloilo entitled Authorizing the City Legal Officer to initiate the
expropriation of Lot No. 180 of Arevalo and Lot Nos. 3497-CC and 3497-DD at La Paz for
School Site Purposes. Id. at 50-51.
[6]
Id. at 53-56.
[7]
Id.
[8]
Presidential Decree No. 1533, Establishing A Uniform Basis For Determining Just Compensation
And The Amount Of Deposit For Immediate Possession Of The Property Involved In Eminent
Domain Proceedings (1978).
Section 1. In determining just compensation for private property acquired through eminent
domain proceedings, the compensation to be paid shall not exceed the value declared by the
owner or administrator or anyone having legal interest in the property or determined by the
assessor, pursuant to the Real Property Tax Code, whichever value is lower, prior to the
recommendation or decision of the appropriate Government office to acquire the property.
Section 2. Upon the filing of the petition for expropriation and the deposit in the Philippine
National Bank at its main office or any of its branches of an amount equivalent to ten per cent
(10%) of the amount of compensation provided in Section 1 hereof, the government or its
authorized instrumentality agency or entity shall be entitled to immediate possession, control
and disposition of the real property and the improvements thereon, including the power of
demolition if necessary, notwithstanding the pendency of the issues before the courts.
[9]
Rollo, p. 59
[10]
Id. at 60-61.
[11]
Id. at 62-64.
[12]
Id. at 63-64.
[13]
Id. at 65-66. Private respondent filed a Motion for Reconsideration against the trial courts
Order, id. at 67-68; petitioner opposed, id. at 69-70. The trial court denied private
respondents Motion in an Order dated January 10, 1984, id. at 71.
[14]
Id. at 74-77.
[15]
Id. at 88.
[16]
Id. at 78-87.
[17]
Id. at 89-93.
[18]
Records, p. 88.
[19]
Id. at 89.
[20]
Rollo, p. 94
[21]
Id. at 95-96.
[22]
Id. at 97.
[23]
Petitioner first claimed that it never received a copy of this Motion, however, private
respondent presented its file copy of the Motion, duly received by the City Legal Office of
Iloilo City.
[24]
Rollo, p. 45.
[25]
Petitioner claims that it never received a copy of the Order.
[26]
Rollo, pp. 105-114.
Petitioner also claimed that it had not been furnished with a copy of the First Assailed Order,
although this was disproved by the lower court. Records, p. 48.
[27]
Rollo, pp. 115-122.
[28]
Petitioner filed a Rejoinder on August 12, 2004; id at 123-126. Private respondent filed a Reply
dated August 17, 2004; id at 127-129.
[29]
Id. at 48-49.
[30]
[31]
Id. at 132-145.
[32]
Estate of Salud Jimenez v. Philippines Export Processing Zone, 402 Phil. 271, 284 (2001).
[33]
Municipality of Bian v. Garcia, G.R. No. 69260, December 22, 1989, 180 SCRA 576, 584-585.
[34]
City of Manila v. Serrano, 411 Phil. 754, 765 (2001).
[35]
National Housing Authority v. Heirs of Guivelondo, 452 Phil. 483, 492 (2003).
[36]
Heirs of Alberto Suguitan v. City of Mandaluyong, 384 Phil. 676, 692 (2000).
[37]
Estate of Salud Jimenez v. Philippine Export Processing Zone, supra note 32 at 288.
[38]
B.H. Berkenkotter & Co. v. Court of Appeals, G.R. No. 89980, December 14, 1992, 216 SCRA
584, 587. See also RULES OF COURT, Rule 67, Sec. 4:
If the objections to and the defenses against the right of the plaintiff to expropriate the
property are overruled, or when no party appears to defend as required by this Rule, the
court may issue an order of expropriation declaring that the plaintiff has a lawful right to take
the property sought to be expropriated, for the public use or purpose described in the
complaint, upon payment of just compensation to be determined as of the date of the taking
of the property or the filing of the complaint whichever came first.
[39]
Republic of the Philippines v. Vda. De Castellvi, 157 Phil. 329, 349 (1974).
[40]
National Power Corporation v. Co, G.R. No. 166973, February 10, 2009, 578 SCRA 235, 246.
[41]
Forfom Development Corporation v. Philippine National Railways, G.R. No. 124795, December
10, 2008. 573 SCRA 350, 369.
[42]
Eusebio v. Luis, G.R. No. 162474, October 13, 2009.
[43]
G.R. No. 161836, February 28, 2006, 483 SCRA 619, 630-632.
[44]
See also Forfom Development Corporation v. Philippine National Railways, supra.
Supreme Court
Manila
SECOND DIVISION
MODESTO PALALI, G.R. No. 158385

Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
JULIET AWISAN, represented by
her Attorney-in-Fact GREGORIO Promulgated:
AWISAN,
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A person occupying a parcel of land, by himself and through his predecessors-in-interest, enjoys the
presumption of ownership. Anyone who desires to remove him from the property must overcome such
presumption by relying solely on the strength of his claims rather than on the weakness of the defense.
This Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court assails the September
27, 2002 Decision[2] and the April 25, 2003 Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No.
52942. The challenged Decision disposed as follows:
WHEREFORE, premises considered, the assailed decision of the trial court
dated May 24, 1996 is hereby REVERSED AND SET ASIDE and a new one is entered:
1. Awarding the subject land in favor of the [respondent] with the

exclusion of the area where the residential house of the [petitioner] is erected.
2. Ordering the [petitioner] to vacate the rootcrop land and surrender its
possession in favor of the [respondent], and enjoining the [petitioner] to refrain from
doing any act disturbing the [respondents] peaceful possession and enjoyment of the
same.
3. Cancelling Tax Declaration No. 31297 of the [petitioner] insofar as the

rootcrop land of .0648 hectares is concerned, with the exclusion of his residential land. All
other reliefs and remedies prayed for are DENIED, there being no sufficient evidence to
warrant granting them.
SO ORDERED.[4]
Factual Antecedents
Respondent Juliet Awisan claimed to be the owner[5] of a parcel of land in Sitio Camambaey, Tapapan,
Bauko, Mountain Province, allegedly consisting of 6.6698 hectares[6] and covered by Tax Declaration No.
147 in her name.[7] On March 7, 1994, she filed an action for quieting of title against petitioner Modesto
Palali, alleging that the latter occupied and encroached on the northern portion of her property and
surreptitiously declared it in his name for tax purposes.[8] We shall refer to this land occupied by petitioner,
which allegedly encroached on the northern portion of respondents 6.6698-hectare land, as the subject
property. Respondent prayed to be declared the rightful owner of the northern portion, for the cancellation
of petitioners tax declaration, and for the removal of petitioner and his improvements from the property.[9]
Respondents (Plaintiffs) Allegations
According to respondent, the 6.6698 hectare land was originally owned by her father, Cresencio
Cadwising. The latter testified that he and his wife were able to consolidate ownership over the land by
declaring them from public land as well as by purchasing from adjoining landowners. He admitted
including in his tax declaration a communal sacred lot (patpatayan) even if he did not acquire free patent
title over the same. As for the properties he bought, these were generally purchased without any
documentation, save for two.[10]
Cadwising also claimed having introduced improvements on the subject property as early as the
1960s.[11] The 6.6698 hectare land was mortgaged to the Development Bank of the Philippines (DBP),
which acquired it in the foreclosure sale. DBP then sold the land to one Tico Tibong, who eventually
donated the same to respondent.
Petitioners (Defendants) Allegations

In his defense, petitioner denied the encroachment and asserted ownership over the subject property. He
maintained that he and his ancestors or predecessors-in-interest have openly and continuously possessed
the subject land since time immemorial. He and his siblings were born on that land and, at that time, the
area around the house was already planted with bananas, alnos, and coffee.[12] When his mother died,
he buried her in the lot beside the house in 1975; while his father was buried near the same plot in
1993.[13] His own home had been standing on the property for the past 20 years. Petitioner insisted that
during this entire time, no one disturbed his ownership and possession thereof.[14]
Sometime in 1974, petitioner declared the said land in his name for taxation purposes.[15] The said Tax
Declaration indicates that the property consists of 200 square meters of residential lot and 648 square
meters of rootcrop land (or a total of 848 square meters).
It is worth mentioning that both the complaint[16] and the pre-trial brief[17] of respondent alleged
encroachment only on the northern portion of her 6.6698-hectare land. During trial, however,
respondents attorney-in-fact, Gregorio Awisan,[18] and respondents predecessor-in-interest, Cresencio
Cadwising,[19] both alleged that there was an encroachment in the southernportion also. This was done
without amending the allegations of the complaint.
Confronted with this new allegation of encroachment on the southern portion, petitioner tried to
introduce his tax declaration over the same (in the name of his deceased father), but was objected to by
respondent on the ground of immateriality.[20] After such objection, however, respondent surprisingly and
inconsistently insisted that the ownership of the southern portion was included in the complaint and was
an issue in the case. The ensuing confusion over the subject of the case is revealed in the following
exchange between the parties lawyers:[21]
Atty. Awisan: Where is the land in question located?

Palali: In Tapapan, Bauko, sir.
Atty. Awisan: Where is that situated in relation to your house?

Palali: It is near my house which is enclosed with fence.
Atty. Awisan: How about the land in question situated in the southern portion, do you know
that?
Palali: That is the land our parents gave to us as inheritance. There are terraces there.
Atty. Awisan: So, the land in question [is] located below your house and on the southern
portion?
Atty. Bayogan: As far as the southern portion is concerned, it is not included in the complaint.
Atty. Awisan: It is included.
Atty. Bayogan: The southern portion refer[s] to Lot 3 and it is not included in the
complaint. In fact when I started asking question regarding this land, the
counsel objected.
Atty. Awisan: This land indicated as Lot 3 is the southern portion.
The trial court, apparently relying on the allegations of the complaint, ruled on the northern
portion as the subject property of the case.
After due trial, the Regional Trial Court of Bontoc, Mountain Province, Branch 35, dismissed[22] the
complaint. It based its decision on respondents failure to prove her allegation of physical possession of
the land. Going by the results of its ocular inspection[23] of the land in question, the trial court noted that
Cadwising (respondents predecessor-in-interest) could not pinpoint and the court did not see any of the
improvements that Cadwising had allegedly introduced to the land.[24] Thus, the trial court held that
respondents claim of ownership was supported solely by her tax declarations and tax payment receipts
which, by themselves, are not conclusive proof of ownership.[25]
In contrast, the trial court duly verified during the ocular inspection the existence of the improvements
introduced by petitioner and his predecessors on the subject property.[26] Moreover, the trial court
observed that the witnesses for the petitioner all lived continuously since their births within or near Sitio
Camambaey in Tapapan and that they knew the land very well. They knew petitioner and his
predecessors, as well as the improvements introduced by them to the land. Thus, the trial court found
that the petitioner presented overwhelming proof of actual, open, continuous and physical possession of
the property since time immemorial. Petitioners possession, coupled with his tax declarations, is strong
evidence of ownership which convinced the court of his better right to the property.[27]
For purposes of clarity, we cite the dispositive portion of the trial courts Decision thus:
Wherefore, premises considered, judgment is hereby rendered in favor of the defendant

Modesto Palali and against the plaintiff Juliet C. Awisan, represented by her Attorney-in-Fact,
Gregorio B. Awisan, as follows:
a) Ordering the dismissal of the complaint and costs against the plaintiff;
b) Adjudging the defendant Modesto Palali as the owner and lawful

possessor of the subject property; and
c) The court cannot however grant the counterclaim of defendant for lack
of evidence to prove the same.
SO ORDERED.[28]
Respondent appealed the trial courts decision to the CA, which reversed the same. The CA found
that petitioner failed to prove actual possession of the entire 6.6698 hectare land, which the CA believed
to be the subject of the case. According to the appellate court, petitioner was only able to prove actual
occupation of the portion where his house was located and the area below where he had planted fruit-
bearing plants.[29]
The CA also ruled that based on the ocular inspection report of the trial
court, petitioners possession did not extend to the entire 6.6698 hectares. In its own words:
Likewise, the report on the ocular inspection of the land in question divulges that
the alleged possession of the land by [petitioner] Modesto Palali does not extend to the
entire 6.6698 hectares of the subject land. Not even in the sketch plan of the land does it
illustrate that the possession of the [petitioner] refers to the entire subject land. Instead,
the possession of [petitioner] merely points to certain portions of the subject land as
drawn and prepared by the tax mappers.
From the foregoing testimony, no sufficient indicia could be inferred that the
possession of the [petitioner] refers to the entire portion of the land.[30]
The appellate court also refused to give credence to petitioners tax declaration. The CA held that
petitioners Tax Declaration No. 31793, which covers only an 848-square meter property, is incongruous
with his purported claim of ownership over the entire 6.6698-hectare land.
Proceeding from this premise, the CA gave greater weight to the documentary and testimonial
evidence of respondent. The presumption of regularity was given to the public documents from which
respondent traced her title to the subject property.
Thus, the CA awarded the entire 6.6698-hectare property to respondent and ordered the
cancellation of petitioners tax declaration (except for the 200-square meter residential lot thereof which
was not being claimed by respondent).[31]
Petitioner moved for a reconsideration of the unfavorable Decision, but his motion was denied for lack of
merit.

Preliminary Matter
The CA Decision is based on a mistaken understanding of the subject property
It is apparent that the CA Decision proceeded from an erroneous understanding of what the
subject property actually is and what the trial court actually ruled upon. The CA was under the mistaken
impression that the subject property was the entire 6.6698 hectares of land allegedly owned by
respondent under her Tax Declaration No. 147. Because of this, the CA ruled against petitioner on the
ground that he failed to prove possession of the entire 6.6698 hectares. The CA also disregarded
petitioners Tax Declaration No. 31793 (despite being coupled with actual possession) because the said
tax declaration covered only an 848-square meter property and did not cover the entire 6.6698 hectare
property. This is clear from the following text lifted from the CA Decision:
The trial courts finding that the defendant-appellee had acquired the subject land by virtue
of acquisitive prescription cannot be countenanced. At the outset, the subject land being
claimed by the plaintiff-appellant as described in the complaint is the 6.6698 hectares
land [boundaries omitted]. The said description is with the exclusion of the portion of land
where the residential house of the defendant-appellee is erected. However, the adverse
and exclusive possession offered by the defendant-appellee, which includes his tax
receipt, does not refer to the entire land consisting of 6.6698 hectares being claimed by
the plaintiff-appellant. x x x The witnesses for the defendant-appellee testified that indeed
Modesto Palalis predecessors-in-interest have once built a house in Camambaey,
Tapapan, Bauko, Mt. Province, but whether or not the defendant-appellee or his
predecessor-in-interest have actually, exclusively, notoriously, and adversely possessed
the entire 6.6698 hectares of land could not be deduced from their testimonies. It could
be gleaned from the testimony of Consigno Saligen, that what the defendant-appellee
actually possessed and claim as their own is merely that portion where the house is
erected and that portion of land below the house where Modesto Palali planted fruit-
bearing plants. x x x
Likewise, the report on ocular inspection of the land in question divulges that the alleged
possession of the land by defendant-appellee Modesto Palali does not extend to
the entire 6.6698 hectares of the subject land. Not even in the sketch plan of the land
does it illustrate that the possession of the defendant-appellee refers to the entire subject
land. Instead, the possession of the defendant-appellee merely points to certain portions
of the subject land as drawn and prepared by the tax mappers.
From the foregoing testimony, no sufficient indicia could be inferred that the possession
of the defendant-appellee refers to the entire portion of the land.[32]
This was perhaps not entirely the appellate courts fault, because a reading of the issues presented by
respondent to the CA gives the wrong impression that the subject property is the entire6.6698 hectares:
x x x [T]he plaintiff-appellant elevated the matter on appeal assigning the

following errors committed by the trial court:
I
The trial court erred in failing to consider the overwhelming superior documentary
and oral evidence of the plaintiff Juliet C. Awisan showing her ownership on (sic) the land
in question consisting of 6.6698 hectares described in her complaint
II
The trial court erred in adjudicating the land in question to the defendant Modesto
Palali who is a squatter on the land whose tax declaration merely overlapped or duplicated
that of the plaintiff and which covered only a small portion of 200 square meters of
residential portion [sic] and 648 square meter of rootcrop land.
x x x x[33]
The foregoing formulation of the issues presented by respondent before the CA erroneously
described the land in question as consisting of 6.6698 hectares and erroneously stated that the trial court
adjudicated the land in question to [petitioner]. Said formulation is very misleading because the case
before the trial court did not involve the ownership of the entire 6.6698 hectares, but merely
the northern portion thereof the property actually occupied by petitioner and much smaller than 6.6698
hectares. Even if we go back to the respondents complaint, we would find there that respondent is
claiming encroachment merely of the northern portion of her 6.6698-hectare property, and not of the
entire 6.6698 property.[34]
Neither did the trial court adjudicate to petitioner the entire 6.6698-hectare land; it simply upheld
petitioners right to the property he is actually occupying. It only declared petitioner as the lawful owner
and possessor of the subject property, which is the property to the north of the 6.6698-hectare land and
occupied by petitioner. This is evident from the trial courts summary of the facts established by the
respondent and her witnesses, to wit:
During the hearing of the case, plaintiff and her witnesses established and disclosed: x x
x that only a portion of the entire 6.6 hectares in its northern portion located below and
above the residential house of the defendant Modesto Palali is now the land in question
as properly shown in the sketch of the land covered by Tax Declaration No. 147 in the
name of Juliet Awisan x x x.[35]
Proceeding from a wrong premise as to what is the subject property, the CA utterly failed to
appreciate the evidence as they relate to the parties claims. Thus, while the general rule is that this Court
is not a trier of facts, and that in a petition for review under Rule 45, only questions of law may be raised,
the Court is behooved to admit the instant case as an exception.[36]
Issue
The issue in this case is who between the parties has the better right to the subject property.
Our Ruling
Having gone over the parties evidence before the trial court, we find adequate support for the
trial courts ruling in favor of petitioner. The CA erred in reversing the trial courts findings, particularly
because, as discussed above, such reversal was premised on the CAs erroneous understanding of the
subject property.
As found by the trial court, petitioner was able to prove his and his predecessors actual, open,
continuous and physical possession of the subject property dating at least to the pre-war era (aside from
petitioners tax declaration over the subject property). Petitioners witnesses were long time residents
of Sitio Camambaey. They lived on the land, knew their neighbors and were familiar with the terrain. They
were witnesses to the introduction of improvements made by petitioner and his predecessors-in-interest.
From their consistent, unwavering, and candid testimonies, we find that petitioners grandfather
Mocnangan occupied the land during the pre-war era. He planted camote on the property because this
was the staple food at that time. He then gave the subject property to his daughter Tammam, while he
gave a separate one to his son Pacolan Mocnangan. In the 1960s, Tammam and her husband Palalag
cultivated the land, built a cogon home, and started a family there. Palalag introduced terraces and,
together with his sons, built earth fences around the property.Palalags family initially planted bananas,
coffee, and oranges; they later added avocadoes, persimmons, and pineapples. When Tammam and
Palalag died, their son, petitioner herein, buried them in the subject property and continued cultivating
the land. He also constructed a new home.
On the other hand, respondent relied merely on her tax declaration, but failed to prove actual
possession insofar as the subject property is concerned. To be sure, respondent attempted to prove
possession of the subject property. Her predecessor-in-interest, Cadwising, had allegedly introduced
improvements like a piggery, poultry, terracing, plantings, and a barbed wire fence.However, not one of
these alleged improvements was found during the ocular inspection conducted by the trial court. The
absence of all his alleged improvements on the property is suspicious in light of his assertion that he has
a caretaker living near the subject property for 20 years. Cadwising did not even bother to explain the
absence of the improvements. The trial courts rejection of Cadwisings assertions regarding the
introduction of improvements is therefore not baseless.
Thus, respondent having failed to prove possession, her claim rests solely on her tax
declaration. But tax declarations, by themselves, are not conclusive evidence of ownership of real
property. In the absence of actual, public, and adverse possession, the declaration of the land for tax
purposes does not prove ownership.[37] Respondents tax declaration, therefore, cannot serve as basis to
oust petitioner who has been in possession (by himself and his predecessors) of the subject property since
before the war.
Neither can respondent rely on the public instruments dealing with the 6.6698-hectare property
covered by her tax declaration. Such public documents merely show the successive transfers of the
property covered by said documents. They do not conclusively prove that the transferor actually owns the
property purportedly being transferred, especially as far as third parties are concerned. For it may very
well be that the transferor does not actually own the property he has transferred, in which case he
transfers no better right to his transferee. No one can give what he does not have nemo dat quod non
habet.[38] Thus, since respondents predecessor-in-interest Cadwising appeared not to have any right to the
subject property, he transferred no better right to his transferees, including respondent.
All told, we hold that as between the petitioner and the respondent, it is the petitioner who has the better
claim or title to the subject property. While the respondent merely relied on her tax declaration, petitioner
was able to prove actual possession of the subject property coupled with his tax declaration. We have
ruled in several cases that possession, when coupled with a tax declaration, is a weighty evidence of
ownership.[39] It certainly is more weighty and preponderant than a tax declaration alone.
The preponderance of evidence is therefore clearly in favor of petitioner, particularly considering

that, as the actual possessor under claim of ownership, he enjoys the presumption of
ownership.[40] Moreover, settled is the principle that a party seeking to recover real property must rely on
the strength of her case rather than on the weakness of the defense.[41] The burden of proof rests on the
party who asserts the affirmative of an issue. For he who relies upon the existence of a fact should be
called upon to prove that fact. Having failed to discharge her burden to prove her affirmative allegations,
we find that the trial court rightfully dismissed respondents complaint.
A final note. Like the trial court, we make no ruling regarding the southern portion of the property
(or Lot 3, as referred to by the parties), because this property was not included in respondents
complaint. Although the Rules of Court provide that when issues not raised by the pleadings are tried with
the express or implied consent of the parties, they shall be treated in all respects as if they had been raised
in the pleadings,[42] such rule does not apply here. Respondent objected[43] when petitioner tried to prove
his ownership of Lot 3 on the ground of immateriality, arguing that ownership of Lot 3 was not an
issue. Respondent cannot now insist otherwise.
WHEREFORE, the petition is GRANTED. The September 27, 2002 Decision as well as the April
25, 2003 Resolution of the Court of Appeals in CA-G.R. CV No. 52942 are REVERSED and SET
ASIDE. The May 24, 1996 Decision of the Regional Trial Court of Bontoc, Mountain Province, Branch 35
is REINSTATED and AFFIRMED. Costs against respondent.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 3-17.
[2]
Id. at 77-93; penned by Associate Justice Amelita G. Tolentino and concurred in by Associate Justices
Martin S. Villarama, Jr. and Remedios Salazar-Fernando.
[3]
Id. at 102-103.
[4]
Id. at 91-92.
[5]
As donee in a Deed of Donation dated November 6, 1993, records, pp. 6-7.
[6]
Before the conduct of the pre-trial conference, respondent sold a portion of her property to a third party
(Deed of Sale of a Portion of Real Estate dated May 24, 1994, id. at 59). Thus, her alleged landholding
was reduced to 5.4326 hectares. For some reason unbeknown to the Court, respondent continued to
refer to her property as consisting of 6.6698 hectares (Id. at 29). Thus, both the trial and appellate
courts also referred to her property as consisting of its original 6.6698 hectares. For convenience,
particularly in reviewing the decisions of the trial and appellate courts, we shall continue to refer to
the property allegedly owned by respondent as consisting of 6.6698 hectares, but it should be kept in
mind that the actual size of the land allegedly owned by respondent was reduced to 5.4326 hectares.
[7]
The plaintiff describes the land donated to her as follows:
ROOTCROP LAND situated at sitio Camambaey, Tapapan, Bauko, Mt. Province, bounded on the north by
a Creek and the Provincial Road; on the south by a creek and public land; on the east by the provincial
road, and west by public land and the municipal road, containing an area of 6.6698 hectares, more
or less, and declared for taxation purposes in the name of plaintiff under TD No. 147 of the Municipal
Tax Rolls of Bauko, Mt. Province, id. at 1.
[8]
Id. at 2-3.
[9]
Id. at 3-4.
[10]
Affidavit of Transfer of Real Property, id. at 75; Deed of Absolute Sale, id. at 73.
[11]
[12]
TSN, May 30, 1995, p. 3.
[13]
Id. at 2-3.
[14]
Records, p. 32.
[15]
Tax Declaration No. 31297 was issued in 1974, id. at 111.
[16]
Id. at 3. The sixth paragraph of the complaint reads:
That said acts of defendant in encroaching, entering the land of herein plaintiff, particularly the said NORTHERN
portion thereof, and thereafter declaring the same surreptitiously for taxation purposes as
abovementioned, and thereby claiming ownership and possession of said NORTHERN portion, is patently
illegal, fraudulent and unjustified, and which acts of defendant constitute a cloud and a thorn to the title of
ownership of and possession of herein plaintiff, which she now prays for the removal and consequently
cleared and dissipated in accordance with law x x x .
[17]
Id. at 29-31. The salient portion reads:
x x x That since its acquisition, plaintiff and family, have been in open, adverse, continuous and uninterrupted
possession of the same, tilling and cultivating it until the present without anyone questioning their said
possession and ownership, including defendant herein. It was only sometime the early months of 1992,
and before the aforementioned donation was formalized, plaintiff, who is residing at Baguio City, sought
assistance from her father-in-law (herein atty-in-fact, Gregorio Awisan) to look into the present status of
the said land, as a result of which, the latter informed that one by the name of Modesto Palali x x x have
encroached and actually entered the property, particularly the northern side thereof, and even declared a
portion thereof with an area of 848 square meters, more or less, as reflected in the latters Tax Declaration
bearing No. 31793 of the Municipal Tax Rolls of Bauko, Mt. Province.
[18]
Q: Do you know the portions of this land entered into by the defendants [sic]?
A: Yes.
xxxx
Q: Will you describe the portion of that property?
A: North is near his [petitioners] house maybe about 2,000 to 3,000 square meters. In the south is about
1,500 square meters.
[19]
TSN, September 30, 1994, pp. 13 and 17-18.
Q: Beside this land of Duclan is a land marked as Palali, Exh. C-5, what does that land refer to?
A: This is the land which Palali entered.
Q: Is that the land that is now being litigated in this case?
A: Yes, sir.
xxxx
Q: I show you Exh. C-6 as claimed by Modesto Palali, what does this exhibit refer to?
A: This is another portion which Palali entered.
Q: Is this the portion which is the subject of this case?
A: A part of the case.
[20]
TSN, May 30, 1995, pp. 9 and 11-12.
Q: Do you have tax declaration on the land in question?
A: There is.
xxxx
Q: I am showing to you Exhs. 1, 2, 3 which are tax declaration nos. 31297, 32674, and 31793; are these
the tax declarations on the land in question?
A: Yes, sir.
xxxx
Q: During ocular inspection also, the plaintiffs representative [sic] named Cresencio Cadwising
included another portion to the south of the property in question; who owns that property that
was included by Cresencio Cadwising on the south?
A: The southern part is also owned by my parents, and distributed among us which we in turn gave to
our children.
Q: In other words, that property which was included by Cresencio Cadwising at the southern side during
ocular inspection also belongs to the Palali clan?
A: Yes, sir.
xxxx
Q: Does your father have tax declaration over that southern property?
A: Yes, sir.
Q: Will you be able to bring that to court if necessary?
A: Yes, sir.
Atty: Awisan (for plaintiff): Immaterial.
Court: Proceed with matters related to the issue.
[21]
TSN, May 30, 1995, pp. 13-14.
[22]
Decision dated May 24, 1996; penned by Judge Manuel B. Bragado, records, pp. 153-161.
[23]
The ocular inspection was conducted on January 20, 1995. See Transcript of the Proceedings had
during the Ocular Inspection of the Land in Question, id at 59-64.
[24]
Id. at 158.
[25]
Id. at 160.
[26]
Id. at 158-159.
[27]
Id. at 160.
[28]
Id. at 160-161.
[29]
Rollo, pp. 87-88.
[30]
Id. at 88-89.
[31]
The CA described the subject property as follows:
At the outset, the subject land being claimed by plaintiff-appellant as described in the complaint is the
6.6698 hectares land bounded by a canal on the northeast and pine land on the northwest, on the
west by a barangay road, by the pine land on the southwest and riceland on the southeast, and on
the east by a provincial road. The said description is with the exclusion of the portion of land where
the residential house of the defendant-appellee is erected. Id. at 87.
[32]
Id. at 87-89.
[33]
Id. at 85. Emphasis supplied.
[34]
Records, p. 154.
[35]
Id. at 157.
[36]
Tio v. Abayata, G.R. No. 160898, June 27, 2008, 556 SCRA 175, 184; Sampayan v. Court of
Appeals, 489 Phil. 200, 207-208 (2005).
[37]
Daclag v. Macahilig, G.R. No. 159578, July 28, 2008, 560 SCRA 137, 151-152; Cequea v. Bolante, 386
Phil. 419, 430-431 (2000).
[38]
Daclag v. Macahilig, supra at 150-151.
[39]
Cequea v. Bolante, supra; Llanes v. Republic, G.R. No. 177947, November 27, 2008, 572 SCRA 258,
271; Heirs of Arzadon-Crisologo v. Raon, G.R. No. 171068, September 5, 2007, 532 SCRA 391, 410.
[40]
Philippine National Bank v. Court of Appeals, 424 Phil. 757, 771 (2002).
[41]
NEW CIVIL CODE, Article 434.
[42]
[43]
Supra note 20.

Supreme Court
Manila
SECOND DIVISION
JIMMY ARENO, JR., G.R. No. 180302
Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
SKYCABLE PCC-BAGUIO, Promulgated:

x-------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Disciplinary action against an erring employee is a management prerogative which, generally, is not
subject to judicial interference. However, this policy can be justified only if the disciplinary action is dictated
by legitimate business reasons and is not oppressive, as in this case.
This petition for review on certiorari[1] assails the Decision[2] dated May 28, 2007 and the
Resolution[3] dated October 16, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 94485, which affirmed
the February 28, 2006 Decision[4] of the National Labor Relations Commission (NLRC) upholding the
legality of petitioner Jimmy Areno Jr.s suspension and subsequent termination from employment.
Factual Antecedents
On January 17, 1995, petitioner was employed as a cable technician by respondent Skycable PCC-Baguio.
On January 17, 2002, an accounting clerk of respondent, Hyacinth Soriano (Soriano), sent to the human
resource manager a letter-complaint[5] against petitioner alleging that on two separate occasions, the latter
spread false rumors about her (the first in the middle of 2001 and the second on December 22,
2001). On January 27, 2002, she was again insulted by petitioner when the latter approached her and
said that she was seen going out with Aldrin Estrada, their field service supervisor, at Central
Park, Baguio City. During that incident, petitioner uttered, Ikaw lang ang nakakaalam ng totoo with
malicious intent and in a provocative manner. Soriano averred that petitioners unscrupulous behavior
constituted serious and grave offense in violation of the companys Code of Discipline.
On the same day, respondent issued a Memorandum[6] requiring petitioner to submit an explanation within
76 hours from notice thereof. Petitioner submitted his written explanation[7] dated January 23,
2002 denying all the allegations in Sorianos letter-complaint and further denying having uttered the
statement imputed on him, explaining thus:
2. That on the 7th of January, 2002 at SkyCable office, I greeted her HELLO, HYA. I
thought she didnt hear me greet her so I continued saying NAKITA NAMIN KAYO
AHSA CENTRAL PARK. With that she answered, KASAMA KO SI EMMAN. Then I
added, BAT NANDOON YUNG 114? Then she reacted TSISMOSO KA KASI! In that
instance, I didnt intend to insult her as she was saying because I never really implied
anything with my statement nor delivered it with malicious intent. So I ended by
saying, BAT DI MO SABIHIN YUNG PROBLEMA MO SA AKIN? IKAW LANG ANG
NAKAKAALAM NIYAN E! In this statement, I was asking her to tell me frankly the reasons
why shes mad at me. I want to stress that I never delivered the statement in a provocative
manner.[8]
An administrative investigation was accordingly conducted on January 31, 2002. In a

Memo dated February 6, 2002, the investigating committee found petitioner guilty of having made
[9]
malicious statements against Soriano during the January 7, 2002 conversation, which is categorized as an
offense under the Company Code of Discipline. Consequently, petitioner was suspended for three days
without pay effective February 13-15, 2002. The Memo was allegedly served on February 7, 2002 but
petitioner refused to sign it.
Notwithstanding the suspension order, however, petitioner still reported for work on February 13,
2002. By reason thereof, respondent sent petitioner a letter denominated as 1st Notice of
Termination[10] requiring him to explain in writing why he should not be terminated for
insubordination. On February 18, 2002, petitioner inquired from respondent whether he is already
dismissed or merely suspended since he was refused entry into the company premises on February 14,
2002.[11] Respondent replied that petitioner was merely suspended and gave him additional time to tender
his written explanation to the 1st Notice of Termination.
On March 2, 2002, petitioner again wrote to respondent, this time requesting for further investigation on
his alleged act of spreading rumors against Soriano in order for him to confront his accuser and present
his witnesses with the assistance of counsel. Respondent denied the request reiterating that there has
been substantial compliance with due process and that a reinvestigation is moot because the suspension
was already served.
Anent the new charge of insubordination, petitioner submitted to respondent his written
explanation[12] averring that he still reported for work on the first day of his suspension because the
accusation of Soriano is baseless and her testimony is hearsay. Besides, according to petitioner, he did
not defy any order related to his duties, no representative of the management prevented him from
working and that reporting to work without being paid for the service he rendered on that day did not in
any way affect the companys productivity.
On March 15, 2002, an investigation on the insubordination case was conducted which was attended by
the parties and their respective counsels. Through a Final Notice of Termination dated April 1,
2002,[13] petitioner was dismissed from service on the ground of insubordination or willful disobedience in
complying with the suspension order.
Proceedings before the Labor Arbiter
On April 5, 2002, petitioner filed a complaint[14] before the Arbitration Branch of the NLRC against
respondent assailing the legality of his suspension and eventual dismissal. He claimed that his suspension
and dismissal were effected without any basis, and that he was denied his right to due process.
On July 31, 2003, the Labor Arbiter rendered a Decision[15] dismissing petitioners complaint for lack of
merit. The Labor Arbiter ruled that the act of petitioner in spreading rumors or intriguing against the honor
of a co-employee was persistent and characterized by willful and wrongful intents. It thus held that the
order suspending petitioner is a legitimate exercise of management prerogative and that the deliberate
refusal of petitioner to comply therewith constitutes willful disobedience.
Proceedings before the NLRC
Petitioner appealed to the NLRC, which, in a Decision[16] dated July 22, 2005 found his suspension and
dismissal illegal. It held that the testimonies given during the January 31, 2002administrative investigation
and used as basis for petitioners suspension are hearsay. The NLRC likewise held that petitioner was
deprived of his basic right to due process when he was not allowed to confront his accuser despite his
repeated requests.
Respondent moved for reconsideration.[17] Petitioner, for his part, filed a Motion for Partial
Reconsideration[18] with respect to the limited award of backwages and to claim payment of attorneys fees
and damages as well.
The NLRC, in its February 28, 2006 Decision,[19] reconsidered its earlier Decision and reinstated the Labor
Arbiters Decision dismissing the complaint. In reversing itself, the NLRC opined that as shown by the
transcripts of the investigation conducted on January 31, 2002, the testimony of Soriano was not, after
all, hearsay. The NLRC also considered the Memorandum dated December 10, 2001 which placed
petitioner under deactivation for three months due to an offense he earlier committed. While under said
deactivation period, the commission of any further infraction warrants the imposition of the penalty of
suspension. Finally, the NLRC struck down petitioners claim that he has no knowledge of the suspension
order since this was never raised before the Labor Arbiter but only on appeal.
Aggrieved, petitioner filed with the CA a petition for certiorari.[20] On May 28, 2007, the CA affirmed the
findings of the NLRC, ruling that the suspension of petitioner was not predicated on hearsay evidence;
that petitioner was not deprived of due process both at the company level and during the proceedings
held before the NLRC; and that petitioners failure to comply with respondents suspension order, despite
notice thereof, is a case of willful disobedience of a lawful order which is a valid ground for dismissal.
Petitioner moved for reconsideration.[21] Before acting thereon, the CA required respondent to file its
comment.[22] Although 19 days late, the CA admitted respondents comment[23] in the interest of justice.[24]
On October 16, 2007, the CA resolved petitioners Motion for Reconsideration as follows:
Finding no cogent reason with which to modify, much less reverse Our assailed Decision
dated May 28, 2007, petitioners Motion for Reconsideration filed on June 18, 2007 is
hereby DENIED.
SO ORDERED.[25]
Issues
Hence, the present petition with the following assignment of errors:
I.
WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE
WHIMSICAL AND CAPRICIOUS DECISION OF THE NLRC WHICH REVERSED ITS
ORIGINAL DECISION FINDING THAT WITNESS HYACINTH SORIANOS TESTIMONY IS
NOT HEARSAY AFTER ALL:
A. BY MEANS OF SELECTIVE CITATION ON A PORTION ON PAGE TWO
OF THE FIVE-PAGE UNSWORN TESTIMONY OF HYACINTH SORIANO THAT HER
TESTIMONY IS NOT HEARSAY AFTER ALL WHEN IN ITS ENTIRETY THE
TESTIMONIES ARE DOUBLE-TRIPLE-HEARSAY AS FOUND [BY] THE RESPONDENT
NLRC IN ITS ORIGINAL DECISION, ASIDE FROM THE FACT THAT IN THAT
JANUARY 31, 2002 HEARING WITNESS HYACINTH SORIANO DID NOT TESTIFY
UNDER OATH AND THE ENTIRE PROCEEDINGS OF THE MINUTES WAS NOT
SIGNED BY THE 3-MEMBER INVESTIGATION COMMITTEE, HENCE THE BASIS OF
THE PETITIONERS SUSPENSION WHICH PUBLIC RESPONDENTS FOUND TO BE A
LEGAL ORDER IS NOTHING BUT A SCRAP OF PAPER.
B. BY SIMPLY STATING THAT PETITIONER WAS NOT DENIED DUE

PROCESS BECAUSE HE WAS FURNISHED COPY OF THE TERMINATION NOTICE
STATING THE GROUNDS THERETO ALTHOUGH IN THE PLANT LEVEL
INVESTIGATION/HEARING ON JANUARY 31, 2002, PETITIONER WAS EXCLUDED
OR HIS PRESENCE WAS NOT ALLOWED DURING THE GUIDED/COUCHED
INTERROGATIONS FOR THE TESTIMONIES OF WITNESS HYACINTH SORIANO
AND AFTER WITNESS SORIANOS GUIDED/COUCHED TESTIMONIES ENDED, THE
PANEL OF INVESTIGATORS SUBSEQUENTLY TOOK THE TESTIMONIES OF THE
PETITIONER, ONE AFTER THE OTHER. IN SHORT, DESPITE HIS REPEATED
DEMANDS FROM THE PRIVATE RESPONDENT MANAGEMENT THAT HE BE
ALLOWED TO CONFRONT HIS ACCUSER HYACINTH SORIANO, PETITIONER WAS
NOT ALLOWED TO CONFRONT HIS ACCUSER.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
FAILING TO CONSIDER THE UNCONTROVERTED FACT THAT THE SO-CALLED THREE-
DAY SUSPENSION WAS ANCHORED ON A SCRAP OF PAPER BECAUSE IT WAS NOT
SIGNED AND ISSUED BY A COMPANY OFFICIAL OF THE PRIVATE RESPONDENT
AUTHORIZED TO EFFECT ANY DISMISSAL OR SUSPENSION ORDER, THUS PETITIONER
DID NOT VIOLATE ANY LAWFUL ORDER.
III.
AFFIRMING THE WHIMSICAL AND CAPRICIOUS SECOND DECISION OF THE
RESPONDENT NLRC WHICH REVERSED ITS ORIGINAL DECISION ON THE ALLEGED
GROUND:
A. THAT THE PETITIONER KNEW OF HIS SUSPENSION WHEN HE

REPORTED FOR DUTY ON FEBRUARY 13, 2002 AS DECREED IN THE
UNSIGNED SO-CALLED SUSPENSION ORDER ALLEGEDLY CONSTITUTING
INSUBORDINATION WHEN THE FACTS DISCLOSE THAT PETITIONER DECLINED
TO RECEIVE IT PERSONALLY AND HE ASKED THAT IT BE SENT TO HIM THROUGH
REGISTERED MAIL AND THIS FACT IS ADMITTED BY PRIVATE RESPONDENT,
THUS PUBLIC RESPONDENTS FINDINGS AND CONCLUSION ARE NOT ONLY
CONTRARY TO THE ADMISSION OF BOTH PARTIES BUT BASED ON
CONJECTURES AND SURMISES.
B. THAT AS FOUND BY THE COURT OF APPEALS IT IS ONLY ON APPEAL
THAT PETITIONER INTERPOSES THE ARGUMENT THAT HE COULD NOT HAVE
KNOWN ABOUT HIS SUSPENSION THUS HE COULD NOT VIOLATE AN ORDER
WHICH HE HAD NOT KNOWN IN THE FIRST PLACE, IS NOT IN ACCORD WITH
THE APPLICABLE JURISPRUDENCE, MOREOVER, UPON SCRUTINY IT WAS NOT
SIGNED BY A COMPANY OFFICIAL AUTHORIZED TO EFFECT DISMISSAL OR
SUSPENSION ORDER. THUS THE COURT OF APPEALS SERIOUSLY ERRED IN ITS
FINDING ON THIS MATTER.
IV.
ADMITTING THE PRIVATE RESPONDENTS COMMENT DESPITE x x x NON-COMPLIANCE
WITH THE COURT OF APPEALS ORDER TO FILE COMMENT [DISREGARDING] THE
STRICT OBSERVANCE OF THE RULES WHICH IS MANDATORY. FURTHERMORE,
WHETHER OR NOT THE COURT OF APPEALS [VIOLATED] THE MANDATE OF SECTION
14, ARTICLE VIII OF THE CONSTITUTION IN ITS DENIAL OF PETITIONERS MOTION
FOR RECONSIDERATION WITHOUT STATING THE LEGAL BASIS THEREFOR.[26]
Petitioner contends that his suspension was without any basis since the testimony of Soriano is
hearsay and was not made under oath. Also, the minutes of the investigative proceeding/hearing was not
signed by the investigators. Petitioner likewise contends that he was denied due process as he was not
given the opportunity to contest the evidence against him. He further insists that the suspension order is
a scrap of paper as it was not signed and issued by an official who is authorized to effectuate such
order. And even assuming that the suspension order is valid, no proof was ever presented to show that
he was indeed served or that he received a copy thereof. Therefore, he could not have violated any lawful
order to justify his dismissal.
Our Ruling
The petition is devoid of merit.
The CA did not err in admitting the comment of

respondent despite its late filing.
Petitioner argues that the CA erred in admitting respondents Comment to petitioners Motion for
Reconsideration which was filed 19 days late.
A close scrutiny of Section 6, Rule 65 of the Rules of Court,[27] which grants discretionary authority
to the CA in ordering parties to file responsive and other pleadings in petitions for certiorari filed before it,
will reveal that such rule is merely directory in nature. This is so because the word may employed by the
rule shows that it is not mandatory but discretionary on the part of the CA to require the filing of pleadings
which it deems necessary to assist it in resolving the controversies.[28] In the same way, the admission of
any responsive pleading filed by party-litigants is a matter that rests largely on the sound discretion of the
court. At any rate, rules of procedure may be relaxed in the interest of substantial justice and in order to
afford litigants maximum opportunity for the proper and just determination of their causes.[29] Strict
adherence to technical adjective rules should never be unexceptionally required because a contrary
precept would result in a failure to decide cases on their merits.[30] The CA could not have erred in
admitting the comment, albeit filed late, when it viewed that the interest of justice would be better served
by the policy of liberality.
CA stated legal basis for denying petitioners motion for

reconsideration.
Petitioner next alleges that the CA denied reconsideration without indicating its legal basis in
violation of the mandate of Section 14, Article VIII of the Constitution, which provides that no petition for
review or motion for reconsideration of a decision of the court shall be refused due course or denied
without stating the legal basis therefor. This requirement, however, was complied with in the instant case,
when the CA, in its resolution denying petitioners motion for reconsideration, stated that it found no cogent
reason to modify, much less reverse itself.[31]
Suspension validly meted out by respondent on

petitioner.
Going now to the merits of the case, the 3-day suspension of petitioner is not tainted with
substantive or procedural infirmities. For one, petitioners insistent claim that his suspension was predicated
on hearsay testimony deserves scant consideration.
The NLRC initially ruled that Sorianos testimony during the investigation on the alleged act of
petitioner in spreading rumors is hearsay. Nevertheless, it reversed itself by holding that while Soriano
stated that her allegation with regard to the first two instances that petitioner was spreading false
information about her is based on what she heard from other people, her narration of the third instance
relating to what has transpired during their January 7, 2002 conversation is not hearsay. The NLRC ruled
quoting in part the relevant testimony of Soriano as recorded in the transcript of the investigation:
x x x. Indeed, complainant had been spreading malicious information against Ms.

Soriano. It appears that Ms. Soriano had averred that this happened on three (3)
occasions. The first two (2) instances happened in midyear of 2001 and another in
December 2001. the [sic] first two (2) instances were merely referred to by the
complainant in passing. Thus, she stated:
Raul: So ang pag-uusapan natin dito ay yung number 3, yung January
7?
Hya: Opo. Kasi yung mid last year at yung December 23, iniignore ko
lang hanggang nung Jan 7 harap harapan na.
Tessa: Are you considering numbers 1 and 2? Kasi dito naman nag-ugat
yun e.
Hya: Maam kasi ang parang point ko dito is to cite na ngayon may proof
na ako kasi hinarap na nya ako unlike noon napuro hearsay lang.
Ngayon parang Napatunayan ko na thru Jan 7 na totoo nga.
Parang ang ano ko kasi dito is yung intrigue. Yung 1 & 2 Rumors
lang pero nung Jan 7, intrigue na un kasi may mga taong
nakarinig.
Raul: So ang sinasabi mo ba is talagang ang offense is yung pag-insulto

nya? Parang ang talagang intension nya is awayin ka? Parang
alam nya maiinis ka.
Hya: Opo
Raul: Kasi di ba when youre provoking a fight usually hinahamon mo? In

this case ba yung sinabi ni Toto ay parang gumawa sya ng
statement na hindi maganda sa iyo at yung reaction mo ay x x
Hya: Sir siguro sa part ni Toto hindi kasi hes used to it na e. Pero on my
part x x x
Raul: So yun ang interpretation mo sa offense ni x x x.
Hya: Opo.
The foregoing reveals that Ms. Sorianos testimony is not hearsay and neither is it say-
so.[32]
On appeal, the CA affirmed this ruling when it likewise found that the following statements of
Soriano were limited to matters of personal knowledge:
Hya: 12:15, pagbungad ko palang, O HYA KUMAIN PALA KAYO SA CENTRAL PARK? Sabi
ko OO KASAMA KO SI EMAN, sasabihin ko palang yung hindi na nakasama si
May, Ang sabi niya na E NASA LABAS NAMAN YUNG SASAKYAN NI. tapos sinabi
nya yung plate # ni sir Aldrin.
Tessa: Nasa labas daw yung sasakyan ni Aldrin.
Hya: Opo, e di nagtaka ako, nag-argue na kami, tinitingnan na kami ng mga Aes tapos
iniwan ko sya.[33]
The CA and NLRC are in agreement with this finding and since both are supported by evidence
on record, the same must be accorded due respect and finality.
Petitioner still contends that the testimonies elicited during the investigative hearing were not
made under oath, that the record of the proceeding is not admissible for being unsigned, and that he was
not given a chance to confront his accuser, thus, invoking denial of due process.
In this case, petitioner was asked to explain and was informed of the complaint against him. A
committee was formed which conducted an investigation on January 31, 2002 by exhaustively examining
and questioning both petitioner and his accuser, Soriano, separately. Petitioner actively participated
therein by answering the questions interposed by the panel members. The proceeding was recorded, and
the correctness of which was certified by respondent thru its Regional Manager, Raul
Bandonill.[34] Undoubtedly, petitioner was given enough opportunity to be heard and defend himself. It
has already been held that the essence of due process is simply an opportunity to be heard, a formal or
trial-type hearing is not essential as the due process requirement is satisfied where the parties are afforded
fair and reasonable opportunity to explain their side.[35]
The decision to suspend petitioner was rendered after investigation and a finding by respondent
that petitioner has indeed made malicious statements against a co-employee. The suspension was
imposed due to a repeated infraction within a deactivation period set by the company relating to a previous
similar offense committed. It is axiomatic that appropriate disciplinary sanction is within the purview of
management imposition.[36] What should not be overlooked is the prerogative of an employer company
to prescribe reasonable rules and regulations necessary for the proper conduct of its business and to
provide certain disciplinary measures in order to implement said rules to assure that the same would be
complied with.[37]Respondent then acted within its rights as an employer when it decided to exercise its
management prerogative to impose disciplinary measure on its erring employee.
Petitioner was validly dismissed on the ground of willful

disobedience in refusing to comply with the suspension
order.
The CA refused to give credence to petitioners assertion of having no knowledge of the suspension
because he refused to receive the suspension order preferring that it be sent by registered mail. The
appellate court affirmed the factual finding of the NLRC that petitioner was definitely aware of his
suspension but only feigned ignorance of the same. As a rule, we refrain from reviewing factual
assessments of agencies exercising adjudicative functions. Factual findings of administrative agencies that
are affirmed by the CA are conclusive on the parties and not reviewable by this Court so long as these
findings are supported by substantial evidence.[38]
Anyhow, evidence on record repudiates petitioners pretension. His insistence that he had no notice
of his suspension is belied by evidence as it shows that the suspension order was served on petitioner
on February 7, 2002 by his immediate superior, Al Luzano, but petitioner declined to sign it. No acceptable
reason was advanced for doing so except petitioners shallow excuse that it should be sent to him by
registered mail.
Petitioner also challenges the validity of the suspension order for being unsigned. The same has
no merit. Upon careful examination, it appears that the contention was raised for the first time in
petitioners motion for reconsideration of the Decision of the CA. In Arceno v. Government Service
Insurance System,[39] the hornbook principle that new issues cannot be raised for the first time on appeal
was reiterated. We emphasized therein that the rule is based on principles of fairness and due process
and is applicable to appealed decisions originating from regular courts, administrative agencies or quasi-
judicial bodies, whether rendered in a civil case, a special proceeding or a criminal case, citing the case
of Tan v. Commission on Elections.[40] Even assuming that it was raised, the same would be without merit
because the suspension order bears the signature of respondents engineering manager and petitioners
immediate superior, Al Luzano, who, in fact, is a member of the panel committee that conducted an
investigation on the complaint of Soriano against petitioner.
As a just cause for dismissal of an employee under Article 282[41] of the Labor Code, willful
disobedience of the employers lawful orders requires the concurrence of two elements: (1) the employees
assailed conduct must have been willful, i.e., characterized by a wrongful and perverse attitude; and (2)
the order violated must have been reasonable, lawful, made known to the employee, and must pertain
to the duties which he had been engaged to discharge.[42] Both requisites are present in the instant case. It
is noteworthy that upon receipt of the notice of suspension, petitioner did not question such order at the
first instance. He immediately defied the order by reporting on the first day of his suspension. Deliberate
disregard or disobedience of rules by the employee cannot be countenanced. It may encourage him to
do even worse and will render a mockery of the rules of discipline that employees are required to
observe.[43]
Petitioner was served the first notice of termination and was given time to submit his written
explanation. A hearing was conducted wherein both parties with their respective counsels were
present. After finding cause for petitioners termination, a final notice apprising him of the decision to
terminate his employment was served. All things considered, respondent validly dismissed petitioner for
cause after complying with the procedural requirements of the law.
The allegation of fraud should be proven.
On the last point, petitioner posits that the unfavorable Decision of the Labor Arbiter and the
Decision of the NLRC were issued and obtained by means of fraud, which is a valid ground for their
annulment. In our jurisdiction, however, fraud is never presumed and should be proved as mere
allegations are not enough.[44] The burden of proof rests on petitioner, which, in this case, he failed to
discharge.
WHEREFORE, the petition is DENIED for lack of merit. The assailed May 28, 2007 Decision
and October 16, 2007 Resolution of the Court of Appeals in CA-G.R. SP No. 94485 are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 4-41.
[2]
Id. at 44-56; penned by Associate Justice Vicente S.E. Veloso and concurred in by Associate Justices
Juan Q. Enriquez, Jr. and Marlene Gonzales-Sison.
[3]
Id. at 58.
[4]
Id. at 130-135; penned by Presiding Commissioner Lourdes C. Javier and concurred in by
Commissioners Romeo O. Lagman and Tito F. Genilo.
[5]
[6]
Id. at 362.
[7]
Id. at 365.
[8]
Id.
[9]
Id. at 366.
[10]
Id. at 361.
[11]
Id. at 368.
[12]
Id. at 356-359.
[13]
Id. at 352-355.
[14]
Id. at 81.
[15]
Rollo, pp. 137-166; penned by Labor Arbiter Monroe C. Tabingan.
[16]
Id. at 116-128.
[17]
Id. at 224-233.
[18]
Id. at 216-222.
[19]
Id. at 130-135.
[20]
CA rollo, pp. 3-28.
[21]
Id. at 384-399.
[22]
Id. at 412.
[23]
Id. at 413-426.
[24]
Id. at 434.
[25]
Rollo, p. 58.
[26]
Id. at 332-334.
[27]
Sec. 6. Order to comment. -- x x x
In petitions for certiorari before the Supreme Court and the Court of Appeals, the provisions of
Section 2, Rule 56, shall be observed. Before giving due course thereto, the court may require
the respondents to file their comment to, and not a motion to dismiss, the petition. Thereafter,
the court may require the filing of a reply and such other responsive or other pleadings as it
may deem necessary and proper.
[28]
People v. Ondo, G.R. No. 101361, November 8, 1993, 227 SCRA 562, 569.
[29]
De Grano v. Lacaba, G.R. No. 158877, June 16, 2009.
[30]
Ambrosio v. Intermediate Appellate Court, G.R. No. 75663, January 17, 1990, 181 SCRA 99, 104.
[31]
JRB Realty, Inc. v. Court of Appeals, 337 Phil. 677, 581-682 (1997).
[32]
Rollo, p. 132.
[33]
Id. at 75.
[34]
CA rollo, p. 433.
[35]
Valiao v. Court of Appeals, 479 Phil. 459, 472 (2004).
[36]
San Miguel Corporation v. National Labor Relations Commission, G.R. Nos. 146121-22, April 16, 2008,
551 SCRA 410, 426.
[37]
Soco v. Mercantile Corporation of Davao, 232 Phil. 488, 494 (1987).
[38]
Herida v. F & C Pawnshop and Jewelry Store, G.R. No. 172601, April 16, 2009.
[39]
G.R. No. 162374, June 18, 2009.
[40]
G.R. Nos. 166143-47, November 20, 2006, 507 SCRA 352.
[41]
ART. 282. TERMINATION BY EMPLOYER.- An employer may terminate an employment for any of the
following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
[42]
Gilles v. Court of Appeals, G.R. No. 149273, June 5, 2009.
[43]
San Miguel Corporation v. Ubaldo, G.R. No. 92859, February 1, 1993, 218 SCRA 293, 300.
[44]
Rabaja Ranch Development Corporation v. AFP Retirment and Separation Benefits System, G.R. No.
177181, July 7, 2009.
Supreme Court
Manila
SECOND DIVISION

Appellee,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
NIEVA ALBERTO y DE NIEVA, Promulgated:

x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In a prosecution for violation of the Dangerous Drugs Law, the pivotal issue usually boils down to the
question of credibility of witness. The testimonies of the police officers who apprehended the accused in
a buy-bust operation are usually accorded credence because of the presumption of regularity in the
performance of their duty, which presumption may be overturned only if there is clear and convincing
evidence to the contrary or that they were inspired by improper motive.[1]
Moreover, non-compliance by the apprehending/buy-bust team with Section 21 of the Dangerous Drugs
Law is not fatal as long as there is justifiable ground therefor and the integrity and evidentiary value of
the confiscated/seized items are properly preserved by the apprehending officer/team.[2]
The Charge
The present appeal stems from an Information filed before the Regional Trial Court of Makati,
which was subsequently docketed as Criminal Case No. 03-470 and raffled to Branch 135 of said
court. The Information charging appellant Nieva Alberto y De Nieva with violation of Section 5, Article II
of Republic Act (RA) No. 9165 reads:
That on or about the 27th day of January 2003, in the City of Makati, Metro Manila,
Philippines, a place within the jurisdiction of this Honorable Court, the above-named
accused, without the necessary license or prescription and without being authorized by
law, did then and there willfully, unlawfully and feloniously [sic] sell, deliver and distribute
Methylamphetamine Hydrochloride, a dangerous drug, weighing zero point twenty-five
(0.25) gram, in consideration of P500.00.
CONTRARY TO LAW.[3]
On March 5, 2003, the appellant, assisted by counsel, pleaded not guilty to the offense
charged. Pre-trial conference was then conducted and, upon its termination, trial ensued. The prosecution
and the defense presented different versions of the incident.
On January 23, 2003, an informant went to the Drug Enforcement Unit (DEU) of the Makati Police Station
to inform PO1 Alex Inopia (PO1 Inopia) that appellant Nieva Alberto y De Nieva was selling shabu. An
entrapment team was thus immediately formed consisting of SPO4 Arsenio Mangulabnan, PO1 Jaime
Laura, PO1 Inopia and PO1 Randy Santos (PO1 Santos). PO1 Inopia was designated as poseur-buyer and
was provided with a P500.00 bill marked money.
The informant contacted the appellant through a cellular phone and they agreed to meet at J.P. Rizal
Extension, Comembo, Makati City, to consummate the transaction. Whereupon, the informant and the
police team proceeded to the designated area.
Upon their arrival thereat, the informant approached the appellant and introduced the poseur-buyer, PO1
Inopia. The appellant asked PO1 Inopia how much shabu he needed and the latter handed over
the P500.00 buy-bust money. The appellant then gave a small plastic sachet containing a white crystalline
substance. Thereafter, PO1 Inopia lighted his cigarette, which was the pre-arranged signal for the
consummation of the illegal sale. PO1 Santos responded and together with PO1 Inopia arrested the
appellant and retrieved from her the buy-bust money. The sachet containing the white crystalline
substance was marked with the initials NDA[4] and sent to the crime laboratory for examination. The
examination showed that the contents of the plastic sachet weighed 0.25 gram and are positive for
methylamphetamine hydrochloride or shabu, a dangerous drug.
The disparate version of the incident by the appellant consisted of denial and frame-up. According to the
appellant, she was engaged in the buy and sell of used cellular phones. A certain Angie Angeles (Angeles)
assisted her in searching for prospective sellers.
On January 23, 2003, Angeles informed her that somebody was looking for a buyer of a cellphone
for P1,500.00. The appellant went to the house of Angeles in Comembo, Makati to meet the seller, but
the latter was not there. The appellant wanted to leave but Angeles prevailed upon her to stay, believing
that the seller may still arrive. When she could no longer wait and was about to leave, several persons
barged into the house and announced that they were conducting a raid. They poked a gun at her,
handcuffed her, searched her person, and confiscated her money which was intended as payment for the
cellphone. At around seven oclock in the evening, she was taken to the Criminal Investigation Division.
The appellant claimed that during her detention, a certain Wilmer Antonio demanded P50,000.00 from
her so that she would be not be charged with any offense. She alleged that she could not file a complaint
against the people responsible for her apprehension since nobody could help her while she was already
detained.
On November 28, 2003, the trial court rendered its Decision,[5] the dispositive portion of which reads as
follows:
WHEREFORE, it appearing that the guilt of accused NIEVA ALBERTO y DE NIEVA was
proven beyond reasonable doubt for violation of Section 5, Article II of R.A. 9165, as
principal, with no mitigating or aggravating circumstances, accused is hereby sentenced
to suffer life imprisonment, to pay a fine of P500,000.00, and to pay costs.
Let the zero point twenty-five (0.25) gram of Methylamphetamine Hydrochloride be

turned over to the PDEA for proper disposition.
SO ORDERED.[6]
The trial court found that all the elements for the illegal sale of shabu were satisfactorily established by
the prosecution. The identity of the buyer and the seller, the object, and the consideration were
proven. Likewise, the delivery of the thing sold and the payment therefor were established.
Thus, appellant filed an appeal raising the following assignment of errors:
I.
THE COURT A QUO GRAVELY ERRED IN GIVING FULL WEIGHT AND CREDENCE TO
INCREDIBLE TESTIMONY OF THE PROSECUTIONS SOLE WITNESS.
II.
THE COURT A QUO GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT OF
THE OFFENSE CHARGED DESPITE THE FAILURE OF THE PROSECUTION TO PROVE HER
GUILT BEYOND REASONABLE DOUBT.[7]
In its Decision[8] promulgated on January 19, 2006, the appellate court affirmed the decision of the trial
court. It held that the trial court did not err in convicting appellant for violation of Section 5, Article II of
RA 9165.
Our Ruling
In a successful prosecution for offenses involving the illegal sale of dangerous drugs under Section
5, Article II of RA 9165, the following elements must concur: (1) the identities of the buyer and seller,
object, and consideration; and (2) the delivery of the thing sold and the payment thereof.[9] What is
material to the prosecution for illegal sale of dangerous drugs is the proof that the transaction or sale
actually occurred, coupled with the presentation in court of the substance seized as evidence.[10]
In the present case, all the elements of the crime have been sufficiently established. Prosecution
witness PO1 Inopia consistently testified that a buy-bust operation took place. As the poseur-buyer, he
positively identified the appellant as the seller of a sealed sachet containing a white crystalline substance
for a sum of P500.00. The sachet was confiscated and marked with initials NDA and taken to the crime
laboratory for examination, where a chemical analysis on the contents thereof confirmed that the same
are indeed methylamphetamine hydrochloride or shabu. The sachet containing said dangerous drug was
positively identified by PO1 Inopia during the trial as the very sachet with white crystalline substance sold
and delivered to him by the appellant. Thus, appellants defense of denial is unavailing. It has been
consistently held that mere denial cannot prevail over the positive testimony of a prosecution witness. A
defense of denial which is unsupported and unsubstantiated by clear and convincing evidence becomes
negative and self-serving, deserving no weight in law, and cannot be given greater evidentiary value over
convincing, straightforward and probable testimony on affirmative matters.[11]
Likewise unavailing is the defense of the appellant that the police officers arrested her to
extort P50,000.00 and that the case was filed after she refused to give said amount. This defense of
frame-up is viewed with disfavor since, like alibi, it can easily be concocted and is a common ploy in most
prosecutions for violations of the Dangerous Drugs Law.[12] In fact, aside from the bare assertions of the
appellant that she was a victim of frame-up and extortion, there is no clear and convincing evidence to
substantiate such claim. On the other hand, she admits that there was no existing rancor between her
and the arresting officers,[13] and that there is no reason why the buy-bust team would single her out for
the sole purpose extorting money from her.
Appellant likewise assails the credibility of the lone prosecution witness. According to the appellant,
considering the circumstances under which the buy-bust operation was conducted as narrated in open
court by PO1 Inopia, it is difficult to believe that the buy-bust team seized only a single sachet
of shabu from her. Likewise unbelievable, per appellants contention, is the amount of P500.00 paid by
PO1 Inopia for the alleged 0.25 gram of shabu, which is grossly inadequate compared to its prevailing
street value. Besides, PO1 Inopias testimony is not worthy of credence for want of corroborative evidence.
It is well-settled that the trial courts determination on the issue of credibility of witnesses and its
consequent findings of facts must be given great weight and respect on appeal, unless certain facts or
substance have been overlooked, which, if considered, might affect the result of the case. This is so
because of the judicial experience that trial courts are in a better position to decide the question of
credibility, having heard the witnesses themselves and observed their deportment and manner of
testifying during the trial.[14]
In the case at bench, we have thoroughly reviewed the records and, like the appellate court, did
not find any justification to disturb the findings of the trial court. Our re-examination of the testimony of
PO1 Inopia follows the trial courts conclusion that his testimony was given in a straightforward and simple
manner. Besides, appellant is questioning the testimony of PO1 Inopia only on matters pertaining to minor
details of the incident that do not, in any way, affect her conviction. The inconsistencies ascribed to PO1
Inopia involve minor details, too trivial to adversely affect his credibility as prosecution witness,[15] and do
not negate his positive identification of the appellant as the perpetrator of the crime.[16] On the other hand,
the testimony of PO1 Inopia on the circumstances that occurred on the date of the entrapment operation
against the appellant from the moment he received a confidential tip from his informer until the time the
buy-bust team apprehended the appellant deserves to be given weight and significance as it emanated
from the mouth of a policeman who enjoys the presumption of regularity in the performance of his
duty. Police officers are presumed to have acted regularly in the performance of their official functions in
the absence of clear and convincing proof to the contrary or proof that they were moved by ill will.[17]
The argument of the appellant that the prosecutions account of the buy-bust operation is
unworthy of belief since no corroborative testimony was presented, fails to impress. There is no law
requiring that in drug cases the testimony of a single witness has to be corroborated to be
believed. Corroborative evidence is vital only when there are reasons to suspect that the witness twisted
the truth, or that his or her observation was inaccurate. Evidence is assessed in terms of quality, not
quantity. It is to be weighed, not counted. Thus, it is not uncommon to reach a conclusion of guilt on the
basis of the testimony of a lone witness.[18] Moreover, it is on record that the appellant no longer required
the presentation of corroborative testimony. During the trial, the prosecution was ready to present another
witness in the person of PO1 Santos. However, the parties agreed to dispense with his testimony since it
would only be corroborative in nature.[19]
The appellant further asserts that there is a serious doubt as to the veracity of the offense charged
since the Information alleges that the offense was committed on January 27, 2003 while the prosecution
witness categorically averred that they arrested her in a buy-bust operation conducted on January 23,
2003. It does not escape our attention, however, that this issue has made its debut only in the Court of
Appeals. In this regard, the rule is that issues not raised in the lower courts cannot be raised for the first
time on appeal without offending the basic rules of fair play, justice and due process.[20]
Lastly, the appellant maintains that serious doubt exists on whether the alleged shabu was
actually seized from her due to the failure of the buy-bust team to observe the proper procedure in the
seizure of the alleged shabu and the subsequent delay in transmitting the same for laboratory
examination. The appellant argues that, under the law, the buy-bust team is mandated to physically
inventory and photograph the seized drug in his presence, or in the presence of his representative or
counsel, and representatives from the media and the Department of Justice.[21] She further contends that
it was also imperative for the prosecution to submit the alleged shabu to the Philippine Drug Enforcement
Agency (PDEA) Forensic Laboratory for qualitative and quantitative examinations within 24 hours from its
confiscation.[22] However, the laboratory report shows that the said item was submitted for examination
only five days after the alleged buy-bust operation.
The defense of the appellant of alleged non-compliance by the apprehending police officers with
existing procedure is based on Section 21 of RA 9165. It reads:
SEC. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered

Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and Essential
Chemicals, Instrumental Paraphernalia and/or Laboratory Equipment. The PDEA shall
take charge and have custody of all dangerous drugs, plant sources of dangerous drugs,
controlled precursors and essential chemicals, as well as instruments/paraphernalia
and/or laboratory equipment so confiscated, seized and/or surrendered, for proper
disposition in the following manner:
(1) The apprehending team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and photograph the same
in the presence of the accused or the person/s from whom such items were confiscated
and/or seized, or his/her representative or counsel, a representative from the media and
the Department of Justice (DOJ), and any elected public official who shall be required to
sign the copies of the inventory and be given a copy thereof;
(2) Within twenty-four (24) hours upon confiscation/seizure of dangerous drugs,

plant sources of dangerous drugs, controlled precursors and essential chemicals, as well
as instruments/paraphernalia and/or laboratory equipment, the same shall be submitted
to the PDEA Forensic Laboratory for a qualitative and quantitative examination;
xxxx
However, the prosecutions failure to submit in evidence the required physical inventory and
photograph of the evidence confiscated will not result to appellants acquittal of the crime charged.[23] Non-
compliance with the above-provisions of RA 9165 is not fatal and will not render the arrest of an accused
illegal or the items seized from her inadmissible.[24] What is of utmost importance is the preservation of
the integrity and the evidentiary value of the seized items, as the same would be utilized in the
determination of the guilt or innocence of the appellant.[25]
Here, there is no doubt that the integrity and the evidentiary value of the drug confiscated from
the appellant during the entrapment operation were properly preserved and safeguarded.The specimen
was immediately and adequately marked. Thereafter, it was sent to the crime laboratory for the requisite
chemistry report. In other words, the sachet of drug seized from the appellant and subsequently marked
with initials NDA was the same specimen submitted to the crime laboratory for chemical analysis. It was
not shown to be contaminated in any manner. The white crystalline substance contained therein was later
on determined to be positive for methylamphetamine hydrochloride, commonly known as shabu, as
shown in Chemistry Report No. D-109-03S dated January 28, 2003.[26] At this point, it is worth noting that
the testimony of the forensic chemist was dispensed with after both parties stipulated that the specimen
submitted by the police officers was subjected to laboratory tests and the results are shown in said
chemistry report.[27]
Further, appellant did not assail the chain of custody or the issue of the disposition and
preservation of subject drug before the trial court. Consequently, she cannot now be allowed to question
its integrity and evidentiary value. Objection to the admissibility of evidence raised for the first time on
appeal cannot be considered.[28]
The Penalty
Having ruled that the guilt of the appellant of the crime charged has been established beyond
reasonable doubt, a determination of the appropriate imposable penalty is now in order.Section 5, Article
II of RA 9165 penalizes the sale of shabu as follows:
SEC. 5. Sale, Trading, Administration, Dispensation, Delivery, Distribution and

Transportation of Dangerous Drugs and/or Controlled Precursors and Essential
Chemicals. The penalty of life imprisonment to death and a fine ranging from Five
hundred thousand pesos (P500,000.00) to Ten million pesos (P10,000,000.00) shall be
imposed upon any person, who, unless authorized by law, shall sell, trade, administer,
dispense, deliver, give away to another, distribute, dispatch in transit or transport any
dangerous drug, including any and all species of opium poppy regardless of the quantity
and purity involved, or shall act as a broker in any of such transactions.[29]
For selling 0.25 gram of methylamphetamine hydrochloride to poseur-buyer PO1 Inopia, we find
that the trial court, as affirmed by the CA, correctly imposed the penalty of life imprisonment. We also find
the fine of P500,000.00 imposed on appellant to be in accordance with law.
WHEREFORE, the appeal is DISMMISED. The Decision of the Court of Appeals in CA-G.R. CR
No. 00894 dated January 19, 2006 which sustained the Decision of the Regional Trial Court of Makati,
Branch 135, finding appellant Nieva Alberto y De Nieva, guilty beyond reasonable doubt of violation of
Section 5, Article II of Republic Act No. 9165 and sentencing her to suffer the penalty of life imprisonment
and a fine of P500,000.00 is AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
People v. Garcia, G.R. No. 172975, August 8, 2007, 529 SCRA 519, 533.
[2]
People v. Pringas, G.R. No. 175928, August 31, 2007, 531 SCRA 828, 842,
[3]
Records, p. 1.
[4]
Exhibit E-1, id. at 32.
[5]
Id at 44 47; penned by Judge Francisco B. Ibay.
[6]
Id. at 47.
[7]
CA rollo, p. 30.
[8]
Id. at 90-102; penned by Associate Justice Monina Arevalo-Zenarosa and concurred in by Associate
Justices Andres B. Reyes, Jr. and Rosmari D. Carandang.
[9]
People v. Dumlao, G.R. No. 181599, August 20, 2008, 562 SCRA 762, 770.
[10]
Id.
[11]
People v. Mateo, G.R. No. 179036, July 28, 2008, 560 SCRA 375, 390.
[12]
People v. Astudillo, 440 Phil. 205, 224 (2002).
[13]
TSN, October 1, 2003, p. 13.
[14]
People v. Vallador, 327 Phil. 303, 310-311 (1996).
[15]
People v. Ondalok, 339 Phil. 17, 25 (1997).
[16]
People v. Daen, Jr., 314 Phil. 280, 292 (1995).
[17]
People v. Mateo, supra note 11 at 390.
[18]
People v. Ayupan, 427 Phil. 200, 208-209 (2002).
[19]
TSN, June 25, 2003, pp. 17-18.
[20]
Pascual v. People, G.R. No. 160540, March 22, 2007, 518 SCRA 730, 738.
[21]
Dangerous Drugs Board Resolution No. 01, Section 2.
[22]
Id., Sec. 3.
[23]
People v. Agulay, G.R. No. 181747, September 26, 2008, 566 SCRA 571, 595.
[24]
Id.
[25]
People v. Del Monte, G.R. No.179940, April 23, 2008, 552 SCRA 627.
[26]
Records, p. 35.
[27]
Id. at 23.
[28]
People v. Mateo, supra note 11 at 410.
[29]
REPUBLIC ACT NO. 9165, Article II, Section 5.
Supreme Court
Manila
SECOND DIVISION
ALLIED BANKING G.R. No. 175097

CORPORATION,
Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
COMMISSIONER OF
INTERNAL REVENUE, Promulgated:
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The key to effective communication is clarity.
The Commissioner of Internal Revenue (CIR) as well as his duly authorized representative must
indicate clearly and unequivocally to the taxpayer whether an action constitutes a final determination on
a disputed assessment.[1] Words must be carefully chosen in order to avoid any confusion that could
adversely affect the rights and interest of the taxpayer.
Assailed in this Petition for Review on Certiorari[2] under Section 12 of Republic Act (RA) No.
9282,[3] in relation to Rule 45 of the Rules of Court, are the August 23, 2006 Decision[4] of the Court of
Tax Appeals (CTA) and its October 17, 2006 Resolution[5] denying petitioners Motion for Reconsideration.
Factual Antecedents
On April 30, 2004, the Bureau of Internal Revenue (BIR) issued a Preliminary Assessment Notice
(PAN) to petitioner Allied Banking Corporation for deficiency Documentary Stamp Tax (DST) in the amount
of P12,050,595.60 and Gross Receipts Tax (GRT) in the amount of P38,995,296.76 on industry issue for
the taxable year 2001.[6] Petitioner received the PAN on May 18, 2004 and filed a protest against it on May
27, 2004.[7]
On July 16, 2004, the BIR wrote a Formal Letter of Demand with Assessment Notices to petitioner,
which partly reads as follows:[8]
It is requested that the above deficiency tax be paid immediately upon receipt hereof,
inclusive of penalties incident to delinquency. This is our final decision based on
investigation. If you disagree, you may appeal the final decision within thirty (30) days
from receipt hereof, otherwise said deficiency tax assessment shall become final,
executory and demandable.
Petitioner received the Formal Letter of Demand with Assessment Notices on August 30, 2004.[9]
Proceedings before the CTA First Division
On September 29, 2004, petitioner filed a Petition for Review[10] with the CTA which was raffled
to its First Division and docketed as CTA Case No. 7062.[11]
On December 7, 2004, respondent CIR filed his Answer.[12] On July 28, 2005, he filed a Motion to
Dismiss[13] on the ground that petitioner failed to file an administrative protest on the Formal Letter of
Demand with Assessment Notices. Petitioner opposed the Motion to Dismiss on August 18, 2005.[14]
On October 12, 2005, the First Division of the CTA rendered a Resolution[15] granting respondents
Motion to Dismiss. It ruled:
Clearly, it is neither the assessment nor the formal demand letter itself that is
appealable to this Court. It is the decision of the Commissioner of Internal Revenue on
the disputed assessment that can be appealed to this Court (Commissioner of Internal
Revenue vs. Villa, 22 SCRA 3). As correctly pointed out by respondent, a disputed
assessment is one wherein the taxpayer or his duly authorized representative filed an
administrative protest against the formal letter of demand and assessment notice within
thirty (30) days from date [of] receipt thereof. In this case, petitioner failed to file an
administrative protest on the formal letter of demand with the corresponding assessment
notices. Hence, the assessments did not become disputed assessments as subject to the
Courts review under Republic Act No. 9282. (See also Republic v. Liam Tian Teng Sons &
Co., Inc., 16 SCRA 584.)
WHEREFORE, the Motion to Dismiss is GRANTED. The Petition for Review is

hereby DISMISSED for lack of jurisdiction.
SO ORDERED.[16]
Aggrieved, petitioner moved for reconsideration but the motion was denied by the First Division
in its Resolution dated February 1, 2006.[17]
Proceedings before the CTA En Banc
On February 22, 2006, petitioner appealed the dismissal to the CTA En Banc.[18] The case was
docketed as CTA EB No. 167.
Finding no reversible error in the Resolutions dated October 12, 2005 and February 1, 2006 of the
CTA First Division, the CTA En Banc denied the Petition for Review[19]as well as petitioners Motion for
Reconsideration.[20]
The CTA En Banc declared that it is absolutely necessary for the taxpayer to file an administrative
protest in order for the CTA to acquire jurisdiction. It emphasized that an administrative protest is an
integral part of the remedies given to a taxpayer in challenging the legality or validity of an
assessment. According to the CTA En Banc, although there are exceptions to the doctrine of exhaustion
of administrative remedies, the instant case does not fall in any of the exceptions.
Issue
Hence, the present recourse, where petitioner raises the lone issue of whether the Formal Letter
of Demand dated July 16, 2004 can be construed as a final decision of the CIR appealable to the CTA
under RA 9282.
Our Ruling
Section 7 of RA 9282 expressly provides that the

CTA exercises exclusive appellate jurisdiction to
review by appeal decisions of the CIR in cases
involving disputed assessments
The CTA, being a court of special jurisdiction, can take cognizance only of
matters that are clearly within its jurisdiction.[21] Section 7 of RA 9282 provides:
Sec. 7. Jurisdiction. The CTA shall exercise:
(a) Exclusive appellate jurisdiction to review by appeal, as herein provided:
(1) Decisions of the Commissioner of Internal Revenue in

cases involving disputed assessments, refunds of
internal revenue taxes, fees or other charges, penalties
in relation thereto, or other matters arising under the
National Internal Revenue Code or other laws
administered by the Bureau of Internal Revenue;
(2) Inaction by the Commissioner of Internal Revenue in cases

involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties in relation
thereto, or other matters arising under the National
Internal Revenue Code or other laws administered by the
Bureau of Internal Revenue, where the National Internal
Revenue Code provides a specific period of action, in
which case the inaction shall be deemed a
denial; (Emphasis supplied)
xxxx
The word decisions in the above quoted provision of RA 9282 has been interpreted to mean the
decisions of the CIR on the protest of the taxpayer against the assessments.[22]Corollary thereto, Section
228 of the National Internal Revenue Code (NIRC) provides for the procedure for protesting an
assessment. It states:
SECTION 228. Protesting of Assessment. When the Commissioner or his duly

authorized representative finds that proper taxes should be assessed, he shall first notify
the taxpayer of his findings: Provided, however, That a preassessment notice shall not be
required in the following cases:
(a) When the finding for any deficiency tax is the result of mathematical error in
the computation of the tax as appearing on the face of the return; or
(b) When a discrepancy has been determined between the tax withheld and the
amount actually remitted by the withholding agent; or
(c) When a taxpayer who opted to claim a refund or tax credit of excess creditable
withholding tax for a taxable period was determined to have carried over and
automatically applied the same amount claimed against the estimated tax liabilities for
the taxable quarter or quarters of the succeeding taxable year; or
(d) When the excise tax due on excisable articles has not been paid; or
(e) When an article locally purchased or imported by an exempt person, such as,
but not limited to, vehicles, capital equipment, machineries and spare parts, has been
sold, traded or transferred to non-exempt persons.
The taxpayers shall be informed in writing of the law and the facts on which the
assessment is made; otherwise, the assessment shall be void.
Within a period to be prescribed by implementing rules and regulations, the

taxpayer shall be required to respond to said notice. If the taxpayer fails to respond, the
Commissioner or his duly authorized representative shall issue an assessment based on
his findings.
Such assessment may be protested administratively by filing a request for

reconsideration or reinvestigation within thirty (30) days from receipt of the assessment
in such form and manner as may be prescribed by implementing rules and regulations.
Within sixty (60) days from filing of the protest, all relevant supporting documents shall
have been submitted; otherwise, the assessment shall become final.
If the protest is denied in whole or in part, or is not acted upon within one hundred
eighty (180) days from submission of documents, the taxpayer adversely affected by the
decision or inaction may appeal to the Court of Tax Appeals within thirty (30) days from
receipt of the said decision, or from the lapse of the one hundred eighty (180)-day period;
otherwise, the decision shall become final, executory and demandable.
In the instant case, petitioner timely filed a protest after receiving the PAN. In response thereto,
the BIR issued a Formal Letter of Demand with Assessment Notices. Pursuant to Section 228 of the NIRC,
the proper recourse of petitioner was to dispute the assessments by filing an administrative protest within
30 days from receipt thereof. Petitioner, however, did not protest the final assessment notices. Instead, it
filed a Petition for Review with the CTA. Thus, if we strictly apply the rules, the dismissal of the Petition
for Review by the CTA was proper.
The case is an exception to the

rule on exhaustion of administrative remedies
However, a careful reading of the Formal Letter of Demand with Assessment Notices leads us to
agree with petitioner that the instant case is an exception to the rule on exhaustion of administrative
remedies, i.e., estoppel on the part of the administrative agency concerned.
In the case of Vda. De Tan v. Veterans Backpay Commission,[23] the respondent contended that
before filing a petition with the court, petitioner should have first exhausted all administrative remedies by
appealing to the Office of the President. However, we ruled that respondent was estopped from invoking
the rule on exhaustion of administrative remedies considering that in its Resolution, it said, The opinions
promulgated by the Secretary of Justice are advisory in nature, which may either be accepted or ignored
by the office seeking the opinion, and any aggrieved party has the court for recourse. The statement of
the respondent in said case led the petitioner to conclude that only a final judicial ruling in her favor would
be accepted by the Commission.
Similarly, in this case, we find the CIR estopped from claiming that the filing of the Petition for
Review was premature because petitioner failed to exhaust all administrative remedies.
The Formal Letter of Demand with Assessment Notices reads:
Based on your letter-protest dated May 26, 2004, you alleged the following:
1. That the said assessment has already prescribed in accordance with

the provisions of Section 203 of the Tax Code.
2. That since the exemption of FCDUs from all taxes found in the Old
Tax Code has been deleted, the wording of Section 28(A)(7)(b) discloses that
there are no other taxes imposable upon FCDUs aside from the 10% Final
Income Tax.
Contrary to your allegation, the assessments covering GRT and DST for taxable year 2001
has not prescribed for [sic] simply because no returns were filed, thus, the three year
prescriptive period has not lapsed.
With the implementation of the CTRP, the phrase exempt from all taxes was
deleted. Please refer to Section 27(D)(3) and 28(A)(7) of the new Tax Code. Accordingly,
you were assessed for deficiency gross receipts tax on onshore income from foreign
currency transactions in accordance with the rates provided under Section 121 of the said
Tax Code. Likewise, deficiency documentary stamp taxes was [sic] also assessed on Loan
Agreements, Bills Purchased, Certificate of Deposits and related transactions pursuant to
Sections 180 and 181 of NIRC, as amended.
The 25% surcharge and 20% interest have been imposed pursuant to the provision of
Section 248(A) and 249(b), respectively, of the National Internal Revenue Code, as
amended.
It is requested that the above deficiency tax be paid immediately upon receipt hereof,
inclusive of penalties incident to delinquency. This is our final decision based on
investigation. If you disagree, you may appeal this final decision within thirty
(30) days from receipt hereof, otherwise said deficiency tax assessment shall
become final, executory and demandable.[24] (Emphasis supplied)
It appears from the foregoing demand letter that the CIR has already made a final decision on
the matter and that the remedy of petitioner is to appeal the final decision within 30 days.
In Oceanic Wireless Network, Inc. v. Commissioner of Internal Revenue,[25] we considered the

language used and the tenor of the letter sent to the taxpayer as the final decision of the CIR.
In this case, records show that petitioner disputed the PAN but not the Formal Letter of Demand
with Assessment Notices. Nevertheless, we cannot blame petitioner for not filing a protest against the
Formal Letter of Demand with Assessment Notices since the language used and the tenor of the demand
letter indicate that it is the final decision of the respondent on the matter. We have time and again
reminded the CIR to indicate, in a clear and unequivocal language, whether his action on a disputed
assessment constitutes his final determination thereon in order for the taxpayer concerned to determine
when his or her right to appeal to the tax court accrues.[26] Viewed in the light of the foregoing, respondent
is now estopped from claiming that he did not intend the Formal Letter of Demand with Assessment
Notices to be a final decision.
Moreover, we cannot ignore the fact that in the Formal Letter of Demand with Assessment
Notices, respondent used the word appeal instead of protest, reinvestigation, or reconsideration. Although
there was no direct reference for petitioner to bring the matter directly to the CTA, it cannot be denied
that the word appeal under prevailing tax laws refers to the filing of a Petition for Review with the CTA. As
aptly pointed out by petitioner, under Section 228 of the NIRC, the terms protest, reinvestigation and
reconsideration refer to the administrative remedies a taxpayer may take before the CIR, while the term
appeal refers to the remedy available to the taxpayer before the CTA. Section 9 of RA 9282, amending
Section 11 of RA 1125,[27] likewise uses the term appeal when referring to the action a taxpayer must take
when adversely affected by a decision, ruling, or inaction of the CIR. As we see it then, petitioner in
appealing the Formal Letter of Demand with Assessment Notices to the CTA merely took the cue from
respondent. Besides, any doubt in the interpretation or use of the word appeal in the Formal Letter of
Demand with Assessment Notices should be resolved in favor of petitioner, and not the respondent who
caused the confusion.
To be clear, we are not disregarding the rules of procedure under Section 228 of the NIRC, as
implemented by Section 3 of BIR Revenue Regulations No. 12-99.[28] It is the Formal Letter of Demand
and Assessment Notice that must be administratively protested or disputed within 30 days, and not the
PAN. Neither are we deviating from our pronouncement in St. Stephens Chinese Girls School v. Collector
of Internal Revenue,[29] that the counting of the 30 days within which to institute an appeal in the CTA
commences from the date of receipt of the decision of the CIR on the disputed assessment, not from the
date the assessment was issued.
What we are saying in this particular case is that, the Formal Letter of Demand with Assessment
Notices which was not administratively protested by the petitioner can be considered a final decision of
the CIR appealable to the CTA because the words used, specifically the words final decision and appeal,
taken together led petitioner to believe that the Formal Letter of Demand with Assessment Notices was
in fact the final decision of the CIR on the letter-protest it filed and that the available remedy was to appeal
the same to the CTA.
We note, however, that during the pendency of the instant case, petitioner availed of the
provisions of Revenue Regulations No. 30-2002 and its implementing Revenue Memorandum Order by
submitting an offer of compromise for the settlement of the GRT, DST and VAT for the period 1998-2003,
as evidenced by a Certificate of Availment dated November 21, 2007.[30]Accordingly, there is no reason to
reinstate the Petition for Review in CTA Case No. 7062.
WHEREFORE, the petition is hereby GRANTED. The assailed August 23, 2006 Decision and the
October 17, 2006 Resolution of the Court of Tax Appeals are REVERSED and SET ASIDE. The Petition
for Review in CTA Case No. 7062 is hereby DISMISSED based solely on the Bureau of Internal Revenues
acceptance of petitioners offer of compromise for the settlement of the gross receipts tax, documentary
stamp tax and value added tax, for the years 1998-2003.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Surigao Electric Co., Inc. v. Court of Tax Appeals, 156 Phil. 517, 522-523 (1974).
[2]
Rollo, pp. 7-21.
[3]
[4]
Rollo, pp. 23-30; penned by Associate Justice Erlinda P. Uy and concurred in by Presiding Justice Ernesto
D. Acosta, and Associate Justices Juanito C. Castaeda, Jr., Lovell R. Bautista, and Caesar A.
Casanova. Associate Justice Olga Palanca-Enriquez inhibited herself and did not take part.
[5]
Id. at 32-34.
[6]
Id. at 53-54.
[7]
Id. at 24.
[8]
Id. at 35-36.
[9]
Id. at 24.
[10]
Id. at 37-61.
[11]
Id. at 24.
[12]
Id.
[13]
Id. at 62-66.
[14]
Id. at 25.
[15]
Id. at 67-72.
[16]
Id. at 71-72.
[17]
Id. at 25.
[18]
Id. at 23.
[19]
Id. at 29.
[20]
Id. at 34.
[21]
Rizal Commercial Banking Corporation v. Commissioner of Internal Revenue, G.R. No. 168498, April
24, 2007, 522 SCRA 144, 150.
[22]
Commissioner of Internal Revenue v. Villa, 130 Phil. 3, 6 (1968).
[23]
105 Phil. 377, 383 (1959).
[24]
Rollo, p. 36.
[25]
G.R. No. 148380, December 9, 2005, 477 SCRA 205, 211.
[26]
Surigao Electric Co., Inc. v. Court of Tax Appeals, supra note 1.
[27]
Section 11. Who may Appeal; Mode of Appeal; Effect of Appeal; Any party adversely affected by a
decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs,
the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the
Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA
within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period
fixed by law for action as referred to in Section 7(a) (2) herein.
xxxx
[28]
Section 3. Due Process Requirement in the Issuance of a Deficiency Tax Assessment.
xxxx
3.1.2 Preliminary Assessment Notice (PAN). If after review and evaluation by the Assessment Division
or by the Commissioner or his duly authorized representative, as the case may be, it is determined
that there exists sufficient basis to assess the taxpayer for any deficiency tax or taxes, the said Office
shall issue to the taxpayer, at least by registered mail, a Preliminary Assessment Notice (PAN) for the
proposed assessment, showing in detail, the facts and the law, rules and regulations, or jurisprudence
on which the proposed assessment is based. If the taxpayer fails to respond within fifteen (15) days
from date of receipt of the PAN, he shall be considered in default, in which case, a formal letter of
demand and assessment notice shall be caused to be issued by the said Office, calling for payment of
the taxpayer's deficiency tax liability, inclusive of the applicable penalties.
xxxx
3.1.4 Formal Letter of Demand and Assessment Notice. The formal letter of demand and assessment
notice shall be issued by the Commissioner or his duly authorized representative. The letter of demand
calling for payment of the taxpayer's deficiency tax or taxes shall state the facts, the law, rules and
regulations, or jurisprudence on which the assessment is based, otherwise, the formal letter of
demand and assessment notice shall be void. The same shall be sent to the taxpayer only by
registered mail or by personal delivery. x x x
3.1.5 Disputed Assessment The taxpayer or his duly authorized representative may protest
administratively against the aforesaid formal letter of demand and assessment notice within thirty (30)
days from date of receipt thereof x x x.
The taxpayer shall state the facts, the applicable law, rules and regulations, or jurisprudence on which
his protest is based, otherwise, his protest shall be considered void and without force and effect x x
x.
The taxpayer shall submit the required documents in support of his protest within sixty (60) days from
the date of filing of his letter of protest, otherwise, the assessment shall become final and executory
and demandable x x x
If the taxpayer fails to file a valid protest against the formal letter of demand and assessment notice
within thirty (30) days from date of receipt thereof, the assessment shall become final, executory and
demandable.
If the protest is denied, in whole or in part, by the Commissioner, the taxpayer may appeal to the
Court of Tax Appeals within thirty (30) days from date of receipt of the said decision, otherwise, the
assessment shall become final, executory and demandable.
In general, if the protest is denied, in whole or in part, by the Commissioner or his duly authorized
representative, the taxpayer may appeal to the Court of Tax Appeals, within thirty (30) days from
date of receipt of the said decision, otherwise, the assessment shall become final, executory and
demandable: Provided, however, that if the taxpayer elevates his protest to the Commissioner within
thirty (30) days from date of receipt of the final decision of the Commissioners duly authorized
representative, the latters decision shall not be considered final, executory and demandable, in which
case, the protest shall be decided by the Commissioner.
If the Commissioner or his duly authorized representative fails to act on the taxpayers protest within
one hundred eighty (180) days from date of submission, by the taxpayer, of the required documents
in support of his protest, the taxpayer may appeal to the Court of Tax Appeals within thirty (30) days
from the lapse of said 180-day period, otherwise, the assessment shall become final, executory and
demandable.
xxxx
[29]
104 Phil. 314, 317 (1958).
[30]
Annex A of petitioners Memorandum.

Supreme Court
Manila
SECOND DIVISION
SPOUSES WILLIAM GENATO G.R. No. 169706

and REBECCA GENATO,

BRION,
- versus - DEL CASTILLO
ABAD, and
PEREZ, JJ.
RITA VIOLA, Promulgated:

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
When there is a conflict between the title of the case and the allegations in the complaint, the latter prevail
in determining the parties to the action. Jurisprudence directs us to look beyond the form and into the
substance so as to render substantial justice to the parties and determine speedily and inexpensively the
actual merits of the controversy with least regard to technicalities.
In the present Petition for Review, petitioners assail the September 9, 2005 Decision[1] of the Court of
Appeals (CA) in CA-G.R. SP No. 89466 which affirmed the Decision of the Office of the President. The
Office of the President affirmed the Decision of the Housing and Land Use Regulatory Board (HLURB),
First Division which granted the motion to quash the writ of execution issued in HLURB Case No. REM-
102491-4959 (REM-A-950426-0059).
Factual Antecedents
In October 1991, a complaint titled "VILLA REBECCA HOMEOWNERS ASSOCIATION, INC. versus MR.
WILLIAM GENATO and spouse REBECCA GENATO" was filed with the HLURB. The said complaint was
verified by 34 individuals, including the respondent herein, who referred to themselves as the
"Complainants" who "caused the preparation of the foregoing Complaint".[2] The complaint stated that on
various dates, complainants executed Contracts to Sell and/or Lease Purchase Agreements with the Sps.
Genato pertaining to housing units in Villa Rebecca Homes Subdivision. Sometime thereafter the HLURB
issued a cease and desist order (CDO) enjoining the collection of amortization payments. This CDO was
subsequently lifted.Thereafter, complainants went to the Sps. Genato with the intention of resuming their
amortization payments. The latter however refused to accept their payments and instead demanded for
a lump sum payment of all the accrued amortizations which fell due during the effectivity of the CDO.
From the disorganized, bordering on incomprehensible, complaint, it can be gleaned that the following
reliefs are prayed for: 1) That Sps. Genato accept the complainants' monthly amortization payments
corresponding to the period of effectivity of the (subsequently lifted) CDO, without any penalty; 2) That
the computation of interest on delinquent payments be at 3% per month and not compounded; 3) That
Sps. Genato be responsible for correcting the deficiencies in the construction and replacement of sub-
standard materials to conform with the plans and specifications; 4) That Sps. Genato be held
answerable/liable to make good their undertaking to provide individual deep wells for the homeowners;
5) That Sps. Genato be responsible for maintaining the street lights and payment of the corresponding
electric bills; 6) That Sps. Genato maintain the contract price of the units for sale and not increase the
prices; and 7) That Sps. Genato be made accountable for the unregistered dwelling units.
On March 8, 1995, the Housing Arbiter rendered a Decision, the dispositive portion of which states:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered
ordering complainants to resume payment of their monthly amortization from date hereof
pursuant to the agreement.Likewise, it is hereby ordered that respondents correct the
deficiencies in the construction of the complaining occupants' units so as to conform to
that which is specified in the plans and specification of the buildings, as well as observe
proper drainage requirements pursuant to law. Likewise, respondents are hereby directed
to immediately put up commercial wells and/or water pumps or facilities in the Villa
Rebecca Subdivision and to reimburse complainants and unit occupants of their total
expenditures incurred for their water supply.[3]
On appeal to the HLURB Board of Commissioners, the Decision was modified, inter alia, by the additional
directive for the complainants to pay 3% interest per month for the unpaid amortizations due from June
29, 1991. The dispositive portion of the Decision of the HLURB Board of Commissioners states:
WHEREFORE, premises considered, the decision of the Arbiter is hereby MODIFIED to

read as follows:
1. Ordering complainants to pay respondent the remaining balance of the purchase

price. Complainant must pay 3% interest per month for unpaid amortizations due from
June 29, 1991. Thereafter complainant must pay its amortization in accordance with the
original term of the contract. These must be complied with upon finality of this decision.
2. Ordering the respondent to:

a. Accept the amortization payment;
b. Provide drainage outfall;
c. Provide the project with water facilities; and
d. Reimburse complainant the following:
d.1 Electric Bills in the amount of P3,146.66
d.2 Cost of construction of water supply to be determined by an appraiser mutually
acceptable to the parties.
Number 2.d to 2.e [sic] must be complied with within thirty (30) days from finality of this
decision.
SO ORDERED.[4]
This Decision, after being revised and then reinstated, subsequently became final and executory.
On May 26, 2000, Arbiter Marino Bernardo M. Torres issued the Writ of Execution. In connection therewith,
the sheriff seized Rita Viola's two delivery trucks and 315 sacks of rice.Respondent Viola then filed an
Urgent Motion to Quash Execution, with Prayers for Issuance of Temporary Restraining Order, Clarification
and Computation of Correct Amount of Money Judgment and Allowance of Appeal.
After various incidents and pleadings by the opposing parties, the two trucks were ordered released. The
315 sacks of rice, however, were sold at public auction to the highest bidder,[5]petitioner Rebecca Genato
in the amount of P189,000.00.[6]
On December 15, 2000, Arbiter Torres issued an Order denying respondent Viola's motion to quash the
writ of execution and directed her to pay the Sps. Genato the amount of P739,133.31.The dispositive
portion of the Order reads:
WHEREFORE, premises considered, the motion to quash writ of execution is hereby

DENIED.
Movant Rita Viola is hereby directed to pay to the respondents the amount of P739,133.31
in payment of their amortizations up to August 2000.
The bond posted by the movant in compliance with the directive of this Office is likewise
ordered cancelled.
SO ORDERED.[7]
Viola appealed the said Order and on January 10, 2003, the HLURB, First Division rendered a Decision,
the dispositive portion of which reads:
WHEREFORE, premises considered, the movants' respective Motions to Quash the Writ
of Execution are hereby GRANTED. Accordingly, the Orders dated December 15, [2000]
are hereby SET ASIDE. The respondents are directed to credit as payment the value of
the 315 sacks of rice in the amount of P318,500.00, which were seized and auctioned to
the account of movant Viola.
SO ORDERED.[8]
The Sps. Genato appealed the said Decision to the Office of the President. On November 8, 2004, the
Office of the President affirmed in toto the Decision of the HLURB, First Division. The motion for
reconsideration filed by the Sps. Genato was denied. They thus elevated the case to the CA. As previously
mentioned, the CA affirmed the Decision of the Office of the President and disposed as follows:
WHEREFORE, premises considered, the petition is DENIED and the assailed decision
dated November 4, 2004 and resolution dated March 31, 2005 of the Office of the
President in O.P. Case No. 03-B-057 are hereby AFFIRMED.
SO ORDERED.[9]
The Sps. Genato no longer filed a motion for reconsideration, they instead filed the present petition for
review.
Issues
1. WHETHER THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE

HLURB HAS NOT ACQUIRED JURISDICTION OVER THE PERSON OF RESPONDENT
RITA VIOLA.
2. WHETHER AFTER THE DECISION HAS BECOME FINAL AND EXECUTORY THE HLURB
COULD STILL RULE ON THE LACK OF JURISDICTION OVER THE PERSON OF RITA
VIOLA.
3. WHETHER RESPONDENT VIOLA CAN CLAIM AN AMOUNT HIGHER THAN WHAT

APPEARS ON SHERIFF'S CERTIFICATE OF SALE.
4. WHETHER THE RULE THAT FINDINGS OF FACTS AND CONCLUSIONS OF ANY

ADJUDICATIVE BODY SHOULD BE CONSIDERED AS BINDING AND CONCLUSIVE ON
THE APPELLATE COURT, IS APPLICABLE IN THE CASE AT BAR.[10]
Petitioners contend that the CA erred in applying the case of Duero v. Court of Appeals,[11] which held that
the lack of jurisdiction of the court over an action cannot be waived. They submit that "jurisdiction of the
court over an action" is different from "jurisdiction over the person". They say that the latter was what the
HLURB was referring to because it stated that Rita Viola was never impleaded. They contend that
jurisdiction over the person can be conferred by consent expressly or impliedly given, as in the case of
Rita Viola.
Petitioners also assert that the HLURB Decision subject of the writ of execution has long been final and
executory, hence, said Decision can no longer be modified. They further assert that the execution of the
said Decision is a ministerial duty of the HLURB.
Petitioners further argue that the best evidence of the value of the 315 sacks of rice seized and auctioned
off is the Sheriff's Certificate of Sale; hence the Board's ruling crediting to the account of Viola an amount
other than that stated in the Certificate of Sale has no sound basis.
Finally, the petitioners contend that the findings and conclusions of an adjudicative body resulting from
an erroneous application of law are not binding on the appellate courts.
Respondent's Arguments
On the other hand, respondent contends that the HLURB did not acquire jurisdiction over her person since
she was not a party to the case; hence, the HLURB decision is a nullity as against her and therefore never
acquired finality. With a void judgment, the resultant execution was likewise void.
She also argues that, since the levy and auction were illegal, the correct valuation of the 315 sacks of rice
is not the price paid at the auction but its actual value of P318,500.00.
Our Ruling
At the outset, it is worth mentioning that except for respondent Rita Viola, all the other individual
members/buyers/owners of the respective housing units have already paid and settled their obligations
with Sps. Genato.[12] Hence, in the present case we only focus on the matters involving Rita Viola.
For a more orderly presentation, we address the fourth issue raised by petitioners first.
Non-applicability of the doctrine on the binding

effect of findings of facts and conclusions of an
adjudicative body
Indeed findings of fact and conclusions of an adjudicative body like the HLURB, which can be considered
as a trier of facts on specific matters within its field of expertise, should be considered as binding and
conclusive upon the appellate courts. This is in addition to the fact that it was in a better position to assess
and evaluate the credibility of the contending parties and the validity of their respective
evidence. However, these doctrines hold true only when such findings and conclusions are supported by
substantial evidence.[13]
In the present case, we find it difficult to find sufficient evidential support for the HLURB's conclusion that
it did not acquire jurisdiction over the person of Viola. We are thus persuaded that there is ample
justification to disturb the findings of the HLURB.
The HLURB acquired jurisdiction over Viola
It is not the caption of the pleading but the allegations therein that are controlling.[14] The inclusion of the
names of all the parties in the title of a complaint is a formal requirement under Section 3, Rule 7 of the
Rules of Court. However, the rules of pleadings require courts to pierce the form and go into the
substance.[15] The non-inclusion of one or some of the names of all the complainants in the title of a
complaint, is not fatal to the case, provided there is a statement in the body of the complaint indicating
that such complainant/s was/were made party to such action. This is specially true before the HLURB
where the proceedings are summary in nature without regard to legal technicalities obtaining in the courts
of law[16] and where the pertinent concern is to promote public interest and to assist the parties in obtaining
just, speedy and inexpensive determination of every action, application or other proceedings.[17]
Respondent Viola, although her name did not appear in the title as a party, was one of the persons who
caused the preparation of the complaint and who verified the same. The allegations in the body of the
complaint indicate that she is one of the complainants. She categorically considered, and held out, herself
as one of the complainants from the time of the filing of the complaint and up to the time the decision in
the HLURB case became final and executory. To repeat, the averments in the body of the complaint, not
the title, are controlling.[18] Hence, having been set forth in the body of the complaint as a complainant,
Viola was a party to the case.
For clarity, the complaint should have been amended to reflect in the title the individual
complainants. There being a "defect in the designation of the parties", its correction could be summarily
made at any stage of the action provided no prejudice is caused thereby to the adverse party.[19] In the
present case, the specification of the individual complainants in the title of the case would not constitute
a change in the identity of the parties. Only their names were omitted in the title but they were already
parties to the case, most importantly, they were heard through their counsel whom they themselves chose
to prepare the complaint and represent them in the case before the HLURB. No unfairness or surprise to
the complainants, including Viola, or to the Sps. Genato would result by allowing the amendment, the
purpose of which is merely to conform to procedural rules or to correct a technical error.[20]
It is now too late to dismiss this petition, and, in effect, nullify all proceedings had before the HLURB on
the ground that Viola does not appear to have been impleaded as a party. The error or defect is merely
formal and not substantial and an amendment to cure such defect is expressly authorized by Sec. 4, Rule
10 of the Rules of Court.[21]
Moreover, it was only when the final and executory judgment of the HLURB was already being executed
against Viola that she, for the first time, reversed her position; and claimed that she was not a party to
the case and that the HLURB did not acquire jurisdiction over her. Viola is estopped[22] from taking such
inconsistent positions. Where a party, by his or her deed or conduct, has induced another to act in a
particular manner, estoppel effectively bars the former from adopting an inconsistent position, attitude or
course of conduct that causes loss or injury to the latter. The doctrine of estoppel is based upon the
grounds of public policy, fair dealing, good faith and justice, and its purpose is to forbid one to speak
against his own act, representations, or commitments to the injury of one to whom they were directed
and who reasonably relied thereon. After petitioners had reasonably relied on the representations of Viola
that she was a complainant and entered into the proceedings before the HLURB, she cannot now be
permitted to impugn her representations to the injury of the petitioners.
At this point, it may be beneficial to elaborate on the matter of jurisdiction. Jurisdiction is defined as the
power and authority of a court to hear, try and decide a case.[23] In order for the court or an adjudicative
body to have authority to dispose of the case on the merits, it must acquire jurisdiction over the subject
matter and the parties.[24] Elementary is the distinction between jurisdiction over the subject matter and
jurisdiction over the person. Jurisdiction over the subject matter is conferred by the Constitution or by
law. In contrast, jurisdiction over the person is acquired by the court by virtue of the party's voluntary
submission to the authority of the court or through the exercise of its coercive processes. Jurisdiction over
the person is waivable unlike jurisdiction over the subject matter which is neither subject to agreement
nor conferred by consent of the parties.[25] In civil case, courts acquire jurisdiction over the plaintiffs upon
the filing of the complaint, while jurisdiction over the defendants is acquired either through the service of
summons upon them in the manner required by law or through their voluntary appearance in court and
their submission to its authority.[26]
The act of filing the complaint with the HLURB is unequivocally a voluntary submission by the
complainants, including Viola, to the authority of the HLURB. Clearly, the HLURB acquired jurisdiction over
Viola, who was one of the complainants, upon the filing of their complaint.
Final and executory judgment may no longer be

modified
The April 27, 1999 HLURB Resolution,[27] reinstating the December 18, 1996 Decision,[28] has long been
final and executory. Nothing is more settled in the law than that a decision that has acquired finality
becomes immutable and unalterable and may no longer be modified in any respect even if the modification
is meant to correct erroneous conclusions of fact or law and whether it was made by the court that
rendered it or by the highest court of the land.[29] The only recognized exceptions to the general rule are
the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party,
void judgments, and whenever circumstances transpire after the finality of the decision rendering its
execution unjust and inequitable.[30] None of the exceptions is present in this case. The HLURB decision
cannot be considered a void judgment, as it was rendered by a tribunal with jurisdiction over the subject
matter of the complaint and, as discussed above, with jurisdiction over the parties. Hence, the same can
no longer be modified.
Amount to be credited on account
of the sale of property levied upon
After a judgment has gained finality, it becomes the ministerial duty of the court or quasi-judicial tribunal
to order its execution.[31] In the present case, the final and executory HLURB decision was partially
executed by the sale of the 315 sacks of rice belonging to Viola.
In determining the amount to be credited to the account of Viola, we look at the Sheriff's Partial Report
and the Sheriff's Certificate of Sale. Both documents state that in the auction sale of the 315 sacks of rice,
Mrs. Rebecca Genato submitted the highest bid in the amount of P189,000.00. Drawing from Section 19,
Rule 39 of the Rules of Court which states that "all sales of property under execution must be made at
public auction, to the highest bidder," it naturally follows that the highest bid submitted is the amount that
should be credited to the account of the judgment debtor.
WHEREFORE, the petition is GRANTED. The assailed September 9, 2005 Decision of the Court of
Appeals is REVERSED and SET ASIDE and the December 15, 2000 Order of Arbiter Marino Bernardo
M. Torres is REINSTATED and AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
CA rollo, pp. 141-152; penned by Associate Justice Remedios A. Salazar-Fernando and
concurred in by Associate Justices Rosmari D. Carandang and Estela M. Perlas-Bernabe.
[2]
Rollo, pp. 47-53.
[3]
Id. at 56.
[4]
Id. at 59.
[5]
There was one other bidder, Mr. Manuel Rigo, whose bid amounted to only P173,250.00.
[6]
CA rollo, p. 64.
[7]
Id. at 71.
[8]
Rollo, p. 80.
[9]
Id. at 45.
[10]
Id. at 199.
[11]
424 Phil. 12, 25 (2002).
[12]
Rollo, p. 17.
[13]
Cabalan Pastulan Negrito Labor Association v. National Labor Relations Commission, 311 Phil.
744 , 756 (1995).
[14]
See Almuete v. Andres, 421 Phil. 522, 531 (2001); See also Leonardo v. Court of Appeals,
[15]
Vlason Enterprises Corporation v. Court of Appeals, 369 Phil. 269, 304 (1999).
[16]
Section 3. Nature of the Proceedings.-Proceedings before the Board shall be summary in nature
without regard to legal technicalities obtaining in the courts of law. The Rules of Court shall not apply
in said proceedings except in suppletory character and whenever practicable. Appearance by counsel
is optional. (1987 HLURB Rules)
[17]
Section 4 of the 1987 HLURB Rules.
[18]
Vlason Enterprises Corporation v. Court of Appeals, supra note 14.
[19]
Sec. 4. of the Rules of Court states: "Formal amendments. - A defect in the designation of the parties
and other clearly clerical or typographical errors may be summarily corrected by the court at any stage
of the action, at its initiative or on motion, provided no prejudice is caused thereby to the adverse
party".
[20]
Cf. Juasing Hardware v. Mendoza, G.R. No. L-55687, July 30, 1982, 115 SCRA 783.
[21]
Cf. Yao Ka Sin Trading v. Court of Appeals, G.R. No. 53820, June 15, 1992, 209 SCRA 763.
[22]
Article 1431 of the Civil Code states: "Through estoppel an admission or representation is rendered
conclusive upon the person making it and cannot be denied or disproved as against the person relying
thereon".
[23]
Zamora v. Court of Appeals, G.R. No. 78206, March 19, 1990, 183 SCRA 279, 283-284.
[24]
See Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation, G.R. No. 172242, August 14, 2007,
530 SCRA 170, 186; Bank of the Philippine Islands v. Sps. Evangelista, 441 Phil 445, 453 (2002).
[25]
Arnado v. Buban, A.M. No. MTJ-04-1543, May 31, 2004, 430 SCRA 382, 386.
[26]
Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation, supra note 24; Bank of the
Philippine Islands v. Sps. Evangelista, supra note 24.
[27]
Rollo, pp. 63-65.
[28]
Id. at 56-59.
[29]
Hulst v. PR Builders, Inc., G.R. No. 156364, September 3, 2007, 532 SCRA 74, 95; Pea v. Government
Service Insurance System, G.R. No. 159520, September 19, 2006, 502 SCRA 383, 404.
[30]
Hulst v. PR Builders, Inc., supra.
[31]
De Luna v. Pascual, G.R. No. 144218, July 14, 2006, 495 SCRA 42, 58.
EN BANC
THEMISTOCLES A. SAO, JR., G.R. No. 182221

Petitioner,
Present:
PUNO, C. J.,
CARPIO,
CORONA,
- versus - CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
COMMISSION ON ELECTIONS, BERSAMIN,
THE MUNICIPAL BOARD OF DEL CASTILLO,
CANVASSERS OF DULAG, ABAD,
LEYTE, FERDINAND A. VILLARAMA, JR.,
SERRANO, in his capacity as PEREZ, and
Acting Chairman of the Municipal MENDOZA, JJ.
Board of Canvassers of Dulag,
Leyte, and MANUEL SIA QUE, Promulgated:
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
This case, with records spanning nearly 2,000 pages, revolves around the simple question of what
issues may be properly alleged in a pre-proclamation controversy. Petitioner has valiantly and passionately
argued his case and invoked every available ground to suspend and annul a proclamation validly made.
Unfortunately, argument is not evidence; advocacy is not legitimacy. The mere invocation of the grounds
of a pre-proclamation controversy, without more, will not justify the exclusion of election returns which
appear regular and authentic on their face.
This Petition for Certiorari filed pursuant to Rule 65 in relation to Rule 64 of the Rules of Court,
assails the Resolution[1] dated October 3, 2007 of the Commission on Elections (COMELEC) First Division
in SPC Case No. 07-191, as well as the COMELEC En Bancs Resolution[2] dated February 12, 2008.
Petitioner Themistocles A. Sao (Sao) was the official candidate of Lakas Christian Muslim
Democrats (LAKAS-CMD) for Municipal Mayor of the Municipality of Dulag, Leyte during the May 14,
2007 synchronized national and local elections.[3] Private respondent Manuel Sia Que (Que) ran for the
same position under the auspices of the Liberal Party.
Petitioners Factual Allegations
Sao alleged that after the casting and counting of votes, at about midnight of May 14, 2007, a
man was seen carrying a ballot box that was not locked; he then inserted certain documents in said ballot
box, took the aluminum seal, sealed the box, and then turned it over to the Reception Group. The election
returns (ERs) allegedly affected by this anomalous activity were ER Nos. 5301624, 5301603, 5301633,
5301602, and 5301668 (the contested ERs) for Precinct Nos. 49-A, 31-A, 58-A, 30-A, and 90-A,
respectively (the questioned precincts).
During the canvassing at the Dulag Municipal Hall, Sao sought to have the contested ERs excluded
on the following grounds: massive fraud, illegal proceedings, and tampered/falsified and obviously
manufactured returns. He alleged that timely oral objections were made, and the written Petition for
Exclusion was filed with the Municipal Board of Canvassers (MBOC)[4] on May 15, 2007 at 6:50
p.m.[5] together with affidavits prepared by his brother, Tancredo A. Sao, and a certain Peter C.
Alicando.[6] Upon the filing of the Petition for Exclusion, canvass of the contested ERs was deferred.
Sao further alleged that in the morning of May 16, 2007, Lydia Camposano (Camposano), Election
Officer for Dulag, and Chairperson of the MBOC, was overheard calling a certain sir over the telephone to
ask for a ruling. The telephone conversation was video recorded by Wilfredo O. Lazar (Lazar), who
executed an affidavit attesting to said occurrence.[7] Sao, through counsel, then verbally moved for the
inhibition of Camposano as MBOC Chairman on the ground of bias and for prejudgment of the election
results. Camposano allegedly acknowledged that she was talking to her superior, Atty. Jose Nick Medros,
Director III of Region VIII and Chairman of the Leyte Provincial Board of Canvassers, but declined to
inhibit herself until she was ordered to do so by her superiors. The canvassing continued.
At around 9:00 p.m. of May 16, 2007, Sao filed his written Petition for Inhibition together with the
affidavit of Lazar, reiterating his request for the inhibition of the MBOC Chair.[8] At midnight of May 16,
2007, Camposano inhibited herself and declared the canvassing temporarily adjourned.
At around 5:00 p.m. of May 17, 2007, Sao received a copy of the COMELEC Regional Offices
Memorandum designating Ferdinand Serrano (Serrano) as the Acting Election Officer and MBOC
Chairperson.[9] Canvassing resumed at about 6:00 p.m. of May 17, 2007, during which Serrano verbally
ruled that the contested ERs would be opened. Serrano promised that this ruling would be put in writing
within 24 hours. Thereafter, petitioner, through counsel, filed a Notice of Appeal at 5:00 a.m. of May 18,
2007[10] covering the contested ERs.
Finally, Sao claimed that instead of suspending the canvass as required by law and the canvassing
rules, Serrano proceeded to hastily open and canvass the contested ERs. Despite the filing of
petitioners Notice of Appeal, and the fact that the exclusion of the contested ERs would materially affect
the results of the election,[11] the MBOC neither made a written ruling nor elevated the appeal to the
COMELEC together with the MBOCs report and records of the case. Instead, the MBOC proclaimed Que
as Municipal Mayor.
Private Respondents Factual Allegations
On the other hand, Que alleged that in the early morning of May 15, 2007, the MBOC of
Dulag, Leyte, convened and started to canvass the ERs.[12] At around 3:46 a.m. of May 15, 2007, the ER
from Precinct No. 30-A was temporarily set aside because of lack of data on the number of registered
voters, voters who actually voted, and excess and rejected ballots. At the time that this ER was opened,
no objection to its inclusion was made.[13]
At around 6:15 a.m. of May 15, 2007, the Board of Election Inspectors (BEI) from Precinct No.
30-A appeared before the MBOC to complete the data. This time counsel for Sao complained that the
LAKAS-CMD copy had imprints but BEI Chairperson Ruel Congzon explained that the imprints were due
to the carbonized duplicate forms, and that the copies given to the various political parties were borrowed
by the watchers so they could copy the election results. Not finding the explanation satisfactory, counsel
for petitioner moved for the exclusion of said ER because of material defects in the return. Camposano
ruled that the ER from Precinct No. 30-A would be set aside until the submission of petitioners written
objection.[14]
Meanwhile, at around 5:20 a.m. of May 15, 2007, petitioners counsel verbally moved for the
exclusion of the ERs from Precinct Nos. 31-A, 49-A, and 58-A on the ground that the ballot boxes were
opened. The ERs were set aside and the members of the BEI from said precincts were summoned to
appear before the MBOC.[15]
At around 6:30 p.m. of May 15, 2007, counsel for petitioner likewise orally objected to the
inclusion of the ER from Precinct No. 90-A on the ground that it had been tampered with and contained
many erasures.[16]
At 6:50 p.m. of May 15, 2007, petitioners counsel submitted a written Petition for Exclusion of the
five contested ERs.[17] Canvass of the contested ERs was deferred until the submission of Ques
comment. On May 16, 2007 at 10:49 a.m., Que submitted his written Opposition.[18]
At around 9:17 p.m. of May 16, 2007, petitioner filed a Petition for Inhibition of
Camposano.[19] Subsequently, at 12:30 a.m. of May 17, 2007, Camposano manifested that she would
inhibit herself as MBOC Chairperson.[20] At 1:12 a.m. of May 17, 2007, canvassing was temporarily
adjourned to await the appointment of a new MBOC Chairperson.[21]
Canvassing resumed at 5:55 p.m. of May 17, 2007, when the MBOC was reconvened with Serrano
as Acting Chairperson[22] at which time, 25 precincts were not yet canvassed. Serrano explained that he
was required by law to finish the canvass, and that the BEIs assigned to the various questioned precincts
would be summoned. He also stated that these allegations cant be determined if we wont open the
election returns x x x the BOC will ascertain if the election return has been tampered [with]. We will see
if statistical data of ballots are filled out and [ask] the BEI to correct the statistical data about the ballots
which were not correct.[23]
While the ERs were being canvassed, counsel for petitioner did not immediately manifest her
intention to appeal the ruling on the canvassing of ER in the questioned precincts. The Minutes of the
Canvass provide:
Precinct Minutes
90-A[24] Precinct 90A of San Rafael completed the data (contested)
Precinct Minutes
Envelope serial No. 015884
Envelope Seal 0916966 (seal open)
ER seal no seal
ER # 5301668
Valid Votes 164
Spoil 0
Excess 0
Rejected 0
Atty. Palabrica asked if the result will be tallied separately.

Chairman Serrano: If it is a pre-proclamation issue, then I
will separate. I am inviting you to house rules 6 & 8. You
are alleging massive fraud and [tampering of ERs].
Atty. Palabrica: I did lump the reasons for this objection.
[I] am asking if its temporarily tallied.
Chairman Serrano: You alleged that the ER [was]
obviously manufactured.
Atty. Palabrica: The ER was already prepared and that is
why the ballot box was opened. The face of the ER [is]
okey.
Chairman Serrano: Such ground is covered by regular
protest.
Asked Lolita Ducanes, chairman and the third member. Are
these your signatures? Are these the same election returns
that you signed and placed on the ballot box?
Lolita Ducanes: Yes, its my signature and they are the
election returns that we signed.
Atty Palabrica: Asked why the ballot box was opened.
Lolita Ducanes: It was opened in the custody group.[25]
30-A[26] At 2:13a.m. to 2:18 p.m. Precinct 30-A of Barangay Arado
was opened and canvassed.
Data
Envelope # 015811
Envelope Seal # 0915307 (seals sticking to envelope)
ER seal # - no inner seal
ER # 5301602
# of valid ballots in compartment for valid ballots 162
# of spoil[ed] ballots 0
# of excess ballots 0
# of rejected ballots 0
Atty. Palabrica: had it noted that BEI of 30-A of Brgy. Arado

did not give a certificate of votes to the Lakas watchers.
58-A[27] At 2:21 a.m. to 2:40 a.m., Precinct 58-A of Barangay Luan
was opened and in good condition.
Precinct Minutes
Data
Envelope # 015854
Envelope Seal # 0916088
ER inner seal # - 0916087
ER # 5301633
# of valid ballots 162
# of spoiled ballots 0
49-A[28] At 2:40 a.m. to 2:48 a.m. Precinct 49A of Barangay
Camote was opened and canvassed.
Data
Envelope # 015803
Envelope Seal # 015803 envelope partly good otherwise
in good condition
ER seal # - 0915855
ER # 5301624
31-A[29] At 2:55 a.m. to 3:05 a.m., Precinct 31-A of Barangay Batug
was opened and canvassed.
Envelope Serial # - 015808 (The envelope is torn a little at
the side otherwise in good condition)
Envelope Seal # 0915327
ER seal # - 0915326
ER # 5301603
Chairman Serrano: Called the BEI members:

BEI Chairman - Fatima Ychon
Poll Clerk - Jeralyn Peque,
Third Member - Noel Lagunzad.
Chairman Serrano: Asked the BEI who prepared the
election return.
BEI members: Replied they were the one who prepared
the election return #5301603 of Brgy. Batug.
At 3:00 a.m. of May 18, 2007, all ERs for the municipality had been canvassed and the canvassing
was ordered terminated.[30]
COMELEC Proceedings
On May 28, 2007, petitioner filed a Petition for Annulment of Proclamation and/or Proceedings of
the Municipal Board of Canvassers of Dulag, Leyte, before the COMELEC, which was docketed as SPC
Case No. 07-191 and raffled to the First Division.[31] This petition was amended on July 12, 2007 by
impleading Que as a necessary party.[32] In the meantime, Que assumed his position on June 30, 2007.
In his petition, Sao argued that the MBOC violated Section 20, Republic Act (RA) No. 7166[33] and
Section 39 of COMELEC Resolution No. 7859.[34] Petitioner also sought to exclude the contested ERs from
the canvass, on the ground that these were tampered with or obviously manufactured. Finally, he also
sought that he be declared and proclaimed, after the exclusion of the contested ERs, as the winning
candidate for the position of Municipal Mayor of that municipality.
Que filed his Answer to the petition on July 26, 2007.[35] The MBOC, through Serrano, filed a
separate Consolidated Answer dated July 25, 2007.[36]
After hearing the case on August 1 and 13, 2007, the COMELEC First Division directed the parties
to submit their respective memoranda.[37] Thereafter, the COMELEC issued its Resolution dated October
3, 2007 upholding the proclamation of Que:[38]
x x x A pre-proclamation controversy refers to any question pertaining to or affecting the

proceedings of the board of canvassers which may be raised by any candidate or by any
registered political party or coalition of political parties before the board or directly with
the Commission, or any matter raised under Sections 233, 234, 235, and 236 of the
Omnibus Election Code in relation to the preparation, transmission, receipt, custody and
appreciation of election returns. On the other hand, Section 243 of the Omnibus Election
Code enumerates the issues that may be raised in a pre-proclamation controversy, viz:
1. Illegal composition or proceedings of the board of canvassers;
2. The canvassed election returns are incomplete, contain material defects,

appear to be tampered with or falsified, or contain discrepancies in the same returns or
in other authentic copies thereof as mentioned in Sections 233, 234, 235 and 236 of the
Omnibus Election Code;
3. The election returns were prepared under duress, threats, coercion, or

intimidation, or they are obviously manufactured or not authentic; and
4. When substitute or fraudulent returns in controverted polling places were

canvassed, the results of which materially affected the standing of the aggrieved
candidate.
It is likewise settled that the above enumeration of the grounds that [many] be properly
raised in a pre-proclamation controversy is restrictive and exclusive.
In the case at bar, as borne out by the records, petitioner anchors his petition for the
exclusion of the election returns from Precinct Nos. 49A, 31A, 58A, 31A, and 90A on the
following grounds: that the election returns were (1) obviously manufactured; (2)
tampered or falsified; [3]that there was massive fraud; and [4] illegal proceedings. In
support thereto, petitioner attached the affidavits of his two (2) supporters, who attested
that they saw open ballot boxes from Precinct Nos. 49A, 31A, and 58A. A painstaking
examination of the records, however, shows that petitioner miserably failed to
substantiate his allegations that the election returns were obviously manufactured,
tampered with, that massive fraud attended the preparation thereof, and that the
proceedings of the board were illegal.
There is an avalanche of jurisprudence which states that to justify the exclusion of election
returns, the allegations that the election returns were obviously manufactured must be
evident from the face of the said documents. In the case at point, however, a meticulous
examination of the contested election returns copies for the Commission, as well as the
copy for the dominant majority party indubitably showed that there is neither a compelling
nor cogent reason to warrant their exclusion.
In the same vein, petitioner failed not only to adduce evidence but [also[ to prove his
allegation of massive fraud or illegality of the proceedings of the board. A contrario, the
MBoC had done nothing [amiss.Rather it tolerated] maximum x x x liberal interpretation
of election laws in favor of the petitioner for, despite the clear absence of an issue
cognizable as a pre-proclamation controversy and non-compliance with the rule on
submission on petitions or objections before it, the board both under the chairmanship of
Camposano and Serrano [allowed] the petitioner x x x to submit his petition. [It also
addressed] the issues/concerns raised, as shown in the Minutes of the Proceedings of the
Board. The Board is correct in not giving credence to petitioners petition for exclusion [of
the questioned returns] as it has been shown that there are no valid grounds raised
thereon which falls within the ambit of Section 234 of the Election Code.
Petitioner moved for reconsideration[39] but the motion was denied by the COMELEC En
Banc on February 12, 2008.[40]
The Parties Arguments
Petitioner insists that all five contested ERs were written by only one person, and these ERs were
surreptitiously presented before the MBOC. Thus, he argues that the issues raised before the MBOC,
namely, that the contested ERs were tampered with and/or falsified, obviously manufactured, and subject
of massive fraud, are pre-proclamation controversies as defined in Section 241 of the Omnibus Election
Code and fall within the contemplation of Section 243(b) of said Code. As such, the contested ERs should
have been excluded from the canvass.Consequently, the MBOCs proclamation of Que violated Section 39
of Commonwealth Act No. 7859 and Section 20 of RA 7166.
On the other hand, Que argues that the allegations raised by petitioner on the contested ERs are
not proper in a pre-proclamation controversy; that petitioner failed to substantiate his claim that the
contested ERs were obviously manufactured, tampered with, or falsified; and that petitioner failed to
follow the strict and mandatory procedure under Section 20 of RA 7166 and COMELEC Resolution No.
8969 for manifesting an appeal.
Our Ruling
A pre-proclamation controversy, as defined in Batas Pambansa (BP) Blg. 881, otherwise known
as the Omnibus Election Code of the Philippines, is:
any question pertaining to or affecting the proceeding of the board of canvassers which
may be raised by any candidate or by any registered political party or coalition of political
parties before the board or directly with the Commission, or any matter raised under
Sections 233, 234, 235 and 236 in relation to the preparation, transmission, receipt,
custody and appearance of the election returns.[41]
Procedural Matters
It is settled that a pre-proclamation controversy is summary in character;[42] indeed, it is the policy

of the law that pre-proclamation controversies be promptly decided, so as not to delay canvass and
proclamation.[43] The Board of Canvassers (BOC) will not look into allegations of irregularity that are not
apparent on the face of ERs that appear otherwise authentic and duly accomplished.[44]
Consistent with the summary character and limited scope of a pre-proclamation controversy,
Section 20 of RA 7166 lays down the procedure to be followed when ERs are contested before the
BOC.[45] Compliance with this procedure is mandatory, so as to permit the BOC to resolve the objections
as quickly as possible. Thus, we held in Siquian, Jr. v. Commission on Elections[46] that:
Compliance with the period set for objections on exclusion and inclusion of election returns
is mandatory. Otherwise, to allow objections after the canvassing would be to open the
floodgates to schemes designed to delay the proclamation and frustrate the electorates will
by some candidates who feel that the only way to fight for a lost cause is to delay the
proclamation of the winner. It should be noted that proceedings before the Board of
Canvassers is summary in nature which is why the law grants the parties a short period to
submit objections and the Board a short period to rule on matters brought to them. x x x[47]
Section 20 of RA 7166 and Section 36 of COMELEC Resolution 2962 provide that any candidate
may contest the inclusion of an ER by making an oral objection at the time the questioned return is
submitted for canvass; the objecting party shall also submit his objections in writing simultaneously with
the oral objections. The BOC shall consider the written objections and opposition, if any, and summarily
rule on the petition for exclusion. Any party adversely affected by such ruling must immediately inform
the BOC if he intends to appeal such ruling.
After the BOC rules on the contested returns and canvasses all the uncontested returns, it shall
suspend the canvass. Any party adversely affected by the ruling has 48 hours to file a Notice of Appeal;
the appeal shall be filed within five days. Upon receipt of the notice of appeal, the BOC will make its report
to the COMELEC, and elevate the records and evidence.
Moreover, pursuant to Section 235 of the Omnibus Election Code, in cases where the ERs appear
to have been tampered with, altered or falsified, the COMELEC shall examine the other copies of the
questioned returns and, if the other copies are likewise tampered with, altered, falsified, or otherwise
spurious, after having given notice to all candidates and satisfied itself that the integrity of the ballot box
and of the ballots therein have been duly preserved, shall order a recount of the votes cast, prepare a
new return which shall be used by the BOC as basis for the canvass, and direct the proclamation of the
winner accordingly.
Based on the records of this case, we find that petitioner failed to timely make his objections to
the contested ERs.
The minutes of the proceedings before the MBOC reveal that the contested ERs were presented
for inclusion in the canvass, and then orally objected to by the petitioner, at the following times:
Precinct No. Time of Presentation for Grounds for Objection

Canvass/Oral Objection
30-A[48] May 15, 2007; 6:15 a.m. Material defect
31-A[49] May 15, 2007; 5:20 a.m. Ballot boxes open
90-A[52] May 15, 2007; 6:30 p.m. Tampering; many erasures
However, only one written petition for exclusion was filed for the five contested ERs at 6:50
p.m. of May 15, 2007.[53] Of course the law does not intend that election lawyers submit their written
objections at exactly the same second as their oral manifestation; however, a lapse of over 12 hours,
long after the ERs have been presented for canvass, is simply inexplicable and unacceptable.
It is also irregular that counsel for petitioner lumped all the objections into one petition for
exclusion. We recognize that this is commonplace among election practitioners, intended for the
convenience of the advocate. However, in cases like these, where each ground for exclusion is separate
and distinct, merging written objections leads to unnecessary chaos in proceedings before the MBOC, and
is here - as a disservice to the clients.
No evidence that the election returns were
falsified or tampered with.
While we are willing to overlook the procedural lapses committed by the petitioner his manifestation and
subsequent Notice of Appeal do not serve to overturn the assailed Resolutions. We find that the MBOC
did not err in proclaiming the private respondent, since the unsubstantiated issues raised by the petitioner
were not proper for a pre-proclamation controversy. As we explained, claims that contested ERs are
obviously manufactured or falsified must be evident from the face of the said documents
themselves.[54] But counsel for petitioner herself admitted that on their face, the ERs were okey. Contrary
to petitioners passionate remonstrations, there is absolutely no indication that the contested ERs were
falsified or tampered with. As such, there was no valid ground to delay the proclamation.
Petitioner anchors his claim of falsification and tampering on the allegation that the genuine ERs
were replaced with manufactured returns, as evidenced by the purported similarity in handwriting of the
contested ERs. Essentially, petitioner argues that the contested ERs cannot be trusted because all five of
the contested ERs were prepared by one person; thus, no copy of the return can be trusted and there
must be a recount of the ballots. He claims that
the copies of the questioned election returns for both the dominant majority party as well
as submitted to COMELEC and that of the dominant minority party, are duplicate copies
of the original which are equally tainted with irregularity.
Unfortunately, petitioner has failed to substantiate these allegations. On this, the COMELEC En
Banc ruled:
x x x First, We cannot give due credence to the affidavits of Mr. Peter Alicando and Mr.
Tancredo Sao considering the infirm nature of affidavits. Second, affiant Sao is the brother
of herein petitioner and his affidavit may most likely be considered as self-serving.
In Salafranca v. Philamlife (Pamplona) Village Homeowners Association, Inc., the

Supreme Court held:
It is settled that no undue importance should be given to a sworn
statement of affidavit as piece of evidence because, being taken ex parte,
an affidavit is almost always incomplete and inaccurate.
Nevertheless, the crux of the affidavits above-mentioned pertains to the alleged

opening of a ballot box by a man who placed several documents therein. While a picture
was attached to show a person purportedly placing something inside a ballot box, it is not
safe to assume that some irregularity indeed took place. What is worth noting is the fact
that while petitioner claims massive fraud and tampering, the pieces of evidence only
show a single ballot box being opened by an unknown person that is for one (1) precinct
alone and definitely not for five (5) precincts as claimed by the petitioner. This
notwithstanding, it is submitted that the ground relied upon may best be addressed in a
protest case.
xxxx
Finally, an examination of the contested election returns will show that the same
appear to be regular and devoid of any signs of tampering or that the same were
manufactured. The allegation that the same were written by one hand does not hold
water. x x x[55] (citations omitted)
Absent any clear showing of grave abuse of discretion, this Court is bound to rely on the findings
and conclusions of the COMELEC - the authority tasked by the Constitution to administer and enforce
election laws.[56]
At any rate, even if we take a second look at the facts, petitioner has still not proven that the ERs
were spurious, falsified, or manufactured. Consider the following:
First, LAKAS-CMD was the dominant majority party in 2007.[57] As such, its watchers would have
been given a copy of the ERs in the questioned precincts by the BEI itself. It was never claimed that
LAKAS-CMD never received its copy of the ERs. It seems rather incredulous, therefore, that ALL the ERs
from the questioned precincts were allegedly surreptitiously replaced.
Second, official watchers from the camps of both LAKAS-CMD and petitioner had the opportunity
to take down the tally of votes and obtain a Certificate of Votes from the BEI.Despite this, there has been
no allegation that the votes recorded in favor of petitioner were not the true votes cast in the election.
Third, the members of the BEI from the questioned precincts themselves affirmed that they
prepared the contested ERs.
Fourth, petitioner never deigned to present any proof on his claim of similarity in handwriting no
expert opinions, no testimony, no technical examination. Unfortunately, it is not at all evident from the
returns that these were manufactured or fabricated.
Unlike a pre-proclamation controversy, the annulment proceedings before the COMELEC were not
summary in character;[58] petitioner had every opportunity to ventilate his case and substantiate his
allegations before the Commission below. This notwithstanding, petitioner failed to present any evidence
sufficient to overcome the presumption that the contested ERs were valid.
WHEREFORE, the Petition for Certiorari is hereby DISMISSED for lack of merit. The Resolution
of the Commission on Elections First Division dated October 3, 2007 in SPC Case No. 07-191 dismissing
petitioners Petition for Annulment of Proclamation and/or Proceedings of the Municipal Board of
Canvassers of Dulag, Leyte, and the Resolution of the Commission on Elections En Banc dated February
12, 2008 denying petitioners motion for reconsideration, are AFFIRMED.
SO ORDERED.

S'>
WE CONCUR:
REYNATO S. PUNO
Chief Justice






JOSE C. MENDOZA
Associate Justice
CERTIFICATION
of the Court.
REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 63-71; penned by Commissioner Romeo A. Brawner and concurred in by
Commissioner Resurrecion Z. Borra.
[2]
Id. at 72-76; penned by Commissioner Rene V. Sarmiento and concurred in by Commissioners
Romeo A. Brawner, Nicodemo T. Ferrer, and Moslemen T. Macarambon.
[3]
Id. at 122-123.
[4]
Originally composed of Election Officer Lydia S. Camposano as Chairperson, Mr. Enrique
Cabaobao as Vice-Chairman, and Ms. Joquinita P. Capili as Secretary.
[5]
Rollo, pp. 124-125.
[6]
Id. at 126-130.
[7]
Id. at 139.
[8]
Id. at 136-138.
[9]
Id. at 141.
[10]
Id. at 143-144.
[11]
The total number of votes cast for the petitioner was 8,915 votes while the total number of
votes cast for the private respondent was 9,092 votes. The total number of votes covered by
the contested election returns is 799 votes, of which 288 were credited to petitioner and 511
were credited to the private respondent, as follows:
Election Precinct No. Barangay No of Contested Votes

Return
Sano Que
5301602 30-A Arado 42 118
5301603 31-A Batug 47 123
5301624 49-A Camote 74 87
5301633 58-A Luan 72 86
5301668 90-A San Rafael _53_ _97_
TOTAL 288 511
[12]
Minutes on the National, Provincial, and Local May 14, 2007 Elections of Dulag, Leyte, p. 2,
Petitioners Annex U (hereinafter, Minutes); rollo, pp. 284.
[13]
Id.
[14]
Id. at 3; id. at 285.
[15]
Id.
[16]
Minutes, p. 4; id. at 286.
[17]
Rollo, pp. 124-125.
[18]
Minutes, p. 4; id. at 286.
[19]
Id. at 8; id. at 290.
[20]
Id. at 9; id. at 291.
[21]
Id. at 10; id. at 292.
[22]
Id.
[23]
Id.
[24]
Id. at 12; id. at 292.
[25]
Id.
[26]
Id. at 14; id. at 296.
[27]
Handwritten Notes of MBOC Secretary Joaquinita Capili; Records, Vol. II, p. 45.
[28]
Minutes, p. 14, rollo, p. 296.
[29]
Id. at 14-15; id. at 310-311.
[30]
Id. at 15; id. at 197.
[31]
[32]
Id. at 55-93.
[33]
An Act Providing For Synchronized National And Local Elections And For Electoral Reforms,
Authorizing Appropriations Therefor, And For Other Purposes (1991).
[34]
General Instructions for the Municipal/City/Provincial and District Board of Canvassers in
Connection with the May 14, 2007 National and Local Elections (April 17, 2007).
[35]
[36]
Id. at 152-180.
[37]
Both petitioner and private respondent filed their respective Memoranda on August 28, 2007;
Records, Vol. I, pp. 206-306. Acting Chairman Serrano filed his Memorandum on September
3, 2007, id. at 345-363; MBOC Members Capili and Cabaobao also filed a Memorandum
on August 31, 2007, id. at 329-342.
[38]
Rollo, pp. 67-69.
[39]
Id. at 77-106.
[40]
Id. at 72-76.
[41]
See also Sections 233-236 of the Omnibus Election Code, which provide:
Sec. 233. When the election returns are delayed, lost or destroyed. - In case its copy of the
election returns is missing, the board of canvassers shall, by messenger or otherwise, obtain
such missing election returns from the board of election inspectors concerned, or if said
returns have been lost or destroyed, the board of canvassers, upon prior authority of the
Commission, may use any of the authentic copies of said election returns or a certified copy
of said election returns issued by the Commission, and forthwith direct its representative to
investigate the case and immediately report the matter to the Commission.
The board of canvassers, notwithstanding the fact that not all the election returns have been
received by it, may terminate the canvass and proclaim the candidates elected on the basis
of the available election returns if the missing election returns will not affect the results of the
election.
Sec. 234. Material defects in the election returns. - If it should clearly appear that some
requisites in form or data had been omitted in the election returns, the board of canvassers
shall call for all the members of the board of election inspectors concerned by the most
expeditious means, for the same board to effect the correction: Provided, That in case of the
omission in the election returns of the name of any candidate and/or his corresponding votes,
the board of canvassers shall require the board of election inspectors concerned to complete
the necessary data in the election returns and affix therein their initials: Provided, further,
That if the votes omitted in the returns cannot be ascertained by other means except by
recounting the ballots, the Commission, after satisfying itself that the identity and integrity of
the ballot box have not been violated, shall order the board of election inspectors to open the
ballot box, and, also after satisfying itself that the integrity of the ballots therein has been
duly preserved, order the board of election inspectors to count the votes for the candidate
whose votes have been omitted with notice thereof to all candidates for the position involved
and thereafter complete the returns.
The right of a candidate to avail of this provision shall not be lost or affected by the fact that
an election protest is subsequently filed by any of the candidates.
Sec. 235. When election returns appear to be tampered with or falsified. - If the election
returns submitted to the board of canvassers appear to be tampered with, altered or falsified
after they have left the hands of the board of election inspectors, or otherwise not authentic,
or were prepared by the board of election inspectors under duress, force, intimidation, or
prepared by persons other than the member of the board of election inspectors, the board of
canvassers shall use the other copies of said election returns and, if necessary, the copy inside
the ballot box which upon previous authority given by the Commission may be retrieved in
accordance with Section 220 hereof. If the other copies of the returns are likewise tampered
with, altered, falsified, not authentic, prepared under duress, force, intimidation, or prepared
by persons other than the members of the board of election inspectors, the board of
canvassers or any candidate affected shall bring the matter to the attention of the
Commission. The Commission shall then, after giving notice to all candidates concerned and
after satisfying itself that nothing in the ballot box indicate that its identity and integrity have
been violated, order the opening of the ballot box and, likewise after satisfying itself that the
integrity of the ballots therein has been duly preserved shall order the board of election
inspectors to recount the votes of the candidates affected and prepare a new return which
shall then be used by the board of canvassers as basis of the canvass.
Sec. 236. Discrepancies in election returns. - In case it appears to the board of canvassers
that there exists discrepancies in the other authentic copies of the election returns from a
polling place or discrepancies in the votes of any candidate in words and figures in the same
return, and in either case the difference affects the results of the election, the Commission,
upon motion of the board of canvassers or any candidate affected and after due notice to all
candidates concerned, shall proceed summarily to determine whether the integrity of the
ballot box had been preserved, and once satisfied thereof shall order the opening of the ballot
box to recount the votes cast in the polling place solely for the purpose of determining the
true result of the count of votes of the candidates concerned.
[42]
Chu v. Commission on Elections, 359 Phil. 509, 517 (1999).
[43]
OMNIBUS ELECTION CODE, Section 246; Abayon v. Commission on Elections, G.R. No.
181295, April 2, 2009.
[44]
Bandala v. Commission on Elections, 468 Phil. 411, 418 (2004).
[45]
SEC. 20. Procedure in the Disposition of Contested Election Returns.
(a) Any candidate, political party or coalition of parties contesting the inclusion or exclusion
in the canvass of any election returns on any of the grounds authorized under Article XX
or Sections 234, 235 and 236 of Article XIX of the Omnibus Election Code shall submit
their oral objection to the chairman of the board of canvassers at the time the
questioned return is presented for inclusion in the canvass. Such objection shall
be recorded in the minutes of the canvass.
(b) Upon receipt of any such objection, the board of canvassers shall automatically
defer the canvass of the contested returns and shall proceed to canvass the returns
which are not contested by any party.
(c) Simultaneous with the oral objection, the objecting party shall also enter his
objection in the form for written objections to be prescribed by the
Commission. Within twenty-four (24) hours from and after the presentation of such an
objection, the objecting party shall submit the evidence in support of the objection, which
shall be attached to the form for written objections. Within the same period of twenty-
four (24) hours after presentation of the objection, any party may file a written and
verified opposition to the objection in the form also to be prescribed by the Commission,
attaching thereto supporting evidence, if any. The board shall not entertain any objection
or opposition unless reduced to writing in the prescribed forms.
The evidence attached to the objection or opposition, submitted by the parties, shall be
immediately and formally admitted into the records of the board by the chairman affixing
his signature at the back of each and every page thereof.
(d) Upon receipt of the evidence, the board shall take up the contested returns,
consider the written objections thereto and opposition, if any, and summarily
and immediately rule thereon. The board shall enter its ruling on the prescribed form
and authenticate the same by the signatures of its members.
(e) Any party adversely affected by the ruling of the board shall immediately
inform the board if he intends to appeal said ruling. The board shall enter said
information in the minutes of the canvass, set aside the returns and proceed to
consider the other returns.
(f) After all the uncontested returns have been canvassed and the contested returns ruled
upon by it, the board shall suspend the canvass. Within forty-eight (48) hours therefrom,
any party adversely affected by the ruling may file with the board a written and verified
notice of appeal; and within an unextendible period of five (5) days thereafter, an appeal
may be taken to the Commission.
(g) Immediately upon receipt of the notice of appeal, the board shall make an appropriate
report to the Commission, elevating therewith the complete records and evidence
submitted in the canvass, and furnishing the parties with copies of the report.
(h) On the basis of the records and evidence elevated to it by the board, the Commission shall
decide summarily the appeal within seven (7) days from receipt of said records and
evidence. Any appeal brought before the Commission on the ruling of the board, without
the accomplished forms and the evidence appended thereto shall be summarily dismissed.
The decision of the Commission shall be executory after the lapse of seven (7) days from
receipt thereof by the losing party.
(i) The board of canvassers shall not proclaim any candidate as winner unless authorized by
the Commission after the latter has ruled on the objections brought to it on appeal by the
losing party. Any proclamation made in violation hereof shall be void ab initio, unless the
contested returns will not adversely affect the results of the election.
[46]
378 Phil 182 (1999). .
[47]
Id. at 185-186.
[48]
Id.
[49]
Minutes, p. 3, rollo, p. 285.
[50]
Id.
[51]
Id.
[52]
Id. at 4, id. at 286.
[53]
Rollo, pp. 124-125.
[54]
Dipatuan v. Commission on Elections, G.R. No. 86117, May 7, 1990, 185 SCRA 86, 93.
[55]
Rollo, pp. 73-75.
[56]
CONSTITUTION, Art. IX-C, Sec. 2(1).
[57]
COMELEC Resolution No. 7877, In the Matter of the Accreditation of the Dominant Majority
Party, the Dominant Minority Party, and the Other Six (6) Accredited Major Political Parties in
the May 14, 2007 National and Local Elections (May 2, 2007).
[58]
In Loong v. Commission on Elections, 326 Phil. 792-793 (1996), we held that:
While, however, the COMELEC is restricted, in pre-proclamation cases, to an examination of the
election returns on their face and is without jurisdiction to go beyond or behind them and
investigate election irregularities, the COMELEC is duty bound to investigate allegations of
fraud, terrorism, violence and other analogous causes in actions for annulment of election
results or for declaration of failure of elections, as the Omnibus Election Code denominates
the same. Thus, the COMELEC, in the case of actions for annulment of election results or
declaration of failure of elections, may conduct technical examination of election documents
and compare and analyze voters signatures and fingerprints in order to determine whether
or not the elections had indeed been free, honest and clean. Needless to say, a pre-
proclamation controversy is not the same as an action for annulment of election results or
declaration of failure of elections.

Supreme Court
Manila
SECOND DIVISION

Appellee,
Present:

- versus - CORONA,*
BRION,
DEL CASTILLO, and
PEREZ, JJ.
HILARIO ESCOTON, Promulgated:

x---------------------------------------------------------------------
-----x
DECISION
DEL CASTILLO, J.:
In rape cases, the credibility of the victim is always the single most important issue.[1] In passing upon this
matter, the highest degree of respect must be accorded to the findings of the trial court.[2]
The Charge
Impugned in this appeal is the February 5, 2008 Decision[3] of the Court of Appeals (CA) in CA-G.R. CR
HC No. 00520 affirming with modification the Decision[4] of the Regional Trial Court (RTC) of
Carigara, Leyte, Branch 13, in Criminal Case No. 4071, convicting appellant Hilario Escoton of the crime
of multiple rape against AAA.[5] The Information[6] contained the following accusatory allegations:
That on or about the 12th day of May, 2001, in x x x, Province of Leyte, Philippines and
within the jurisdiction of this Honorable Court, the above-named accused, with deliberate
intent and with lewd designs, taking advantage of the minority, as well as relationship of
the accused with the victim, and by use of force and intimidation being armed with a
sickle (garab) did then and there willfully, unlawfully and feloniously have carnal
knowledge for five (5) times in the same evening of May 12, 2001, with one AAA, a 10-
year-old, a niece of the accused, against her will to her damage and prejudice.
Contrary to law with the qualifying circumstance that the victim is under 18 years and the
offender is a relative by consanguinity within the third civil degree of the victim.
The appellant pleaded not guilty to the crime charged during his arraignment. After the termination of the
pre-trial conference, trial ensued.
The evidence presented by the prosecution established that AAA was born on October 29, 1990,
as shown by her Certificate of Live Birth[7] and Baptismal Certificate.[8] The appellant is the uncle of AAA,
being the brother of her mother. On May 12, 2001, at around 7 oclock in the evening, AAA and her brother
were asleep in the house of their maternal grandmother with whom they were residing. The appellant
woke up AAA and told her to follow him to his house which was about 500 meters away. AAAs brother
also woke up and accompanied her. Their grandmother did not give them permission to leave, but they
still proceeded towards their destination.
Upon arrival, the appellant undressed himself and removed the lower garments of AAA. He made her lie
down on the bamboo floor then inserted his penis into her vagina despite her pleas to discontinue his
hideous act. AAA felt pain as the appellant had sex with her. The appellant raped AAA for five times during
the night while her brother lay silently beside her.
When daylight came, the appellant ordered AAA and her brother to fetch drinking water. However, instead
of heeding appellants order, they went home to their grandmother to whom AAA tearfully narrated her
ordeal. Upon advice of a relative, they reported the incident to the police and AAA submitted herself to a
physical examination in a hospital. Although the doctors who performed the medical examination on AAA
the day after she was raped could no longer be located during the trial, the Records Officer affirmed the
authenticity of the document containing the results of said examination and the signatures of doctors
appearing thereon. The record of the medical examination on AAA indicated that her genitalia was normal
with incomplete healed lacerations of the hymen at 3, 8, and 9 oclock positions. The vaginal smear was
negative for spermatozoa.[9]

The appellant presented a totally different version of the incident. He testified that on May 12, 2001, at
around 7 oclock in the evening, he was on his way home after consuming tuba. He passed by the house
of his mother and noticed her in the balcony having a conversation with his aunt Clarita and her
husband. He was then requested to fetch AAA, who was watching television in the house of another
relative. The appellant obeyed and after finding AAA told her to go home. However, AAA got angry, cursed
him and insisted on watching the television.Irked by AAAs behavior, appellant pushed her, which made
her fall from the stairs until she landed on the ground. It was only after this incident that AAA went home.
When the appellant returned to his mothers house, his mother and his aunt Clarita were enraged and
hurled invectives at him. He cursed them in return. His mother warned that he would be sent to prison
for repeatedly beating up AAA. He replied that the meager amount paid to him by his aunt Clarita and her
husband whenever they hired him to work in their farm was demeaning to his person. Thereafter, he
proceeded to the house of his uncle and slept on the balcony where he awoke at 6 oclock the next
morning.
The appellant asserted that his aunt Clarita initiated this case after he challenged her and her husband to
a fight. He also claimed that AAA concocted false accusation against him because he used to beat her
with a whip and push her head to the ground as punishment for her stubbornness.
On June 28, 2004, the trial court rendered its Decision, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, pursuant to Art. 266-B of the Revised Penal Code as
amended, and further amended by R.A. 8353 (The Anti-Rape Law of 1997) and the
amendatory provision of R.A. No. 7659 (The Death Penalty Law), without any mitigating
circumstance, the Court found accused HILARION ESCOTON, GUILTY, beyond
reasonable doubt of the crime of MULTIPLE RAPE charged under the information and
sentenced to suffer the maximum penalty of DEATH and ordered to pay civil indemnity
to AAA in the amount of Seventy Five Thousand (P75,000.00) Pesos; for moral damages
in the amount of Seventy Five Thousand (P75,000.00) Pesos; and for exemplary damages
in the amount of Twenty Five Thousand (P25,000.00) Pesos; and
Pay the Cost.
SO ORDERED.[10]
The Verdict of the Court of Appeals
In its Decision
Q. You said that when you reached thereat you were undressed, by the way, what were
you wearing that time when undressed?
A. I was wearing then a short and a sando.
Q. Now, what was taken off from you first, was it the sando or shorts?
A. My shorts.
Q. Now, do you have a panty that time?

A. Yes, sir.
Q. Now, after the shorts were taken was it one after the other with your panty or
simultaneous?
A. It was taken off simultaneously, the shorts and the panty.
Q. After your shorts and your panty was [sic] taken off from your body, what did the
accused do relative to your upper apparel?
xxxx
A. He did not take off my sando.
PROS. MERIN:
Q. After your shorts and panty was [sic] successfully taken off from your body, what next
did the accused do upon your person?
A. He inserted his penis [into] my vagina.
Q. Was the accused wearing something when he inserted his penis [into] your vagina?
A. He was not wearing anything.
Q. When did he [undress] himself after you were undressed or before you were
undressed?
xxxx
A. He took off first his apparel before taking off my shorts and
panty.
PROS. MERIN:
Q. You mean, he undressed himself after your arrival at the house?

A. Yes, sir.
Q. What was your relative position when your uncle Hilario Escoton inserted his penis
[into] your vagina?
A. I was then lying.
Q. Lying where?
A. I was then lying on the center of the room.
Q. Now is there any floor to that?
A. Yes, sir.
Q. And what is it made of?

A. Made of bamboo sheets.
Q. Now, after you [were] made to lie on that bamboo splits and his penis was inserted
[into] your vagina, what did you feel?
A. I felt the warmth.
Q. What did [sic] Hilario doing with his penis [into] your vagina?
A. He kept on inserting.
Q. You mean he made a push and pull movement?
xxxx
A. Yes, sir.
PROS. MERIN
Q. Was he successful in inserting his penis [into] your vagina?

A. Yes, sir.
Q. For how long was the accused doing the push and pull movement of his penis [into]
your vagina?
A. I cannot exactly remember because he kept on repeating it.
Q. Now, how [sic] did you feel while the accused was doing the push and pull movement
of his penis [into] your vagina?
A. Pain, sir.
Q. Pain coming from where?

A. In my vagina, sir.
Q. Now, was the accused able to reach his ejaculation?

A. The warm.
Q. Warm what?
A. Warm liquid.
Q. And where was that liquid coming out?

A. From his penis.
Q. Now, after he was able to ejaculate, what did the accused do?
A. He lie [sic] for a while.
Q. How about you what did you do after he was able to ejaculate while lying?
A. I wore my panty.
Q. What did you tell your uncle while he was raping you.
A. I said, dont do that kuya.
Q. What do you mean kuya, to whom are you addressing the word kuya?
A. To Hilario.
Q. Is that what you address him, your uncle?

A. Yes, sir.
Q. How many times by the way after he rested for a while and you already put your panty,
what next happened tell this Court?
xxxx
A. He repeated again.
PROS. MERIN:
Q. What do you mean he repeated again?

A. He raped me again.
Q. You mean he inserted again his penis [into] your vagina?

A. Yes, sir.
Q. Now, you said a while ago that you wore already a panty did I hear you correctly?
A. Yes, sir.
Q. And what did he do with your panty?

A. He slept for a while.
Q. And when did he wake up?

A. I do not know because he kept on repeating.
Q. You mean, he had repeatedly raped you on that evening?
xxxx
A. Yes, sir.
PROS. MERIN
Q. How many times were you raped that evening?
xxxx
A. Five times, sir.[14]
We stress that in rape cases the accused may be convicted based solely on the testimony of the
victim, provided that such testimony is credible, natural, convincing and consistent with human nature
and the normal course of things.[15] In this regard, the trial court is in the best position to assess the
credibility of the victim, having personally heard her and observed her deportment and manner of
testifying during the trial. In the absence of any showing that the trial court overlooked, misunderstood,
or misapplied some factor or circumstances of weight that would affect the result of the case, or that the
judge acted arbitrarily, the trial courts assessment of credibility deserves the appellate courts highest
respect.[16] Here, the appellant fails to persuade us to depart from this principle and to apply the exception.
The testimony of rape victims are given full weight and credence, considering that no young
woman, especially of tender age, would concoct a story of defloration, allow an examination of her private
parts, and thereafter pervert herself by being subjected to a public trial, if she was not motivated solely
by the desire to seek justice for the wrong done to her.[17] It is highly improbable that a girl of tender years
who is not yet exposed to the ways of the world, would impute to any man a crime so serious as rape if
what she claims is false.[18] Considering that the victim in this case underwent a harrowing experience and
exposed herself to the rigors of public trial, it is unlikely that she would concoct false accusations against
the appellant, who is her uncle.
It should be noted that AAA immediately informed her grandmother of the incident. Upon the
advise of a relative they proceeded to the police station to file a complaint against the
appellant. Thereafter, they proceeded to the hospital for a medical examination. AAAs act of immediately
reporting the commission of the rape strengthens her credibility.[19] Her spontaneous revelation of the
assault on her and her unrelenting determination to have the appellant arrested and prosecuted of rape
lend credence to her claim that she was indeed raped.[20]
Appellant likewise contends that the court a quo grievously erred in relying on the medico-legal
report considering that the examining physician who issued the same was not presented for its
identification. However, medical examination or medical report is not indispensable to prove the
commission of rape, for it is merely corroborative evidence.[21] An accused can still be convicted of rape
on the sole basis of the testimony of the victim.[22] Here, even if we disregard the medico-legal report, the
result would still be the same the prosecution, through the testimony of AAA, has successfully proved the
case of rape against the appellant.
Appellant vehemently denies raping AAA and claims that he was already drunk and had fallen
asleep in the house of his uncle during the alleged commission of the crime. However, he failed to present
any witness to corroborate his testimony. Denial and alibi are inherently weak defenses and constitute
self-serving negative evidence which cannot be accorded greater evidentiary weight than the positive
declaration of a credible witness. Between the positive assertions of the victim and the negative averments
of the appellant, the former indisputably deserve more credence and are entitled to greater evidentiary
weight.[23]
Much less convincing is the proposition of the appellant that AAA filed the complaint against him
because she and her other relatives were harboring ill feelings and evil motives against him. Ill motives
become inconsequential where there are affirmative or categorical declarations establishing the
accountability of the appellant for the felony, as in this case.[24]Moreover, we have observed that persons
convicted of rape sometimes attribute the charges against them to family feuds, resentment or
revenge.[25] However, as borne out by numerous cases, family resentment, revenge or feuds have never
swayed us from giving full credence to the testimony of a complainant for rape, especially a minor who
remained steadfast and unyielding throughout the trial that she was sexually violated.[26]
Appellant also argues that the testimony of AAA is unworthy of credence since it is replete with
inconsistencies. He contends that if AAAs grandmother was with her at the time he fetched her, then AAA
could have easily refused since her grandmother did not allow her to go with him. He further contends
that if he really intended to rape AAA, he would not have allowed her younger brother to tag along as an
eyewitness.
The factual question raised by the appellant fails to impress. It is an inconsequential matter that
does not bear upon the elements of the crime of rape. The decisive factor in the prosecution for rape is
whether the commission of the crime has been sufficiently proven. For a discrepancy or inconsistency in
the testimony of a witness to serve as a basis for acquittal, it must refer to the significant facts
indispensable to the guilt or innocence of the appellant for the crime charged.[27] As the inconsistencies
alleged by the appellant had nothing to do with the elements of the crime of rape, they cannot be used
as ground for his acquittal.[28]
Further, victims do not cherish keeping in their memory an accurate account of the manner in
which they were sexually violated. Thus, an errorless recollection of a harrowing experience cannot be
expected of a witness, especially when she is recounting details from an experience as humiliating and
painful as rape. Furthermore, rape victims, especially child victims, should not be expected to act the way
mature individuals would when placed in such a situation.[29]
In this case, minor inconsistencies are expected because (1) AAA was a child witness, (2) she was
made to testify on a painful and humiliating incident, (3) she was sexually assaulted several times, and
(4) she was made to recount details and events that happened two years before she testified.[30]
The Penalty
Thus, given the foregoing circumstances, we find no cogent reason to reverse the findings of the
trial court, as affirmed by the Court of Appeals. The prosecution sufficiently proved the guilt beyond
reasonable doubt of the appellant. The trial court correctly meted the penalty of death since the rape
committed against a child under 12 years of age by an offender who is a relative by consanguinity within
the third civil degree merits no less than the imposition of capital punishment under Article 266-B of the
Revised Penal Code.[31] It is clear from the birth certificate of AAA that she was only ten years old when
she was ravished by the appellant, her uncle, being the brother of her mother.
However, with the passage of Republic Act No. 9346 entitled An Act Prohibiting The Imposition
Of The Death Penalty In The Philippines, the penalty, as correctly imposed by the Court of Appeals, should
be reclusion perpetua.[32] Pursuant to the same law, the accused-appellant shall not be eligible for parole
under Act No. 4103, otherwise known as the Indeterminate Sentence Law.[33]
While the appellant was meted the proper penalty for committing one count of rape, we must not
overlook the fact that the prosecution established beyond reasonable doubt that the appellant is guilty of
five counts of rape. AAA related in detail to the trial court in a simple and straightforward manner how she
was repeatedly ravished by the appellant, thereby leaving no doubt about its credibility and
truthfulness. She testified that the appellant inserted his penis inside her vagina and after consummating
this act, she was raped again for four times under the same circumstances throughout the night. Thus,
appellant must be held guilty of five counts of rape and suffer the penalty of reclusion perpetua without
eligibility of parole for each count.
The Damages
The five counts of rape committed by the appellant also require a modification of the award of damages
by the trial court, as sustained by the Court of Appeals. For each of the five counts of rape, AAA is entitled
to an award of P75,000.00 as civil indemnity, another P75,000.00 as moral damages and P30,000.00 as
exemplary damages, in line with prevailing jurisprudence.[34]
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 00520, which
affirmed with modification the Decision of the Regional Trial Court of Carigara, Leyte, Branch 13, finding
appellant Hilario Escoton guilty beyond reasonable doubt of committing multiple rape is AFFIRMED with
the following modifications:
(1) For each of the five counts of rape committed, he is sentenced to suffer
the penalty of reclusion perpetua without eligibility of parole; and
(2) For each of the five counts of rape committed, he is ordered to pay
complainant civil indemnity in the amount of P75,000.00 and moral damages in the sum of P75,000.00,
and P30,000.00 as exemplary damages.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
RENATO C. CORONA ARTURO D. BRION

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
In lieu of Associate Justice Roberto A. Abad who is on leave per Special Order No. 812
[1]
People v. Ceballos, Jr., G. R. No. 169642, September 14, 2007, 533 SCRA 493, 508. .
[2]
People v. Balonzo, G.R. No. 176153, September 21, 2007, 533 SCRA 760, 768.
[3]
CA rollo, 122-146.
[4]
CA rollo, pp. 14-25; penned by Judge Crisostomo L. Garrido.
[5]
Implementing RA 9262, the real name of the child-victim is withheld to protect his/her
privacy. Fictitious initials are used instead to represent him/her. Likewise, the personal circumstances
or any other information tending to establish or compromise his/her identity, as well as those of his/her
[6]
Records, p. 1.
[7]
Folder of Exhibits, Exh. B.
[8]
Id., Exh. C.
[9]
Id., Exh. A.
[10]
[11]
Rollo, pp. 5-24. Penned by Associate Justice Amy C. Lazaro-Javier and concurred in by Associate
Justices Pampio A. Abarintos and Francisco P. Acosta.
[12]
Id. at 24.
[13]
ART. 266-A. Rape; When and How Committed. Rape is committed
1) By a man who shall have carnal knowledge of a woman under any of the following circumstances:
a) Through force, threat or intimidation;
b) When the offended party is deprived of reason or otherwise unconscious;
c) By means of fraudulent machination or grave abuse of authority;
d) When the offended party is under twelve (12) years of age or is demented, even
though none of the circumstances mentioned above be present;
xxxx
[14]
TSN, July 2, 2003, pp. 8-11.
[15]
People v. Malones, 469 Phil. 301, 318 (2004).
[16]
Id. at 319.
[17]
People v. Villafuerte, G.R. No. 154917, May 18, 2004, 428 SCRA 427, 433.
[18]
People v. Andales, 466 Phil. 873, 887 (2004).
[19]
People v. Balbarona, G.R. No. 146854, April 28, 2004, 428 SCRA 127, 137.
[20]
People v. Torres, 464 Phil. 971, 986 (2004).
[21]
People v. Ugang, 431 Phil. 552, 565 (2002).
[22]
People v. Cabalse, 480 Phil 317, 326 (2004).
[23]
People v. Bang-ayan, G.R. No. 172870, September 22, 2006, 502 SCRA 658, 670.
[24]
People v. Guambor, 465 Phil. 671, 679-680 (2004).
[25]
People v. Cariaga, 456 Phil. 944, 968 (2003).
[26]
People v. Glodo, G.R. No. 136085, July 7, 2004, 433 SCRA 535, 546.
[27]
People v. Masapol, 463 Phil. 25, 33 (2003).
[28]
[29]
People v. Bejic, G.R. No. 174060, June 25, 2007, 525 SCRA 488, 508-509.
[30]
People v. Montinola, G.R. No. 178061, January 31, 2008, 543 SCRA 412, 424.
[31]
ART. 266-B. Penalties. x x x.
The death penalty shall also be imposed if the crime of rape is committed with any of the following
aggravating/qualifying circumstances:
1) When the victim is under eighteen (18) years of age and the offender is a parent, ascendant,
guardian, relative by consanguinity or affinity within the third civil degree, or the common-law spouse
of the parent of the victim;
x x x x.
[32]
SEC 2. In lieu of the death penalty, the following shall be imposed:
(a) The penalty of reclusion perpetua, when the law violated makes use of the nomenclature of
the penalties of the Revised Penal Code.
(b) The penalty of life imprisonment, when the law violated does not make use of the
nomenclature of the penalties of the Revised Penal Code.
[33]
People v. Santos, G.R. No. 172322, September 8, 2006, 501 SCRA 325, 344.
[34]
Peope v. Araojo, G.R. No. 185203, September 17, 2009.
Supreme Court
Manila
SECOND DIVISION
ARMANDO VIDAR @ Ricky, G.R. No. 177361

NORBERTO BUTALON,() SONNY
MARBELLA @ Spike and JOHN Present:
DOES and PETER DOES,
Petitioners, CARPIO, J., Chairperson,
CORONA,*
BRION,
- versus - DEL CASTILLO, and
PEREZ, JJ.

x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A person is killed, either by reason or on occasion of the robbery. To sustain a conviction for
robbery with homicide, the prosecution must prove the following elements: (1) taking of personal property
belonging to another; (2) with intent to gain; (3) with the use of violence or intimidation against a person;
and (4) on the occasion or by reason of the robbery, the crime of homicide, as used in its generic sense,
was committed. A conviction requires certitude that the robbery is the malefactors main purpose and
objective, and the killing is merely incidental to the robbery. The intent to rob must precede the taking of
human life, but the killing may occur before, during, or after the robbery.[1]
In the instant case, the prosecution satisfactorily proved that the crime committed by the
petitioners was robbery with homicide.
Factual Antecedents
It was early evening of April 30, 2001, when army officer, Sgt. Julio D. Dioneda (Dioneda), was brutally
murdered and valuables taken from his house located at Sitio Burabod, Barangay Poblacion, Bacon
District, Sorsogon City.
Consequently, a criminal charge for Robbery with Homicide against herein petitioners Armando Vidar @
Ricky (Vidar), Norberto Butalon (Butalon), Sonny Marbella @ Spike (Marbella), and several Does was filed
under an Information[2] which reads:
The undersigned accuses ARMANDO VIDAR @ Ricky of Sto. Domingo, Pto. Diaz,
Sorsogon, NORBERTO BUTALON, of Maslog, Legaspi City, and SONNY MARBELLA @
Spike of Lungib, Pilar, Sorsogon and several other JOHN DOES and PETER DOES, of the
crime of ROBBERY WITH HOMICIDE, defined and penalized under Article 294 par. 1 of
the Revised Penal Code, committed as follows:
That on or about the 30th day of April 2001, at about 7:00 oclock in the evening at Sitio
Burabod, Barangay Poblacion, Bacon District, Sorsogon City, Philippines and within the
jurisdiction of this Honorable Court, the above named accused, conspiring and
confederating together and helping one another, armed with firearms, did then and there
willfully, unlawfully and feloniously and with intent to gain, enter the dwelling of one Sgt.
Julio D. Dioneda and once inside, took therefrom at gunpoint a Cal. 45 pistol, a wallet
containing P1,000.00 cash, a crash helmet and a motorcycle all belonging to the said Sgt.
Julio D. Dioneda; that on the occasion of the said robbery and for the purpose of enabling
them to take, steal and carry away the items above mentioned with ease, herein accused,
in pursuance of their conspiracy, did then and there, willfully, unlawfully and feloniously,
with treachery and taking advantage of their superior number and strength and with
intent to kill, attack, assault and repeatedly shot the said Sgt. Julio D. Dioneda, inflicting
upon him multiple gunshot wounds that caused his instantaneous death, to the damage
and prejudice of his legal heirs.
CONTRARY TO LAW.
Sorsogon City, Sorsogon, July 8, 2002.
Petitioners, assisted by their counsel de parte, pleaded not guilty to the crime of Robbery with Homicide
as charged in the Information. After pre-trial was terminated, trial on the merits followed.
The antecedent facts of this case as recounted by the prosecution witnesses Florecita Dioneda (Florecita)
and Nia Dioneda Elemanco (Nia) that led to the conviction of the petitioners are as follows:
At about 7:00 oclock in the evening of April 30, 2001, Florecita, wife of the victim, and her sister-in-law
Nia, were inside the formers house at Burabod, Poblacion, Bacon District, SorsogonCity. They were
watching television when three armed men suddenly barged inside. One of them, later identified
as Marbella, poked a gun at Florecita while the other two ransacked the house taking a wallet, crash
helmet and a .45 caliber firearm with its magazine. These items belong to Dioneda who was then taking
a bath outside the house. Florecita and Nia followed the three men when the latter went out. At the yard,
they saw the three men together with more or less 10 other persons surrounding Dioneda who was lying
facing the ground. Despite Florecitas pleas not to kill her husband, Marbella and Vidar still fired a volley of
shots causing Dionedas instantaneous death. The three then boarded Dionedas motorcylcle and fled the
area.
Nia corroborated the material details of the robbery and the killing and testified further that she could not
forget the faces of the three malefactors as she was very sure that they were the ones who barged inside
the house and later killed her brother.
Petitioners vehemently denied the accusations against them. Marbella averred that he does not know
Dioneda and that he was in his house in Lungib, Pilar, Sorsogon on April 30, 2001 while Vidar asserted
that he has no knowledge of the killing of Dioneda. Butalon, on the other hand, professed his innocence,
claiming that he also does not know Dioneda and that he was in his house at Omoroy, Legaspi City on April
30, 2001. Collectively, they alleged that the possible motive behind the charge against them is that they
were known members of the New Peoples Army (NPA).
The Regional Trial Court of Sorsogon, Branch 52, relying on the credible and positive testimonies of the
prosecution witnesses, rejected the defense interposed by the petitioners and accordingly rendered a
Decision[3] on September 2, 2004 finding all of them guilty of the crime of robbery with homicide. The
dispositive portion of said Decision reads:
WHEREFORE-, premises considered, the Court finds accused Armando Vidar @

Ricky, Norberto Butalon, and Sonny Marbella @ Spike guilty beyond reasonable doubt of
the crime of Robbery with Homicide, defined and penalized under Article 294 of the
Revised Penal Code with the aggravating circumstance of treachery, and applying the
provision of Art. 63, par. 1 of the Revised Penal Code, in relation to Article 294 par. 1 of
the Revised Penal Code, the Court hereby sentences each one of them to suffer the
maximum penalty of DEATH and to pay jointly and severally, the heirs of the victim the
amount of P50,000.00 as civil indemnity and the further sum of P5,500.00 as actual
damages, the sum of P50,000.00 as moral damages, the amount of P3,336,768.00 as
unearned income and the amount of P50,000.00 as exemplary damages without
subsidiary imprisonment in case of insolvency and to pay the costs.
The Clerk of Court is hereby ordered to transmit the records of this case to the
Honorable Supreme Court for automatic review, and to prepare the Mittimus immediately.
The Warden of the Bureau of Jail Management and Penology

(BJMP) Sorsogon City and/or Legaspi City is hereby ordered to deliver the accused to the
National Penitentiary, Muntinlupa City, with proper escort and security immediately.
SO ORDERED.
On appeal, petitioners raised the following errors:

I
The Honorable Court a quo erred in finding the accused-appellants guilty of the
crime of robbery with homicide despite the insufficiency of evidence for the prosecution
to support the same.
II
The Honorable Court a quo erred in not finding that robbery and homicide were
committed in furtherance of rebellion as admitted both by the prosecution and the
defense witnesses that the victim was killed by reason of his being a member of the
Philippine Army and in the performance of his duty and the assailants are members of the
New Peoples Army (NPA) of which the accused- appellants are also members even up to
the time of their arrest.
On December 18, 2006, the Court of Appeals (CA) rendered its Decision[4] finding the appeal to be
unmeritorious. The appellate court gave credence to the eyewitnesses account of the victims death and
the identity of herein petitioners.
Accordingly, the CA affirmed the findings of the trial court but modified the penalty imposed from Death
to reclusion perpetua. The decretal portion of the decision reads:
WHEREFORE, the judgment of the Regional Trial Court of Sorsogon City, Branch 52,
dated September 2, 2004 convicting the accused-appellants ARMANDO VIDAR alias
RICKY, NORBERTO BUTALON, SONNY MARBELLA alias SPIKE of the crime of Robbery
with Homicide is AFFIRMED. Considering, however, the repeal of R.A 7659 with the
passage of Republic Act No. 9346 on June 24, 2006 prohibiting the imposition of the death
penalty, in lieu of the trial courts imposition of the death penalty, each of the accused-
appellants is hereby sentenced to suffer reclusion perpetua. They are further directed to
indemnify the heirs of the victim the amount of P50, 000.00 as civil indemnity, P50,000.00
as moral damages, P50,000.00 as exemplary damages, P5,500.00 as actual damages
and P2,224,512.00 for the victims loss of earning capacity.
SO ORDERED.[5]
On August 8, 2007, we issued a Resolution[6] treating the instant petition as petitioners Supplemental Brief
and notified the Office of the Solicitor General (OSG) that it may file a supplemental brief within 30 days
from notice thereof, if it so desires. The OSG filed a Manifestation[7] (in lieu of Supplemental Brief) that it
had already exhaustively argued all the issues relevant to the case in its Appellees Brief[8] dated October
17, 2005.
Petitioners contend that the appellate court erred in affirming the decision of the trial court despite the
absence of proof adduced before the court below establishing beyond reasonable doubt that they
committed the crime of robbery with homicide. They maintain that the delay of almost a year in filing
formal charges against them cast serious doubt on the intention and motive of the complainant. They
aver that while the incident took place on April 30, 2001, formal charges against them were filed only in
February 2002.
In refuting petitioners contention, the OSG representing the respondent, reiterated the ruling of the court a
quo and sought the affirmation of the assailed decision.
Our Ruling
Petitioners arguments are bereft of merit. The delay did not greatly weaken the credibility of the
testimonies of the prosecution witnesses. In the light of the circumstances obtaining in the case at bar,
we believe that the delay in reporting to the police authorities the attendant facts of the crime for which
the petitioners have been charged is consistent with normal human behavior considering that after a tragic
incident, the last thing that the bereaved would want is to provoke further reprisals from the perpetrators
of the felonious act. Although there is a natural tendency to seek the ends of justice for the treacherous
killing of a dearly departed, personal safety takes priority as dictated by our culture. Moreover, considering
private complainants honest belief that petitioners are known to be members of the NPA, the fear of
reprisal from them was ever present which caused her momentary silence. After all, delay in reporting the
occurrence of a crime or other unusual event in rural areas is well known.[9] Others reveal the perpetrator
of the crime only after the lapse of one year or so to make sure that the possibility of a threat to his life
or to his loved ones is already diminished if not totally avoided. In People v. Gornes[10] we held that:
It is true that the charge against the appellant was initiated only three and a half years
after the commission of the crime. However, the fact of delay alone does not work against
the witness.
Thus, the fact of delay attributed to the prosecution witnesses cannot be taken against them.[11] What is
important is that their testimonies regarding the incident bear the earmarks of truth and dependability.
One thing which bolsters the prosecution witnesses credibility is the fact that they had no motive to
prevaricate against the petitioners. They were not actuated by improper motive to fabricate the facts and
to foist a very serious offense against them. Where there is no evidence, as in this case, to indicate that
the prosecution witnesses were actuated by improper motive, the presumption is that they were not so
actuated and that their testimonies are entitled to full faith and credit.[12] For personal motive on the part
of a witness to testify against the accused to be appreciated as showing bias, its presence should be
supported by satisfactory proof.[13] Aside from their bare allegation, petitioners miserably failed in this
regard. On the contrary, we are not prepared to disbelieve the prosecution witnesses testimonies on their
vital points substantiating the circumstances of time and place of the offense charged against petitioners.
Petitioners likewise contend that their identification by the prosecution witnesses was attended with
irregularity considering that they were identified merely from among the four photographs presented
at Camp Escudero. They posit that this manner of identification provides an incredible suggestive
procedure.
We beg to disagree.
In ascertaining whether an out-of-court identification is positive or derivative, the Court has adopted the
totality of circumstances test wherein the following factors are taken into consideration: 1) the witnesss
opportunity to view the criminal at the time of the crime; 2) the witnesss degree of attention at that time;
3) the accuracy of any prior description given by the witness; 4) the level of certainty demonstrated by
the witness at the identification; 5) the length of time between the crime and the identification; and 6)
the suggestiveness of the identification procedure.[14]
We have scrutinized with great caution the witnesses manner of identifying petitioners vis-a-vis the
foregoing factors and we discern nothing irregular that would result in an erroneous identification.
At the outset, it must be stressed that the prosecution witnesses had an unobstructed view of the
petitioners appearance who were not donning masks to hide their faces when the latter barged inside the
house. There is no indication that darkness prevailed inside the house so as to have an obscure view at
the time. They even testified that one of the petitioners even poked a gun at them while the others were
ransacking the house. Thus even for a while, there was a frontal confrontation between petitioners and
the witnesses, giving the latter an opportunity to take a good look at petitioners. Nothing in the records
allows the presence of any distraction that would have disrupted the witnesses attention during the
occurrence of the incident. Nia even described to the policemen the physical appearance of petitioners
though no cartographic sketch was presented.[15] Experience dictates, precisely because of the unusual
acts of violence committed right before witnesses eyes, that they remember with a high degree of
reliability the identity of criminals.[16] Though a considerable length of time had elapsed, the witnesses
never wavered in their identification of petitioners. They cannot forget their faces.
It is worth mentioning also that the identification of petitioners was effectively admitted when petitioners
failed to dispute the same before the lower courts. The in-court identification of the petitioners later on
dispels any doubt as to the correctness of their identities. As we held in People v. Rivera:[17]
Even assuming arguendo that the appellant Alfonso Riveras out-of-court identification
was tainted with irregularity, his subsequent identification in court cured any flaw that
may have attended it. Without hesitation, the two prosecution witnesses, Renato Losaria
and Juanito Baylon identified the appellant as one of the assailants. In People v. Timon,
the accused were identified through a show-up. The accused assailed the process of
identification because no other suspect was presented in a police line-up. We ruled that a
police line-up is not essential in identification and upheld the identification of the accused
through a show-up. We also held that even assuming arguendo that the out-of-court
identification was defective, the defect was cured by the subsequent positive identification
in court for the inadmissibility of a police line-up identification x x x should not necessarily
foreclose the admissibility of an independent in-court identification.
Moreover, the burden is on petitioners to prove that their mug shot identification was unduly
suggestive. There is no evidence that the authorities had supplied or even suggested to the witnesses
that petitioners were the suspected gunmen. We, therefore, fail to see any flaw that would invalidate the
eyewitnesses identification. As aptly observed by the CA:
Both Florecita Dioneda and Nia Elemanco gave a credible eyewitness account of the
victims x x x death [by gunshots] in the hands of accused-appellant. Their testimony [sic]
giving details of a startling and shocking incident that cannot easily be fabricated deserves
credence and full probative weight for it indicates sincerity and truthfulness in the
narration of events. Both of these witnesses had a good look at the victims assailants,
who did not at any time during the incident attempt to conceal their faces. Accused-
appellant MARBELLA even stood less [than] a meter from Florecita Dioneda as he pointed
a gun at her while another accused-appellant even [etched] upon her a distinct impression
of his baldness as repeatedly mentioned by her during her testimony. As there is nothing
to indicate that these two principal witnesses were moved by improper motives, their
positive declarations on the witness stand deserve full faith and credit.[18]
The fact that the prosecution witnesses are related to the victim will not necessarily taint their
testimonies. The weight of testimony of witnesses is neither impaired nor in any way affected by their
relationship to the victim when there is no showing of improper motive on their part.[19] Relationship per
se of a witness with the victim of the crime does not necessarily mean that the witness is biased.[20] These
prosecution witnesses are the most aggrieved parties, being the victims widow and sister. Thus, their
motive of putting the killers behind bars cannot be considered improper.[21] It would be unnatural for a
relative who is interested in avenging the crime to implicate persons other than the real culprit lest the
guilty go unpunished.[22]
Deeply entrenched in our jurisprudence is the rule that the assessment of the credibility of witnesses is a
domain best left to the trial court judge because of his unique opportunity to observe their deportment
and demeanor on the witness stand; a vantage point denied appellate courts and when his findings have
been affirmed by the Court of Appeals, these are generally binding and conclusive upon this Court.[23]
Significantly, in the pleadings filed before the trial court and in the appellate court, petitioners were
steadfast in their position that the crime was committed in furtherance of rebellion, obviously to escape
criminal liability for the present charge. This is judicial admission that they indeed committed the crime. A
judicial admission conclusively binds the party making it. He cannot thereafter take a position contradictory
to or inconsistent with his pleading. Acts or facts admitted do not require proof and cannot be contradicted
unless it is shown that the admission was made through palpable mistake or that no such admission was
made.[24] Moreover, when a party adopts a certain theory in the court below, he is not allowed to change
his theory on appeal, for to allow him to do so would not only be unfair to the other party but would also
be offensive to the basic rules of fair play, justice and due process.[25]
Treachery was also duly proven. The deadly and successive actions of the petitioners did not allow the
victim any opportunity to defend himself. The victim was innocently taking a bath totally unaware of the
planned attack against him. Or while he may have realized a possible danger to his person, the attack
was executed in such a manner as to make defense, not to say counter attack, impossible. The
suddenness of the assault, without the slightest provocation from him who was unarmed and with nary
an opportunity to repel the aggression or defend himself, ineluctably qualified the crime with alevosia.[26]
The twin defenses of denial and alibi raised by petitioners must necessarily fail in view of the positive
identification made by the prosecution witnesses. Alibi and denial are inherently weak defenses and must
be brushed aside when the prosecution has sufficiently and positively ascertained the identity of the
accused.[27] And it is only axiomatic that positive testimony prevails over negative testimony.[28]
The testimonies of the prosecution witnesses thus established beyond reasonable doubt the elements of
robbery with homicide, namely: 1) the taking of personal property was committed with violence or
intimidation against persons; 2) the property taken belongs to another; 3) the taking was done with animo
lucrandi; and 4) by reason of the robbery or on the occasion thereof, the crime of homicide which is
therein used in a generic sense, was committed.[29]
As to damages, we find the amounts awarded by the trial court as modified by the CA with respect to the
amount of the loss of earning capacity to have been duly substantiated and warranted. We see no cogent
reason to reverse the same.
Finally, we take note that petitioner Butalon died before final judgment. According to the written report of
the Penal Superintendent,[30] Butalon died at the New Bilibid Prison Hospital on October 21, 2004. Thus,
consistent with our ruling in People v. Bayotas[31] that the death of an accused pending appeal of his
conviction extinguishes his criminal liability as well as the civil liability based solely thereon, we declare the
dismissal of the petition of the late Norberto Butalon.
WHEREFORE, the petition for review is DENIED. The challenged Decision of the Court of Appeals in
CA-G.R. CR H.C. No. 00554 dated December 18, 2006 is AFFIRMED with MODIFICATION that the
petition of Norberto Butalon is dismissed, his criminal and civil liability having been extinguished by reason
of his death.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

Associate Justice Associate JusticeAssociate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the

Constitution, and the Division Chairpersons
attestation, it is hereby certified that the
conclusions in the above Decision had been
reached in consultation before the case was
assigned to the writer of the opinion of the
Courts Division.
REYNATO S. PUNO
Chief Justice
*
In lieu of Associate Justice Roberto A. Abad
who is on leave per Special Order No.
812 dated January 4, 2010.
[1]
People v. Musa, G.R. No. 170472, July 3,
2009.
[2]
Records, p. i.
[3]
Records, pp. 113-119, penned by Judge
Honesto A. Villamor.
[4]
CA rollo, pp. 107-122; penned by
Associate Justice Rosmari D. Carandang
and concurred in by Associate Justices
Renato C. Dacudao and Estela M. Perlas-
Bernabe.
[5]
Id. at 53.
[6]
Rollo, p. 89.
[7]
Id. at 90-91.
[8]
[9]
People v. Belon, G.R. No. 87759, February
26, 1991, 194 SCRA 447, 457.
[10]
G.R No. 104869, February 23, 1994, 230
SCRA 270, 279.
[11]
People v. Carizo, G.R. No. 96551, July 6,
1994, 233 SCRA 687, 700.
[12]
People v. Simon, 473 Phil. 336, 365
(2004).
[13]
People v. Foncardes, 466 Phil. 992, 1005
(2004).
[14]
People v. Sinco, 408 Phil. 1, 13 (2001).
[15]
[16]
People v. Foncardes, supra note 13 at 1006.
[17]
458 Phil. 856, 876-877 (2003).
[18]
Rollo, p. 49.
[19]
Velasco v. People, G.R. No.
166479, February 28, 2006, 483 SCRA
649, 668.
[20]
Tadeja v. People, G.R. No. 145336, July 21,
2006, 496 SCRA 157, 165.
[21]
People v. Navales, 334 Phil. 521, 541 (1997).
[22]
People v. Dulanas, G.R. No. 159058, May 3,
2006, 489 SCRA 58, 76.
[23]
Heirs of Florentino Remetio v. Villareal,
G.R. No. 132357, May 31, 2006, 490
SCRA 43, 47.
[24]
Heirs of Pedro Clemena y Zurbano v. Heirs of
Irene B. Bien, G.R. No. 155508, September
11, 2006, 501 SCRA 405, 414-415.
[25]
Naval v. Court of Appeals, G.R. No.
167412, February 22, 2006, 483 SCRA
102, 109.
[26]
People v. Pallarco, 351 Phil. 391, 410
(1998).
[27]
People v. Torres, G.R No.
176262, September 11, 2007, 532 SCRA
654, 665.
[28]
People v. Corpuz, G.R No.
168101, February 13, 2006, 482 SCRA
435, 450.
[29]
People v. Lara, G. R No. 171449, October
23, 2006, 505 SCRA 137, 154.
[30]
CA rollo, p. 126.
[31]
G.R No. 102007, September 2, 1994, 236
SCRA 239, 241.
ortFootnotes]>[31] G.R No.
102007, September 2, 1994, 236 SCRA 239,
241.
[31]
G.R No. 102007, September 2, 1994, 236
SCRA 239, 241.
ootnote'>[31] G.R No. 102007, September 2,
1994, 236 SCRA 239, 241.
haracter: footnote'>[31] G.R No.
102007, September 2, 1994, 236 SCRA 239,
241.
o-special-character: footnote'>[31] G.R No.
102007, September 2, 1994, 236 SCRA 239,
241.
an style='mso-special-character:
footnote'>[31]G.R No. 102007, September 2,
1994, 236 SCRA 239, 241.
Supreme Court
Manila
SECOND DIVISION
HILARIO P. SORIANO, G.R. No. 162336
Petitioner,
- versus - Present:
PEOPLE OF THE PHILIPPINES, CARPIO, J., Chairperson,
BANGKO SENTRAL NG CORONA,*
PILIPINAS (BSP), PHILIPPINE BRION,
DEPOSIT INSURANCE DEL CASTILLO, and
CORPORATION (PDIC), PUBLIC PEREZ, JJ.

PROSECUTOR ANTONIO C.
BUAN, and STATE
PROSECUTOR ALBERTO R. Promulgated:
FONACIER,
Respondents. [1] February 1, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A bank officer violates the DOSRI[2] law when he acquires bank funds for his personal benefit, even if such
acquisition was facilitated by a fraudulent loan application. Directors, officers, stockholders, and their
related interests cannot be allowed to interpose the fraudulent nature of the loan as a defense to escape
culpability for their circumvention of Section 83 of Republic Act (RA) No. 337.[3]
Before us is a Petition for Review on Certiorari[4] under Rule 45 of the Rules of Court, assailing
the September 26, 2003 Decision[5] and the February 5, 2004 Resolution[6] of the Court of Appeals (CA)
in CA-G.R. SP No. 67657. The challenged Decision disposed as follows:
WHEREFORE, premises considered, the instant petition for certiorari is
hereby DENIED.[7]
Factual Antecedents
Sometime in 2000, the Office of Special Investigation (OSI) of the Bangko Sentral ng Pilipinas (BSP),
through its officers,[8] transmitted a letter[9] dated March 27, 2000 to Jovencito Zuo, Chief State Prosecutor
of the Department of Justice (DOJ). The letter attached as annexes five affidavits,[10] which would allegedly
serve as bases for filing criminal charges for Estafa thru Falsification of Commercial Documents, in relation
to Presidential Decree (PD) No. 1689,[11] and for Violation of Section 83 of RA 337, as amended by PD
1795,[12] against, inter alia, petitioner herein Hilario P. Soriano. These five affidavits, along with other
documents, stated that spouses Enrico and Amalia Carlos appeared to have an outstanding loan of P8
million with the Rural Bank of San Miguel (Bulacan), Inc. (RBSM), but had never applied for nor received
such loan; that it was petitioner, who was then president of RBSM, who had ordered, facilitated, and
received the proceeds of the loan; and that the P8 million loan had never been authorized by RBSM's
Board of Directors and no report thereof had ever been submitted to the Department of Rural Banks,
Supervision and Examination Sector of the BSP. The letter of the OSI, which was not subscribed under
oath, ended with a request that a preliminary investigation be conducted and the corresponding criminal
charges be filed against petitioner at his last known address.
Acting on the letter-request and its annexes, State Prosecutor Albert R. Fonacier proceeded with the
preliminary investigation. He issued a subpoena with the witnesses affidavits and supporting documents
attached, and required petitioner to file his counter-affidavit. In due course, the investigating officer issued
a Resolution finding probable cause and correspondingly filed two separate informations against petitioner
before the Regional Trial Court (RTC) of Malolos, Bulacan.[13]
The first Information,[14] dated November 14, 2000 and docketed as Criminal Case No. 237-M-2001, was
for estafa through falsification of commercial documents, under Article 315, paragraph 1(b), of the Revised
Penal Code (RPC), in relation to Article 172 of the RPC and PD 1689. It basically alleged that petitioner
and his co-accused, in abuse of the confidence reposed in them as RBSM officers, caused the falsification
of a number of loan documents, making it appear that one Enrico Carlos filled up the same, and thereby
succeeded in securing a loan and converting the loan proceeds for their personal gain and benefit.[15] The
information reads:
That in or about the month of April, 1997, and thereafter, in San Miguel, Bulacan,
and within the jurisdiction of this Honorable Court, the said accused HILARIO P.
SORIANO and ROSALINDA ILAGAN, as principals by direct participation, with
unfaithfulness or abuse of confidence and taking advantage of their position as President
of the Rural Bank of San Miguel (Bulacan), Inc. and Branch Manager of the Rural Bank of
San Miguel San Miguel Branch [sic], a duly organized banking institution under Philippine
Laws, conspiring, confederating and mutually helping one another, did then and there,
willfully and feloniously falsify loan documents consisting of undated loan
application/information sheet, credit proposal dated April 14, 1997, credit proposal dated
April 22, 1997, credit investigation report dated April 15, 1997, promissory note dated
April 23, 1997, disclosure statement on loan/credit transaction dated April 23, 1997, and
other related documents, by making it appear that one Enrico Carlos filled up the
application/information sheet and filed the aforementioned loan documents when in truth
and in fact Enrico Carlos did not participate in the execution of said loan documents and
that by virtue of said falsification and with deceit and intent to cause damage, the accused
succeeded in securing a loan in the amount of eight million pesos (PhP8,000,000.00) from
the Rural Bank of San Miguel San Ildefonso branch in the name of Enrico Carlos which
amount of PhP8 million representing the loan proceeds the accused thereafter converted
the same amount to their own personal gain and benefit, to the damage and prejudice of
the Rural Bank of San Miguel San Ildefonso branch, its creditors, the Bangko Sentral ng
Pilipinas, and the Philippine Deposit Insurance Corporation.
The other Information[17] dated November 10, 2000 and docketed as Criminal Case No. 238-M-2001, was
for violation of Section 83 of RA 337, as amended by PD 1795. The said provision refers to the prohibition
against the so-called DOSRI loans. The information alleged that, in his capacity as President of RBSM,
petitioner indirectly secured an P8 million loan with RBSM, for his personal use and benefit, without the
written consent and approval of the bank's Board of Directors, without entering the said transaction in the
bank's records, and without transmitting a copy of the transaction to the supervising department of the
bank. His ruse was facilitated by placing the loan in the name of an unsuspecting RBSM depositor, one
Enrico Carlos.[18] The information reads:
That in or about the month of April, 1997, and thereafter, and within the
jurisdiction of this Honorable Court, the said accused, in his capacity as President of the
Rural Bank of San Miguel (Bulacan), Inc., did then and there, willfully and feloniously
indirectly borrow or secure a loan with the Rural Bank of San Miguel San Ildefonso branch,
a domestic rural banking institution created, organized and existing under Philippine laws,
amounting to eight million pesos (PhP8,000,000.00), knowing fully well that the same has
been done by him without the written consent and approval of the majority of the board
of directors of the said bank, and which consent and approval the said accused
deliberately failed to obtain and enter the same upon the records of said banking
institution and to transmit a copy thereof to the supervising department of the said bank,
as required by the General Banking Act, by using the name of one depositor Enrico Carlos
of San Miguel, Bulacan, the latter having no knowledge of the said loan, and one in
possession of the said amount of eight million pesos (PhP8,000,000.00), accused
converted the same to his own personal use and benefit, in flagrant violation of the said
law.
Both cases were raffled to Branch 79 of the RTC of Malolos, Bulacan.[20]

On June 8, 2001, petitioner moved to quash[21] these informations on two grounds: that the court had no
jurisdiction over the offense charged, and that the facts charged do not constitute an offense.
On the first ground, petitioner argued that the letter transmitted by the BSP to the DOJ constituted the
complaint and hence was defective for failure to comply with the mandatory requirements of Section 3(a),
Rule 112 of the Rules of Court, such as the statement of address of petitioner and oath and
subscription.[22] Moreover, petitioner argued that the officers of OSI, who were the signatories to the letter-
complaint, were not authorized by the BSP Governor, much less by the Monetary Board, to file the
complaint. According to petitioner, this alleged fatal oversight violated Section 18, pars. (c) and (d) of the
New Central Bank Act (RA 7653).
On the second ground, petitioner contended that the commission of estafa under paragraph 1(b) of Article
315 of the RPC is inherently incompatible with the violation of DOSRI law (as set out in Section 83[23] of
RA 337, as amended by PD 1795),[24] hence a person cannot be charged for both offenses. He argued
that a violation of DOSRI law requires the offender to obtain a loan from his bank, without complying
with procedural, reportorial, or ceiling requirements. On the other hand, estafa under par. 1(b), Article
315 of the RPC requires the offender to misappropriate or convert something that he holds in trust, or
on commission, or for administration, or under any other obligation involving the duty to return the
same.[25]
Essentially, the petitioner theorized that the characterization of possession is different in the two
offenses. If petitioner acquired the loan as DOSRI, he owned the loaned money and therefore, cannot
misappropriate or convert it as contemplated in the offense of estafa. Conversely, if petitioner committed
estafa, then he merely held the money in trust for someone else and therefore, did not acquire a loan in
violation of DOSRI rules.

In an Order[26] dated August 8, 2001, the trial court denied petitioner's Motion to Quash for lack of
merit. The lower court agreed with the prosecution that the assailed OSI letter was not the complaint-
affidavit itself; thus, it need not comply with the requirements under the Rules of Court. The trial court
held that the affidavits, which were attached to the OSI letter, comprised the complaint-affidavit in the
case. Since these affidavits were duly subscribed and sworn to before a notary public, there was adequate
compliance with the Rules. The trial court further held that the two offenses were separate and distinct
violations, hence the prosecution of one did not pose a bar to the other.[27]
Petitioners Motion for Reconsideration was likewise denied in an Order dated September 5,
2001.[28]
Aggrieved, petitioner filed a Petition for Certiorari[29] with the CA, reiterating his arguments before the trial
court.
The CA denied the petition on both issues presented by petitioner.
On the first issue, the CA determined that the BSP letter, which petitioner characterized to be a fatally
infirm complaint, was not actually a complaint, but a transmittal or cover letter only. This transmittal letter
merely contained a summary of the affidavits which were attached to it. It did not contain any averment
of personal knowledge of the events and transactions that constitute the elements of the offenses
charged. Being a mere transmittal letter, it need not comply with the requirements of Section 3(a) of Rule
112 of the Rules of Court.[30]
The CA further determined that the five affidavits attached to the transmittal letter should be considered
as the complaint-affidavits that charged petitioner with violation of Section 83 of RA 337 and for Estafa
thru Falsification of Commercial Documents. These complaint-affidavits complied with the mandatory
requirements set out in the Rules of Court they were subscribed and sworn to before a notary public and
subsequently certified by State Prosecutor Fonacier, who personally examined the affiants and was
convinced that the affiants fully understood their sworn statements.[31]
Anent the second ground, the CA found no merit in petitioner's argument that the violation of the DOSRI
law and the commission of estafa thru falsification of commercial documents are inherently inconsistent
with each other. It explained that the test in considering a motion to quash on the ground that the facts
charged do not constitute an offense, is whether the facts alleged, when hypothetically admitted,
constitute the elements of the offense charged. The appellate court held that this test was sufficiently met
because the allegations in the assailed informations, when hypothetically admitted, clearly constitute the
elements of Estafa thru Falsification of Commercial Documents and Violation of DOSRI law.[32]
Petitioners Motion for Reconsideration[33] was likewise denied for lack of merit.
Issues
Restated, petitioner raises the following issues[34] for our consideration:
Whether the complaint complied with the mandatory requirements provided under
Section 3(a), Rule 112 of the Rules of Court and Section 18, paragraphs (c) and (d) of RA
7653.
II
Whether a loan transaction within the ambit of the DOSRI law (violation of Section 83 of
RA 337, as amended) could also be the subject of Estafa under Article 315 (1) (b) of the
Revised Penal Code.
III
Is a petition for certiorari under Rule 65 the proper remedy against an Order denying a
Motion to Quash?
IV
Whether petitioner is entitled to a writ of injunction.
Our Ruling
First Issue:
Whether the complaint complied with the mandatory requirements provided

under Section 3(a), Rule 112 of the Rules of Court and Section 18,
paragraphs (c) and (d) of
Republic Act No. 7653
Petitioner moved to withdraw the first issue from

the instant petition
On March 5, 2007, the Court noted[35] petitioner's Manifestation and Motion for Partial Withdrawal of the
Petition[36] dated February 7, 2007. In the said motion, petitioner informed the Court of the promulgation
of a Decision entitled Soriano v. Hon. Casanova,[37] which also involved petitioner and similar BSP letters
to the DOJ. According to petitioner, the said Decision allegedly ruled squarely on the nature of the BSP
letters and the validity of the sworn affidavits attached thereto. For this reason, petitioner moved for the
partial withdrawal of the instant petition insofar as it involved the issue of whether or not a court can
legally acquire jurisdiction over a complaint which failed to comply with the mandatory requirements
provided under Section 3(a), Rule 112 of the Rules of Court and Section 18, paragraphs (c) and (d) of RA
7653.[38]
Given that the case had already been submitted for resolution of the Court when petitioner filed his latest
motion, and that all respondents had presented their positions and arguments on the first issue, the Court
deems it proper to rule on the same.
In Soriano v. Hon. Casanova, the Court held that

the affidavits attached to the BSP transmittal
letter complied with the mandatory requirements
under the Rules of Court.
To be sure, the BSP letters involved in Soriano v. Hon. Casanova[39] are not the same as the BSP letter
involved in the instant case. However, the BSP letters in Soriano v. Hon. Casanova and the BSP letter
subject of this case are similar in the sense that they are all signed by the OSI officers of the BSP, they
were not sworn to by the said officers, they all contained summaries of their attached affidavits, and they
all requested the conduct of a preliminary investigation and the filing of corresponding criminal charges
against petitioner Soriano. Thus, the principle of stare decisis dictates that the ruling in Soriano v. Hon.
Casanova be applied in the instant case once a question of law has been examined and decided, it should
be deemed settled and closed to further argument.[40]
We held in Soriano v. Hon. Casanova, after a close scrutiny of the letters transmitted by the BSP
to the DOJ, that these were not intended to be the complaint, as envisioned under the Rules. They did
not contain averments of personal knowledge of the events and transactions constitutive of any
offense. The letters merely transmitted for preliminary investigation the affidavits of people who had
personal knowledge of the acts of petitioner. We ruled that these affidavits, not the letters transmitting
them, initiated the preliminary investigation. Since these affidavits were subscribed under oath by the
witnesses who executed them before a notary public, then there was substantial compliance with Section
3(a), Rule 112 of the Rules of Court.
Anent the contention that there was no authority from the BSP Governor or the Monetary Board to file a
criminal case against Soriano, we held that the requirements of Section 18, paragraphs (c) and (d) of RA
7653 did not apply because the BSP did not institute the complaint but merely transmitted the affidavits
of the complainants to the DOJ.
We further held that since the offenses for which Soriano was charged were public crimes, authority holds
that it can be initiated by any competent person with personal knowledge of the acts committed by the
offender. Thus, the witnesses who executed the affidavits clearly fell within the purview of any competent
person who may institute the complaint for a public crime.
The ruling in Soriano v. Hon. Casanova has been adopted and elaborated upon in the recent case
of Santos-Concio v. Department of Justice.[41] Instead of a transmittal letter from the BSP, the Court
in Santos-Concio was faced with an NBI-NCR Report, likewise with affidavits of witnesses as
attachments. Ruling on the validity of the witnesses sworn affidavits as bases for a preliminary
investigation, we held:
The Court is not unaware of the practice of incorporating all allegations in one
document denominated as complaint-affidavit. It does not pronounce strict adherence to
only one approach, however, for there are cases where the extent of ones personal
knowledge may not cover the entire gamut of details material to the alleged offense. The
private offended party or relative of the deceased may not even have witnessed the
fatality, in which case the peace officer or law enforcer has to rely chiefly on affidavits of
witnesses. The Rules do not in fact preclude the attachment of a referral or transmittal
letter similar to that of the NBI-NCR. Thus, in Soriano v. Casanova, the Court held:
A close scrutiny of the letters transmitted by the BSP and PDIC

to the DOJ shows that these were not intended to be the complaint
envisioned under the Rules. It may be clearly inferred from the tenor of
the letters that the officers merely intended to transmit the affidavits of
the bank employees to the DOJ. Nowhere in the transmittal letters is
there any averment on the part of the BSP and PDIC officers of personal
knowledge of the events and transactions constitutive of the criminal
violations alleged to have been made by the accused. In fact, the letters
clearly stated that what the OSI of the BSP and the LIS of the PDIC did
was to respectfully transmit to the DOJ for preliminary investigation the
affidavits and personal knowledge of the acts of the petitioner. These
affidavits were subscribed under oath by the witnesses who executed
them before a notary public. Since
the affidavits, not the letters transmitting them, were intended
to initiate the preliminary investigation, we hold that Section 3(a), Rule
112 of the Rules of Court was substantially complied with.
Citing the ruling of this Court in Ebarle v. Sucaldito, the Court of
Appeals correctly held that a complaint for purposes of preliminary
investigation by the fiscal need not be filed by the offended party. The
rule has been that, unless the offense subject thereof is one that
cannot be prosecuted de oficio, the same may be filed, for
preliminary investigation purposes, by any competent person. The
crime of estafa is a public crime which can be initiated by any competent
person. The witnesses who executed the affidavits based on their
personal knowledge of the acts committed by the petitioner fall within the
purview of any competent person who may institute the complaint for a
public crime. x x x (Emphasis and italics supplied)
A preliminary investigation can thus validly proceed on the basis of an affidavit

of any competent person, without the referral document, like the NBI-NCR Report, having
been sworn to by the law enforcer as the nominal complainant. To require otherwise is
a needless exercise. The cited case of Oporto, Jr. v. Judge Monserate does not appear
to dent this proposition. After all, what is required is to reduce the evidence into
affidavits, for while reports and even raw information may justify the initiation of an
investigation, the preliminary investigation stage can be held only after sufficient evidence
has been gathered and evaluated which may warrant the eventual prosecution of the
case in court.[42]
Following the foregoing rulings in Soriano v. Hon. Casanova and Santos-Concio v. Department of
Justice, we hold that the BSP letter, taken together with the affidavits attached thereto, comply with the
requirements provided under Section 3(a), Rule 112 of the Rules of Court and Section 18, paragraphs (c)
and (d) of RA 7653.
Second Issue:
Whether a loan transaction within the ambit of the DOSRI law (violation of
Section 83 of RA 337, as amended) could be the subject of Estafa under
Article 315 (1) (b) of the
Revised Penal Code
The second issue was raised by petitioner in the context of his Motion to Quash Information on
the ground that the facts charged do not constitute an offense.[43] It is settled that in considering a motion
to quash on such ground, the test is whether the facts alleged, if hypothetically admitted, would establish
the essential elements of the offense charged as defined by law.The trial court may not consider a situation
contrary to that set forth in the criminal complaint or information. Facts that constitute the defense of the
petitioner[s] against the charge under the information must be proved by [him] during trial. Such facts or
circumstances do not constitute proper grounds for a motion to quash the information on the ground that
the material averments do not constitute the offense. [44]
We have examined the two informations against petitioner and we find that they contain allegations which,
if hypothetically admitted, would establish the essential elements of the crime of DOSRI violation and
estafa thru falsification of commercial documents.
In Criminal Case No. 238-M-2001 for violation of DOSRI rules, the information alleged that petitioner
Soriano was the president of RBSM; that he was able to indirectly obtain a loan from RBSM by putting the
loan in the name of depositor Enrico Carlos; and that he did this without complying with the requisite
board approval, reportorial, and ceiling requirements.
In Criminal Case No. 237-M-2001 for estafa thru falsification of commercial documents, the information
alleged that petitioner, by taking advantage of his position as president of RBSM, falsified various loan
documents to make it appear that an Enrico Carlos secured a loan of P8 million from RBSM; that petitioner
succeeded in obtaining the loan proceeds; that he later converted the loan proceeds to his own personal
gain and benefit; and that his action caused damage and prejudice to RBSM, its creditors, the BSP, and
the PDIC.
Significantly, this is not the first occasion that we adjudge the sufficiency of similarly worded
informations. In Soriano v. People,[45] involving the same petitioner in this case (but different transactions),
we also reviewed the sufficiency of informations for DOSRI violation and estafa thru falsification of
commercial documents, which were almost identical, mutatis mutandis, with the subject informations
herein. We held in Soriano v. People that there is no basis for the quashal of the informations as they
contain material allegations charging Soriano with violation of DOSRI rules and estafa thru falsification of
commercial documents.
Petitioner raises the theory that he could not possibly be held liable for estafa in concurrence with
the charge for DOSRI violation. According to him, the DOSRI charge presupposes that he acquired a loan,
which would make the loan proceeds his own money and which he could neither possibly misappropriate
nor convert to the prejudice of another, as required by the statutory definition of estafa.[46] On the other
hand, if petitioner did not acquire any loan, there can be no DOSRI violation to speak of. Thus, petitioner
posits that the two offenses cannot co-exist. This theory does not persuade us.
Petitioners theory is based on the false premises that the loan was extended to him by the bank
in his own name, and that he became the owner of the loan proceeds. Both premises are wrong.
The bank money (amounting to P8 million) which came to the possession of petitioner was money
held in trust or administration by him for the bank, in his
fiduciary capacity as the President of said bank.[47] It is not accurate to say that petitioner became the
owner of the P8 million because it was the proceeds of a loan. That would have been correct if the
bank knowingly extended the loan to petitioner himself. But that is not the case here. According to the
information for estafa, the loan was supposed to be for another person, a certain Enrico Carlos; petitioner,
through falsification, made it appear that said Enrico Carlos applied for the loan when in fact he (Enrico
Carlos) did not. Through such fraudulent device, petitioner obtained the loan proceeds and converted the
same. Under these circumstances, it cannot be said that petitioner became the legal owner of the P8
million. Thus, petitioner remained the banks fiduciary with respect to that money, which makes it capable
of misappropriation or conversion in his hands.
The next question is whether there can also be, at the same time, a charge for DOSRI violation
in such a situation wherein the accused bank officer did not secure a loan in his own name, but was
alleged to have used the name of another person in order to indirectly secure a loan from the bank. We
answer this in the affirmative. Section 83 of RA 337 reads:
Section 83. No director or officer of any banking institution shall, either directly or
indirectly, for himself or as the representative or agent of others, borrow any of the
deposits of funds of such bank, nor shall he become a guarantor, indorser, or surety for
loans from such bank to others, or in any manner be an obligor for moneys borrowed
from the bank or loaned by it, except with the written approval of the majority of the
directors of the bank, excluding the director concerned. Any such approval shall be
entered upon the records of the corporation and a copy of such entry shall be transmitted
forthwith to the Superintendent of Banks. The office of any director or officer of a bank
who violates the provisions of this section shall immediately become vacant and the
director or officer shall be punished by imprisonment of not less than one year nor more
than ten years and by a fine of not less than one thousand nor more than ten thousand
pesos. x x x
The prohibition in Section 83 is broad enough to cover various modes of borrowing.[48] It covers loans by
a bank director or officer (like herein petitioner) which are made either: (1) directly, (2) indirectly, (3) for
himself, (4) or as the representative or agent of others. It applies even if the director or officer is a mere
guarantor, indorser or surety for someone else's loan or is in any manner an obligor for money borrowed
from the bank or loaned by it. The covered transactions are prohibited unless the approval, reportorial
and ceiling requirements under Section 83 are complied with. The prohibition is intended to protect the
public, especially the depositors,[49] from the overborrowing of bank funds by bank officers, directors,
stockholders and related interests, as such overborrowing may lead to bank failures.[50] It has been said
that banking institutions are not created for the benefit of the directors [or officers]. While directors have
great powers as directors, they have no special privileges as individuals. They cannot use the assets of
the bank for their own benefit except as permitted by law. Stringent restrictions are placed about them so
that when acting both for the bank and for one of themselves at the same time, they must keep within
certain prescribed lines regarded by the legislature as essential to safety in the banking business.[51]
A direct borrowing is obviously one that is made in the name of the DOSRI himself or where the
DOSRI is a named party, while an indirect borrowing includes one that is made by a third party, but the
DOSRI has a stake in the transaction.[52] The latter type indirect borrowing applies here. The information
in Criminal Case 238-M-2001 alleges that petitioner in his capacity as President of Rural Bank of San Miguel
San Ildefonso branch x x x indirectly borrow[ed] or secure[d] a loan with [RBSM] x x x knowing fully well
that the same has been done by him without the written consent and approval of the majority of the
board of directors x x x, and which consent and approval the said accused deliberately failed to obtain
and enter the same upon the records of said banking institution and to transmit a copy thereof to the
supervising department of the said bank x x x by using the name of one depositor Enrico Carlos x x x, the
latter having no knowledge of the said loan, and once in possession of the said amount of eight million
pesos (P8 million), [petitioner] converted the same to his own personal use and benefit.[53]
The foregoing information describes the manner of securing the loan as indirect; names petitioner
as the benefactor of the indirect loan; and states that the requirements of the law were not complied with.
It contains all the required elements[54] for a violation of Section 83, even if petitioner did not secure the
loan in his own name.
The broad interpretation of the prohibition in Section 83 is justified by the fact that it
even expressly covers loans to third parties where the third parties are aware of the transaction (such as
principals represented by the DOSRI), and where the DOSRIs interest does not appear to be beneficial
but even burdensome (such as in cases when the DOSRI acts as a mere guarantor or surety). If the law
finds it necessary to protect the bank and the banking system in such situations, it will surely be illogical
for it to exclude a case like this where the DOSRI acted for his own benefit, using the name of an
unsuspecting person. A contrary interpretation will effectively allow a DOSRI to use dummies to
circumvent the requirements of the law.
In sum, the informations filed against petitioner do not negate each other.
Third Issue:
Is a Rule 65 petition for certiorari the proper remedy against
an Order denying a Motion to Quash?
This issue may be speedily resolved by adopting our ruling in Soriano v. People,[55] where we held:
In fine, the Court has consistently held that a special civil action for certiorari is
not the proper remedy to assail the denial of a motion to quash an information. The
proper procedure in such a case is for the accused to enter a plea, go to trial without
prejudice on his part to present the special defenses he had invoked in his motion to
quash and if after trial on the merits, an adverse decision is rendered, to appeal therefrom
in the manner authorized by law. Thus, petitioners should not have forthwith filed a
special civil action for certiorari with the CA and instead, they should have gone to trial
and reiterated the special defenses contained in their motion to quash. There are no
special or exceptional circumstances in the present case that would justify immediate
resort to a filing of a petition for certiorari. Clearly, the CA did not commit any reversible
error, much less, grave abuse of discretion in dismissing the petition.[56]
Fourth Issue:
Whether petitioner is entitled to a writ of injunction
The requisites to justify an injunctive relief are: (1) the right of the complainant is clear and unmistakable;
(2) the invasion of the right sought to be protected is material and substantial; and (3) there is an urgent
and paramount necessity for the writ to prevent serious damage. A clear legal right means one clearly
founded in or granted by law or is enforceable as a matter of law. Absent any clear and unquestioned
legal right, the issuance of an injunctive writ would constitute grave abuse of discretion.[57] Caution and
prudence must, at all times, attend the issuance of an injunctive writ because it effectively disposes of the
main case without trial and/or due process.[58] In Olalia v. Hizon,[59] the Court held as follows:
It has been consistently held that there is no power the exercise of which is more
delicate, which requires greater caution, deliberation and sound discretion, or more
dangerous in a doubtful case, than the issuance of an injunction. It is the strong arm of
equity that should never be extended unless to cases of great injury, where courts of law
cannot afford an adequate or commensurate remedy in damages.
Every court should remember that an injunction is a limitation upon the freedom
of action of the [complainant] and should not be granted lightly or precipitately. It should
be granted only when the court is fully satisfied that the law permits it and the emergency
demands it.
Given this Court's findings in the earlier issues of the instant case, we find no compelling reason to grant
the injunctive relief sought by petitioner.
WHEREFORE, the petition is DENIED. The assailed September 26, 2003 Decision as well as the
February 5, 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 67657 are AFFIRMED. Costs
against petitioner.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
In lieu of Associate Justice Roberto A. Abad who is on leave per Special Order No. 812
[1]
The Petition for Review on Certiorari under Rule 45 filed before the Court erroneously included Judge
Arturo G. Tayag among its public respondents. We have deleted his name in the case title in
accordance with Section 4 (a), Rule 45 of the Rules of Court, which reads:
Sec. 4 Contents of petition. -- The petition shall be filed in eighteen (18) copies, with the
original copy intended for the court being indicated as such by the petitioner, and shall
(a) state the full name of the appealing party as the petitioner and the adverse party as
respondent, without impleading the lower courts or judges thereof either as petitioners or
respondents; x x x (Emphasis supplied)
[2]
Director, Officer, Stockholder and Related Interest.
[3]
The General Banking Act.
[4]
Rollo, pp. 10-23.
[5]
Id. at 25-36; penned by Associate Justice Arsenio J. Magpale and concurred in by Associate Justices
Conrado M. Vasquez, Jr. and Bienvenido L. Reyes.
[6]
Id. at 38-39.
[7]
Id. at 36.
[8]
Bank Attorney III Jose R. Fajardo, Deputy Director Alfonso C. Peaco IV, and Director Vicente S.
Aquino. CA rollo, p. 36.
[9]
Id. at 34-36.
[10]
Id. at 288-328.
[11]
Increasing the Penalty for Certain Forms of Swindling or Estafa.
[12]
Amending Further Republic Act No. 337, As Amended, Otherwise Known as the General
Banking Act.
[13]
[14]
Id. at 21-23.
[15]
Id.
[16]
Id. at 21-22.
[17]
Id. at 24-26.
[18]
Id.
[19]
Id. at 24-25.
[20]
Presided by Hon. Arturo G. Tayag but subsequently raffled off to Branch 17, Regional Trial
Court, Malolos, Bulacan, presided by Judge Ma. Theresa V. Mendoza- Arcega, rollo, p. 838.
[21]
[22]
Id. at 28-29.
[23]
Sec. 83. No director or officer of any banking institution shall, either directly or indirectly, for
himself or as the representative or agent of others, borrow any of the deposits of funds of
such bank, nor shall he become a guarantor, indorser, or surety for loans from such bank to
others, or in any manner be an obligor for moneys borrowed from the bank or loaned by it, except
with the written approval of the majority of the directors of the bank, excluding the director
concerned. Any such approval shall be entered upon the records of the corporation and a copy
of such entry shall be transmitted forthwith to the Superintendent of Banks. The office of any
director or officer of a bank who violates the provisions of this section shall immediately
become vacant and the director or officer shall be punished by imprisonment of not less than
one year nor more than ten years and by a fine of nopan> CA rollo, pp. 30-31.
[26]
Id. at 17-19.
[27]
Id. at 18-19.
[28]
Id. at 20.
[29]
Id. at 2-16.
[30]
Rollo, pp. 30-31.
[31]
Id. at 31-32.
[32]
Id. at 35.
[33]
[34]
Rollo, p. 855.
[35]
Id. at 887.
[36]
Id. at 880-886.
[37]
G.R. No. 163400, March 31, 2006, 486 SCRA 431.
[38]
Rollo, pp. 881-883.
[39]
Supra note 36.
[40]
Ting v. Velez-Ting, G.R. No. 166562, March 31, 2009, 582 SCRA 694.
[41]
G.R. No. 175057, January 29, 2008, 543 SCRA 70.
[42]
Id. at 84-85.
[43]
[44]
Soriano v. People, G.R. Nos. 159517-18, June 30, 2009, 591 SCRA 244, 257-258, citing Caballero v.
Sandiganbayan, G.R. Nos. 137355-58, September 25, 2007, 534 SCRA 30, 43 and Torres v. Hon.
Garchitorena, 442 Phil. 765, 777 (2002).
[45]
Id. at 257.
[46]
Rollo, p. 864.
[47]
FLETCHER CYCLOPEDIA OF THE LAW OF CORPORATIONS 838 (perm. ed., 1986 rev. vol.) states that:
At common law, and by the modern current of authority in this country, and in England, the
directors of a private corporation, while not regarded as trustees in the strict, technical sense,
are considered in equity as bearing a fiduciary relation to the corporation and its
stockholders. In other words, it is universally recognized that courts of equity treat the
relationship of director and stockholders as a trusteeship, in order to determine the rights,
duties and liabilities of the directors; x x x Moreover, these rules should be applied even more
stringently to an officer and director of a bank who should be concerned with the welfare of
depositors as well as that of customers and stockholders. The law demands the fullest
disclosure and fair dealing by a director or officer in his relations with a bank. Thus, in the
discharge of his high trust the law holds a bank president to standards of probity and fidelity
more lofty than those of the market place. These high standards this court is not disposed to
whittle down. (Citations omitted and emphasis added)
[48]
Go v. Bangko Sentral ng Pilipinas, G.R. No. 178429, October 23, 2009.
[49]
Id.
[50]
10 Am Jur 2d, Banks, Section 239.
[51]
People v. Knapp, 206 NY 373, a case cited in Go v. Bangko Sentral ng Pilipinas, supra.
[52]
People v. Concepcion, 44 Phil. 126 (1922).
[53]
[54]
In Go v. Bangko Sentral ng Pilipinas, supra note 47, the elements of a DOSRI law violation
were enumerated:
1. the offender is a director or officer of any banking institution;
2. the offender, either directly or indirectly, for himself or as representative or agent of
another, performs any of the following acts:
a. he borrows any of the deposits or funds of such bank; or
b. he becomes a guarantor, indorser, or surety for loans from such bank to others, or
c. he becomes in any manner an obligor for money borrowed from bank or
loaned by it;
3. the offender has performed any of such acts without the written approval of the majority
of the directors of the bank, excluding the offender, as the director concerned.
[55]
d=ftn57>
[56]
Id. at 261.
[57]
Boncodin v. National Power Corporation Employees Consolidated Union (NECU), G.R. No.
162716, September 27, 2006, 503 SCRA 611, 622-623.
[58]
F. REGALADO, REMEDIAL LAW COMPENDIUM, Vol. I, p. 639 (7th revised ed., 1999).
[59]
274 Phil. 66, 75-76 (1991).
(1991).

Supreme Court
Manila
SECOND DIVISION
DUMAGUETE CATHEDRAL G.R. No. 182722

CREDIT COOPERATIVE
[DCCCO], Represented by Present:
Felicidad L. Ruiz, its General
Manager, CARPIO, J., Chairperson,
Petitioner, BRION,
DEL CASTILLO,
-versus- ABAD, and
PEREZ, JJ.
COMMISSIONER OF
INTERNAL REVENUE, Promulgated:
Respondent. January 22, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The clashing interests of the State and the taxpayers are again pitted against each other. Two
basic principles, the States inherent power of taxation and its declared policy of fostering the creation and
growth of cooperatives come into play. However, the one that embodies the spirit of the law and the true
intent of the legislature prevails.
This Petition for Review on Certiorari under Section 11 of Republic Act (RA) No. 9282,[1] in relation
to Rule 45 of the Rules of Court, seeks to set aside the December 18, 2007 Decision[2] of the Court of Tax
Appeals (CTA), ordering petitioner to pay deficiency withholding taxes on interest from savings and time
deposits of its members for taxable years 1999 and 2000, pursuant to Section 24(B)(1) of the National
Internal Revenue Code of 1997 (NIRC), as well as the delinquency interest of 20% per annum under
Section 249(C) of the same Code. It also assails the April 11, 2008 Resolution[3] denying petitioners Motion
for Reconsideration.
Factual Antecedents
Petitioner Dumaguete Cathedral Credit Cooperative (DCCCO) is a credit cooperative duly

registered with and regulated by the Cooperative Development Authority (CDA).[4] It was established on
February 17, 1968[5] with the following objectives and purposes: (1) to increase the income and
purchasing power of the members; (2) to pool the resources of the members by encouraging savings and
promoting thrift to mobilize capital formation for development activities; and (3) to extend loans to
members for provident and productive purposes.[6] It has the power (1) to draw, make, accept, endorse,
guarantee, execute, and issue promissory notes, mortgages, bills of exchange, drafts, warrants,
certificates and all kinds of obligations and instruments in connection with and in furtherance of its business
operations; and (2) to issue bonds, debentures, and other obligations; to contract indebtedness; and to
secure the same with a mortgage or deed of trust, or pledge or lien on any or all of its real and personal
properties.[7]
On November 27, 2001, the Bureau of Internal Revenue (BIR) Operations Group Deputy
Commissioner, Lilian B. Hefti, issued Letters of Authority Nos. 63222 and 63223, authorizing BIR Officers
Tomas Rambuyon and Tarcisio Cubillan of Revenue Region No. 12, Bacolod City, to examine petitioners
books of accounts and other accounting records for all internal revenue taxes for the taxable years 1999
and 2000.[8]
Proceedings before the BIR Regional Office
On June 26, 2002, petitioner received two Pre-Assessment Notices for deficiency withholding
taxes for taxable years 1999 and 2000 which were protested by petitioner on July 23, 2002.[9] Thereafter,
on October 16, 2002, petitioner received two other Pre-Assessment Notices for deficiency withholding
taxes also for taxable years 1999 and 2000.[10] The deficiency withholding taxes cover the payments of
the honorarium of the Board of Directors, security and janitorial services, legal and professional fees, and
interest on savings and time deposits of its members.
On October 22, 2002, petitioner informed BIR Regional Director Sonia L. Flores that it would only
pay the deficiency withholding taxes corresponding to the honorarium of the Board of Directors, security
and janitorial services, legal and professional fees for the year 1999 in the amount of P87,977.86,
excluding penalties and interest.[11]
In another letter dated November 8, 2002, petitioner also informed the BIR Assistant Regional
Director, Rogelio B. Zambarrano, that it would pay the withholding taxes due on the honorarium and per
diems of the Board of Directors, security and janitorial services, commissions and legal & professional fees
for the year 2000 in the amount of P119,889.37, excluding penalties and interest, and that it would avail
of the Voluntary Assessment and Abatement Program (VAAP) of the BIR under Revenue Regulations No.
17-2002.[12]
On November 29, 2002, petitioner availed of the VAAP and paid the amounts of P105,574.62
and P143,867.24[13] corresponding to the withholding taxes on the payments for the compensation,
honorarium of the Board of Directors, security and janitorial services, and legal and professional services,
for the years 1999 and 2000, respectively.
On April 24, 2003, petitioner received from the BIR Regional Director, Sonia L. Flores, Letters of
Demand Nos. 00027-2003 and 00026-2003, with attached Transcripts of Assessment and Audit
Results/Assessment Notices, ordering petitioner to pay the deficiency withholding taxes, inclusive of
penalties, for the years 1999 and 2000 in the amounts of P1,489,065.30 and P1,462,644.90,
respectively.[14]
Proceedings before the Commissioner of Internal Revenue
On May 9, 2003, petitioner protested the Letters of Demand and Assessment Notices with the
Commissioner of Internal Revenue (CIR).[15] However, the latter failed to act on the protest within the
prescribed 180-day period. Hence, on December 3, 2003, petitioner filed a Petition for Review before the
CTA, docketed as C.T.A. Case No. 6827.[16]
Proceedings before the CTA First Division
The case was raffled to the First Division of the CTA which rendered its Decision on February 6,
2007, disposing of the case in this wise:
IN VIEW OF ALL THE FOREGOING, the Petition for Review is hereby PARTIALLY
GRANTED. Assessment Notice Nos. 00026-2003 and 00027-2003 are hereby MODIFIED
and the assessment for deficiency withholding taxes on the honorarium and per diems of
petitioners Board of Directors, security and janitorial services, commissions and legal and
professional fees are hereby CANCELLED. However, the assessments for deficiency
withholding taxes on interests are hereby AFFIRMED.
Accordingly, petitioner is ORDERED TO PAY the respondent the respective

amounts of P1,280,145.89 and P1,357,881.14 representing deficiency withholding taxes
on interests from savings and time deposits of its members for the taxable years 1999
and 2000. In addition, petitioner is ordered to pay the 20% delinquency interest from May
26, 2003 until the amount of deficiency withholding taxes are fully paid pursuant to
Section 249 (C) of the Tax Code.
SO ORDERED.[17]
Dissatisfied, petitioner moved for a partial reconsideration, but it was denied by the First Division
in its Resolution dated May 29, 2007.[18]
Proceedings before the CTA En Banc
On July 3, 2007, petitioner filed a Petition for Review with the CTA En Banc,[19] interposing the
lone issue of whether or not petitioner is liable to pay the deficiency withholding taxes on interest from
savings and time deposits of its members for taxable years 1999 and 2000, and the consequent
delinquency interest of 20% per annum.[20]
Finding no reversible error in the Decision dated February 6, 2007 and the Resolution dated May
29, 2007 of the CTA First Division, the CTA En Banc denied the Petition for Review[21] as well as petitioners
Motion for Reconsideration.[22]
The CTA En Banc held that Section 57 of the NIRC requires the withholding of tax at
source. Pursuant thereto, Revenue Regulations No. 2-98 was issued enumerating the income payments
subject to final withholding tax, among which is interest from any peso bank deposit and yield, or any
other monetary benefit from deposit substitutes and from trust funds and similar arrangements x x
x. According to the CTA En Banc, petitioners business falls under the phrase similar arrangements; as
such, it should have withheld the corresponding 20% final tax on the interest from the deposits of its
members.
Issue
Hence, the present recourse, where petitioner raises the issue of whether or not it is liable to pay
the deficiency withholding taxes on interest from savings and time deposits of its members for the taxable
years 1999 and 2000, as well as the delinquency interest of 20% per annum.
Petitioner argues that Section 24(B)(1) of the NIRC which reads in part, to wit:
SECTION 24. Income Tax Rates.
xxxx
(B) Rate of Tax on Certain Passive Income:
(1) Interests, Royalties, Prizes, and Other Winnings. A final tax at the
rate of twenty percent (20%) is hereby imposed upon the amount of interest from any
currency bank deposit and yield or any other monetary benefit from deposit substitutes
and from trust funds and similar arrangements; x x x
applies only to banks and not to cooperatives, since the phrase similar arrangements is preceded by terms
referring to banking transactions that have deposit peculiarities. Petitioner thus posits that the savings and
time deposits of members of cooperatives are not included in the enumeration, and thus not subject to
the 20% final tax. To bolster its position, petitioner cites BIR Ruling No. 551-888[23] and BIR Ruling [DA-
591-2006][24] where the BIR ruled that interests from deposits maintained by members of cooperative are
not subject to withholding tax under Section 24(B)(1) of the NIRC. Petitioner further contends that
pursuant to Article XII, Section 15 of the Constitution[25] and Article 2 of Republic Act No. 6938 (RA 6938)
or the Cooperative Code of the Philippines,[26] cooperatives enjoy a preferential tax treatment which
exempts their members from the application of Section 24(B)(1) of the NIRC.
As a counter-argument, respondent invokes the legal maxim Ubi lex non distinguit nec nos
distinguere debemos (where the law does not distinguish, the courts should not distinguish). Respondent
maintains that Section 24(B)(1) of the NIRC applies to cooperatives as the phrase similar arrangements
is not limited to banks, but includes cooperatives that are depositaries of their members. Regarding the
exemption relied upon by petitioner, respondent adverts to the jurisprudential rule that tax exemptions
are highly disfavored and construed strictissimi jurisagainst the taxpayer and liberally in favor of the taxing
power. In this connection, respondent likewise points out that the deficiency tax assessments were issued
against petitioner not as a taxpayer but as a withholding agent.
Our Ruling

Petitioners invocation of BIR Ruling No. 551-888,
reiterated in BIR Ruling [DA-591-2006], is
proper.
On November 16, 1988, the BIR declared in BIR Ruling No. 551-888 that cooperatives are not
required to withhold taxes on interest from savings and time deposits of their members.The pertinent BIR
Ruling reads:
November 16, 1988

BIR RULING NO. 551-888
24 369-88 551-888
Gentlemen:
This refers to your letter dated September 5, 1988 stating that you are a corporation
established under P.D. No. 175 and duly registered with the Bureau of Cooperatives
Development as full fledged cooperative of good standing with Certificate of Registration
No. FF 563-RR dated August 8, 1985; and that one of your objectives is to provide and
strengthen cooperative endeavor and extend assistance to members and non-members
through credit scheme both in cash and in kind.
Based on the foregoing representations, you now request in effect a ruling as to whether
or not you are exempt from the following:
1. Payment of sales tax

2. Filing and payment of income tax
3. Withholding taxes from compensation of employees and savings account and
time deposits of members. (Underscoring ours)
In reply, please be informed that Executive Order No. 93 which took effect on March 10,
1987 withdrew all tax exemptions and preferential privileges e.g., income tax and sales
tax, granted to cooperatives under P.D. No. 175 which were previously withdrawn by P.D.
No. 1955 effective October 15, 1984 and restored by P.D. No. 2008 effective January 8,
1986. However, implementation of said Executive Order insofar as electric, agricultural,
irrigation and waterworks cooperatives are concerned was suspended until June 30,
1987. (Memorandum Order No. 65 dated January 21, 1987 of the President) Accordingly,
your tax exemption privilege expired as of June 30, 1987. Such being the case, you are
now subject to income and sales taxes.
Moreover, under Section 72(a) of the Tax Code, as amended, every employer making
payment of wages shall deduct and withhold upon such wages a tax at the rates
prescribed by Section 21(a) in relation to section 71, Chapter X, Title II, of the same Code
as amended by Batas Pambansa Blg. 135 and implemented by Revenue Regulations No.
6-82 as amended. Accordingly, as an employer you are required to withhold the
corresponding tax due from the compensation of your employees.
Furthermore, under Section 50(a) of the Tax Code, as amended, the tax imposed or
prescribed by Section 21(c) of the same Code on specified items of income shall be
withheld by payor-corporation and/or person and paid in the same manner and subject
to the same conditions as provided in Section 51 of the Tax Code, as amended. Such
being the case, and since interest from any Philippine currency bank deposit and yield or
any other monetary benefit from deposit substitutes are paid by banks, you are not the
party required to withhold the corresponding tax on the aforesaid savings account and
time deposits of your members. (Underscoring ours)
Very truly yours,

(SGD.) BIENVENIDO A. TAN, JR.
Commissioner
The CTA First Division, however, disregarded the above quoted ruling in determining whether
petitioner is liable to pay the deficiency withholding taxes on interest from the deposits of its members. It
ratiocinated in this wise:
This Court does not agree. As correctly pointed out by respondent in his
Memorandum, nothing in the above quoted resolution will give the conclusion that savings
account and time deposits of members of a cooperative are tax-exempt. What is entirely
clear is the opinion of the Commissioner that the proper party to withhold the
corresponding taxes on certain specified items of income is the payor-corporation and/or
person. In the same way, in the case of interests earned from Philippine currency deposits
made in a bank, then it is the bank which is liable to withhold the corresponding taxes
considering that the bank is the payor-corporation. Thus, the ruling that a cooperative is
not the proper party to withhold the corresponding taxes on the aforementioned accounts
is correct. However, this ruling does not hold true if the savings and time deposits are
being maintained in the cooperative, for in this case, it is the cooperative which becomes
the payor-corporation, a separate entity acting no more than an agent of the government
for the collection of taxes, liable to withhold the corresponding taxes on the interests
earned. [27] (Underscoring ours)
The CTA En Banc affirmed the above-quoted Decision and found petitioners invocation of BIR
Ruling No. 551-88 misplaced. According to the CTA En Banc, the BIR Ruling was based on the premise
that the savings and time deposits were placed by the members of the cooperative in the
bank.[28] Consequently, it ruled that the BIR Ruling does not apply when the deposits are maintained in
the cooperative such as the instant case.
We disagree.
There is nothing in the ruling to suggest that it applies only when deposits are maintained in a
bank. Rather, the ruling clearly states, without any qualification, that since interest from any Philippine
currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks,
cooperatives are not required to withhold the corresponding tax on the interest from savings and time
deposits of their members. This interpretation was reiterated in BIR Ruling [DA-591-2006] dated October
5, 2006, which was issued by Assistant Commissioner James H. Roldan upon the request of the
cooperatives for a confirmatory ruling on several issues, among which is the alleged exemption of interest
income on members deposit (over and above the share capital holdings) from the 20% final withholding
tax. In the said ruling, the BIR opined that:
xxxx
3. Exemption of interest income on members deposit (over and above the share capital
holdings) from the 20% Final Withholding Tax.
The National Internal Revenue Code states that a final tax at the rate of twenty
percent (20%) is hereby imposed upon the amount of interest on currency bank deposit
and yield or any other monetary benefit from the deposit substitutes and from trust funds
and similar arrangement x x x for individuals under Section 24(B)(1) and for domestic
corporations under Section 27(D)(1). Considering the members deposits with the
cooperatives are not currency bank deposits nor deposit substitutes, Section 24(B)(1) and
Section 27(D)(1), therefore, do not apply to members of cooperatives and to deposits of
primaries with federations, respectively.
It bears stressing that interpretations of administrative agencies in charge of enforcing a law are
entitled to great weight and consideration by the courts, unless such interpretations are in a sharp conflict
with the governing statute or the Constitution and other laws.[29] In this case, BIR Ruling No. 551-888 and
BIR Ruling [DA-591-2006] are in perfect harmony with the Constitution and the laws they seek to
implement. Accordingly, the interpretation in BIR Ruling No. 551-888 that cooperatives are not required
to withhold the corresponding tax on the interest from savings and time deposits of their members, which
was reiterated in BIR Ruling [DA-591-2006], applies to the instant case.
Members of cooperatives deserve a preferential

tax treatment pursuant to RA 6938, as amended
by RA 9520.
Given that petitioner is a credit cooperative duly registered with the Cooperative Development
Authority (CDA), Section 24(B)(1) of the NIRC must be read together with RA 6938, as amended by RA
9520.
Under Article 2 of RA 6938, as amended by RA 9520, it is a declared policy of the State to foster
the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing
people power towards the attainment of economic development and social justice. Thus, to encourage
the formation of cooperatives and to create an atmosphere conducive to their growth and development,
the State extends all forms of assistance to them, one of which is providing cooperatives a preferential tax
treatment.
The legislative intent to give cooperatives a preferential tax treatment is apparent in Articles 61
and 62 of RA 6938, which read:
ART. 61. Tax Treatment of Cooperatives. Duly registered cooperatives under this Code
which do not transact any business with non-members or the general public shall not be
subject to any government taxes and fees imposed under the Internal Revenue Laws and
other tax laws. Cooperatives not falling under this article shall be governed by the
succeeding section.
ART. 62. Tax and Other Exemptions. Cooperatives transacting business with both
members and nonmembers shall not be subject to tax on their transactions to
members. Notwithstanding the provision of any law or regulation to the contrary, such
cooperatives dealing with nonmembers shall enjoy the following tax exemptions; x x x.
This exemption extends to members of cooperatives. It must be emphasized that cooperatives

exist for the benefit of their members. In fact, the primary objective of every cooperative is to provide
goods and services to its members to enable them to attain increased income, savings, investments, and
productivity.[30] Therefore, limiting the application of the tax exemption to cooperatives would go against
the very purpose of a credit cooperative. Extending the exemption to members of cooperatives, on the
other hand, would be consistent with the intent of the legislature. Thus, although the tax exemption only
mentions cooperatives, this should be construed to include the members, pursuant to Article 126 of RA
6938, which provides:
ART. 126. Interpretation and Construction. In case of doubt as to the meaning of any
provision of this Code or the regulations issued in pursuance thereof, the same shall be
resolved liberally in favor of the cooperatives and their members.
We need not belabor that what is within the spirit is within the law even if it is not within the letter
of the law because the spirit prevails over the letter.[31] Apropos is the ruling in the case of Alonzo v.
Intermediate Appellate Court,[32] to wit:
But as has also been aptly observed, we test a law by its results; and likewise, we
may add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the
first concern of the judge should be to discover in its provisions the intent of the lawmaker.
Unquestionably, the law should never be interpreted in such a way as to cause injustice
as this is never within the legislative intent. An indispensable part of that intent, in fact,
for we presume the good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in consonance with
justice. Law and justice are inseparable, and we must keep them so. To be sure, there
are some laws that, while generally valid, may seem arbitrary when applied in a particular
case because of its peculiar circumstances. In such a situation, we are not bound, because
only of our nature and functions, to apply them just the same, [is] slavish obedience to
their language. What we do instead is find a balance between the word and the will, that
justice may be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the
law as it is worded, yielding like robots to the literal command without regard to its cause
and consequence. Courts are apt to err by sticking too closely to the words of a law, so
we are warned, by Justice Holmes again, where these words import a policy that goes
beyond them. While we admittedly may not legislate, we nevertheless have the power to
interpret the law in such a way as to reflect the will of the legislature. While we may not
read into the law a purpose that is not there, we nevertheless have the right to read out
of it the reason for its enactment. In doing so, we defer not to the letter that killeth but
to the spirit that vivifieth, to give effect to the lawmakers will.
The spirit, rather than the letter of a statute determines its

construction, hence, a statute must be read according to its spirit or
intent. For what is within the spirit is within the statute although it is not
within the letter thereof, and that which is within the letter but not within
the spirit is not within the statute. Stated differently, a thing which is
within the intent of the lawmaker is as much within the statute as if within
the letter; and a thing which is within the letter of the statute is not within
the statute unless within the intent of the lawmakers. (Underscoring ours)
It is also worthy to note that the tax exemption in RA 6938 was retained in RA 9520. The only
difference is that Article 61 of RA 9520 (formerly Section 62 of RA 6938) now expressly states that
transactions of members with the cooperatives are not subject to any taxes and fees. Thus:
ART. 61. Tax and Other Exemptions. Cooperatives transacting business with both
members and non-members shall not be subjected to tax on their transactions with
members. In relation to this, the transactions of members with the cooperative shall not
be subject to any taxes and fees, including but not limited to final taxes on members
deposits and documentary tax. Notwithstanding the provisions of any law or regulation to
the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax
exemptions: (Underscoring ours)
xxxx
This amendment in Article 61 of RA 9520, specifically providing that members of cooperatives are not
subject to final taxes on their deposits, affirms the interpretation of the BIR that Section 24(B)(1) of the
NIRC does not apply to cooperatives and confirms that such ruling carries out the legislative intent. Under
the principle of legislative approval of administrative interpretation by reenactment, the reenactment of a
statute substantially unchanged is persuasive indication of the adoption by Congress of a prior executive
construction.[33]
Moreover, no less than our Constitution guarantees the protection of cooperatives. Section 15, Article XII
of the Constitution considers cooperatives as instruments for social justice and economic development. At
the same time, Section 10 of Article II of the Constitution declares that it is a policy of the State to promote
social justice in all phases of national development. In relation thereto, Section 2 of Article XIII of the
Constitution states that the promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance. Bearing in mind the foregoing provisions,
we find that an interpretation exempting the members of cooperatives from the imposition of the final tax
under Section 24(B)(1) of the NIRC is more in keeping with the letter and spirit of our Constitution.
All told, we hold that petitioner is not liable to pay the assessed deficiency withholding taxes on
interest from the savings and time deposits of its members, as well as the delinquency interest of 20%
per annum.
In closing, cooperatives, including their members, deserve a preferential tax treatment because
of the vital role they play in the attainment of economic development and social justice.Thus, although
taxes are the lifeblood of the government, the States power to tax must give way to foster the creation
and growth of cooperatives. To borrow the words of Justice Isagani A. Cruz: The power of taxation, while
indispensable, is not absolute and may be subordinated to the demands of social justice.[34]
WHEREFORE, the Petition is hereby GRANTED. The assailed December 18, 2007 Decision of
the Court of Tax Appeals and the April 11, 2008 Resolution are REVERSED and SET ASIDE. Accordingly,
the assessments for deficiency withholding taxes on interest from the savings and time deposits of
petitioners members for the taxable years 1999 and 2000 as well as the delinquency interest of 20% per
annum are hereby CANCELLED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
[2]
Rollo, pp. 45-64; penned by Associate Justice Olga Palanca-Enriquez and concurred in by Presiding
Justice Ernesto D. Acosta and Associate Justices Juanito C. Castaeda, Jr., Lovell R. Bautista, Erlinda P.
Uy and Caesar A. Casanova.
[3]
Id. at 80-81.
[4]
Id. at 47.
[5]
Id. at 7.
[6]
Id. at 57.
[7]
Id.
[8]
Id. at 118.
[9]
Id. at 48.
[10]
Id.
[11]
Id. at 48-49.
[12]
Id. at 49.
[13]
Id. at 49-50.
[14]
Id. at 50-51.
[15]
Id. at 51.
[16]
Id.
[17]
Id. at 46-47.
[18]
Id. at 51.
[19]
Id. at 11.
[20]
Id. at 52.
[21]
Id. at 63.
[22]
Id. at 80-81.
[23]
Id. at 18-19.
[24]
Id. at 75-78.
[25]
SEC. 15. The Congress shall create an agency to promote the viability and growth of
cooperatives as instruments for social justice and economic development.
ART. 2. Declaration of Policy.- It is the declared policy of the State to foster the creation and
[26]
growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people
power towards the attainment of economic development and social justice. The State shall
encourage the private sector to undertake the actual formation and organization of
cooperatives and shall create an atmosphere that is conducive to the growth and development
of these cooperatives.
Toward this end, the Government and all its branches, subdivisions, instrumentalities and
agencies shall ensure the provision of technical guidance, financial assistance and other
services to enable said cooperatives to develop into viable and responsive economic
enterprises and thereby bring about a strong cooperative movement that is free from any
conditions that might infringe upon the autonomy or organizational integrity of cooperatives.
Further, the State recognizes the principle of subsidiarity under which the cooperative sector will
initiate and regulate within its own ranks the promotion and organization, training and
research, audit and support services relative to cooperatives with government assistance
where necessary.
(Now amended by Republic Act No. 9520 or the Philippine Cooperative Code of 2008.)
[27]
Rollo, pp. 62-63.
[28]
Id. at 62.
[29]
Nestle Philippines, Inc. v. Court of Appeals, G.R. No. 86738, November 13, 1991, 203 SCRA
504, 510.
[30]
REPUBLIC ACT NO. 6938, Article 7.
[31]
Taada and Macapagal v. Cuenco, et al., 103 Phil. 1051, 1086 (1957).
[32]
234 Phil. 267, 272-273 (1987).
[33]
Commissioner of Internal Revenue v. American Express International, Inc. (Philippine Branch),
500 Phil. 586 (2005).
[34]
Dissenting Opinion of Justice Isagani A. Cruz in Republic of the Philippines v. Judge Peralta,
234 Phil. 40, 59 (1987).
SECOND DIVISION
JULIUS CACAO y PRIETO, G.R. No. 180870

Petitioner,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In order to safeguard its citizenry from the harmful effects of dangerous drugs on their physical and mental
well-being, the State pursued an intensive and unrelenting campaign against the trafficking and use of
dangerous drugs and other similar substances.[1] However, in our desire to totally eradicate this social ill,
we must adhere to the constitutional pronouncement that in all criminal prosecutions, the accused shall
be presumed innocent until the contrary is proved.[2] This case illustrates once more our faithful adherence
to said constitutional requirement.
Factual Antecedents
For review is the Decision[3] of the Court of Appeals (CA) in CA-G.R. CR

No. 29985 dated July 27, 2007 affirming in toto the Decision[4] of the Regional Trial Court (RTC) of Laoag
City, Branch 13 in Criminal Case No. 11489-13 dated November 25, 2005 finding herein petitioner Julius
Cacao y Prieto (Cacao) guilty beyond reasonable doubt of violating Section 11, Article II of Republic Act
(RA) No. 9165 (The Comprehensive Dangerous Drugs Act of 2002) and sentencing him to suffer the
penalty of imprisonment ranging from 12 years and one day to 15 years and ordering him to pay a fine
of P400,000.00. Also assailed is the Resolution[5] of the CA dated December 11, 2007 denying the motion
for reconsideration.
On October 15, 2004, two separate informations were filed against Joseph Canlas y Naguit[6] and
Cacao[7] indicting them for violation of Section 11, Article II of RA 9165 before the RTC of Laoag
City. Insofar as pertinent to this petition, we shall quote the information only against Cacao in Criminal
Case No. 11489-13 which reads:
That on or about the 14th day of October, 2004, at Laoag City, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, did then and there
willfully, unlawfully and feloniously [sic] have in his possession, control and custody 1
plastic sachet of methamphetamine hydrochloride or shabu containing a total of 1.6
grams including plastic sachets [sic] without any license or authority, in violation of the
aforesaid law.
CONTRARY TO LAW.[8]
When arraigned on November 30, 2004, Cacao pleaded not guilty.[9] Thereafter trial on the merits
followed.
The inculpatory facts, as unveiled by the prosecution in its evidence given during the trial, were briefly
synthesized by the Office of the Solicitor General, viz:
On October 14, 2004, at around 7:45 in the evening, Police Officer 3 (PO3) Celso Pang-
ag of the Intelligence and Operation Section of the Laoag City Police Station received a
telephone call from an informant about a drug session being held inside Room 5 of the
Starlight Hotel located at Barangay 5, Ablan Avenue, Laoag City.
Acting on the information, PO3 Pang-ag, together with PO2 Jonel Mangapit, went
immediately to the Starlight Hotel to determine the veracity of the report. Upon arrival at
the target area, PO3 Pang-ag and PO2 Mangapit approached the lady clerk manning the
information counter of Starlight Hotel and inquired about the alleged drug session at
Room 5 of the hotel.
The lady clerk informed PO3 Pang-ag and PO2 Mangapit that the roomboy of the hotel
was about to deliver a softdrink to Room 5 and they could follow him if they [so
wish]. Thus, PO3 Pang-ag and PO2 Mangapit followed the roomboy to Room 5. Upon
arrival, the roomboy knocked at the door and a woman, later identified as Mylene, opened
the door wide enough to enable the police officers to look inside.
PO3 Pang-ag and PO2 Mangapit saw petitioner seated on top of the bed sniffing shabu
while Joseph Canlas was on the floor assisting petitioner sniffing shabu. At this juncture,
PO3 Pang-ag and PO2 Mangapit arrested petitioner and Joseph and confiscated from
them the drug paraphernalia, glass tooter, scissors, lighters and plastic sachets.
PO2 Mangapit frisked petitioner and recovered from him one plastic sachet containing
shabu.
After informing petitioner and Joseph of their constitutional rights, PO3 Pang-ag and PO2
Mangapit brought them to the Laoag City Police Station and turned them over to the
police officer on duty while the confiscated items were turned over to SPO3 Loreto
Ancheta.
The Philippine National Police (PNP) laboratory conducted an examination on the

specimen recovered from appellant and his companion which tested positive for shabu.[10]
Cacao professed his innocence and presented his defense in this wise:
In the afternoon of 14 October 2004, petitioner was waiting for a ride going home along
the National Road at the rotunda of San Nicolas, Ilocos Norte. Joseph Canlas [who was
on his way to] Laoag City aboard his motorcycle x x x pulled over and asked the petitioner
if the latter could spare a moment to estimate a work he wanted to be done in his
house. Admittedly, the petitioner is a contractor. Petitioner agreed and they both boarded
Canlas motorcycle for Laoag City.
While in Laoag City, petitioner and Canlas stopped at the public market for the latter to
collect [loan payment] as he is also a money lender. Petitioner stayed [by] Canlas
motorcycle. When Canlas returned, it was then that they decided to have chicks (or
womanize). They then proceeded to Starlight Hotel located along Ablan
Ave., Laoag City on board Canlas motorcycle.
x x x at the Starlight Hotel, petitioner asked for a room and [was given] Room 5 x x
x. Thereafter, Canlas stayed inside Room 5 while petitioner went out to the hotels counter
to wait for the woman they [had] contacted. Present at the counter at the time was the
lady cashier [named] Cherry Corpuz.
In about thirty (30) minutes, a tricycle-for-hire arrived with a man and a woman on board
as passengers. The tricycle went inside the hotel and stopped right in front of the counter
where the petitioner and the lady cashier were. After alighting from the tricycle, the
woman companion inquired where Room 5 is [and was directed] by the lady cashier. The
woman [who] alighted from the tricycle in the company of another male person was later
on identified to be Mylene Daquioag. Thereafter, Mylene Daquioag proceeded to Room 5
while the male companion stayed behind with the petitioner at the hotels counter. When
petitioner could not wait [any] longer because there was only one woman who arrived,
he x x x asked the male companion of Mylene Daquioag if another woman is coming. The
male companion answered in the negative. A couple of minutes [later], petitioner followed
to Room 5 so he could [sic] go home instead because it was then getting late.
Upon entering the room, petitioner saw Mylene Daquioag and Canlas seated at the table
inside the room. He also saw Mylene Daquioag offer something contained in plastic x x x
to Canlas. The latter refused as he said it is a woman that he was asking [for].
Barely a moment after entering Room 5, the two then heard a knock on the door from
the outside. Mylene Daquiaog immediately stood up and told the petitioner and Canlas
that they are (her) companions.
As soon as the door was unlocked by Mylene Daquioag, several policemen barged inside
the room with their guns drawn out. Petitioner was shoved to the bed by one of the
police. He was later bodily searched but nothing was found from [sic] him except his
wallet containing cash of about P 7,000.00. The wallet was later turned over to the
petitioners wife at the Police Station of Laoag, City. The P7,000.00 was never seen again.
As petitioner was made to sit at [sic] the bed, one of the police officers pointed to a plastic
sachet on the floor. It was about two (2) meters away from him and about a meter from
the police pointing [to] it. The same police then explained that the plastic sachet belongs
to the petitioner. Immediately, petitioner cried foul on the assertion.
Due to the suddenness of events, the petitioner was not as much as able to notice what
the other police did to Canlas.
Without much ado, the petitioner and Canlas were apprehended, handcuffed and brought
to the Laoag City Police Station. Charges were later on filed against them.[11]
On November 25, 2005, the trial court rendered its judgment finding Cacao guilty of the offense charged
and sentenced him accordingly, viz:
WHEREFORE x x x
The accused Julius Cacao is likewise found GUILTY beyond reasonable doubt as charged
of illegal possession of methamphetamine hydrochloride weighing 1.3987 grams in
Criminal Case No. 11489 and is therefore sentenced to suffer the indeterminate penalty
of imprisonment from TWELVE (12) YEARS and ONE (1) DAY to FIFTEEN (15) YEARS
and to pay the fine of Four hundred thousand (P400,000.00) pesos, Philippine Currency.
The sachets of shabu confiscated from the accused are all confiscated in favor of the
Government, the same to be disposed as the law prescribes. Cost de oficio.
SO ORDERED.[12]
Aggrieved by the Decision of the trial court, Cacao interposed an appeal to the CA. On July 27, 2007, the
appellate court rendered judgment affirming Cacaos conviction. It held that the circumstances obtaining
in this case validly cloaked the arresting officers with the authority to search and seize any contraband or
prohibited material which may be used as proof of the offense of which Cacao is charged. It also ruled
that there is no proof that the police officers compelled Cacao to admit a crime. As to the alleged
contradictory statements, the appellate court ruled that they refer only to minor details which are not
sufficient to overthrow the probative value accorded them by the trial court.
Petitioner moved for reconsideration[13] but the motion was denied by the appellate court in its
Resolution[14] dated on December 11, 2007.
Issues
In this petition, Cacao ascribes to the trial court the following errors:
I. The lower court gravely erred in ruling that the guilt of the
accused was proven beyond reasonable doubt considering the myriad material
inconsistencies, discrepancies, and incredible statements in the prosecution
evidence.[15]
II. The lower court gravely erred in failing to lend credence to the
critical testimony of Benedict Villanueva.[16]
III. The lower court erred in not finding that the crucial first link in the
chain of custody of the specimen subjected for examination was not proven.[17]
IV. The lower court gravely erred in declaring that the defense of
frame-up cannot be given weight.[18]
V. The lower court gravely erred in relying on the weakness of the

defense.[19]
VI. The lower court gravely erred in failing to find that the presumption
of innocence of the petitioner stands unrebutted, hence, his conviction is
erroneous.[20]
Our Ruling
We find merit in the petition.
As a general rule, factual findings and conclusions of the trial court and the CA are entitled to great weight
and respect and will not be disturbed on appeal. However, if there is any indication that the trial court
overlooked certain facts or circumstances which would substantially affect the disposition of the
case,[21] we will not hesitate to review the same. In this case, we find it imperative to review the factual
findings of the trial court because of certain inconsistencies in the testimonies of the prosecution witnesses
on material points.
Jurisprudence holds that in prosecution of cases involving illegal possession of prohibited drugs, the
prosecution must establish with moral certainty the elemental act of possession of a prohibited substance
coupled with the fact that such possession is not authorized by law. Essential, however, in a drug-related
case is that the identity of the dangerous drug be established beyond reasonable doubt.[22] Since the
dangerous drug constitutes the corpus delicti of the offense and the fact of its existence is vital to a
judgment of conviction,[23] it behooves upon the prosecution to establish and prove with certainty that the
dangerous drug presented in court as evidence against the accused is the same item recovered from his
possession.
We have scrutinized in detail the testimonies of the prosecution witnesses and found not only glaring
inconsistencies on material points but more importantly a failure to identify indubitably the prohibited drug
allegedly confiscated from Cacao.
The testimonies of the prosecutions principal

witnesses are inconsistent as to who delivered
the prohibited drug to the evidence custodian.
PO3 Celso Pang-ag (Pang-ag) and PO2 Jonel Mangapit (Mangapit) both testified that it was the latter who
brought the item confiscated from petitioner to the evidence custodian, SPO3 Loreto Ancheta (Ancheta).
Thus:
Q: What about the two plastic sachets you confiscated from the possession of the accused
Joseph and the one plastic sachet which Jonel Mangapit confiscated from the
possession of Julius Cacao as well as the drug paraphernalia you mentioned, what
did you do with them?
A: We turned over the confiscated drug paraphernalia and the one I confiscated to the
evidence custodian, SP03 Loreto Ancheta and the one confiscated by P02
Mangapit was also turned over by him to the evidence custodian, sir.
Q: Who was the evidence custodian whom you and Jonel Mangapit turned over the items
you said?
A: SPO3 Loreto Ancheta, Sir.[24]
Mangapit corroborated Pang-ags testimony that it was he who delivered to Ancheta the item he seized
from Cacao. Thus:
Q: How about the one big plastic sachet you were able to seize from the right front pocket
of accused Cacao, what did you do?
A: I turned it over to the evidence custodian, Sir.
Q: Who was that evidence custodian to whom you turned over that plastic sachet?
A: SP02 Loreto Ancheta, Sir.[25]
The foregoing assertions are totally at odds with the testimony of Ancheta, the evidence custodian. The
latter denied that it was Mangapit who delivered the item allegedly recovered from Cacao. Instead, he
repeatedly and categorically declared that it was SP03 Balolong (Balolong) from whom he received the
plastic sachet of shabu.
Q: Who delivered to you the specimen allegedly confiscated from the possession of
Cacao?
A: SP03 Balolong, Sir.[26]
During his cross-examination, Ancheta confirmed his declaration that it was Balolong and definitely
not Mangapit who handed to him the plastic sachet of shabu. Ancheta testified thus:
Q: You said that it was officer Balolong who handed to you the plastic sachet of shabu
which was allegedly taken from the possession of accused Julius Cacao, did I hear
you right?
A: Julius Cacao, yes sir.
Q: It was not officer Mangapit who handed to you the plastic sachet of shabu?
A: Balolong, sir.
Q: It was not Mangapit?

A: No sir.[27]
When confronted with the afore-quoted testimony of Ancheta, Mangapit cannot explain the variance. He
just gave a sweeping answer I do not know.[28]
We cannot understand why the courts below did not doubt or suspect the patently inconsistent and
contradictory testimonies of the principal witnesses of the prosecution. Contrary to the findings of the
appellate court, we are of the considered view that this contradiction is not so inconsequential or minor
but a discrepancy touching on substantial and significant matter which could well affect the credibility of
the witnesses.
The prosecution failed to satisfactorily establish

that the item presented in court was the same
item confiscated from Cacao.
The patent inconsistency between the testimonies of Mangapit and Pang-ag, on one hand, and the
testimony of Ancheta on the other hand, necessarily leads us to doubt that the plastic sachet
of shabu identified in court is the same item that was allegedly seized and confiscated from petitioner. If
the version of Mangapit is to be believed, then the most lamentable aspect pertains to his failure to identify
the seized item with certainty. For sure Mangapit, who is the most competent person to make the proper
identification being the officer who confiscated the item from Cacao, never actually identified the same:
Q: If shown to you again that one big plastic sachet where you put markings would you
be able to recognize and identify the same?
A: Yes, sir.
Q: Giving to you an already opened brown envelope with several contents, will you please
sort out [the] contents and bring out that big plastic sachet you claimed you
confiscated from the custody of accused Cacao?
A: (Witness sorting out the contents of the plastic bag containing several items). (Witness
examining the plastic sachet mounted on the bond paper marked as Exhibit B-1).
Q: Are the markings you claimed which were placed in the plastic sachet still visible and
readable?
A: Yes, sir.
Q: Will you please read for record purposes the markings?

A: Initial JPC and my signature, sir.
(Witness pointing to the initials and signature written on a darker masking tape on the
plastic sachet).[29]
Verily, there was no actual and effective identification of the subject specimen. After sorting out the
contents of the plastic bag, witness Mangapit merely pointed to the initial and signature written on a
masking tape attached to the plastic sachet. At no instance did he make a categorical and accurate
declaration that the sachet contained the shabu allegedly confiscated from Cacao.
The only other person who could have identified the subject drug is Pang-ag. However, we cannot lend
credence to his supposed identification, the same not being also positive, certain and unequivocal. Besides,
there is no showing that this witness actually saw the shabu at the time it was allegedly seized from
petitioner. In fact, Pang-ag is even incompetent to make the identification since from all indications, he
has never been in possession of it.
Be that as it may, any identification made by these witnesses on the item allegedly seized from petitioner
is rendered meaningless and bereft of probative value in view of the categorical denial of the evidence
custodian that he received the same from Mangapit. It is now clearly evident from the records that the
sachet of shabu which the evidence custodian received, marked and submitted for examination and later
presented in court is not the same sachet of shabu which Mangapit claimed to have confiscated from
petitioner and subsequently transmitted to the evidence custodian.
Moreover, considering the testimony of Ancheta, it was Balolong who forwarded the seized item. It is
quite strange that Ancheta would point to Balolong as the sender of the seized items if he had no basis in
saying so. However, our own scrutiny of the records failed to show the role of Balolong in the operation
since admittedly, the only lawmen who participated therein were Mangapit and Pang-ag. In fact, as
testified to by Mangapit, Balolong proceeded to the hotel after the operation.[30] How then was Balolong
able to get hold of the confiscated substance when he was neither a party to nor present during the
operation? Who entrusted the substance to him assuming that somebody requested him to submit it for
safekeeping? These are only some of the lingering questions which must be answered convincingly and
satisfactorily so as to ensure that there had been no substitution, contamination or tampering with the
sachet of shabu allegedly taken from petitioner. It must be noted that Balolong was never presented to
testify in this case. Thus, there is no evidence to prove that what was turned over to the evidence
custodian by Balolong and later presented in court was the same substance recovered from petitioner. The
failure to establish the chain of custody is fatal to the prosecutions case. There can be no crime of illegal
possession of a prohibited drug when nagging doubts persist on whether the item confiscated was the
same specimen examined and established to be the prohibited drug.[31] In People v.
Casimiro,[32] citing People v. Mapa,[33] we acquitted the accused for failure of the prosecution to establish
the identity of the prohibited drug which constitutes the corpus delicti. Equally true in Zarraga v.
People,[34] we also acquitted the accused in view of the prosecutions failure to indubitably show the identity
of the shabu.
At this juncture, it must be stressed that the corpus delicti in dangerous drugs cases constitutes the drug
itself. This means that proof beyond reasonable doubt of the identity of the prohibited drug is essential.[35]
Likewise, our ruling in People v. Gutierrez[36] on chain of custody rule is instructive. Thus:
As a mode of authenticating evidence, the chain of custody rule requires the presentation
of the seized prohibited drugs as an exhibit be preceded by evidence sufficient to support
a finding that the matter in question is what the proponent claims it to be. This would
ideally cover the testimony about every link in the chain, from seizure of the prohibited
drug up to the time it is offered in evidence, in such a way that everyone who touched
the exhibit would describe how and from whom it was received, to include, as much as
possible, a description of the condition in which it was delivered to the next in the chain.
Finally, petitioners defenses of denial and frame-up are concededly inherently weak and commonly used
in drug-related cases. However, it must be stressed that conviction of the accused must rest not on the
weakness of the defense but on the strength of the evidence of the prosecution.
Based on the foregoing, we are of the considered view that the quantum of evidence needed to convict,
that is proof beyond reasonable doubt, has not been adequately established by the prosecution. While as
a rule we desist from disturbing the findings and conclusions of the trial court especially with respect to
the credibility of witnesses, we must bow to the superior and immutable rule that the guilt of the accused
must be proved beyond reasonable doubt because the law presumes that the accused is innocent unless
and until proven otherwise. Presumption of regularity in the performance of official duty cannot by itself
override the constitutional right of the accused to be presumed innocent unless overcome by strong, clear
and compelling evidence.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. CR
No. 29985 dated July 27, 2007 affirming in toto the Decision of the Regional Trial Court of Laoag City,
Branch 13, in Criminal Case No. 11489-13, and its Resolution dated December 11, 2007 denying the
motion for reconsideration, are REVERSED and SET ASIDE.Petitioner Julius Cacao y Prieto
is ACQUITTED on ground of reasonable doubt.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
See Republic Act No. 9165 (2002), Sec. 2.
[2]
CONSTITUTION, Art. III, Sec. 14(a).
[3]
Rollo, pp. 63-92; penned by Associate Justice Vicente S. E. Veloso and concurred in by
Associate Justices Juan Q. Enriquez, Jr. and Marlene Gonzales-Sison.
[4]
Records, Criminal Case No. 11489-13, pp. 97-108; penned by Judge Philip G. Salvador.
[5]
Rollo, p. 95.
[6]
Docketed as Criminal Case No. 11487-13.
[7]
Docketed as Criminal Case No. 11489-13.
[8]
Records, Criminal Case No. 11489-13, p. 1.
[9]
Id. at 31.
[10]
Rollo, pp. 134-136.
[11]
Id. at 21-23.
[12]
Records, Criminal Case No. 11487-13, pp. 7-8.
[13]
CA rollo, p. 164.
[14]
Id. at 207.
[15]
Rollo, p. 28.
[16]
Id. at 34.
[17]
Id. at 45.
[18]
Id. at 51.
[19]
Id. at 52.
[20]
Id.
[21]
American Home Assurance Company v. Chua, 368 Phil. 555, 565 (1999).
[22]
People v. Obmiranis, G.R. No. 181492, December 16, 2008, 574 SCRA 140, 148; Malinlin v.
People, G.R No. 172950, April 27, 2007, 553 SCRA 619, 632.
[23]
Cario v. People, G.R. No. 178757, March 13, 2009; People v. Simbahon, 449 Phil. 74, 83 (2003).
[24]
TSN, February 1, 2005, pp. 7-8.
[25]
[26]
[27]
Id. at 10.
[28]
[29]
[30]
[31]
Valdez v. People. G.R. No. 170180, November 23, 2007, 538 SCRA 611, 628-629.
[32]
432 Phil. 966, 977 (2002).
[33]
G.R. No. 91014, March 31, 1993, 220 SCRA 670.
[34]
G.R. No. 162064, March 14, 2006, 484 SCRA 639, 652.
[35]
People v. Quebral, G.R. No. 185379, November 27, 2009.
[36]
G.R. No. 177777, December 4, 2009.
SECOND DIVISION
BIENVENIDO T. BUADA, G.R. No. 180374

ISAIAS B. QUINTO,
NEMESIO BAUTISTA,
ORLANDO R. BAUTISTA
FREDDIE R. BAUTISTA, Present:
CARLITO O. BUADA,
GERARDO O. BUADA, CARPIO, J., Chairperson,
ARMANDO M. OLIVA, BRION,
ROGELIO F. RAPAJON, and DEL CASTILLO,
EUGENIO F. FLORES, ABAD, and
Petitioners, PEREZ, JJ.
- versus -
Promulgated:
CEMENT CENTER, INC.,
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In all contractual, property or other relations, when one of the parties is at a disadvantage on
account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap,
the courts must be vigilant for his protection.[1]
This is a Petition for Review on Certiorari assailing the July 19, 2007 Decision[2] of the Court of
Appeals (CA) in CA-G.R. SP No. 95154 which granted respondents Petition for Review and nullified and
set aside the Decisions of the Regional Adjudicator[3] dated March 9, 1999 and of the Department of
Agrarian Reform Adjudication Board (DARAB)[4] dated March 11, 2005 dismissing the Complaint for
Confirmation of Voluntary Surrender and Damages filed by respondent. Likewise assailed is the CA
Resolution[5] dated October 11, 2007 which denied petitioners Motion for Reconsideration.
Factual Antecedents
Petitioners Bienvenido T. Buada, Isaias B. Quinto, Nemesio Bautista, Orlando T. Bautista, Freddie
R. Bautista, Carlito O. Buada, Gerardo O. Buada, Armando M. Oliva, Rogelio F. Rapajon, and Eugenio F.
Flores were tenant-farmers cultivating three parcels of agricultural land owned by respondent Cement
Center, Inc.[6]
On March 13, 1998, respondent filed a Complaint[7] for Confirmation of Voluntary Surrender and
Damages against petitioners with the Department of Agrarian Reform Adjudication Board, Region 1
in Urdaneta City, Pangasinan. It claimed that on June 28, 1995, petitioners entered into a Compromise
Agreement with respondent whereby the former, for and in consideration of the sum of P3,000.00 each,
voluntarily surrendered their respective landholdings. However, despite respondents repeated demands,
petitioners refused to vacate subject landholdings.
In their Answer,[8] petitioners alleged that their consent to the Compromise
Agreement was obtained through fraud, deceit, and misrepresentation. They claimed that sometime in
1995, respondent induced them to sign a Compromise Agreement by representing that the subject
landholdings are no longer viable for agricultural purposes. Petitioners alleged that respondent assured
them that they would only apply for the conversion of the land and that they would have to surrender the
land only upon the approval of said application and that thereafter, they will be paid a disturbance
compensation of P3,000.00 each. Petitioners also claimed that respondent promised to hire them to work
on the project that was planned for the converted land. But, should the application for conversion be
denied, petitioners will continue to be tenants and could later become beneficiaries under the
Comprehensive Agrarian Reform Law.
Ruling of the Regional Adjudicator
On March 9, 1999, the Regional Adjudicator rendered a decision in favor of the tenant-
farmers. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, Respondents being bonafide tenants of the

subject landholdings, the instant case is hereby DISMISSED for lack of merit.
SO ORDERED.[9]
The Regional Adjudicator held that the Compromise Agreement was not enforceable because it violated
the provisions of Administrative Order No. 12, Series of 1994.[10] Said administrative order requires the
payment of disturbance compensation which should not be less than five times the average of the annual
gross value of the harvest on their actual landholdings during the last five preceding calendar years. As
such, the disturbance compensation being offered by respondent to each of the petitioners, which
is P3,000.00 plus the income derived from a single cropping, is grossly inadequate. The Regional
Adjudicator likewise noted that respondent did not offer homelots to the petitioners as required under the
aforesaid administrative order.
Finally, the Regional Adjudicator held that since respondents application for conversion was denied, then
the purpose for the execution of the Compromise Agreement was rendered nugatory.As a consequence
of the denial of the application, the subject landholdings shall be placed under the Comprehensive Agrarian
Reform Program (CARP) compulsory coverage, as provided under the Administrative Order No. 12, Series
of 1994.
Ruling of the DARAB
Aggrieved, respondent appealed to DARAB which rendered its Decision on March 11, 2005, the
dispositive portion of which reads:
WHEREFORE, premises considered, the Appeal is DENIED and the assailed

Decision is hereby AFFIRMED.[11]
In affirming the Decision of the Regional Adjudicator, the DARAB found that respondent failed to prove
that petitioners voluntarily surrendered their tenancy rights over the subject landholdings. It held that
since the application for conversion was denied, then the Compromise Agreement is not a perfected
obligation; it is as if the petitioners voluntary surrender never existed.
Alleging that the DARAB gravely erred and committed grave abuse of discretion in dismissing its
appeal, respondent thereafter filed a Petition for Review with the CA. The CA found the appeal meritorious
and rendered its Decision in the following tenor:
WHEREFORE, in the light of the foregoing, the instant Petition is GRANTED. The
assailed decisions of the Department of Agrarian Reform Adjudication Board (DARAB)
dated March 11, 2005 and the Regional Adjudicator dated March 9, 1999 are NULLIFIED
and SET ASIDE. The petitioners Complaint for Confirmation of Voluntary Surrender and
Damages is likewise GRANTED.
The voluntary surrender of the three (3) parcels of land covered by Transfer
Certificate of Title Nos. 127892, 123800, and 83276 by the respondents in favor of the
petitioner as embodied in the Compromise Agreement is hereby CONFIRMED.
Accordingly, the respondents are ORDERED to VACATE the subject landholdings

upon payment by the petitioner to them of the amount of Three Thousand Pesos
(P3,000.00) each representing their disturbance compensation.[12]
The appellate court found the Compromise Agreement executed by the parties to be valid. It held
that its enforceability is not subject to the approval by the DARAB of the respondents application for
conversion. Likewise, the deficiency in consideration is not a ground to annul an otherwise valid and
enforceable agreement. The appellate court also found petitioners to be literate on the ground that they
were able to affix their signatures to the agreement.
Petitioners Motion for Reconsideration was denied.
Issues
In this Petition for Review on Certiorari petitioners raise the following issues:
1. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING AN INFERENCE

[THAT] THE COMPROMISE AGREEMENT IS NOT SUBJECT TO INTERPRETATION.
2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING [AN] INFERENCE

(THAT) THE PETITIONERS WHO ARE TENANTS ARE LITERATE THUS, THEY
UNDERSTOOD THE IMPORT OF THE CONTRACT THEY SIGNED.
3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING (AN) INFERENCE
(THAT) THE DEFICIENCY OF CONSIDERATION (which is not in accordance with
ADMINISTRATIVE ORDER NO. 12) DOES NOT NULLIFY THE CONTRACT.
Our Ruling
Well-settled is the rule that this Court is not a trier of facts. When supported by substantial
evidence, the findings of fact of the CA are conclusive and binding with, and are not reviewable by us
unless the case falls under any of the recognized exceptions. One of the exceptions is when the findings
of fact of the CA are contrary to those of the trial court[13] or quasi-judicial agency. In this case, the findings
of fact of the CA and the DARAB are conflicting, thus we are compelled to take a look at the factual milieu
of this case.
It is the policy of the State to promote the

Security of Tenure of Farmers over their
leasehold.
Republic Act (RA) No. 3844 (1963), otherwise known as the Agricultural Land Reform Code,
declares it to be the policy of the State to make small farmers more independent, self-reliant and
responsible citizens, and a source of genuine strength in our democratic society.[14] Towards this end, the
same law guarantees the security of tenure of farmers with respect to the land they cultivate, thus:
Section 7. Tenure of Agricultural Leasehold Relation - The agricultural leasehold

relation once established shall confer upon the agricultural lessee the right to continue
working on the landholding until such leasehold relation is extinguished. x x x
As an exception to this security of tenure, however, Section 8 of RA 3844 specifically enumerates
the grounds for the extinguishment of agricultural leasehold relations, viz:
Section 8. Extinguishment of Agricultural Leasehold Relation. The agricultural

leasehold relation established under this Code shall be extinguished by:
(1) Abandonment of the landholding without the knowledge of the agricultural

lessor;
(2) Voluntary surrender of the landholding by the agricultural lessee,

written notice of which shall be served three months in advance; or
(3) Absence of the persons under Section nine to succeed to the lessee, in the
event of death or permanent incapacity of the lessee. (Emphasis supplied)
Voluntary surrender, as a mode of extinguishment of tenancy relations, does not require any court
authorization considering that it involves the tenant's own volition.[15] To protect the tenant's right to
security of tenure, voluntary surrender, as contemplated by law, must be convincingly and sufficiently
proved by competent evidence. The tenant's intention to surrender the landholding cannot be presumed,
much less determined by mere implication. Otherwise, the right of a tenant farmer to security of tenure
becomes an illusory one.[16] Moreover, RA 3844 provides that the voluntary surrender of the landholding
by an agricultural lessee should be due to circumstances more advantageous to him and his family.[17]
The Compromise Agreement did not constitute

the voluntary surrender contemplated by law.
Respondent asserts that petitioners voluntarily surrendered their landholdings. Petitioners,

however, deny this claim and instead maintain that they did not execute the Compromise Agreement with
a view to absolutely sell and surrender their tenancy rights in exchange for P3,000.00 for each of
them. They assert that such agreement was subject to suspensive conditions, i.e., the approval of
respondents application for conversion of the land to non-agricultural and their subsequent absorption as
laborers in the business that respondent will put up on said land, or, if the application will not be approved,
petitioners will continue to be tenants of the land and could later on qualify as beneficiaries of the
CARP. Petitioners assert that they were not aware that these conditions were not incorporated in the
Compromise Agreement because they were not literate in the English language used. Neither were they
represented by counsel nor were the contents of the agreement explained to them. Petitioners thus claim
that the Compromise Agreement should be interpreted in accordance with the real intention of the parties
pursuant to Articles 1370 and 1371 of the Civil Code.[18] Petitioners likewise claim that as they were illiterate
in the English language, they could not have given their valid consent to the Compromise
Agreement. Lastly, they aver that the disturbance fee of P3,000.00 for each tenant violates Administrative
Order No. 12, Series of 2004 which provides:
In all cases of petitions for conversions resulting in the displacement of farmer-

beneficiaries, such beneficiaries shall be entitled to a disturbance compensation, which
should not be less than five (5) times the average of the annual gross value of
the harvest on their actual landholdings during the last 5 preceding calendar
years. In addition, the DAR shall exert all efforts to see to it that free homelots and
assured employment for displaced beneficiaries are provided by the applicant/developer.
Respondent, on the other hand, counters that as the Compromise Agreement does not reflect the
conditions alleged by petitioners, parol evidence should not be allowed to prove such conditions; that
petitioners cannot claim that they are illiterate in the English language and that the contents of the
agreement were not explained to them as it is incumbent upon every contracting party to learn and know
the contents of an instrument before signing and agreeing to it; and, that it was not necessary for
petitioners to be assisted by counsel in signing the agreement as the execution thereof is not akin to a
custodial investigation or criminal proceedings wherein the right to be represented by counsel is
indispensable. As to the disturbance fee, respondent believes that the sum of P3,000.00 for each tenant
is fair and sufficient because apart from said amount, petitioners were allowed to cultivate the lands for a
single cropping without any obligation to pay any lease rental in the form of palay or cotton harvest or
any other mode of payment.
As earlier stated, vital to these contentions is the resolution of the basic issue of whether or not
petitioners as tenants-farmers intended to absolutely and voluntarily surrender their tenancy rights over
the subject landholdings.
Closer to, although not identical with, the factual setting of this case is Talavera v. Court of
Appeals.[19] In said case, we found that the evidence on record and therein petitioners' arguments were
not enough to overcome the rights of the private respondent as provided in the Constitution and the
agrarian statutes. The following circumstances were considered: (1) the [K]asunduan executed by the
tenant-farmer in favor of the landowners wherein the former purportedly voluntarily relinquished his
tenancy rights for the amount of P1,000.00 was prepared by one of the landowners; (2) the tenant-farmer
continued to work on the farm from 1973 to 1984 when the landowners ejected him, or for a period of
more than 10 years after the execution of the [K]asunduan; and, (3) it was not shown why the tenant-
farmer would voluntarily give up his sole source of livelihood even if he needed money to pay off his debts
or what he did from 1973 to 1984 if the claim of the Talaveras that they worked on the land themselves
during said period was correct. Hence, we held that the [K]asunduan wherein the leasehold tenant
allegedly surrendered his tenancy rights voluntarily for the sum of P1,000.00, did not constitute voluntary
surrender as contemplated by law, and reinstated the tenant in the landholding.
On the other hand, in Levardo v. Yatco,[20] we upheld the waiver of tenancy rights and ruled that:
Based on the evidence on record, respondents paid Aguido P2,000,000.00 and

Hernando P2,417,142.00 as disturbance compensation. A reading of the Pinanumpaang
Salaysay executed by petitioners show that they gave up their leasehold rights "dahil sa
aming kagustuhang umiba ng hanap buhay ng higit ang pagkikitaan kaysa
panakahan." The money given by respondents as disturbance compensation
was indeed advantageous to the families of petitioners, as it would have
allowed them to pursue other sources of livelihood.
Petitioners did not refute in their pleadings the authenticity of the documents
purporting to be their waiver of tenancy rights. As a matter of fact, they themselves
attached the said documents to their complaints and argued that said waivers were
obtained through fraud and misrepresentation, since they were unaware that CLTs were
issued in their names. However, such argument deserves scant consideration, since it has
been established that no such CLTs were issued to petitioners; and more importantly, the
lands in dispute do not fall under the coverage of P.D. No. 27. In addition, said waivers of
tenancy rights were notarized and therefore the same have the presumption of regularity
in their favor. (Emphasis supplied)
A perusal of the subject Compromise Agreement reveals that the parties considered the amount
of P3,000.00 together with the income from a single cropping as comprising the disturbance compensation
package, viz:
4. The aforeindicated income derived from the properties and the financial
assistance of P3,000.00 shall be considered as the disturbance compensation package in
favor of the SECOND PARTY by reason or as a result of their vacating the premises in
accordance with Administrative Order No. 1, Series of 1990 of the Department of Agrarian
Reform.[21] (Emphasis supplied)
Petitioners, however, assail the disturbance compensation package provided in the Compromise
Agreement as insufficient and contrary to Administrative Order No. 12, Series of 2004. They claim that
they would not have acceded to such a measly amount were it not for the agreement that respondent
will hire them as workers on the planned project on the subject land.
Despite the above contentions of petitioners, respondent failed to present evidence to show that
the disturbance compensation package corresponds with the compensation required by the said
Administrative Order. Neither was there any showing that said disturbance compensation is not less than
five times the average annual gross value of the harvest on petitioners actual landholdings during the
preceding five calendar years.
Moreover, it was not shown why petitioners as tenant-farmers would voluntarily give up their sole
source of livelihood. There was likewise no showing that the money was indeed advantageous to
petitioners families as to allow them to pursue other sources of livelihood. To stress, tenancy relations
cannot be bargained away except for the strong reasons provided by law which must be convincingly
shown by evidence in line with the State's policy of achieving a dignified existence for the small farmers
free from pernicious institutional restraints and practices.[22]
In view of the foregoing, we find the evidence on record and respondent's arguments insufficient
to overcome the rights of petitioners as provided in the Constitution and agrarian statutes. The alleged
voluntary surrender of petitioners of their tenancy rights for the sum of P3,000.00 each could not
constitute as voluntary surrender within the contemplation of law.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA G.R. SP
No. 95154 dated July 19, 2007 and its Resolution dated October 11, 2007 are REVERSED and SET
ASIDE. The Decisions of the Regional Adjudicator dated March 9, 1999 and the Department of Agrarian
Reform Adjudication Board dated March 11, 2005, dismissing respondents Complaint for Confirmation of
Voluntary Surrender and Damages are REINSTATED and AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
CIVIL CODE OF THE PHILIPPINES, Art. 4.
[2]
Rollo, pp. 7-17; penned by Associate Justice Amelita G. Tolentino and concurred in by Associate Justices
Lucenito N. Tagle and Sixto C. Marella, Jr.
[3]
Id. at 82-87.
[4]
Id. at 90-94.
[5]
Id. at 72-73.
[6]
The following are the area, location and Transfer Certificates of Title (TCT) covering said parcels of land:
TCT No. Area Location
127892 75,815 sq. m. Batanguil, Sison, Pangasinan
123800 75,815 sq. m. Batanguil, Sison, Pangasinan
83276 34,738 sq. m. Bahonan, Pozzorubio, Pangasinan
[7]
Rollo, pp. 75-78.
[8]
Id. at 79-81.
[9]
Id. at 87.
[10]
Consolidated and Revised Rules and Regulations Governing Conversion of Agricultural Lands
to Non-Agricultural Uses.
[11]
Rollo, p. 94.
[12]
Id. at 16.
[13]
The Consolidated Bank and Trust Corp. v. Court of Appeals, 316 Phil. 246, 252 (1995) citing Massive
Construction, Inc. v. Intermediate Appellate Court, G.R. Nos. 70310-11, June 1, 1993, 223 SCRA 1,
7.
[14]
REPUBLIC ACT NO. 3844, Section 2, par (6).
[15]
Jacinto v. Court of Appeals, 176 Phil. 580, 588 (1978).
[16]
Ludo & Luym Development Corporation v. Barretto, G.R. No. 147266, September 30, 2005, 471 SCRA
390, 405; Talavera v. Court of Appeals, G.R. No. 77830, February 27, 1990, 182 SCRA 778, 782.
[17]
REPUBLIC ACT NO. 3844 provides:
Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year - The agricultural
lessee may terminate the leasehold during the agricultural year for any of the following causes:
xxxx
(5) Voluntary surrender due to circumstances more advantageous to him and his family.
[18]
Art. 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.
Art. 1371. In order to judge the intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered.
[19]
G.R. No. 77830, February 27, 1990, 182 SCRA 778.
[20]
G.R. No. 165494, March 20, 2009.
[21]
Compromise Agreement dated 28 June 1995, par. 4; rollo, p. 544.
[22]
Talavera v. Court of Appeals, supra note 19 at 784, citing Republic Act No. 3844 Section 2 [2].
SECOND DIVISION
PHILIPPINE NATIONAL BANK, G.R. No. 179161
Petitioner,
Present:
- versus - CARPIO MORALES,*
ABAD,
DEL CASTILLO, and
PEREZ, JJ.
DKS INTERNATIONAL, INC.
and MICHAEL DY, Promulgated:
Respondents. January 22, 2010
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:

Considering that the sub-lessee which was ordered by the court to surrender possession of the
disputed property in a case for forcible entry no longer possessed the same, having already surrendered
possession thereof to the lessor and not to the prevailing party which is the lessee, the Regional Trial
Court (RTC) recalled the Writ of Execution with Break Open it earlier issued.The question which now
confronts this Court is: Was the recall proper?
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the
Decision[1] dated March 16, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 88098 which denied
petitioners Petition for Certiorari[2] as well as the Resolution[3] dated August 6, 2007 which likewise denied
its Motion for Reconsideration thereto.
Factual Antecedents
On June 9, 1978, the Philippine Government (through the now defunct Department of General
Services) and petitioner Philippine National Bank (PNB) entered into a Contract of Lease[4] where the
former leased in favor of the latter its 21,727-square meter land located at Numancia St.,
Binondo, Manila. The contract was effective from August 1, 1978 to July 31, 2003and renewable for a
similar period upon agreement of the parties. It also stipulated that except for its subsidiary corporations,
petitioner shall not directly or indirectly sublease, assign or encumber its leasehold rights in whole or in
part on the leased area to any person or corporation without the prior written approval of the
government.[5]
On October 12, 2000, respondent DKS International Inc. (DKS) applied for the sublease of a
9,500-square meter portion of the aforesaid property with petitioner. In a letter[6] dated February 1, 2001,
petitioner informed Mr. Andres S. Dy (Dy) of DKS that petitioners Executive Committee had already
approved the amendments on the terms and conditions of the sublease.In another letter[7] dated March
5, 2001, petitioner advised Dy that it was ready to turn over possession of said property and required him
to remit not later than March 15, 2001 the amount of P400,000.00 representing two months security
deposit. However, the Land Management Bureau (LMB)[8] denied on August 31, 2001 and December 5,
2001 petitioners request to sublease said portion of the property to DKS.[9] Hence, the sublease was not
implemented.
Prior to DKS application for sublease, petitioner signified its intention to renew the lease for
another 25 years through a letter dated August 24, 2000 to the LMB as the original lease was about to
expire. In a Memorandum dated May 6, 2002, then Secretary Heherson Alvarez (Sec. Alvarez) of the
Department of Environment and Natural Resources (DENR) approved the recommendation of the LMB to
renew the contract of lease for another 25 years effective August 1, 2003 or until August 1, 2028 with
several conditions on the sublease, among which were: (1) that petitioner shall sublease the 9,500-square
meter area in favor of DKS for the same period of 25 years and, (2) that DKS shall start its development
of the portion of the property within two years from May 6, 2002 and complete its development as
proposed within seven years.[10]
On August 6, 2002, however, Sec. Alvarez ordered the recall of his May 6, 2002 Memorandum
until such time that the terms and conditions of the lease and the capability of the sub-lessees are re-
evaluated and approved.[11]
Petitioner alleged that during the period recited above, it was in continuous and peaceful
possession of the property including the subject 9,500-square meter portion which it operated as a car
park until DKS, through force, intimidation, stealth and threat, forcibly and unlawfully took over possession
on October 9, 2002.
According to petitioner, Dy and two men in civilian clothes arrived at the car park at around 6:30
p.m. on October 9, 2002. When the three requested the security guard on duty to let them enter the
premises, the latter initially refused but was eventually prevailed upon. Dy thereafter instructed the two
men to wear their complete security guard uniform and start their tour of duty in the area. The two, thus,
respectively positioned themselves inside and outside the gate of the area and prevented the paying car
park tenants from entering the premises. Two days later, 12 more security personnel from the Frontliner
Security Agency arrived. The following day, the Operations Officer of Frontliner Security Agency posted at
the car parks main gate a notice which read, This place is operated by DKS, No trespassing. From then
on, DKS had possession and control of the car park in violation of petitioners right as lessee of said
premises.[12]
Hence, petitioner filed a case for forcible entry against DKS and Dy docketed as Civil Case No.
174024 which was raffled to the Metropolitan Trial Court (MeTC) of Manila, Branch 27.[13]
While said case was pending, the DENR came up with a Final Endorsement[14] signed by Sec.
Alvarez on November 29, 2002, informing petitioners president, Lorenzo V. Tan, of the DENRs approval
of petitioners request for renewal of the lease contract. In said endorsement, the DENR endorsed three
sub-lessees excluding DKS.
Finding in favor of petitioner, the MeTC rendered its Decision[15] dated August 20, 2003 in this
wise:
WHEREFORE, judgment is hereby rendered ordering defendants DKS

International, Inc., Michael Dy and all persons claiming rights and interest under them:
1. To vacate the property covering 9,500 square meters located at Numancia

Street, Binondo, Manila, specifically designated as Lot No. 1, Block 1862 of the Manila
Cadastre No. 13 and peacefully surrender possession thereof to plaintiff PNB;
2. To pay plaintiff PNB reasonable compensation in the amount of P200,000.00
per month starting October 2002, until completely vacated and fully surrendered;
3. To pay attorneys fees fixed in the reasonable amount of P10,000.00; and,
4. To pay the costs of the suit.

SO ORDERED.[16]
Upon motion[17] of petitioner, the MeTC issued a Writ of Execution[18] dated October 3, 2003 which,
however, was not implemented because of the timely appeal of respondents to the RTC.
On March 10, 2004, the RTC-Manila, Branch 40 rendered its Decision[19] affirming the Decision of
the MeTC and ordering the issuance of a writ of execution with break open order, viz:
WHEREFORE, the Decision, dated August 20, 2003, is AFFIRMED. Let the writ of
execution be issued without prejudice to an appeal that may be taken by defendants-
appellants. Likewise, let a break open order be issued authorizing this Courts Sheriff to
break open the gate or any other facility for the ingress [to] and/or egress [from] of the
subject premises and to employ all necessary means to carry out the writ of
execution. The Branch Sheriff is authorized to secure the assistance and/or to deputize
the Philippine National Police (PNP) in order to ensure effective enforcement of the Writ
of Execution.
SO ORDERED.[20]
Accordingly, a Writ of Execution with Break Open Order was issued on March 29, 2004.[21]
On March 30, 2004, respondents appealed to the CA by way of Petition for Review which
was docketed as CA-G.R. SP No. 83129.
Meanwhile, before the Writ of Execution with Break Open Order could be implemented,
respondents filed before the RTC an Urgent Motion to Recall Writ and the Command to Sheriff With
Comment[22] alleging that during the previous hearings of the case, they have proven that petitioner filed
a Complaint for Injunction with prayer for the issuance of a Temporary Restraining Order/Writ of
Preliminary Injunction and Damages[23] against the government, docketed as Civil Case No. 03-0368-CFM
and raffled to Branch 118 of RTC-Pasay City (Pasay case). Apparently, the Final Endorsement approving
petitioners request for renewal of lease contract earlier issued by Sec. Alvarez was withdrawn by his
successor, Sec. Elisea G. Gozun (Sec. Gozun), on grounds that same was contrary to law and public policy
and that the issuance thereof was without factual and legal bases.[24] In view of said withdrawal, a
repossession and take-over team was created by virtue of LMB Special Order No. 2003-91.[25] In a
Memorandum dated May 27, 2003, Sec. Gozun directed the LMB to immediately repossess and take over
the subject property upon the expiration of the lease on July 31, 2003 thus, prompting petitioner to file
the Pasay case. Unfortunately for petitioner, its application for TRO was denied by said court.[26]
Respondents further alleged that when the RTC Pasays denial of the TRO was affirmed by the CA
in its Decision[27] dated October 30, 2003 in a petition for certiorari docketed as CA-G.R. SP No. 78980,
the government had taken over the premises by August 31, 2003. Thus, respondents manifested that
they cannot anymore surrender possession of the premises to petitioner as they are no longer in
possession thereof.
The government, through the LMB, also filed an Urgent Motion for Leave to Intervene on the
Incident Involving the Enforcement of the Writ of Execution and to Treat this Motion as The
Intervention.[28] It manifested therein that although it has nothing to do with the ejectment case, it
vehemently objects to the notice of the sheriff, particularly on the matter of surrendering possession of
the premises to petitioner. It pointed out that since the government was already in possession of the
premises following petitioners loss of any right of possession therein, it will be an abuse of discretion on
the part of the court to order that the property be taken from the government and to have the same
delivered to petitioner, under the guise of enforcing a writ of execution in the ejectment case. LMB likewise
sought permission to intervene in the incident involving the enforcement of the writ.
To these two motions, petitioner filed an Opposition with Manifestation[29] asserting that the two
motions are both pro forma, patently unmeritorious and serve no other purpose but to unduly delay the
implementation of the Writ of Execution and therefore, should be denied.
The RTC did not find merit in LMBs prayer to intervene in the issue of the implementation of the
writ. In its Order[30] dated July 14, 2004, it held that (1) the governments intervention will unduly delay
the mandated immediate execution of the decision in the ejectment case to the prejudice of petitioner;
(2) the governments rights may still be fully protected in a separate proceeding (particularly in the Pasay
case); and, (3) the intervention preempts the decision in the Pasay case. The RTC also did not give
credence to the claim of LMB that the government was already in possession of the property subject of
the writ of execution saying that same was a mere general claim. Said court, thus, accordingly denied the
two motions for lack of merit and again ordered the Branch Sheriff of the MeTC to immediately implement
the Writ of Execution with Break Open Order it earlier issued.
Upon motion for reconsideration of the government however, the RTC recalled the Writ of
Execution with Break Open Order. It considered the Sheriffs Partial Return dated May 5, 2004 signed by
the Deputy Sheriff of MeTC-Manila, Br. 27, which reads:
This is to certify that on May 5, 2004 at around 10:50 in the morning, after the
lapse of (the) five (5)-day period given by the undersigned to the Defendants to voluntarily
vacate the place which they failed to do so, the undersigned, together with the
representative of the Philippine National Bank, assisted by police officers, went back [to]
the premises in question at Numancia St., Binondo, Manila to implement the Writ of
Execution with a Break Open Order issued by Hon. Placido C. Marquez. Thereat, Mr.
Matusalem Ruperto, Commander of Sphinx Security Investigation and Detective Services
informed us that DKS has already turned over the premises to Land Management
Bureau. Mr. Matusalem Ruperto further informed the undersigned that Judge Marquez
issued an order [preventing us] from implementing the Writ. Our attention was caught
by the phrase posted in the premises that the same is government property. And upon
further inquiry, said property is already guarded by Sphinx Security Investigation and
Detective Services.[31]
Thus, the RTC issued the Order dated July 29, 2004,[32] the pertinent portions of which read:
Considering that Land Management Bureau is now in physical possession of the

subject property and not defendants-appellants DKS International Inc. and Michael Dy, it
would be a blunt error for this Court to order the transfer of the physical possession of
the government which is admittedly the owner of the subject property to plaintiff-appellee
Philippine National Bank. The [W]rit of [E]xecution with [B]reak [O]pen [Order] dated
March 29, 2001 issued by this Court can no longer be implemented and the same must
be recalled. The Sheriff is ordered to desist from implementing the same. This renders
movant Republics reply (to plaintiff-appellees opposition with manifestation dated April
30, 2004) dated June 1, 2004, with attached verification and certificate against forum
shopping, with prayer that LMBS urgent motion for leave to intervene etc., dated April 28,
2004 and related pleadings moot and academic.
On the question of damages or monetary judgment referred to in the Writ of

Execution with [B]reak [O]pen [Order], dated March 29, 2004, plaintiff-appellee and
defendants-appellants, thru counsel, agreed that same should be left [for resolution to]
the Honorable Court of Appeals which has taken jurisdiction over the same.
WHEREFORE, in view of the foregoing, the Writ of Execution with [B]reak [O]pen
[Order], dated March 29, 2004, is recalled and the Deputy Sheriff of the Metropolitan Trial
Court of Manila, Br. 27, is directed to desist from implementing the same. The question
of damages or monetary judgment earlier referred to in this Order is left for resolution by
the Honorable Court of Appeals. Consistent with this Order, movant Republics reply (to
plaintiff-appellees opposition with manifestation dated April 30, 2004) dated June 1, 2004,
and related pleadings, are now moot and academic.
SO ORDERED.
Expectedly, petitioner filed a motion for reconsideration[33] of said Order but

said motion was denied in an Order dated October 18, 2004.[34]
Hence, petitioner filed a Petition for Certiorari before the CA docketed as CA-G.R. SP No. 88098
imputing grave abuse of discretion amounting to lack of or in excess of jurisdiction on the part of the RTC
in recalling the writ of execution with break open order.
In the meantime, the CA rendered its Decision[35] in CA-G.R. SP No. 83129 on June 28,
2005 denying the petition and affirming in toto the Decision of the RTC in the forcible entry case. In said
Decision, the CA declared that the issue of the expiration of the lease and the take over of the property
by the government will not prevent the execution of the decision pending appeal, it being a basic rule that
decisions against the defendants in ejectment cases are immediately executory.[36] Respondents
appeal[37] from said Decision was denied by this Court in a Resolution dated December 12, 2005 and same
has attained finality on March 23, 2006.[38]
On March 16, 2007, the CA promulgated its Decision[39] in CA-G.R. SP No. 88098 denying the
petition for lack of merit. It ruled that the RTC committed no grave abuse of discretion amounting to lack
of or in excess of jurisdiction when it recalled the writ of execution with break open order. It held that the
expiration of the lease contract between petitioner and the government and the latters take-over and/or
repossession of the premises from respondents were supervening events.
Petitioner filed a Motion for Reconsideration but it was denied through a Resolution dated August
6, 2007.
Issues
In this Petition for Review on Certiorari, petitioner raises the following issues:
THE COURT OF APPEALS RENDERED ITS ASSAILED DECISION DATED MARCH 16,
2007 AND RESOLUTION DATED AUGUST 6, 2007 NOT IN ACCORD WITH LAW OR
APPLICABLE JURISPRUDENCE, MORE SPECIFICALLY:
(i) In passing upon an issue not submitted to it for resolution;
(ii) In declaring that petitioner PNB has no right of possession over

the subject property;
(iii) In disregarding the uncontroverted findings of facts and the

unassailed Decision of the Metropolitan Trial Court of Manila, Branch 27 in Civil
Case No. 174024-CV, which was later affirmed by the Regional Trial Court of
Manila, Branch 40 in Civil Case No. 03-108416; and
(iv) In allowing the stay of the execution and recall of the break open
order even in the absence of the required supersedeas bond.[40]
In its assailed Decision, the CA made the following pronouncement:
It is undisputed that the property in dispute is owned by the Republic of

the Philippines and that PNBs lease having expired on 31 July 2003, there being no
renewal of the lease, the latter has no right of possession over the subject property. As
such, the right of possession of the subject property belongs to the Republic of
the Philippines, acting through the DENR and the LMB.[41]
By the above-quoted portion of the CA Decision, petitioner claims that said court sweepingly ruled
on the issue of ownership and on the basis thereof granted possession of the disputed property to the
government. Petitioner contends that as the petition is an offshoot of a forcible entry case, the CA should
not have discussed the issue of ownership, because the only question that courts must resolve in
ejectment proceedings is who is entitled to the physical possession of the premises. Petitioner further
imputes error on the part of the CA when it passed upon the issue of the expiration of the lease contract,
which petitioner claims to be irrelevant to this case and is already subject of a full-blown trial in RTC-Pasay.
On the other hand, respondents posit that the CA must necessarily take notice of the facts that
the government is the owner of the subject property, that it is now in possession of the same and that
the lease contract between the government and the petitioner has already expired, since these same facts
constitute the supervening events which rendered the writ of execution with break open moot and
academic.
Our Ruling
It is well to remind petitioner that the sole issue raised before the CA in CA-G.R. SP No. 88098, is
whether or not the RTC gravely abused its discretion amounting to lack of or in excess of jurisdiction when
it recalled the writ of execution with break open order.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction.[42] The abuse of discretion must be grave as where the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and
gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by
or to act at all in contemplation of law.[43] Grave abuse of discretion refers not merely to palpable errors
of jurisdiction or to violations of the Constitution, the law and jurisprudence.[44] It refers also to cases in
which, for various reasons, there has been gross misapprehension of facts.[45]
We find that the CA correctly took notice of the governments take-over and repossession of the
subject property, as these are the very same facts which the RTC considered to be the reasons why the
writ of execution with break open order it earlier issued cannot anymore be implemented. Without
discussing these issues, the CA would not be able to make a determination whether the recall of the writ
of execution was proper under the circumstances. Such an assessment is imperative because the
resolution of the issue of whether or not the RTC committed grave abuse of discretion hinges on it.
However, we deem it proper to pronounce to be without binding effect the pronouncement of the
CA that there was no renewal of the lease contract between the government and petitioner. The authority
of the CA was confined only to ruling upon the issue of whether or not the RTC committed grave abuse
of discretion in issuing the order recalling the writ of execution. The determination of whether there was
a renewal or non-renewal of the contract of lease between petitioner and the government is beyond the
competence of the CA to pass upon, since it is already the subject of litigation in the Pasay case. In fact,
petitioner, in its Reply,[46] alleges that a Decision has already been rendered in the Pasay case on August
29, 2008 wherein it was held that the Contract of Lease between petitioner and the government has been
validly and effectively renewed on July 31, 2003 for another period of 25 years. Thus, to avoid any
confusion on the matter, we should defer to the decision of the RTC in the Pasay case with respect to the
issue of the renewal of the contract of lease between the government and herein petitioner, without
prejudice to the outcome of any appeal in relation to said case.
This, notwithstanding a review of the record, nevertheless shows that the CA was correct in holding that
the RTC did not commit grave abuse of discretion or act in excess of its jurisdiction in issuing the order
which recalled the writ of execution with break open order.
By virtue of the Decisions of the MeTC and the RTC which both ruled in favor of petitioner in the
subject forcible entry case, petitioner was indeed, as a matter of right, entitled to a writ of execution
pursuant to Sec. 21, Rule 70 of the Rules of Court.[47] Thus, the RTC ordered the issuance of a writ of
execution with break open in the dispositive portion of its March 10, 2004 Decision. But before said writ
could be implemented, inescapable material facts and circumstances were brought to the attention of the
RTC. The respondents had already surrendered possession of the subject premises to the
government. Clearly, the portion of the Decision ordering respondents to vacate the subject property and
peacefully surrender possession thereof to petitioner has become impossible to implement. For how can
respondents surrender possession of the premises when they were no longer in possession? And, as
correctly observed by the RTC, it would be a misstep if the government which is admittedly the owner of
the subject property and which was not a party to the ejectment case, would be ordered to vacate the
same in order that possession thereof may be delivered to petitioner. We thus hold that under these
circumstances, the recall of the writ of execution with break open order was warranted.
It is well to emphasize for purposes of clarity, however, that the portion of the Decision that has
become impossible to implement is only that portion respecting the order to vacate and surrender
possession of the property. Conversely, the portions which provide for the payment of reasonable
compensation and attorneys fees in favor of petitioner remain enforceable. We note that this was
perceived by the parties themselves but they nevertheless agreed that the issue on the monetary award
be left to the discretion of the CA as shown by the following portions of the RTCs July 29, 2004 Order:
On the question of damages or monetary judgment referred to in the

Writ of Execution with break open, dated March 29, 2004, plaintiff-appellee
and defendants-appellants, thru counsel, agreed that same should be left [for
resolution to] the Honorable Court of Appeals which has taken jurisdiction
over the same.
WHEREFORE, in view of the foregoing, the Writ of Execution with [B]reak [O]pen
[Order], dated March 29, 2004, is recalled and the Deputy Sheriff of the Metropolitan Trial
Court of Manila, Br. 27, is directed to desist from implementing the same. The question
of damages or monetary judgment earlier referred to in this Order is left for
resolution [to] the Honorable Court of Appeals. Consistent with this Order, movant
Republics reply (to plaintiff-appellees opposition with manifestation dated April 30, 2004)
dated June 1, 2004, and related pleadings, are now moot and academic.
And, in view of the finality of the Decision of the CA in CA-G.R. SP No. 83129 which as earlier stated,
affirmed the Decision of the RTC, it is now up to petitioner to seek the execution of the portion of the
Decision respecting the monetary awards in the main case, if same has not yet been enforced.
Petitioner next contends that the writ of execution with break open order was abruptly recalled without
respondents complying with the mandatory requirements of Sec. 19, Rule 70 of the Rules of
Court. Petitioner stresses that in order to stay the immediate execution of a judgment in an ejectment
case while an appeal is pending, the defendant must perfect his appeal, file a supersedeas bond and
periodically deposit the rentals which became due during the pendency of the appeal. But despite the
failure of respondents to post the required supersedeas bond, the CA still affirmed the recall of the issuance
of the writ of execution with break open order.
Petitioners contention fails to persuade us. Sec. 19, Rule 70 of the Rules of Court is not applicable in
this case. In Uy v. Santiago,[48] we held that it is only the execution of the MeTC or Municipal Trial Courts
judgment pending appeal with the RTC which may be stayed by compliance with the requisites provided
in Section 19, Rule 70 of the Rules of Court. This can be deduced from the wordings of the subject
provision, to wit:
Section 19. Immediate execution of judgment; how to stay same.- If

judgment is rendered against the defendant, execution shall issue immediately upon
motion, unless an appeal has been perfected and the defendant to stay execution
files a sufficient supersedeas bond, approved by the Municipal Trial Court and
executed in favor of the plaintiff to pay the rents, damages, and costs accruing down
to the time of the judgment appealed from, and unless, during the pendency of the
appeal, he deposits with the appellate court the amount of rent due from time to time
under the contract, if any, as determined by the judgment of the Municipal Trial Court.
In the absence of a contract, he shall deposit with the Regional Trial Court the
reasonable value of the use and occupation of the premises for the preceding month
or period at the rate determined by the judgment of the lower court on or before the
tenth day of each succeeding month or period. The supersedeas bond shall be
transmitted by the Municipal Trial Court, with the other papers, to the clerk
of the Regional Trial Court to which the action is appealed.
All amounts so paid to the appellate court shall be deposited with said court
or authorized government depositary bank, and shall be held there until the final
disposition of the appeal, unless the court, by agreement of the interested parties, or
in the absence of reasonable grounds of opposition to a motion to withdraw, or for
justifiable reasons, shall decree otherwise. Should the defendant fail to make the
payments above prescribed from time to time during the pendency of the appeal, the
appellate court, upon motion of the plaintiff, and upon proof of such failure, shall
order the execution of the judgment appealed from with respect to the restoration of
possession, but such execution shall not be a bar to the appeal taking its course until
the final disposition thereof on the merits.
After the case is decided by the Regional Trial Court, any money paid to the Court
by the defendant for purposes of the stay of execution shall be disposed of in accordance
with the provisions of the judgment of the Regional Trial Court. In any case wherein it
appears that the defendant has been deprived of the lawful possession of land or building
pending the appeal by virtue of the execution of the judgment of the Municipal Trial Court,
damages for such deprivation of possession and restoration of possession may be allowed
the defendant in the judgment of the Regional Trial Court disposing of the appeal.
This is not the situation here. Respondents are not staying the execution of the judgment of the MeTC
pending appeal to the RTC as the latter court, in fact, had already rendered its judgment on the
appeal. Clearly, the above-quoted provision does not find any application in the present petition.
Petitioner likewise faults the CA in giving full credence to the Sheriffs Partial Return dated May 5,
2004 stating that respondent DKS had already turned over possession of subject premises to the
government. Suffice it to state, though, that this matter is factual in nature and is beyond the scope of a
petition for review on certiorari. The resolution of factual issues is the function of lower courts, whose
findings on these matters are received with respect and considered binding by the Supreme Court subject
only to certain exceptions, none of which is present in this instant petition.[49] This is especially true when
the findings of the RTC have been affirmed by the CA as in this case.
Lastly, petitioner prays in the alternative that respondents be ordered to pay the monetary award as
contained in the RTC decision. We cannot, however, grant such relief as again, this is beyond our
competence in this petition. To reiterate, we are only confined here to reviewing errors of law allegedly
committed by the CA in its assailed Decision. Such relief should have been sought in the appeal from the
main case.
WHEREFORE, the petition is DENIED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
CONCHITA CARPIO MORALES ROBERTO A. ABAD
JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
In lieu of Justice Arturo D. Brion per Raffle dated January 11, 2010.
[1]
CA rollo, pp. 303-316; penned by Associate Justice Celia C. Librea-Leagogo and concurred in by
Associate Justices Portia Alio-Hormachuelos and Regalado E. Maambong.
[2]
Id. at 2-16.
[3]
Rollo, pp. 10-11.
[4]
[5]
Id. at 14.
[6]
Id. at 17 & 47.
[7]
Id. at 18.
[8]
Now the agency responsible for administering, surveying, managing, disposing alienable and disposable
lands and other government lands not placed under the jurisdiction of other government agencies,
and is a staff sectoral bureau of the Department of Environment and Natural Resources.
[9]
[10]
Id. at 19.
[11]
Id. at 21.
[12]
Id. at 2-11.
[13]
Id.
[14]
Rollo, pp. 152-174.
[15]
Records, Vol. I, pp. 184-196; penned by Judge Ma. Theresa Dolores C. Gomez-Estoesta.
[16]
Id. at 195-196.
[17]
Id. at 197-201.
[18]
Id. at 253-255.
[19]
Id. at 402-410; penned by Judge Placido C. Marquez.
[20]
Id. at 409-410.
[21]
Id. at 445-446.
[22]
[23]
[24]
Id. at 216-217.
[25]
Id. at 220.
[26]
Id. at 240-241; Order dated August 28, 2003 issued by RTC-Pasay, Br. 118.
[27]
Penned by Justice Arturo D. Brion (now a member of this Court) and concurred in by Justices Josefina
Guevara-Salonga and Amelita G. Tolentino, id. at 453-468.
[28]
Id. at 476-480.
[29]
Id. at 496-505.
[30]
Id. at 653-659.
[31]
Id. at 699.
[32]
Rollo, pp. 108-109.
[33]
[34]
[35]
Penned by Justice Josefina Guevara-Salonga and concurred in by Justices Ruben T. Reyes (now retired
member of this Court) and Fernanda Lampas Peralta, id. at 389-402.
[36]
Id. at 302-315.
[37]
Docketed as G.R. No. 169948.
[38]
[39]
[40]
Rollo, p. 43.
[41]
CA rollo, p. 312.
[42]
Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation, G.R. No. 152228,
September 23, 2005, 470 SCRA 650, 661.
[43]
Id.
[44]
Presidential Commission on Good Government v. Hon. Desierto, 445 Phil. 154, 175 (2003).
[45]
Id.
[46]
Rollo, pp. 143-150.
[47]
Immediate execution on appeal to the Court of Appeals or Supreme Court. The judgment of the
Regional Trial Court against the defendant shall be immediately executory, without prejudice to a
further appeal that may be taken therefrom.
[48]
391 Phil. 575, 580 (2000).
[49]
Bunyi and Bunyi v. Factor, G.R. No. 172547, June 30, 2009.

Supreme Court
Manila
SECOND DIVISION
LUMINZA DELOS REYES, A.M. No. RTJ-08-2152

Complainant, (Formerly A.M. OCA IPI No. 08-2846-RTJ)
Present:
- versus -
DE CASTRO,*
JUDGE DANILO S. CRUZ and BRION,
and CLERK OF COURT V DEL CASTILLO, and
GODOLFO R. GUNDRAN, ABAD, JJ.
of the Regional Trial Court,
Branch 152, Pasig City, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Courts exist to administer justice fairly and without delay. Our overriding concern is to eradicate the
impression formed in the minds of the litigants that the wheels of justice grind ever so slowly. We have
always reminded the judges to dispose of the cases within the prescribed period of time because we do
not want the truism - justice delayed is justice denied - to lose its meaning or relevance. In the same
context, we have constantly exhorted all court employees to be conscientious of their duties and
responsibilities considering that any indiscretion or transgression on their part would impact negatively on
the Court as an institution.
The instant administrative case stemmed from a letter-complaint filed by complainant Luminza Delos
Reyes (Delos Reyes) against respondents Judge Danilo S. Cruz (Judge Cruz) and Clerk of Court V Godolfo
R. Gundran (Clerk of Court Gundran), both of the Regional Trial Court of Pasig City, Branch 152, for
dereliction of duty. Specifically, Judge Cruz is charged with delay in the disposition of LRC Case No. R-
5740[1] while Clerk of Court Gundran is charged with failure to timely transmit the records of said case.
In her letter-complaint dated March 13, 2008, complainant alleged that she is the defendant in LRC Case
No. R-5740 pending before Branch 152 of the Regional Trial Court of Pasig City. She claimed that
on March 25, 2004, Judge Cruz issued an Order giving the parties 15 days within which to file their
respective memorandum after which the case would be deemed submitted for decision. The parties
complied; hence, on April 9, 2004 the case was deemed submitted for decision.
However, it was only on July 30, 2007, or more than three years since the case was submitted for
resolution, that a decision in the said case was rendered. Consequently, complainant argued that Judge
Cruz incurred delay in disposing the case thus should be held administratively liable therefor.
Complainant also alleged that after receipt of the adverse decision, she timely filed on September 6,
2007 a notice of appeal and paid the corresponding appeal and docket fees. However, despite the lapse
of more than six months from the time the appeal was filed, respondent Clerk of Court Gundran still failed
to transmit the records to the appellate court in violation of Section 10, Rule 41 of the Rules of Court.
On April 11, 2008, then Court Administrator Zenaida N. Elepao required Judge Cruz and Clerk of Court
Gundran to file their respective comment on the complaint. Both respondents complied.
In his Comment, Judge Cruz did not deny that he incurred delay in the disposition of LRC Case No. R-
5740. Instead, he begged the indulgence of the Court and claimed that he was indisposed since the latter
part of 2004. He narrated that in January 2005, he was diagnosed of diabetes; on November 3, 2005, the
cataract on his left eye was removed while that on his right eye was extracted on April 4, 2006; and
on October 26-28, 2007, he was hospitalized due to heart complications. Judge Cruz also explained that
the delay was partly due to heavy pressure of work.
On the other hand, Clerk of Court Gundran denied being remiss in his duties. He claimed that in October
2007, he already instructed the clerk-in-charge to complete the records of the case and to prepare the
transmittal letter. Apparently, the clerk-in-charge encountered some difficulty in completing the
records. He signed the transmittal letter on February 28, 2008 only to discover that Judge Cruz has not
yet issued an order giving due course to the appeal. The records were eventually transmitted on March
28, 2008, or on the same day the order giving due course to the appeal was issued by Judge Cruz. Clerk
of Court Gundran also claimed that he found it difficult to personally examine if the records have been
completed and transmitted on time due to the heavy court docket and the numerous reports that needed
to be prepared and submitted. Finally, he insisted that there was no deliberate intention to delay the
transmittal of the records or to cause damage to the complainant.
In its Report and Recommendation dated October 13, 2008, the Office of the Court Administrator stated
that:
EVALUATION: Evidently, there were two delays incurred in this case. First is the delay in
deciding the subject case and the second is the delay in the transmittal of the record of
the case to the Court of Appeals.
The delay in deciding the case is attributable solely to Judge Cruz. While we do not
condone such delay, we are inclined to consider in the instant matter his physical condition
the deterioration of which is supported by several medical certificates and hospital
records. He even availed of the Health and Welfare Plan of the Supreme Court.
The case of respondent Gundran, should, however, be treated differently. As Branch
Clerk, it is his duty to verify the completeness of the records that will be transmitted to
the appellate court within thirty (30) days after perfection of the appeal. He cannot
transfer the blame to his staff. Had he followed up his verbal instruction, if there was any,
he would not have incurred the delay.
xxxx
RECOMMENDATION: Respectfully submitted for the consideration of the Honorable Court

are our recommendations that:
1. this case be RE-DOCKETED as a regular administrative

matter;
2. the charges against Judge Danilo S. Cruz be DISMISSED with

WARNING however that he should be cautious in observing periods for
rendition of judgment; and
3. respondent Clerk of Court Godofredo Gundran be

SUSPENDED for one (1) month and one (1) day for simple neglect of duty.
We find both respondents to be remiss in their duties.
As regards Judge Cruz, we find him grossly inefficient in failing to decide LRC Case No. R-5740
within 90 days from the time it was submitted for decision. He should be mindful that failure to resolve
cases submitted for decision within the period fixed by law constitutes a serious violation of the
constitutional right of the parties to the speedy disposition of their cases.[2]Article VIII, Section 15(1) of
the Constitution succinctly provides that:
SEC. 15. (1) All cases or matters filed after the effectivity of this Constitution must
be decided or resolved within twenty-four months from date of submission for the
Supreme Court, and, unless reduced by the Supreme Court, twelve months for all lower
collegiate courts, and three months for all other lower courts.
As such, lower courts are given a period of 90 days only within which to decide or resolve a case
from the time it is submitted for decision.[3] In this case, it is undisputed that LRC Case No. R-5740 was
submitted for decision on April 9, 2004 but the decision was rendered only on July 30, 2007 or more than
three years beyond the 90-day reglementary period.
The reasons proffered by Judge Cruz for incurring delay in deciding the case within the prescribed
period fail to persuade us. He claims that his illness primarily caused the delay in the disposition. However,
it has not escaped our attention that the case was submitted for decision as early as April 2004 while
Judge Cruz claimed to be indisposed only towards the end of 2004.There was also no showing that
respondent judge was constantly ill from the time the case was submitted for resolution in April 2004 until
the promulgation of the judgment in July 2007. He did not present any proof to show that he was absent
from work for a prolonged period of time. Moreover, removal of cataract from both eyes does not entail
prolonged confinement. In fact, Judge Cruz claimed that he was admitted to the hospital only on October
26-28, 2007. At any rate, this confinement occurred long after the rendition of the judgment in LRC Case
No. R-5740.
Besides, granting that his illness hindered the efficient performance of his functions, all respondent
judge had to do was to request for an extension of time within which to decide the case. Judge Cruz,
however, made no such request. In a similar case,[4] we held that:
Indeed, Judge Ubiadas illness could have adversely affected the performance of
his duties. Despite having just been subjected to a triple by-pass operation, he knew fully
well that he still had to act as the judge of four (4) RTC branches for two (2) months. If
his illness had indeed seriously hampered him in the discharge of his duties, Judge
Ubiadas could have requested this Court for additional time to decide/resolve pending
cases and incidents. His illness cannot be an excuse for his failure to render decisions or
resolutions within the constitutionally prescribed period, considering that he could have
requested an extension or other relief from this Court but he did not. It is incumbent upon
him to dispose the cases assigned to him without undue delay.
This Court has incessantly admonished members of the bench to administer

justice without undue delay, for justice delayed is justice denied. The present clogged
dockets in all levels of our judicial system cannot be cleared unless every magistrate
earnestly, painstakingly and faithfully complies with the mandate of the law. Undue delay
in the disposition of cases amounts to a denial of justice which, in turn, brings the courts
into disrepute and ultimately erodes the faith and confidence of the public in the
judiciary.[5]
We also find unacceptable Judge Cruzs justification that the delay was partly due to heavy
pressure of work. Precisely, a judge is mandated to resolve cases with dispatch. Section 5, Canon 6 of the
New Code of Judicial Conduct[6] categorically exhorts all judges to perform all judicial duties, including the
delivery of reserved decisions, efficiently, fairly and with reasonable promptness. In Report on the Judicial
Audit Conducted in the MTCC, Branch 2, Cagayan de Oro City,[7] we declared that:
We are not unmindful of the burden of heavy caseloads heaped on the shoulders
of every trial judge. But that cannot excuse them from doing their mandated duty to
resolve cases with diligence and dispatch. Judges burdened with heavy caseloads should
request the Court for an extension of the reglementary period within which to decide their
cases if they think they cannot comply with their judicial duty.Hence, under the
circumstances, all that said judge needed to do was request for an extension of time since
this Court has, almost invariably, been considerate with regard to such requests. x x x A
heavy caseload may excuse a judges failure to decide cases within the reglementary
period but not their failure to request an extension of time within which to decide the case
on time.
We have always extended a sympathetic attitude towards judges. In fact, in recent years, we
have exerted efforts towards improving their condition. In return, we expect them to likewise exert efforts
towards improving the image of the judiciary. It must be emphasized that the honor and integrity of the
judicial system is measured not only by the fairness and correctness of decisions rendered, but also by
the expediency with which disputes are resolved.[8] At this juncture, we remind respondent judge that:
Delay in the disposition of cases not only deprives litigants of their right to speedy
disposition of their cases, but also tarnishes the image of the judiciary. Procrastination
among members of the judiciary in rendering decisions and taking appropriate actions on
the cases before them not only causes great injustice to the parties involved but also
invites suspicion of ulterior motives on the part of the judge, in addition to the fact that it
erodes the faith and confidence of our people in the judiciary, lowers its standards and
brings it into disrepute.[9]
As regards respondent Clerk of Court Gundran, we find him guilty of simple neglect of duty for
failure to timely transmit the records of LRC Case No. R-5740. Section 10, Rule 41 of the Rules of Court
provides that:
SEC. 10. Duty of clerk of court of the lower court upon perfection of appeal. Within
thirty (30) days after perfection of all the appeals in accordance with the preceding
section, it shall be the duty of the clerk of court of the lower court:
(a) To verify the correctness of the original records or the record on appeal, as
the case may be, and to make a certification of its correctness;
(b) To verify the completeness of the records that will be transmitted to the
appellate court;
(c) If found to be incomplete, to take such measures as may be required to

complete the records, availing of the authority that he or the court may exercise for this
purpose; and
(d) To transmit the records to the appellate court.
If the efforts to complete the records fail, he shall indicate in his letter of
transmittal the exhibits or transcripts not included in the records being transmitted to the
appellate court, the reasons for their non-transmittal, and the steps taken or that could
be taken to have them available.
The clerk of court shall furnish the parties with copies of his letter of transmittal
of the records [to] the appellate court.
Verily, the duty to verify the correctness and completeness of the records of the case rests with the
respondent. However, in this case, respondent Clerk of Court Gundran relegated the performance of his
job to another court employee without any justifiable reason. We are likewise not persuaded by his
contention that the transmittal was delayed because the clerk-in-charge to whom he assigned the job
encountered some difficulty in completing the records. Section 10, Rule 41 of the Rules of Court expressly
provides that if the records are found to be incomplete, measures should be taken to complete the
records. In his comment, however, Clerk of Court Gundran made no mention of any steps taken to
complete the records. At any rate, the failure to complete the records does not justify its non-
transmittal. Under the Rules, when the records cannot be completed, respondent should indicate in his
letter of transmittal the exhibits or transcripts not included in the records being transmitted to the appellate
court, the reasons for their non-transmittal, and the steps taken or that could be taken to have them
available.[10]Finally, it has not escaped our notice that the records were eventually transmitted only
on March 28, 2008 or more than six months after complainant filed her appeal, or about two weeks after
the instant administrative complaint was filed.
We stress that clerks of court are essential judicial officers who perform delicate
administrative functions vital to the prompt and proper administration of justice. Their
duty is, inter alia, to assist in the management of the calendar of the court and in all
matters that do not involve discretion or judgment properly belonging to the judge. They
play a key role in the complement of the court, as their office is the hub of adjudicative
and administrative orders, processes and concerns. As such, they are required to be
persons of competence, honesty and probity, they cannot be permitted to slacken on their
jobs.[11]
Section 9, Rule 140 of the Rules of Court classifies undue delay in rendering a decision or order
as a less serious charge punishable by either (a) suspension from office without salary and other benefits
for not less than one nor more than three months; or (b) a fine of more than P10,000.00 but not
exceeding P20,000.00.[12] In the instant case, there was undue delay of more than three years before the
decision in LRC Case No. R-5740 was rendered. We therefore find the penalty of fine of P11,000.00 as
appropriate under the circumstances.
On the other hand, Section 22, Rule XIV of the Omnibus Civil Service Rules and Regulations
classifies simple neglect of duty as a less grave offense punishable by suspension of one month and one
day to six months, if committed for the first time, and by dismissal if committed for the second time. As
such, we find the penalty of suspension of two months as appropriate under the circumstances.
WHEREFORE, we find Judge Danilo S. Cruz of the Regional Trial Court of Pasig City, Branch
152, GUILTY of undue delay in rendering a decision in LRC Case No. R-5740 and is hereby FINED the
amount of P11,000.00. Likewise, Clerk of Court V Godolfo R. Gundran of the same court is
also GUILTY of simple neglect of duty and is hereby meted the penalty of suspension of two months
without salary and benefits. Both are STERNLY WARNED that a repetition of the same or similar offense
will be dealt with more severely.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
*
In lieu of Justice Jose P. Perez, per raffle dated January 6, 2010.
[1]
Gregorio O. De Los Reyes, represented by Bienvenida R. de Luna, Attorney-in-fact v. Luminza
De Los Reyes and the Register of Deeds of Pasig City.
[2]
Re: Judicial Audit Conducted in the RTC, Branch 6, Tacloban City, A.M. No. RTJ-09-
2171, March 17, 2009.
[3]
Id.
[4]
Letter of Judge Josefina D. Farrales, Acting Presiding Judge, RTC, Br. 72, Olongapo City Re:
30 Cases and 84 Motions Submitted for Decision/Resolution in the Said Court, A.M. No. 06-3-
196-RTC & A.M. No. 06-7-416-RTC, December 24, 2008, 575 SCRA 365.
[5]
Id. at 383-384.
[6]
A.M. No. 03-05-01-SC; effective June 1, 2004.
[7]
A.M. No. 02-8-207-MTCC, July 27, 2009.
[8]
Id.
[9]
Re: Report on the Judicial Audit Conducted at the MeTC, Branch 55, Malabon City, A.M. No.
08-3-73-MeTC, July 31, 2009.
[10]
RULES OF COURT, Rule 41, Sec. 10.
[11]
Supra note 7.
[12]
RULES OF COURT, Rule 140, Sec. 11.
SECOND DIVISION

Appellee,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
EDGARDO ESTRADA, Promulgated:

Appellant. ________________
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A bud plucked from the stalk

would never have its chance to blossom.
A young plant prematurely clipped of its branches
would never develop and grow to its full and natural potential.
Both would need care and attention to be able to recover and mend.
In the ultimate end, however, what has been lost could never be regained or restored.
This is exactly what happened to AAA,[1] a barrio lass from Atimonan, Quezon, who was robbed of her
innocence not once but twice in July 1997. Worse, it was her paternal uncle who perpetrated the lecherous
acts and precipitately initiated her to the ways of the world. AAA was only 12-years old when defiled.
Factual Antecedents
On November 19, 1997, two similarly-worded Informations were filed against appellant Edgardo Estrada
charging him with two counts of Rape committed as follows:
That on or about the month of July 1997, at Barangay x x x, in the Municipality of

Atimonan, Province of Quezon, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, who is the uncle of the offended party, with lewd
design, by means of force, threats and intimidation, did then and there willfully, unlawfully
and feloniously have carnal knowledge of one AAA, a minor, 12 years of age, against her
will.
Contrary to law.[2]
The cases were docketed as Criminal Case Nos. 5746-G & 5747-G and raffled to Branch 61 of the Regional
Trial Court of Gumaca, Quezon. Appellant was arraigned on January 20, 1998, and pleaded not guilty. Trial
on the merits thereafter ensued.
The prosecution presented AAA as its first witness. She testified that since she was about seven years old,
she lived in the house of her grandmother in Atimonan, Quezon. Her mother was staying in Manila while
her father died when she was only an infant. Sometime in July 1997, she was sleeping side by side with
her uncle, herein appellant, when the latter suddenly placed his knees between her thighs and proceeded
to remove her clothes. Appellant who was already naked went on top of her and inserted his penis in her
vagina. AAA tried to resist but appellant pinned her hands above her head. After having carnal knowledge
of AAA, appellant told her not to report to anyone what had transpired or she would be killed.
After the rape incident, AAA stayed at her grandfathers house which was likewise located in the
same barangay where her grandmothers house was situated. She thought that she would be safe
there. However, she was grievously mistaken. One evening, also in the month of July 1997, appellant
arrived thereat and again raped AAA. While the latter was sleeping, appellant poked a knife at her and
ordered her to remove her clothes. AAA was cowed into submission and appellant succeeded in sexually
assaulting her for the second time. AAAs grandfather who was sleeping nearby did not even notice what
was happening as the latter was hard of hearing.
As proof that AAA was only 12 years old when the rape incidents transpired, she presented her Birth
Certificate showing that she was born on May 1, 1985.
On the other hand, appellant was 51 years old and married. He admitted that AAA is his niece, the latter
being the daughter of his brother. However, he denied raping AAA on two occasions.He claimed that he
lived in Poblacion, Atimonan, Quezon, which is approximately seven kilometers away from where the
victim lived. He alleged that he never went to his parents houses; instead, it was his mother who made
occasional visits to his house. He insisted that the charges were filed against him because AAA resented
his advice not to socialize with boys because she was still young.
The other defense witness was Irene. She testified that AAA is her granddaughter and that appellant is
her son. She narrated that although AAA used to live in her house, she was not aware of any rape incident
having been committed thereat. She admitted though that she loved her son more than she loved her
granddaughter.
On August 16, 2002, the trial court rendered its Decision[3] finding appellant guilty of qualified rape on two
counts and sentenced him to suffer the supreme penalty of death. The trial court found that the qualifying
circumstances of minority and relationship were both satisfactorily established by the prosecution. The
WHEREFORE, the Court finds the accused Edgardo Estrada GUILTY beyond
reasonable doubt of the crime of RAPE on two (2) counts defined and punishable under
Article 335 of the Revised Penal Code as amended by Republic Act 7659 and hereby
sentences him to suffer the penalty of DEATH for each rape and to indemnify the
complainant in the amount of P75,000.00 or a total of P150,000.00; and to
pay P50,000.00 or a total of P100,000.00 as moral damages and the amount
of P30,000.00 or a total of P60,000.00 as exemplary damages to deter others from
committing the same crime.
Costs against the accused.[4]
The trial court found that the prosecution satisfactorily proved all the elements of rape. During the
first rape, the appellant employed violence against the person of the victim by pinning her hands above
her head. She was likewise threatened with bodily harm in case she reports what happened. During the
second rape, he poked a knife at her and succeeded in having carnal knowledge of her.[5]
The qualifying circumstances of minority and relationship were likewise appreciated by the trial
court. Based on the Birth Certificate presented by the prosecution, it was established that the victim was
a 12-year old minor when she was ravished on two occasions in July 1997. On the other hand, the trial
court held that the parties relationship with each other was established by their testimonies. Appellant
testified that AAA is his niece while the latter admitted that appellant is her uncle.
The trial court was not persuaded by the defenses of alibi and denial proffered by the appellant. It
found the same barren and undeserving of any credence vis--vis AAAs categorical testimony. Thus:
Accuseds denial is also an intrinsically weak defense. To merit credibility, it must

be buttressed by strong evidence of non-culpability x x x. The rule is that affirmative
testimony is stronger than a negative one, especially when it comes from the mouth of a
credible witness x x x. It was keenly observed by the Court that AAA was emotionally
affected as she recalled the harrowing experiences she suffered from her uncle as she
had to wipe the tears from time to time as she testified. As between a categorical
testimony which has a ring of truth on one hand, and a bare denial on the other, the
former is generally held to prevail. x x x A mere denial constitutes self-serving evidence
which cannot be accorded greater evidentiary weight than the declaration of a credible
witness who testifies on affirmative matters. x x x As against positive identification by the
private complainant, mere denials of the accused cannot overcome conviction by the trial
court. x x x[6]
Appellants contention that AAA filed the charges against him because she did not take kindly to
his advice not to associate with boys was briskly set aside by the court a quo. It found the same too lame
a reason to charge one with a capital crime. Likewise, the court brushed aside Irenes corroborative
account for being incredible and partial. The trial court found it inconceivable and not in accord with the
traditional Filipino values and norms that a son would not visit his parents for years notwithstanding the
fact that they lived only seven kilometers apart and the distance could easily be traversed by automobiles.
On appeal, appellant insisted that the trial court erred in convicting him because his guilt was not
proven beyond reasonable doubt. He insisted that his conviction could not be based solely on the
testimony of AAA.
On January 31, 2007, the Court of Appeals rendered its Decision[7] affirming
with modifications the Decision of the trial court. Just like the trial court, the appellate court found the
victims tale of defloration simple, candid, straightforward and unflawed by any material or significant
inconsistency thus deserving of full faith and credit.[8] The Court of Appeals noted that AAAs account
contained details of the sexual assaults only a real victim could remember and reveal, and narrated them
in a manner only one who had undergone them could do.[9] Moreover, the victims testimony was
corroborated by the medical findings that she suffered hymenal lacerations.[10]
The Court of Appeals completely brushed aside appellants imputation of ill-motives on the part of
the victim. It found as too flimsy a reason that AAA resented her uncles advice not to have any romantic
interests motivating her to fabricate the rape charges against him.[11] It also gave short shrift to appellants
denial and alibi. Appellants denial was disregarded in view of the victims positive identification of him as
the perpetrator of the crimes. His alibi was likewise rejected because of his failure to prove that it was
impossible for him to be at the scene of the crimes at the time they were committed.
The Court of Appeals however deviated from the ruling of the trial court when it held that appellant
should be held liable only for simple rape and not for qualified rape, notwithstanding the minority of the
victim and the fact that her attacker was her uncle. The Court of Appeals opined that mere allegation in
the Information that the appellant was the victims uncle would not suffice to satisfy the special qualifying
circumstance of relationship. It must be categorically stated that appellant is a relative within the 3rd civil
degree by consanguinity or affinity.[12]Consequently, the award of civil indemnity was reduced
to P50,000.00 for each count of rape.
The dispositive portion of the Decision of the Court of Appeals reads:
WHEREFORE, the assailed decision is AFFIRMED with MODIFICATIONS as

follows:
1. finding appellant guilty of two counts of SIMPLE RAPE

in Criminal Case Nos. 5746-G and 5747-G and sentencing him to suffer the penalty
of reclusion perpetua for each count; and
2. reducing the civil indemnity awarded to the victim

to P50,000.00 for each count of rape.
No costs.
SO ORDERED.[13]
Hence this appeal.
On October 8, 2007, we notified the parties that they may file their supplemental briefs if they so
desire.[14] However, both manifested that they are adopting the allegations in their appellees/appellants
briefs and would thus no longer file their supplemental briefs.[15]
Our Ruling
Applying the guiding principles that a) an accusation for rape is easy to make, difficult to prove and even
more difficult to disprove; b) in view of the intrinsic nature of the crime, the testimony of the complainant
must be scrutinized with utmost caution; and c) the evidence of the prosecution must stand on its own
merits and cannot draw strength from the weakness of the evidence for the defense,[16] we affirm the
Decision of the Court of Appeals finding herein appellant guilty of two counts of simple rape.
Factual findings of the trial court, especially when
affirmed by the Court of Appeals, deserve great
weight and respect.
Both the trial court and the Court of Appeals found the testimony of the victim credible. According to the
trial court, she candidly, positively and categorically testified as to her harrowing experiences.[17] Thus, it
was convinced that appellant indeed raped AAA.[18] It also keenly observed that AAA was emotionally
affected as she recalled the harrowing experiences she suffered from her uncle as she had to wipe the
tears from time to time as she testified.[19]
We scoured the records of the case and we find no reason to deviate from the above
findings. There is no showing at all that the trial court overlooked, misunderstood or misapplied facts or
circumstances of weight which would have affected the outcome of the case.[20] We therefore defer and
give highest respect to the findings of the trial court because it is in the best position to assess and
determine the credibility of the witnesses. Because of its vantage position, it can detect a guilty blush, a
slight hesitation, a fearful glance, and an anguished cry.
In addition, the Court of Appeals adopted the findings of the trial court on the credibility of the
victim. Hence, the more reason for us not to disturb the said findings. The Court of Appeals held that:
Utilizing the same settled legal precepts, we have ourselves meticulously scrutinized the
victims testimony and, like the trial court, found her tale of defloration simple, candid,
straightforward and unflawed by any material or significant inconsistency thus deserving
of full faith and credit. Her account contains details of the sexual assaults only a real victim
could remember and reveal, and narrated them in a manner only one who had undergone
them could do.
Indeed, a witness who testified in a categorical, straightforward, spontaneous and frank

manner and remained consistent on cross-examination is a credible witness. Moreover,
the testimony of a rape victim, especially one who is young and immature, deserves full
credit considering that no woman would concoct a story of defloration, allow an
examination of her private parts and thereafter allow herself to be perverted in a public
trial if she was not motivated solely by the desire to have the culprit apprehended and
punished. More so when, as in this case, the rape victim accuses a close relative of having
ravished her.Indeed, if the victim, who was only twelve years old when she was raped,
had the guile to accuse her own uncle of rape and send him to jail it was only because
she was motivated by an honest desire to have the crime against her punished.
The victims credibility is further buttressed by the findings of Dr. Geronimo Ayala, who
conducted a physical examination on her on September 3, 1997 after she had reported
the rape incident to the authorities.His medical findings revealed that the victim had (old)
lacerated wound, 7 oclock position on her genitalia and her hymen was not intact.x x x[21]
Appellants denial crumbles under the weight of

complainants positive identification of him as the
perpetrator of the crimes.
The trial court and the Court of Appeals correctly rebuffed appellants denial. The same is self-serving and
undeserving of any credence at all in view of the victims categorical, positive and forthright identification
of him as the perpetrator of the crimes. Irenes testimony likewise deserved to be rejected. She was a
biased witness having admitted that she loved her son more than she loved her granddaughter. At any
rate, appellants denial is an inherently weak and negative defense. It could not prevail over AAAs positive
identification. We also do not deign to dignify appellants imputation of ill-motives to the victim. We still
believe that no woman would allow herself to be subjected to the indignities of a rape trial if she is not in
search of truth and justice.
Appellants alibi deserves no consideration at all.
In order for the defense of alibi to prosper, two requisites must concur: first, the appellant was at a
different place at the time the crime was committed, and second, it was physically impossible for him to
be at the crime scene at the time of its commission. In this case, appellant miserably failed to establish
the fact that it was physically impossible for him to be at the locus criminis. By his own admission, the
distance between his place and that of his parents where the rape incidents were committed is about
seven kilometers only and could easily be traversed by public transport.
Appellant is guilty only of two counts of simple

rape.
The rape incidents were committed in July 1997 hence the law applicable is Article 335 of the Revised
Penal Code as amended by Republic Act No. 7659[22] which 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.
1. By using force or intimidation;

2. When the woman is deprived of reason or otherwise unconscious; and
3. When the woman is under twelve years of age or is demented.
The crime shall be punished by reclusion perpetua.
xxxx
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 within
the third civil degree, or the common-law spouse of the parent of the victim.
xxxx
In the instant case, it was clearly established by the prosecution that on two occasions in July 1997, the
victim was sexually abused by appellant through force and intimidation, against her will and without her
consent. The qualifying circumstance of minority of the victim was likewise proven by the presentation of
the latters Birth Certificate.
However, as regards the allegation in the Information that appellant is an uncle of the victim, we
agree with the Court of Appeals that the same did not sufficiently satisfy the requirements of Art. 335 of
the Revised Penal Code, i.e., it must be succinctly stated that appellant is a relative within the 3rd civil
degree by consanguinity or affinity. It is immaterial that appellant admitted that the victim is his niece. In
the same manner, it is irrelevant that AAA testified that appellant is her uncle. We held in People v.
Velasquez:[23]
However, the trial court erred in imposing the death penalty on accused-appellant,
applying Section 11 of Republic Act No. 7659. We have consistently held that the
circumstances under the amendatory provisions of Section 11 of R.A. No. 7659, the
attendance of which could mandate the imposition of the single indivisible penalty of
death, are in the nature of qualifying circumstances which cannot be proved as such
unless alleged in the information. Even in cases where such circumstances are proved,
the death penalty cannot be imposed where the information failed to allege them. To
impose the death penalty on the basis of a qualifying circumstance which has not been
alleged in the information would violate the accuseds constitutional and statutory right to
be informed of the nature and cause of the accusation against him.
While the informations in this case alleged that accused-appellant is the uncle of the two
victims, they did not state that he is their relative within the third civil degree of
consanguinity or affinity. The testimonial evidence that accused-appellants wife and Luisa
de Guzman are sisters is immaterial. The circumstance that accused-appellant is a relative
of the victims by consanguinity or affinity within the third civil degree must be alleged in
the information. In the case at bar, the allegation that accused-appellant is the uncle of
private complainants was not sufficient to satisfy the special qualifying circumstance of
relationship. It was necessary to specifically allege that such relationship was within the
third civil degree. Hence, accused-appellant can only be convicted of simple rape on two
counts, for which the penalty imposed is reclusion perpetua in each case.
In view of the foregoing, the Court of Appeals was correct in finding appellant guilty only of two counts of
simple rape and in sentencing him to suffer the penalty of reclusion perpetua for each count, and in
ordering him to pay P50,000.00 as civil indemnity, P50,000.00 as moral damages and P30,000.00 as
exemplary damages for each count of rape.[24]
WHEREFORE, the Decision of the Court of Appeals dated January 31, 2007 in CA-G.R. CR-H.C. No.
00254 is AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
The identity of the victim or any information to establish or compromise her identity, as well as those
of her immediate family or household members, shall be withheld pursuant to Republic Act No. 7610,
An Act Providing for Stronger Deterrence and Special Protection Against Child Abuse, Exploitation and
Discrimination, and for Other Purposes; Republic Act No. 9262, An Act Defining Violence Against
Women and Their Children, Providing for Protective Measures for Victims, Prescribing Penalties
Therefor, and for Other Purposes; and Section 40 of A.M. No. 04-10-11-SC, known as the rule on
Violence Against Women and Their Children, effective November 5, 2004.
[2]
CA rollo, pp. 8-9.
[3]
Id. at 16-33; penned by Judge Aurora V. Maqueda-Roman.
[4]
Id. at 33.
[5]
Id. at 28.
[6]
Id. at 31.
[7]
Id. at 114-135; penned by Associate Justice Rebecca De Guia-Salvador and concurred in by Associate
Justices Ricardo R. Rosario and Marlene Gonzales-Sison.
[8]
Id. at 126.
[9]
Id.
[10]
Id. at 127.
[11]
Id. at 129.
[12]
Id. at 132.
[13]
Id. at 134.
[14]
Rollo, p. 28.
[15]
Id. at 29-32; 33-36.
[16]
[17]
CA rollo, p. 25.
[18]
Id. at 28.
[19]
Id. at 31.
[20]
See People v. Dalisay, G.R. No. 188106, November 25, 2009.
[21]
[22]
See People v. Manalili, supra note 16. Article 335 of the Revised Penal Code, as amended by Republic
Act No. 7659 applies when the rape was committed before October 22, 1997. Articles 266-A and 266-
B of the Revised Penal Code, as amended by Republic Act No. 8353 apply to rapes committed on or
after October 22, 1997.
[23]
427 Phil. 454, 462-463 (2002).
[24]
People v. Dalisay, supra note 20; People v. Araojo, G.R. No. 185203, September 17, 2009.
SECOND DIVISION

Appellee,
Present:

- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
JOSELITO NOQUE y GOMEZ, Promulgated:

Appellant. January 15, 2010
x---------------------------------------------------------------------
-----x
DECISION
DEL CASTILLO, J.:
The illicit trade and use of dangerous drugs destroys the moral fiber of society. It has eroded and disrupted
family life, increased the transmission of sexually related diseases, resulted in permanent and fatal damage
to the physical and mental health, and wasted dreams, opportunities and hopes for a better future. As an
ardent sentinel of the peoples rights and welfare, this Court shall not hesitate to dispense justice on people
who engage in such an activity.[1] The commitment to this end is exemplified in this appeal.
The Charges
The appeal stems from two Informations filed before the Regional Trial Court (RTC) of Manila, which were
subsequently docketed as Criminal Case Nos. 01-189458 and 01-189459, and raffled to Branch 35 of said
court. The Information in Criminal Case No. 01-189458 charging appellant Joselito Noque y Gomez with
violation of Section 15, Article III in relation to Section 21 (e), (f), (m), (o), Article 1 of Republic Act (RA)
No. 6425, as amended by Presidential Decree (PD) No. 1683 and as further amended by RA 7659 reads:
That on or about January 30, 2001, in the City of Manila, Philippines, the said accused,
not having been authorized by law to sell, dispense, deliver, transport or distribute any
regulated drug, did then and there willfully, unlawfully and knowingly sell or offer for sale,
dispense, deliver, transport or distribute 2.779 (two point seven seven nine grams) and
2.729 (two point seven two nine grams) of white crystalline substance known as shabu
containing methamphetamine hydrochloride, which is a regulated drug.
Contrary to law.[2]
On the other hand, the Information in Criminal Case No. 01-189459 contains the following accusatory
allegations for violation of Section 16, Article III in relation to Section 2 (e-2) Article I of RA 6425 as
amended by Batas Pambansa (BP) Bilang 179 and as further amended by RA 7659:
That on or about January 30, 2001, in the City of Manila, Philippines, the said accused
without being authorized by law to possess or use any regulated drug, did then and there
willfully, unlawfully and knowingly have in his possession and under his custody and
control (six seven nine point two one five grams) 679.215 grams of white crystalline
substance known as shabu containing methamphetamine hydrochloride, a regulated
drug, without the corresponding license or prescription thereof.
Contrary to law.[3]
During his arraignment on July 23, 2001, appellant pleaded not guilty to both charges. Pre-trial conference
was conducted and upon its termination a joint trial ensued.
At 9 oclock in the evening of January 30, 2001, a confidential informant of

Senior Police Officer 4 (SPO4) Norberto Murillo, went to Police Station No. 4 of the Western Police District
(WPD) to tip off on the drug trafficking activities of the appellant in Malate, Manila. SP04 Murillo
immediately directed Police Officers (POs) Christian Balais (Balais) and Dionisio Borca (Borca) to conduct
surveillance in the area mentioned by the informant. The surveillance confirmed appellants illegal
operations being conducted at No. 630 San Andres Street, Malate, Manila. Thereafter, SP04 Murillo
formed and led a buy-bust team with POs Balais, Borca, Ramon Pablo, Roberto Godoy, Edgardo Book,
Bernard Mino, Rodante Bollotano, and Melchor Barolo as members. PO1 Balais was designated as poseur-
buyer and was provided with 10 pieces of 100 peso bills as buy-bust money.
The buy-bust team, together with the informant, proceeded to the aforementioned address and upon
arrival thereat, positioned themselves outside the appellants house. PO1 Balais and the informant
thereafter called out the appellant, who welcomed the two and brought them to his bedroom. The
informant asked the appellant if he had P1,000.00 worth of methamphetamine hydrochloride
or shabu then pointed to PO1 Balais as the actual buyer. When PO1 Balais handed the marked money to
the appellant, the latter brought out from under a table a pranela bag from which he took two plastic
sachets containing white crystalline granules suspected to be shabu. The informant slipped out of the
house as the pre-arranged signal to the buy-bust team that the sale had been consummated.
After seeing the informant leave, the team entered appellants house. SPO4 Murillo frisked the appellant
and recovered the buy-bust money. He also confiscated the pranela bag that contained a large quantity
of crystalline granules suspected to be shabu. The two persons who were in a pot session with the
appellant at the time of the raid were likewise arrested and brought to the WPD Station No. 9 for
investigation.
The seized articles were taken to the police station and submitted to the crime laboratory for examination
to determine the chemical composition of the crystalline substance. Police Inspector (P/Insp.) and Forensic
Chemical Officer Miladenia Tapan examined one self-sealing transparent plastic bag with markings JNG
containing 679.215 grams of white crystalline granules; and two heat-sealed transparent plastic sachets
each containing white crystalline substance, pre-marked JNG-1 weighing 2.779 grams and JNG-2weighing
2.729 grams. The qualitative examinations yielded positive results for ephedrine, a regulated drug.
The appellant gave a different version of the events that transpired. He testified that he was in his house
in the evening of January 23, 2001 when six policemen led by SPO4 Murillo entered and arrested an
unidentified occupant of the room next to his. The arresting team returned after 30 minutes and
apprehended another person. When they came back the third time, they took him with them to WPD
Station No. 9 where his wallet, belt and shoes were taken. While under detention, SPO4 Murillo ordered
him to admit selling illegal substances but he refused. He was released on January 26, 2001 only to be
rearrested at around 9 oclock in the evening on January 30, 2001 when SPO4 Murillo and his team
returned to his house and took him at gunpoint to the police station where he was detained for 24
hours. Police officers presented him later to Mayor Lito Atienza and General Avelino Razon for a press
conference.
In its Decision[4] dated February 28, 2003, the trial court convicted the appellant of both charges. It
declared that the evidence adduced by the prosecution established with moral certainty his guilt for
committing the crimes in the manner narrated in the Informations. The testimonies of police officers that
they caught appellant in flagrante delicto of selling and possessing a dangerous drug are clear and positive
evidence that deserve more evidentiary weight than appellants defenses of denial and frame-up, which
are mere negative and self-serving assertions unsubstantiated by clear and convincing evidence. The trial
court also ruled that it cannot deviate from the presumption of regularity in the performance of duty on
the part of the police officers since no ill motives were ascribed to them that would entice them to testify
falsely against the appellant.
The trial court also held that while the Informations alleged methamphetamine hydrochloride as the drug
seized from the appellant, the drug actually confiscated which was ephedrine, is a precursor of
methamphetamine, i.e., methamphetamine is an element of, and is present in ephedrine. Ephedrine is
the raw material while methamphetamine is its refined product. Both drugs have the same chemical
formula except for the presence of a single atom of oxygen which when removed by means of chemical
reaction changes ephedrine to methamphetamine. Thus, the trial court ruled that the appellant can be
convicted of the offenses charged, which are included in the crimes proved. The trial court further held
that under Section 4, Rule 120 of the Rules of Court, a variance in the offense charged in the complaint
or information and that proved shall result in the conviction for the offense charged which is included in
the offense proved.
In determining the quantity of methamphetamine hydrochloride upon which the proper imposable penalty
on the appellant must be based, the trial court gave credence to the testimony of prosecution witness,
P/Insp. Tapan that a gram of ephedrine would produce gram of methamphetamine when refined.[5]
Conformably, the methamphetamine contents of 5.508 grams[6] of ephedrine in Criminal Case No. 01-
189458 would be 2.754 grams. Moreover, the methamphetamine contents of 679.215 grams of ephedrine
in Criminal Case No. 01-189459 would be 339.6075 grams.
WHEREFORE, judgment is rendered:
In Criminal Case No. 01-189458, pronouncing accused JOSELITO NOQUE y

GOMEZ guilty beyond reasonable doubt of selling a net quantity of 2.754 grams of
methamphetamine hydrochloride without authority of law, penalized under Section 15 in
relation to Section 20 of Republic Act No. 6425, as amended, and sentencing the said
accused to the indeterminate penalty ranging from four (4) years and two (2) months
of prision correccional, as minimum, to six (6) years and one (1) day of prision mayor, as
maximum, and to pay the costs.
In Criminal Case No. 01-189459, pronouncing the same accused JOSELITO

NOQUE y GOMEZ guilty beyond reasonable doubt of possession of a net quantity of
339.6075 grams of methamphetamine hydrochloride without license or prescription,
penalized under Section 16 in relation to Section 20 of Republic Act No. 6425, as amended,
and sentencing the said accused to the penalty of reclusion perpetua and to pay a fine of
P5,000,000.00, plus the costs.
In the service of his sentences, the full time during which the accused had been
under preventive imprisonment should be credited in his favor provided that he had
agreed voluntarily in writing to abide with the same disciplinary rules imposed on
convicted prisoner. Otherwise, he should be credited with four-fifths (4/5) only of the time
he had been under preventive imprisonment.
Exhibits B and C are ordered confiscated and forfeited in favor of the

government. Within ten (10) days following the promulgation of this judgment, the
Branch Clerk of this Court, is ordered to turn over, under proper receipt, the regulated
drug involved in these cases to the Philippine Drug Enforcement Agency (PDEA) for proper
disposal.
SO ORDERED.[7]
The CA affirmed the trial courts judgment. It held that the designations in the Informations are
for violations of Sections 15 and 16 of RA 6425 that define and penalize the crimes of illegal sale and illegal
possession of regulated drugs. While the allegations in the Informations refer to unauthorized sale and
possession of shabu or methamphetamine hydrochloride, and not of ephedrine, the allegations are
however immediately followed by the qualifying phrase which is a regulated drug. Stated differently, the
CA held that the designations and allegations in the informations are for the crimes of illegal sale and
illegal possession of regulated drugs. There being no dispute that ephedrine is a regulated drug, pursuant
to Board Resolution No. 2, Series of 1988, issued by the Dangerous Drugs Board on March 17, 1988, the
CA ruled that the appellant is deemed to have been sufficiently informed of the nature of the crime with
which he is accused. The fact that the chemical structures of ephedrine and methamphetamine are the
same except for the presence of an atom of oxygen in the former strengthens this ruling.[8]
However, the CA modified the penalty imposed by the trial court in Criminal Case No. 01-
189458. It held that in the absence of any mitigating or aggravating circumstances in this case, the penalty
should be imposed in its medium period, ranging from six months of arresto mayor, as minimum, to two
years, four months and one day of prision correccional, as maximum. Thus, the dispositive portion of the
Decision of the CA reads:
WHEREFORE, premises considered, the February 28, 2003 Decision of the Regional Trial
Court of Manila, Branch 35, is hereby AFFIRMED with the MODIFICATION that in Criminal
Case No. 01-189458, accused-appellant is hereby sentenced to suffer the indeterminate
penalty of six (6) months of arresto mayor, as minimum, to two (2) years, four (4) months
and one (1) day of prision correccional, as maximum.
SO ORDERED.[9]
Our Ruling
The appeal is bereft of merit.

The prosecutions evidence satisfactorily proved
that appellant is guilty of illegal sale of a
dangerous drug.
The prosecution successfully proved that appellant violated Section 15, Article III of RA 6425. The
prosecutions evidence established the concurrence of the elements of an illegal sale of a dangerous drug,
to wit: (1) the identity of the buyer and seller, object, and consideration; and (2) the delivery of the thing
sold and the payment therefor.[10]
In the instant case, the police officers conducted a buy-bust operation after receiving confirmed
surveillance reports that the appellant was engaged in the illicit sale of dangerous drugs at No. 630 San
Andres Street, Malate, Manila. PO1 Balais, the designated poseur-buyer of the buy-bust team, personally
identified the appellant as the person who volunteered to sell to him P1,000.00 worth of white crystalline
substance alleged to be shabu. The police officer received this illegal merchandise after giving the
appellant the marked money as payment. Undoubtedly, the appellant is guilty of selling a dangerous drug.
The prosecutions evidence satisfactorily proved
that appellant illegally possessed a dangerous
drug.
The prosecution was also successful in proving that appellant violated Section 16, Article III of RA 6425. It
adduced evidence that established the presence of the elements of illegal possession of a dangerous
drug. It showed that (1) the appellant was in possession of an item or an object identified to be a
prohibited or regulated drug, (2) such possession is not authorized by law, and (3) the appellant was
freely and consciously aware of being in possession of the drug.[11]
The police buy-bust team apprehended the appellant for the sale of a white crystalline substance then
proceeded to search the premises. They found a large quantity of the same substance inside the bag that
contained the two sachets of the regulated drug sold to PO1 Balais. Appellant did not offer any explanation
why he is in custody of the said substance. Neither did the appellant present any authorization to possess
the same. Mere possession of a regulated drug per se constitutes prima facie evidence of knowledge
or animus possidendi sufficient to convict an accused absent a satisfactory explanation of such possession
the onus probandi is shifted to the accused, to explain the absence of knowledge or animus
possidendi.[12] With the burden of evidence shifted to the appellant, it was his duty to explain his innocence
on the regulated drug seized from his person. However, as already mentioned, he did not offer any excuse
or explanation regarding his possession thereof.
There is no evidence showing that the police

officers are actuated by ill motives.
Likewise to be considered against the appellant is his failure to present evidence imputing evil motive on
the part of the police officers who participated in the entrapment operation to testify falsely against
him. Where there is no evidence that the principal witness of the prosecution was actuated by ill or devious
motive, the testimony is entitled to full faith and credit.[13]
Appellants right to be informed of the nature and

cause of the accusations was not violated.
The only issue raised by the appellant in this petition is that his conviction for the sale and possession
of shabu, despite the fact that what was established and proven was the sale and possession of ephedrine,
violated his constitutional right to be informed of the nature and cause of the accusations against him
since the charges in the Informations are for selling and possessing methamphetamine hydrochloride.
We agree with the findings of the CA and the trial court, as well as the testimony of the forensic
chemical officer, that the drug known as ephedrine has a central nervous stimulating effect similar to that
of methamphetamine. In fact, ephedrine is an important precursor used in the clandestine synthesis of
methamphetamine, which in crystallized form is methamphetamine hydrochloride.
Thus, on March 17, 1988, pursuant to Section 20(8) of RA 6425, as amended, the Dangerous
Drugs Board in its Board Regulation No. 2, S. 1988, classified as regulated drug all raw materials of
ephedrine, as well as preparations containing the said drug. The chemical formula of ephedrine is C10
H15 NO, whereas that of methamphetamine is C10 H15 N. The only difference between ephedrine and
methamphetamine is the presence of a single atom of oxygen in the former. The removal of the oxygen
in ephedrine will produce methamphetamine. With ephedrine containing fifty percent (50%) of
methamphetamine hydrochloride if the oxygen content in the former is removed, the nearly 680 grams
of ephedrine seized from the appellant contains about 340 grams of methamphetamine hydrochloride.
Moreover, as correctly observed by CA, the offenses designated in the Informations are for
violations of Sections 15 and 16 of RA 6425, which define and penalize the crimes of illegal sale and
possession of regulated drugs. The allegations in the Informations for the unauthorized sale and
possession of shabu or methamphetamine hydrochloride are immediately followed by the qualifying
phrase which is a regulated drug. Thus, it is clear that the designations and allegations in the Informations
are for the crimes of illegal sale and illegal possession of regulated drugs. Ephedrine has been classified
as a regulated drug by the Dangerous Drugs Board in Board Resolution No. 2, Series of 1988.
The CA correctly ruled that Sections 4 and 5, Rule 120 of the Rules of Court,[14] can be applied by analogy
in convicting the appellant of the offenses charged, which are included in the crimes proved. Under these
provisions, an offense charged is necessarily included in the offense proved when the essential ingredients
of the former constitute or form part of those constituting the latter. At any rate, a minor variance between
the information and the evidence does not alter the nature of the offense, nor does it determine or qualify
the crime or penalty, so that even if a discrepancy exists, this cannot be pleaded as a ground for
acquittal.[15] In other words, his right to be informed of the charges against him has not been violated
because where an accused is charged with a specific crime, he is duly informed not only of such specific
crime but also of lesser crimes or offenses included therein.[16]
The Penalties
In Criminal Case No. 01-189458, appellant is found guilty of violation of Section 15, Article III of
RA 6425, as amended. We explained in People
v. Isnani[17] that:
Under Section 15, Article III in relation to the second paragraph of Sections 20
and 21 of Article IV of Republic Act No. 6425, as amended by Section 17 of R.A. No. 7659,
the imposable penalty of illegal sale of a regulated drug (shabu), less than 200 grams, as
in this case, is prision correccional to reclusion perpetua. Based on the quantity of the
regulated drug subject of the offense, the imposable penalty shall be as follows:
QUANTITY IMPOSABLE PENALTY
Less than one (1) gram

to 49.25 grams prision correccional
49.26 grams to 98.50 grams prision mayor
98.51 grams to 147.75 grams reclusion temporal
147.76 grams to 199 grams reclusion perpetua
The quantity of shabu involved is 0.060 grams. Pursuant to the second paragraph
of Sections 20 and 21 of Article IV of R.A. No. 6425, as amended by Section 17 of R.A.
No. 7659 (for unauthorized sale of less than 200 grams of shabu) and considering our
ruling in the above case, the imposable penalty is prision correccional.
Applying the Indeterminate Sentence Law, and there being no aggravating or

mitigating circumstance that attended the commission of the crime, the maximum period
is prision correccional in its medium period which has a duration of 2 years, 4 months and
1 day to 4 years and 2 months. The minimum period is within the range of the penalty
next lower in degree which is arresto mayor, the duration of which is 1 month and 1 day
to 6 months. Hence, appellant should be sentenced to 6 months of arresto mayor, as
minimum, to 2 years, 4 months and 1 days of prision correctional in its medium period,
as maximum.
In Criminal Case No. 01-189458, the quantity of the prohibited drug seized from appellant is 2.754
grams. Accordingly, the Court of Appeals correctly modified the penalty imposed by the trial court to six
months of arresto mayor, as minimum, to two years, four months and one day of prision correccional, as
maximum.
As regards Criminal Case No. 01-189459, Section 16, Article III of RA 6425, as amended, provides
for the penalty of reclusion perpetua to death and a fine ranging from P500,000.00 to P10 million upon
any person who shall possess or use any regulated drug without the corresponding license or
prescription. Section 20 of RA 6425, as amended, further provides that the penalty imposed for the offense
under Section 16, Article III shall be applied if the dangerous drug involved is 200 grams or more
of shabu. In this case, the appellant was found in illegal possession of 339.6075 grams of prohibited
drug. Therefore, both the trial court and the Court of Appeals correctly imposed the penalty of reclusion
perpetua and a fine of P500,000.00 to appellant.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 00684
is AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
See People v. San Juan, 427 Phil. 236, 247-248 (2002).
[2]
Records, p. 2.
[3]
Id. at 3.
[4]
Id. at 140-153; penned by Judge Ramon P. Makasiar.
[5]
TSN, October 11, 2002, p. 15.
[6]
2.729 grams plus 2.779 grams.
[7]
[8]
[9]
Records, p. 17.
[10]
People v. Lee Hoi Ming, 459 Phil. 187, 193 (2003).
[11]
People v. Tiu Won Chua, 453 Phil. 177, 186 (2003).
[12]
People v. Tee, 443 Phil. 521, 551 (2003).
[13]
People v. Bocalan, 457 Phil. 472, 482 (2003).
[14]
Sec. 4. Judgment in case of variance between allegation and proof. When there is a variance between
the offense charged in the complaint or information, and that proved, and the offense charged is
included in or necessarily includes the offense proved, the accused shall be convicted of the offense
proved which is included in the offense charged, or of the offense charged which is included in the
offense proved.
Sec. 5. When an offense includes or is included in another. An offense charged necessarily includes the
offense proved when some of the essential elements or ingredients of the former, as alleged in the
complaint or information, constitute the latter. An offense charged is necessarily included in the
offense proved, when the essential ingredients of the former constitute or form part of those
constituting the latter.
[15]
People v. Bunsol, 159 Phil. 846, 851 (1975).
[16]
See People v. Villamar, 358 Phil. 886, 894 (1998).
[17]
G.R. No. 133006, June 9, 2004, 431 SCRA 439, 456-457, citing People v. Tira, G.R. No. 139615, May
28, 2004, 430 SCRA 134.
SECOND DIVISION
SPOUSES PATRICIO and G.R. No. 163271

MYRNA BERNALES,
Petitioners,
- versus -
HEIRS OF JULIAN SAMBAAN, Present:

namely: EMMA S. FELICILDA,
ANITA S. SAMBAAN, CARPIO, J., Chairperson,
VIOLETA S. DADSANAN, BRION,
ABSALON S. SAMBAAN, DEL CASTILLO,
AGUSTINE S. SAMBAAN, ABAD, and
EDITHA S. MANGUIRAN, PEREZ, JJ.
GRACE S. NITCHA.
CLODUALDO S. SAMBAAN,
GINA S. SAMBAAN and
FE S. YAP, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A legal tussle among children is a nightmare for their parents. Sometimes, this happens when
pecuniary interests takes precedence over family relationship. In the instant case, we are at the forefront
of a family squabble over a disputed land situated in Cagayan de Oro City which was purportedly conveyed
to the eldest child through a Deed of Absolute Sale.[1]
Branch 18 of the Regional Trial Court (RTC) of Misamis Oriental[2] rendered judgment in favor of
the herein respondents, which was affirmed in toto by the Court of Appeals[3] (CA).Alleging that the CA
Decision[4] is not in accordance with law and jurisprudence, as well as the evidence on record, petitioners
now come to us via the instant Petition for Review on Certiorari.[5]
Factual Antecedents
Julian Sambaan (Julian), married to Guillerma Saarenas-Sambaan (Guillerma), was the registered
owner of a property located at Bulua, Cagayan de Oro City. The lot was covered by Transfer Certificate of
Title (TCT) No. T-14202[6] issued on March 8, 1972, and more particularly described as follows:
A parcel of land (Lot No. 5947-A of the Subdivision Plan (LRC) Psd-138019, being a portion
of Lot No. 5947, Cagayan Cadastre, LRC Cad. Rec. No. 1572) situated in the Barrio of
Bulua, City of Cagayan de Oro, Island of Mindanao x x x containing an area of THREE
THOUSAND SIX HUNDRED FORTY THREE (3,643) SQUARE METERS, more or less.
The respondents herein and the petitioner Myrna Bernales (Myrna) are the children of Julian and
Guillerma. Myrna, who is the eldest of the siblings, is the present owner and possessor of the property in
question.
Sometime in 1975, Julian was ambushed at Merayon, Talakad, Bukidnon, and was hospitalized
due to a gunshot wound. On April 11, 1975, Julian allegedly requested his children to gather so that he
could make his last two wishes. Julians first wish was for the children to redeem the subject property
which was mortgaged to Myrna and her husband Patricio Bernales (Patricio), while his second wish was
for his remains not to be brought to the house of Myrna at Nazareth, Cagayan de Oro City. Thus, in 1982,
respondent Absalon Sambaan (Absalon), one of Julians children, offered to redeem the property but the
petitioners refused because they were allegedly using the property as tethering place for their cattle.
In January 1991, respondents received information that the property covered by TCT No. T-14202
was already transferred to petitioners name. Whereupon, they secured a copy of the Deed of Absolute
Sale dated December 7, 1970 which bore the signatures of their parents and had it examined by the
National Bureau of Investigation (NBI). The result of the examination revealed that the signatures of their
parents, Julian and Guillerma, were forged.
Thus, on April 13, 1993, the respondents, together with their mother Guillerma, filed a Complaint
for Annulment of Deed of Absolute Sale and Cancellation of Transfer Certificate of Title No. T-14204 with
Damages and Writ of Preliminary Injunction[7] against herein petitioners. They alleged that in spite of the
forged signature of their parents, the petitioners were able to register the Deed of Absolute Sale with the
Registry of Deeds of Cagayan de Oro City and secure TCT No. T-14204[8] on March 8, 1972. They prayed
for an injunctive relief in order to prevent the petitioners from selling, disposing, or mortgaging said
property. They further prayed that (i) the Deed of Absolute Sale and TCT No. T-14204 be annulled; (ii)
they be declared the absolute owners of the property; (iii) all documents executed, made and entered
into relative to the said title be declared void; and, (iv) the petitioners be ordered to pay them P300,000.00
as moral and exemplary damages, and P50,000.00 as attorneys fees plus P1,000.00 as appearance fee.
On May 6, 1992, petitioners filed their Answer,[9] alleging that the subject property (Lot No. 5947-
A) used to be a portion of Lot No. 5947, which was originally owned by Clodualdo Sambaan (Clodualdo)
and Gliceria Dacer (Gliceria). Lot No. 5947 is more particularly described as follows:
A parcel of land (Lot No. 5947 of the Cadastral Survey of Cagayan) situated at Bulua,
Cagayan de Oro City. Bounded on the NE., by Lot No. 5984 and 5948; E., by Lot Nos.
5948 and 5946, SW., by Lot No. 5946; and on the NW., by Lot No. 5984, containing an
area of 7,286 square meters, more or less, under Tax Declaration No. 21421 and covered
by Original Certificate of Title No. 7921 issued on September 23, 1940.
After the death of Clodualdo and Gliceria in 1949, their heirs, namely, Alicia Lago, wife of Pedro Gacusan;
Bernardo Lago (single); Gloria Lago, wife of Jimmy Angco; Dionesia Lago, married to Paulino Unat;
Prysbetero Sambaan, married to Rosario Zaragosa; Juanito Sambaan, married to Renerio Galos; Leo
Sambaan, married to Adeloisa Tambulian; Renato Sambaan, married to Adelina Ablon; Aida Sambaan
(single); Julian Sambaan, married to Guillerma Saarenas; Paz Sambaan, wife of Rufinito Lago; and, Bernie
Sambaan, married to Alicia Sabuero, executed an Extra Judicial Settlement and Sale[10] dated April 10,
1970 involving the abovementioned land covered by Original Certificate of Title (OCT) No. 7921.
It appears, however, that Juanito, Aida and Renato sold their share to a certain Domingo Ebarrat
(Ebarrat). Hence, a portion of the property belonged to Julian while another portion belonged to
Ebarrat. In view of the co-ownership between Ebarrat and Julian, the former and the latter executed
a Deed of Partition[11] dated September 8, 1970 whereby Lot No. 5947 was divided. The eastern half with
an area of 3,643 square meters was assigned to Julian, while the western half with the same area went
to Ebarrat.
Petitioners claimed that Julian subsequently sold his share to them by virtue
of a Deed of Absolute Sale [12] dated December 7, 1970. The said property is
described as follows:
A Parcel of land (Lot No. 5947-A, being a portion of Lot No. 5947, Cadastral Survey of
Cagayan) situated at Bulua, Cagayan de Oro City. Bounded on the North by Lot Nos.
5947-B and 5948, Cad. 237; South by Lot Nos. 5946, Cad-237; East by Lot Nos. 5948
and 5946, Cad. 237; and West by Lot No. 5947-B, containing an area of 3643 square
meters, more or less, covered by OCT No. 7921 (now TCT No. T-14202) of the Registry
of Deeds of Cagayan de Oro City.
Thereafter, on December 10, 1970, Ebarrat and Patricio executed an Agreement[13] wherein
Ebarrat acknowledged that petitioners are the owners of the 18 coconut trees planted in Ebarrats property
and even made Julian as a witness to the said Agreement.
In addition, petitioners alleged that the imputation of falsification of the signatures of Julian and
Guillerma is a product of respondents inflamed imagination because the latter envy them for they have
been successful in managing their properties. Petitioners thus prayed that judgment be rendered
dismissing the complaint; affirming their title over the controverted property and ordering respondents to
pay them P500,000.00 as moral damages; P300,000.00 as exemplary damages; P50,000.00 as attorneys
fees and costs of litigation.
On July 27, 1992, petitioners filed a Motion for Production and Inspection of Document[14] to
compel respondents to produce and permit them to inspect and to copy or photograph the Deed of
Absolute Sale subject matter of said examination. Thereafter, the trial court issued
an Order[15] dated August 14, 1992 granting the motion and directing the Regional Office of the NBI to
bring the document to court so that the same may be properly examined.
On August 11, 1992, Guillerma died in Cagayan de Oro City and was accordingly dropped as co-
plaintiff.
After trial on the merits, the trial court rendered its Decision[16] dated August 2, 2001 ruling in
favor of the respondents, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the plaintiffs were able to establish a strong
preponderance of evidence in their favor. Accordingly, Transfer Certificate of Title No. T-
14204 is hereby declared NULL AND VOID, and is hereby CANCELLED. Let another title
be issued in the name of the late Julian Sambaan. The defendants are jointly and severally
directed to pay the plaintiffs the sum of P20,000.00 as moral damages, P20,000.00 as
attorneys fees and P1,671.00 representing actual expenses.[17]

Petitioners, alleging among others that the trial court erred in finding that the signature of Julian
on the assailed document was a forgery, went to the CA by way of ordinary appeal. On August 20, 2003,
the CA rendered a Decision affirming the findings of the trial court, the dispositive portion of which reads:
WHEREFORE, premises considered, the appealed Decision dated August 2, 2001 of

the Regional Trial Court of Cagayan de Oro City, Branch 18, in Civil Case no. 92-179 is
hereby AFFIRMED in toto. Costs against appellants.[18]
Petitioners filed a Motion for Reconsideration[19] which was denied by the CA in its
Resolution[20] dated March 17, 2004.
Issues
In this Petition for Review on Certiorari, petitioners assail the Decision of the CA on the following
grounds:
A. THE COURT OF APPEALS ERRED WHEN IT RULED THAT PRESCRIPTION DID NOT
BAR RESPONDENTS ACTION TO RECOVER OWNERSHIP OF THE SUBJECT PROPERTY.
B. THE COURT OF APPEALS ERRED WHEN IT DISREGARDED SETTLED PRINCIPLES ON

THE ADMISSIBILITY AND APPRECIATION OF OPINIONS OF EXPERT WITNESSES IN ITS
BLANKET ACCEPTANCE OF THE INADEQUATE TESTIMONY OF THE DOCUMENT
EXAMINER WHO WAS COMMISSIONED BY RESPONDENTS PRIOR TO THE
COMMENCEMENT OF CIVIL CASE NO. 92-179.
C. THE COURT OF APPEALS ERRED WHEN IT DISREGARDED THE RULES OF EVIDENCE

IN ARRIVING AT THE CONCLUSION THAT THE DEED OF ABSOLUTE SALE WAS A
FORGED DOCUMENT ON THE BASIS OF SPECIMEN SIGNATURES THE GENUINENESS
OF WHICH WERE NEVER ESTABLISHED.
D. THE COURT OF APPEALS ERRED WHEN IT DISREGARDED LEGAL PRINCIPLES ON

HANDWRITING COMPARISON IN USING SPECIMEN SIGNATURES OF GUILLERMA
SAMBAAN THAT WERE MADE AT THE TIME AND FOR THE SPECIFIC PURPOSE OF THE
HANDWRITING ANALYSIS OF THE DEED OF ABSOLUTE SALE.
E. THE COURT OF APPEALS ERRED WHEN IT DISREGARDED JURISPRUDENCE ON THE

PROOF REQUIRED TO ESTABLISH FORGERY IN ARRIVING AT THE CONCLUSION THAT
THE SIGNATURE OF JULIAN SAMBAAN ON THE DEED OF ABSOLUTE SALE WAS
FORGED BECAUSE IT BELIEVED THAT GUILLERMA SAMBAANS SIGNATURE WAS ALSO
FORGED.
F. THE COURT OF APPEALS CONTRAVENED THE LEGAL RULES GOVERNING THE
APPRECIATION OF DOCUMENTS IN RULING AGAINST THE VALIDITY OF JULIAN
SAMBAANS SALE OF THE SUBJECT PROPERTY TO PETITIONERS DESPITE THE
EXISTENCE OF THE AGREEMENT DATED 10 DECEMBER 1970 CONFIRMING THE SALE.
G. THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS AWARD OF

DAMAGES IN FAVOR OF RESPONDENTS AND IN DISMISSING PETITIONERS
COUNTERCLAIMS FOR DAMAGES.
Our Ruling
The core issue to be resolved in the present controversy is the authenticity of the Deed of Absolute
Sale which is a question of fact rather than of law. In Manila Bay Club Corporation v.Court of
Appeals,[21] we held that for a question to be one of law, it must involve no examination of the probative
value of the evidence presented by the litigants or any of them. There is a question of law when the doubt
or difference arises as to what the law is pertaining to a certain state of facts. On the other hand, there is
a question of fact when the doubt arises as to the truth or the falsity of alleged facts.[22]
In the case at bench, the issues raised by the petitioners are essentially factual matters, the
determination of which are best left to the courts below. Well-settled is the rule that the Supreme Court
is not a trier of facts. Factual findings of the lower courts are entitled to great weight and respect on
appeal, and in fact accorded finality when supported by substantial evidence on the record.[23] Substantial
evidence is more than a mere scintilla of evidence. It is that amount of relevant evidence that a reasonable
mind might accept as adequate to support a conclusion,[24] even if other minds, equally reasonable, might
conceivably opine otherwise.[25] But to erase any doubt on the correctness of the assailed ruling, we have
carefully perused the records and, nonetheless, arrived at the same conclusion. We find that there is
substantial evidence on record to support the Court of Appeals and trial courts conclusion that the
signatures of Julian and Guillerma in the Deed of Absolute Sale were forged.
The examination conducted by the NBI disclosed

that Julian and Guillermas signatures were
forged.
We find that both the trial court and the Court of Appeals correctly gave probative value to the
testimony of the NBI Senior Document Examiner Caroline Moldez Pitoy, who categorically testified that
the signatures of Julian and Guillerma in the Deed of Absolute Sale were forged, viz:[26]
Atty. Dalisay: As Senior Document Examiner of the National Bureau of Investigation, do

[sic] you have [the] occasion of examining [sic] the signatures of Julian
Sambaan and Guillerma Saarenas by virtue of the case of the Regional
Director, Regional Office of the National Bureau of Investigation, Cagayan
de Oro City?
A: Yes sir.
xxxx
Q: What was the result of the findings on the signatures of Julian Sambaan and Guillerma
Saarenas Sambaan appearing on the Deed of Sale dated December 12,
1990.
A: After [conducting] comparative examinations x x x on the standard specimen
signatures of Julian Sambaan [and Guillerma Sambaan] as well as the x
x x questioned x x x signatures x x x we found out that [they were] not
written by one and the same person.[27]
xxxx
Q: What was the procedure which you have taken x x x in examining the authenticity of
the signatures of Guillerma Saarenas Sambaan?
A: Per Standard Operating Procedures, the first thing we did upon receipt of the
documents submitted to us is to check x x x the documents attached to
the basic letter-request and then the questioned and standard documents
were classified as to the sufficiency and appropriateness of the standards,
and then these were evaluated, after which, they were marked
accordingly, then we go to examining all the standard/specimens first, to
determine whether the handwriting is done by one and the same person
before comparing with the questioned and standard signatures. x x x
After they were found to be written by one and the same person, before
comparing with the questioned documents, the handwriting
characteristics were properly observed in these two (2) sheets of
photographs, then, the final evaluation is made, after which, a written
report is made as a result of the examination, then the same is forwarded
to the Document Examiner for re-examination and this Examiner affixes
his signature and submits the same to the Chief of the Division for
approval and the said report passes to the office of the Regional Director
for final approval.
Petitioners failed to present any evidence to

rebut the findings of the NBI handwriting expert.
Moreover, the findings of the NBI document examiner were corroborated by the trial courts own
observation, as affirmed by the CA, that even a cursory examination of Guillermas questioned signature
from her specimen signatures in the enlarged photographs (Exhibits F and F-1) would show that it needs
no expert witness to notice the wide difference in stroke, as well as the writing style in capital G.[28] What
is more, Emma S. Felicilda, the daughter of then deceased Guillerma, likewise testified that in fact my
mother was the one who filed the complaint in this instant case because according to her, she did not
sign the said document.[29]
The fact that the examination was commissioned

by the respondents did not make said
examination null and void.
It is of no moment that the examination of the Deed of Absolute Sale was commissioned by the
respondents. In the end, it is the court which has the discretion and authority on whether to give probative
value to the results of the examination. As held in Sali v. Abubakar,[30] the fact that the NBI conducted the
examination of certain contested documents upon the request of a private litigant does not necessarily
nullify the examination thus made:
x x x Its purpose is, presumably, to assist the court having jurisdiction over said litigations,
in the performance of its duty to settle correctly the issue relative to said documents. Even
a non-expert private individual may examine the same, if there are facts within his
knowledge which may help the courts in the determination of said issue. Such
examination, which may properly be undertaken by a non-expert private individual, does
not, certainly, become null and void when the examiner is an expert and/or an officer of
the NBI.
Indeed, any person, expert or not, either in his private or in his official capacity, may
testify in court on matters, within his personal knowledge, which are relevant to a suit,
subject to the judicial authority to determine the credibility of said testimony and the
weight thereof. [On] the other hand, the question whether a public official may or shall
be ordered or permitted by his superior to examine documents and testify thereon in a
given case, is one mainly administrative in character, which is within the competence of
said superior officer, or the Bureau Director or Head of the Office, or the corresponding
department head to decide, and is independent of the validity of the examination thus
made or of the credence and weight to be given by the Court to the conclusions reached,
in consequence of said examination, by the official who made it.
The procedures taken by the NBI document

examiner did not violate Section 22, Rule 132 of
the Rules of Court.
We are not swayed by petitioners allegation that the comparisons made by the document
examiner, the CA and the trial court, of Guillermas signature in the Deed of Absolute Sale and her specimen
signatures, violated Section 22, Rule 132[31] of the Rules of Court on the authentication
of private documents. It should be borne in mind that in this case respondents were not presenting
evidence to authenticate a private document. On the contrary, they are challenging the signatures
appearing in the Deed of Absolute Sale.
The confluence of the following circumstances

prove by preponderance of evidence that the
Deed of Absolute Sale was forged.
Records show that Julian was unaware of any absolute conveyance of his rights over the subject
property in favor of petitioners. As found by the trial court and affirmed by the CA, Julian even requested
his children to redeem subject property from the petitioners. In furtherance of his fathers request, Absalon
offered to redeem the subject property from the petitioners in 1982, however, the latter refused because
they were allegedly using the same as tethering place for their cattle.[32]
The caretaker of the subject property, Eufronio Abrea, also testified on cross-examination that
there were times when the brothers and sisters of Myrna went to the land and asked for
coconuts.[33] Petitioners take this to imply that the respondents never owned the subject property because
they had to ask for coconuts from petitioners, who were the real owners of the property.[34] We disagree
with this interpretation. Harvesting of coconuts requires specialized skills; an ordinary person who does
not know how to climb necessarily has to ask the caretaker to get the coconuts for him or her.
In addition, Myrna admitted that she was not present when her parents signed the assailed Deed
of Absolute Sale.[35] Neither was she cognizant of who the witnesses were to the said
deed.[36] Interestingly, Guillerma, one of the alleged signatories, would have been privy to the transaction
that involved her husband. Yet, she joined herein respondents in filing an action for the Annulment of the
Deed of Absolute Sale on the ground of forgery.
Lastly, the trial court and the CA were one in proclaiming that considering that the subject property
belongs to Julians capital, the execution of the assailed Deed of Absolute Sale could be validly made by
Julian even without his wifes signature.[37] As a matter of fact, the wifes name was not typed in the assailed
deed and her purported signature merely appears next to the supposed signature of Julian. This only
confirms that the person who prepared the deed knew that her signature was unnecessary for the assailed
document.
The trial court and the CA further concluded:
x x x If such was the case, we are in a query why the signature of GUILLERMA must have
to be forged when her consent, as spouse of JULIAN, is not necessary to the execution
of the Deed of Absolute Sale?The answer to this is simple: JULIAN never executed the
assailed Deed of Absolute Sale in favor of MYRNA and such deed conveys no ownership
in favor of the appellants.[38]
Conclusions and findings of fact by the trial court are entitled to great weight on appeal and should
not be disturbed unless for strong and cogent reasons because the trial court is in a better position to
examine real evidence, as well as to observe the demeanor of the witnesses while testifying in the
case.[39] The fact that the CA adopted the findings of fact of the trial court makes the same binding upon
this court.[40] In Philippine Airlines, Inc. v. Court of Appeals, [41] we held that factual findings of the CA
which are supported by substantial evidence are binding, final and conclusive upon the Supreme Court. A
departure from this rule may be warranted where the findings of fact of the CA are contrary to the findings
and conclusions of the trial court,[42] or when the same is unsupported by the evidence on record.[43] There
is no ground to apply the exception in the instant case, however, because the findings and conclusions of
the CA are in full accord with those of the trial court.
The forged Deed of Absolute Sale is null and

conveys no title.
Having affirmed the findings of fact of both the CA and the trial court that the signatures of Julian
and Guillerma are forgeries, we now come to the question of the validity of the transfer of title to the
petitioners.
In Sps. Solivel v. Judge Francisco,[44] we held that:
x x x in order that the holder of a certificate for value issued by virtue of the registration
of a voluntary instrument may be considered a holder in good faith for value, the
instrument registered should not be forged. When the instrument presented is forged,
even if accompanied by the owners duplicate certificate of title, the registered owner does
not thereby lose his title, and neither does the assignee in the forged deed acquire any
right or title to the property.
x x x The innocent purchaser for value protected by law is one who purchases a titled
land by virtue of a deed executed by the registered owner himself, not by a forged deed,
as the law expressly states. x x x
In Instrade, Inc. v. Court of Appeals,[45] we reiterated the said ruling maintaining that [A]s early
as Joaquin v. Madrid, x x x, we said that in order that the holder of a certificate for value issued by virtue
of the registration of a voluntary instrument may be considered a holder in good faith and for value, the
instrument registered should not be forged. Indubitably, therefore, the questioned Deed of Absolute Sale
did not convey any title to herein petitioners. Consequently, they cannot take refuge in the protection
accorded by the Torrens system on titled lands.
Thus, we hold that with the presentation of the forged deed, even if accompanied by the owners
duplicate certificate of title, the registered owner did not thereby lose his title, and neither does the
assignee in the forged deed acquire any right or title to the said property. The CA has aptly arrived at the
same conclusion in its August 20, 2003 Decision affirming in toto the August 2, 2001 Decision of the RTC
of Cagayan de Oro City ratiocinating that:
It is significant to stress that the main thrust in the case at bench is the regularity and
validity of the assailed Deed of Absolute Sale dated December 7, 1970 (Record p. 374,
Exhibit 3) allegedly executed by JULIAN in favor of the appellants. As such, we must not
confuse the issue at hand by averring that other documents should be considered in
determining the validity of the deed of absolute sale. The reason is simple: the valid
execution of the Deed of Absolute Sale will convey and transfer ownership in favor of
appellants title based on the rule that by the contract of sale one of the contracting parties
obligates himself to transfer ownership of and to deliver a determinate thing, and the
other to pay therefor a sum certain in money or its equivalent (Coronel vs. Court of
Appeals, 263 SCRA 15). The fact that the assailed Deed was not signed by JULIAN and
the signatures of JULIAN and GUILLERMA were forged per findings of the NBI Senior
Document Examiner, it can therefore be inferred that the subsequent issuance of Transfer
Certificate of Title No. T-14204 has no basis at all since ownership was not conveyed to
appellants by reason of the forged Deed.
In addition, as to the issue that the Agreement dated December 10, 1970 (Record p. 375,
Exhibit 4) executed between DOMINGO and PATRICIO were excluded, we believe there
is no need to delve on the said Agreement since the same will not in any way give
justification to the forgery committed in the Deed of Absolute Sale. As explained by the
court a quo, to which we concur, appellees should not be faulted because they are not
lawyers, and as such they may not be able to appreciate the legal logic between Exhibits
3 and 4.[46]
Prescription did not bar respondents action to

recover ownership of the subject property.
Citing Article 1454[47] of the Civil Code, petitioners assert that since the respondents admit that
there was a mortgage transaction between Julian and herein petitioners involving the subject property
there is no dispute that an implied trust was created by operation of law. In which case, respondents right
to reconveyance had already prescribed when they filed the annulment case on April 3, 1992, or more
than 10 years after petitioners repudiated such implied trust.
On the other hand, respondents assert that the element of consent is totally wanting in the
assailed Deed of Absolute Sale because the signatures of Julian and Guillerma, which is equivalent to their
consent, were forged by the petitioners.[48] They maintain that the absence of consent made the said
document null and void.[49] Hence, this case falls under the purview of Article 1410 of the Civil Code which
provides that an action to declare the inexistence of void contracts does not prescribe.[50]
We agree with the respondents. The supposed vendor's signature having been proved to be a
forgery, the instrument is totally void or inexistent as "absolutely simulated or fictitious" under Article 1409
of the Civil Code.[51] According to Article 1410, "the action or defense for the declaration of the inexistence
of a contract does not prescribe. The inexistence of a contract is permanent and incurable which cannot
be cured either by ratification or by prescription.[52]
The award of moral damages and attorneys fees

is proper.
On this aspect, we must consider the blood relations among the parties. One of the respondents,
Emma S. Felicilda, testified on cross examination that they had high regard for Myrna, their eldest
sister.[53] The same was echoed by respondent Anita Sambaan on cross examination.[54] They could not
believe that Myrna would keep and appropriate the land for herself and transfer the title exclusively to her
name.[55] On direct examination, respondent Emma S. Felicilda likewise testified that the forgery caused
them anger and bad emotions.[56]
Moreover, it was Julians dying wish for the property to be redeemed from the
petitioners.[57] Hence, it is not unexpected that the sentimental significance of the property and the anger
and emotions caused by the unlawful transfer of the same have moved the respondents to recover the
same through the instant action. We therefore hold that the award of P20,000.00 as moral damages is
proper.
In addition, in view of the complexity of the instant case and the multiple levels of appeal that this
case had gone through, we also affirm the award of attorneys fees of P20,000.00 as well as the actual
damages of P1,671.00 incurred by the prevailing party which was substantiated during trial.
On a final note, it bears stressing that the arguments raised by the petitioners are essentially the same
issues they put forward before the CA which have been duly passed upon and considered by the appellate
court in affirming the RTC Decision in toto.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
JOSE P. PEREZ
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1]
Records, p. 374.
[2]
Penned by Judge Edgardo T. Lloren.
[3]
Penned by Associate Justice Mercedes Gozo-Dadole and concurred in by Associate Justices Delilah
Vidallon-Magtolis and Rosmari D. Carandang.
[4]
Rollo, pp. 45-64.
[5]
Id. at 10-43.
[6]
Records, pp. 5-6.
[7]
Id. at 1-4.
[8]
Id. at 7.
[9]
Id. at 34-40.
[10]
Id. at 41-42.
[11]
Id. at 372-373.
[12]
Id. at 374.
[13]
Id. at 375.
[14]
Id. at 73-74.
[15]
Id. at 84.
[16]
Id. at 538-547.
[17]
Rollo, pp. 265-266.
[18]
Id. at 64.
[19]
[20]
Id. at 186.
[21]
315 Phil. 805, 820 (1995).
[22]
Id.
[23]
Xentrex Motors, Inc. v. Court of Appeals, 353 Phil. 258, 262 (1998).
[24]
Judge Espaol v. Judge Mupas, 484 Phil. 636, 657 (2004).
[25]
Bascos, Jr. v. Tagahanan, G.R. No. 180666, February 18, 2009.
[26]
Rollo, pp. 369-372.
[27]
Emphasis supplied.
[28]
Rollo, p. 53.
[29]
TSN, April 13, 1994, p. 7.
[30]
124 Phil. 444, 447-448 (1966).
[31]
Sec. 22. How genuineness of handwriting proved. The handwriting of a person may be proved
by any witness who believes it to be the handwriting of such person because he has seen the
person write, or has seen writing purporting to be his upon which the witness has acted or
been charged, and has thus acquired knowledge of the handwriting of such person. Evidence
[in respect to] the handwriting may also be given by a comparison, made by the witness or
the court, with writings admitted or treated as genuine by the party against whom the
evidence is offered, or proved to be genuine to the satisfaction of the judge.
[32]
Rollo, p. 47.
[33]
[34]
Rollo, p. 362.
[35]
TSN, July 5, 1996, p. 20 reads on cross-examination:
Q: But you were not present when the alleged signature was affixed. Is that correct?
A: I was not present.
[36]
TSN, August 21, 1995, p. 16 reads on direct examination:
Q: Did you know who were the witnesses to the signing of this document?
A: No, sir.
[37]
Records, p. 59.
[38]
Id.
[39]
Chase v. Buencamino, Sr., 221 Phil. 65, 78 (1985).
[40]
395 Phil 791, 801 (2000).
[41]
341 Phil. 624, 633 (1997).
[42]
Republic v. Court of Appeals, 373 Phil. 1, 13 (1999).
[43]
Alba Vda. De Raz v. Court of Appeals, 372 Phil. 710, 725 (1999).
[44]
252 Phil. 223, 231 (1989).
[45]
395 Phil 791, 801 (2000).
[46]
Rollo, pp. 60-61.
[47]
Article 1454. If an absolute conveyance of property is made in order to secure the performance of an
obligation of the grantor toward the grantee, a trust by virtue of law is established. If the fulfilment of
the obligation is offered by the grantor when it becomes due, he may demand reconveyance of the
property to him.
[48]
Rollo, p. 425.
[49]
Id. at 427.
[50]
Id. at 425.
[51]
Villanueva v. Court of Appeals, G.R. No. 84464, June 21, 1991, 198 SCRA 472, 479.
[52]
Arturo M. Tolentino, COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE OF
THE PHILIPPINES Volume IV, p. 633.
[53]
TSN, April 13, 1994, p. 26.
[54]
TSN, March 28, 1995, p. 13.
[55]
TSN, April 13, 1994, p.26; March 28, 1995, p. 13.
[56]
Id at 8.
[57]
Id. at 47.
SECOND DIVISION
[G.R. No. 157095 : January 15, 2010]
MA. LUISA G. DAZON, PETITIONER, VS. KENNETH Y. YAP AND PEOPLE OF THE
PHILIPPINES, RESPONDENTS.
DECISION
DEL CASTILLO, J.:
The primordial function of the Housing and Land Use Regulatory Board (HLURB) is
the regulation of the real estate trade and business. Though the agency's jurisdiction has been
expanded by law, it has not grown to the extent of encompassing the conviction and
punishment of criminals.
The present Petition for Review on Certiorari assails the Orders of the Regional Trial Court
(RTC) of Lapu-Lapu City, Branch 54 dated October 2, 2002 and January 13,2003, which granted
the Motion to Withdraw Information filed by the public prosecutor and denied the motion for
reconsideration filed by petitioner, respectively.
Factual Antecedents
Respondent Kenneth Y. Yap was the president of Primetown Property Group, Inc., (Primetown)
the developer of Kiener Hills Mactan Condominium, a low-rise condominium project. In
November 1996, petitioner Ma. Luisa G. Dazon entered into a contract[1] with Primetown for the
purchase of Unit No. C-108 of the said condominium project. Petitioner made a downpayment
and several installment payments, totaling P1,114,274.30.[2] Primetown, however, failed to
finish the condominium project. Thus, on March 22, 1999, petitioner demanded for the refund
of her payments from Primetown, pursuant to Section 23[3]of Presidential Decree (PD) No. 957
(1976), otherwise known as "The Subdivision and Condominium Buyers' Protective Decree".
Primetown failed to refund petitioner's payments.
On October 26,2000,[4] petitioner filed a criminal complaint with the Office of the City
Prosecutor of Lapu-Lapu City against respondent as president of Primetown for violation of
Section 23 in relation to Section 39[5] of PD 957. Subsequently, after a finding of probable
cause, an Information[6] was filed with the RTC of Lapu-Lapu City docketed as Criminal Case
No. 015331-L.
Meanwhile, respondent, in connection with the resolution finding probable cause filed a Petition
for Review with the Department of Justice (DOJ). On June 14,2002, the DOJ rendered a
Resolution[8] ordering the trial prosecutor to cause the withdrawal of the Information. Hence,
the prosecutor filed a Motion to Withdraw Information[9] with the RTC.
The RTC disposed of the matter as follows:
Wherefore, in view of the foregoing, the Motion to Withdraw Information filed by [the] public
prosecutor is hereby granted. Accordingly, the information' filed against the herein accused is
ordered withdrawn and to be transmitted back to the City Prosecutor's Office of Lapu-Lapu City.
Furnish copies of this order to Prosecutor Rubi, Attys. Valdez and Pangan.
SO ORDERED.[10] Petitioner's motion for reconsideration was denied.[11]
Issue
Hence, the present Petition for Review on Certiorari raising the following issue: ''Whether or not
a regional trial court has jurisdiction over a criminal action arising from violation of PD 957".[12]
Petitioner contends that jurisdiction is conferred by law and that there is no law expressly
vesting on the HLUKB exclusive jurisdiction over criminal actions arising from violations of PD
957.
Respondent, on the other hand, contends that there is no error of law involved in this case and
that petitioner failed to give due regard to the hierarchy of courts by filing the present petition
directly with the Supreme Court instead of with the Court of Appeals. He further argues that the
real issue is not of jurisdiction but the existence of probable cause. The Secretary of Justice,
according to respondent, found no probable cause to warrant the filing of the Information,
hence its directive to cause the withdrawal of the Information.
Our Ruling
The DOJ Resolution dated June

14, 2002 which ordered the
withdrawal of the information
was based on the finding that
the HLURB, and not the regular
court, has jurisdiction over the case.
Both the respondent[13] and the OSG[14] agree with the petitioner that the regular courts and not
the HLURB have jurisdiction over the criminal aspect of PD 957. The parties, however, disagree
on the basis of the directive of the DOJ for the withdrawal of the Information. Was it, as
argued by petitioner, lack of jurisdiction of the RTC or was it, as argued by respondent, lack of
probable cause? We perused the DOJ Resolution dated June 14, 2002 and we find that the
basis of the resolution was, not that there was lack of probable cause but, the finding that it is
the HLURB that has jurisdiction over Hie case. Pertinent portions of the said DOJ Resolution
provide:
A perusal of the allegations in the complaint-affidavit would show complainant's grievance

against respondent was the failure of the latter's firm to refund the payments she made for one
of the units in the aborted Mactan condominium project in the total amount of P1,114,274.30.
As early as in the case of Solid Homes, Inc. vs. Payawal, 177 SCRA 72, the Supreme Court had
ruled that the Housing and Land Use Regulatory Board (HLURB) has exclusive jurisdiction over
cases involving real estate business and practices under PD 957. This ruling is reiterated in
several subsequent cases, to name a few of them, Union Bank of the Philippines-versus-HLURB,
G.R. No. 953364, June 29, 1992; C.T. Torres Enterprises vs. Hilionada, 191 SCRA 286; Villaflor
vs. Court of Appeals, 280 SCRA 297; Marina Properties Coip. vs. Court of Appeals, 294 SCRA
273; and Raet vs. Court of Appeals, 295 SCRA 677. Of significant relevance is the following
pronouncement of the Supreme Court in Raet vs. Court of Appeals (supra), as follows:
xxx The contention has merit. The decision in the ejectment suit is conclusive only on the
question of possession of the subject premises. It does not settle the principal question
involved in the present case, namely, whether there was perfected contract of sale between
petitioners and private respondent PVDHC involving the units in question. Under 8(100) of
E.O. No. 648 dated February 7, 1981, as amended by E.O. No. 90 dated December 17, 1986
this question is for the HLURB to decide. The said provision of law gives that agency the power
toâ€”
Hear and decide cases of unsound real estate business practices; claims involving refijnd filed
against project owners, developers, dealers, brokers, or salesmen; and cases of specific
performance.
This jurisdiction of the HLURB is exclusive. It has been held to extend to the determination of
the question whether there is a perfected contract of sale between condominium buyers and
[the] developer x x x.
In fine, the Rule of Law dictates that we should yield to this judicial declaration upholding the
jurisdiction of the HLURB over cases of this nature.
Hence, there is a need for the Court to make a definite ruling on a question of law - the matter
of jurisdiction over the criminal aspect of PD 957.
Jurisdiction over criminal actions

arising from violations of PD 957
is vested in the regular courts.
Jurisdiction is" conferred by law and determined by the material averments in the complaint as
well as the character of the relief sought.15 The scope and limitation of the jurisdiction of the
HLURB are well-defined.'6 Its precusor, the National Housing Authority (NHA),17 was vested
under PD 957 with exclusive jurisdiction to regulate the real estate trade and business,18
specifically the registration of subdivision or condominium projects and dealers, brokers and
salesmen of subdivision lots or condominium units, issuance and suspension of license to sell;
and revocation of registration certificate and license to sell. Its jurisdiction was later expanded
under PD 1344 (1978) to include adjudication of certain cases, to wit:
Sec. 1. In the exercise of its functions to regulate the real estate trade and business and in
addition to its powers provided for in Presidential Decree No. 957, the National Housing
Authority shall have the exclusive jurisdiction to hear and decide cases of the following nature:
a) Unsound real estate business practices;
b) Claims involving refund and any other claims filed by subdivision lot or condominium unit
buyer against the project owner, developer, dealer, broker or salesman; and
c) Cases involving specific performance of contractual and statutory obligations filed by buyers
of subdivision lot or condominium unit against the owner, developer, dealer, broker or
salesman. (Italics supplied)
It is a settled rule of statutory construction that the express mention of one thing in the law
means the exclusion of others not expressly mentioned. This rule is expressed in the familiar
maxim expressio unius est exclusio alterius[19]. Where a statute, by its terms, is expressly
limited to certain matters, it may not, by interpretation or construction, be extended to others.
The rule proceeds from the premise that the legislature would not have made specified
enumerations in a statute had the intention been not to restrict its meaning and to confine its
terms to statute had the intention been not to restrict its meaning and to confine its terms to
those expressly mentioned.[20] Noticeably, cases that are criminal in nature are not mentioned in
the enumeration quoted above. The primordial function of the HLURB, after all, is
the regulation of the real estate trade and business and not the conviction and punishment of
criminals. "It may be conceded that the legislature may confer on administrative boards or
bodies quasi-judicial powers involving the exercise of judgment and discretion, as incident to
the performance of administrative functions. But in so doing, the legislature must state its
intention in express terms that would leave no doubt, as even such quasi-judicial prerogatives
must be limited, if they are to be valid, only to those incidental to or in connection with the
performance of administrative duties, which do not amount to conferment of jurisdiction over a
matter exclusively vested in the courts".[21]
Administrative agencies being tribunals of limited jurisdiction can only wield such powers as are
specifically granted to them by their enabling statutes. PD 957 makes the following specific
grant of powers to the NHA (now HLURB) for the imposition of administrative fines, and it also
mentions penalties for criminal cases, to wit:
Sec. 38. Administrative Fines.- The Authority may prescribe and impose fines not exceeding ten
thousand pesos for violations of the provisions of this Decree or any rule or regulation
thereunder. Fines shall be payable to the Authority and enforceable through writs of execution
in accordance with the provisions of the Rules of Court (Italics supplied)
Sec. 39. Penalties.- Any person who shall violate any of the provisions of this Decree and/or any
rule or regulation that may be issued pursuant to this Decree shall, upon conviction, be
punished by a fine of not more than twenty thousand (P20,000.00) pesos and/or imprisonment
of not more than ten years: Provided, That in the case of corporations, partnership,
cooperatives, or associations, the President, Manager or Administrator or the person who has
charge of the administration of the business shall be criminally responsible for any violation of
this/Decree and/or the rules and regulations promulgated pursuant thereto,
Having limited, under Section 38 of PD 957, the grant of power to the former NHA, now HLURB,
over the imposition of fines to those which do not exceed ten thousand pesos, it is clear that
the power in relation to criminal liability mentioned in the immediately succeeding provision, to
impose, upon conviction, fines above ten thousand pesos and/or imprisonment, was not
conferred on it. Section 39, unlike Section 38, conspicuously does not state that it is the MIA
that may impose the punishment specified therein.
Not having been specifically conferred with power to hear and decide cases which are criminal
in nature, as well as to impose penalties therefor, we find that the HLURB has no jurisdiction
over criminal actions arising from violations of PD 957.
On the other hand, BP Big. 129 states:
Sec. 20. Jurisdiction in Criminal Cases. - Regional Trial Courts shall exercise exclusive original
jurisdiction in all criminal cases not within the exclusive jurisdiction of any court, tribunal or
body, except those now falling under the exclusive and concurrent jurisdiction of
the Sandiganbayan which shall hereafter be exclusively taken cognizance of by the latter.
Based on the above-quoted provision, it is the RTC that has jurisdiction over criminal cases
arising from violations of PD 957.
In the present case, the affidavit-complaint[23] alleges the violation of Section 23 oFTD 957 and
asks for the institution of a criminal action against respondent Yap, as President of
Primetown. The Office of the City Prosecutor found probable cause for the filing of
an'Information for the subject offense. The DOJ made no reversal of such finding of probable
cause. Instead, it directed the withdrawal of the information on the erroneous premise that it is
the HLURB which has jurisdiction over the case. However, as above-discussed, and contrary to
the resolution of the Secretary of Justice, it is not the HLURB but the RTC that has jurisdiction
to hear the said criminal action.
WHEREFORE, the petition is GRANTED. The assailed October 2, 2002 and January 13, 2003
Orders of the Regional Trial Court of Lapu-Lapu City, Branch 54, are REVERSED and SET
ASIDE. The said Court is DIRECTED to proceed with the arraignment of the respondent and
to hear the case with dispatch.
SO ORDERED.

Supreme Court
Manila
SECOND DIVISION

Plaintiff-Appellee,
Present:
CARPIO,* J., Chairperson,

- versus - LEONARDO-DE CASTRO,**
BRION,
DEL CASTILLO, and
ABAD, JJ.
REYNALDO ALBALATE, JR., Promulgated:

Accused-Appellant. December 18, 2009
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Factual Antecedents
Appellant Reynaldo Albalate, Jr. was charged with two counts of rape committed against his niece
Maria.[1] The accusatory portions of the two Informations read as follows:
Crim. Case No. 3169-C:
That on or about the evening of the 21st day of November 1998, at Barangay
_____________, Municipality of Lopez, Province of Quezon, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, an uncle and a relative by
consanguinity within the third civil degree of one Maria, with lewd design, by means of
force, threats and intimidation, did then and there willfully, unlawfully and feloniously have
carnal knowledge of said Maria , a minor, 12 years of age against her will.
Contrary to law.[2]
Crim. Case No. 3170-C:
That on or about the 21st day of November, 1998 at around 8:00 oclock in the
morning, at Barangay ___________, Municipality of Lopez, Province of Quezon,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
an uncle and a relative by consanguinity within the third civil degree of one Maria, armed
with an ice-pick, with lewd design, by means of force, threats and intimidation, did then
and there willfully, unlawfully and feloniously have carnal knowledge of one Maria, a
minor, 12 years of age against her will.
Contrary to law.[3]
Appellant pleaded not guilty when arraigned. Trial on the merits thereafter ensued.
On July 24, 2002, the Regional Trial Court of Calauag, Quezon, Branch 63, rendered its
Decision[4] finding the appellant guilty. The trial court based its judgment of conviction on the following
factual findings:
This Court painstakingly scrutinized with great caution the testimony of private
complainant x x x and found the same to be clear, straightforward, credible and
convincing. At the time when the rape incidents happened [on] November 21, 1998, the
victim x x x was, as alleged by the prosecution, just a twelve (12) years old barrio lass
living in the house of her paternal grandparents in Barangay x x x, Quezon. It was in the
said house where she was forcibly deflowered by her uncle Reynaldo Albalate, Jr. on two
separate incidents that transpired on that fateful day of November 21, 1998. Maria
candidly testified that in the morning of the said day while she was alone in the house of
her grandparents, the accused Reynaldo Albalate, Jr. armed with an ice pick forcibly
removed her dress and placed himself on top of her. Afterwards, Reynaldo Albalate, Jr.
inserted his penis in her private part and at the same time kissed and warned her that if
she will tell x x x anybody what he had done to her, he will kill her x x x. She added that
on the evening of the same day (November 21, 1998) the accused Reynaldo Albalate, Jr.
first boxed her, then undressed her and once again put himself on top of her and
proceeded to rape her. Maria reported the rape incidents to her grandmother x x x who
is also the mother of the accused x x x but her grandmother told her that she x x x was
lying x x x. When asked by the Court x x x whether she offered resistance when she was
raped by the accused x x x, the victim x x x averred that nagpapalag po ako x x x. In the
course of the cross-examination conducted by the defense counsel, the victim x x x even
disclosed that when she was raped by the accused x x x in the morning of November 21,
1998, she was alone in her grandmothers house because she told her cousin Ruel x x x
to tend [to] the carabao. She added that when her cousin Ruel came back, the latter saw
that she was being raped by the accused x x x. She also categorically testified that when
the accused proceeded to rape her, there was bleeding in her vagina and she was hurt.
When she urinated, it was very painful. She pointed out that the subject rape incident
was her first sexual experience x x x.
On the other hand, the accused in order to exculpate himself from the crime
charged in the two Informations interposed the defense of denial and alibi. Accused x x x
denied that he twice raped the victim x x x at about 8:00 oclock in the morning and
about 9:00 oclock in the evening of November 21, 1998 x x x. He also claimed that the
parents of the victim x x x were mad at him that is why they filed the instant cases against
him. Reynaldo explained that when they were young, the victims father was angry with
him because of the sharing of copras in their farm. One day, they had a fight and Marias
father chased and boxed him so he boxed the former. [The other defense witness,
Florentina Escleto, tried to bolster the alleged innocence of the accused of the
crimes.] The said witness tried to establish the defense of alibi in favor of the accused x x
x. She testified that when the subject incidents of rape happened on November 21,
1998 at Barangay x x x, Quezon, the accused x x x was with her and her son making
copra at Barangay Ilayang Ilog-B, Lopez, Quezon. She added that accused x x x arrived
at Brgy. Ilayang Ilog-B on November 18, 1998 and only left said Barangay at the end of
the month of November 1998 x x x. This Court carefully scrutinized and weighed the
defense of denial and alibi proffered by the accused and was not persuaded by the
same. The denial and alibi of the accused deserve scant consideration. x x x
In the case at bar, accused x x x was positively identified in a straightforward and

categorical manner by the victim x x x as the defiler of her womanhood on two occasions
on x x x November 21, 1998.Thus, the denial and alibi interposed by the accused wilted
and crumbled in the face of such positive identification. It is also quite interesting x x x
that when the accused x x x testified in open court x x x, he only advanced the defense
of flat denial. He never mentioned x x x that when the alleged rape incidents happened
on November 21, 1998 x x x he was at Brgy. Ilayang Ilog-B, Lopez, Quezon helping
Florentina Escleto and her son in making copra. It was only when Florentina Escleto
testified x x x that the evidence of alibi cropped up. No other witnesses were presented
by the defense to bolster the alibi. Even the son of Florentina Escleto who she claimed
was with her and accused x x x in making copra at Brgy. Ilayang Ilog-B, Lopez, Quezon
on November 21, 1998 was not presented to shore up the defense of alibi. Thus, it is not
hard for this Court to discern that the accuseds defenses of denial and alibi were mere
concoction, undeserving of any evidentiary weight and value.
It is also [worth noting] that the accused x x x tried to impute ill-motive on the
part of the victim x x x and her parents for filing the instant cases against him. He claimed
that the parents of the victim particularly the victims father was mad at him because when
they were still young, they had a fight wherein he hacked the former. However, the said
allegation of the accused was not fully substantiated by any other evidence that would
clearly show the alleged ill-motive on the part of the complainant and her parents. Further,
to the mind of this Court, it is inconceivable that the victim x x x and her parents would
concoct a story of rape over such alleged quarrel between the victims father and the
accused and thus subject Maria to public humiliation and shame. x x x.[5]
xxxx
Again, it is worth repeating that this Court found the testimony of private complainant x
x x to be clear, straightforward and convincing thus, worthy of credence. She categorically
testified that accused x x x through force and intimidation ha[d] carnal knowledge of her
against her will on two separate occasions that occurred in the morning and in the evening
of November 21, 1998 x x x.[6]
The trial court noted that although the prosecution satisfactorily established that appellant was a
relative of the victim by consanguinity within the 3rd civil degree, it however failed to prove the victims
minority. It held that while the victim testified that she was only 12 years old when the rape incidents
transpired, the same could not be deemed conclusive and binding upon the court because no other
evidence such as a birth certificate was presented to corroborate or substantiate the victims minority.[7]
WHEREFORE, in view of all the foregoing considerations, this Court hereby finds
accused Reynaldo Albalate, Jr. GUILTY beyond reasonable doubt of the crime of RAPE
both in Criminal Case No. 3169-C and Criminal Case No. 3170-C and hereby sentences
said accused to suffer the penalty of RECLUSION PERPETUA in both cases and to pay the
private offended party Maria the amount of FIFTY THOUSAND PESOS (P50,000.00) as
civil indemnity plus the amount of FIFTY THOUSAND PESOS (P50,000.00) as moral
damages in each case.
The accused is to be credited [for] his preventive imprisonment if proper and any
pursuant to the provision of Article 29 of the Revised Penal Code as amended by R.A.
6127 and E.O. 214.
SO ORDERED.[8]

On appeal, appellant mainly argued that the prosecution failed to prove his guilt beyond
reasonable doubt and thus the trial court erred in finding him guilty of two counts of rape.Appellant claimed
that he could not have raped the victim because the examining physician testified that Maria did not suffer
any hymenal lacerations. Appellant also alleged that the trial court failed to consider the fact that the victim
had ill-motives to testify against him considering that the victims father had a previous quarrel with the
appellant. The defense also argued that the veracity of the victims testimony was weakened by the
prosecutions failure to present the testimony of Ruel, the victims cousin, to corroborate the testimony of
the victim.
The Court of Appeals, however, did not find merit in appellants contentions. Thus, in its
Decision[9] dated May 3, 2006, the Court of Appeals affirmed in toto[10] the Decision of the trial court.
The appellate court did not dignify appellants defenses of denial and alibi in view of the fact that he was
positively identified by the victim as the perpetrator of the crime. Appellants imputation of ill-motives was
also disregarded. The Court of Appeals opined that no member of the victims family would subject the
victim to the stigma and embarrassment concomitant with a rape trial, if he or she is not motivated by an
honest desire to have the malefactor punished. Anent the findings of the examining physician that the
victim suffered no hymenal lacerations, the Court of Appeals opined that the same did not mean that the
victim was not raped. It held that a medical examination is not indispensable in rape cases. The
perpetrator of the crime may be found guilty based solely on the testimony of the victim if the same is
found to be credible. Finally, the Court of Appeals held that the veracity of the prosecutions evidence was
not diminished by its failure to present the testimony of Ruel which would only be corroborative.
As regards the penalties imposed by the trial court, the Court of Appeals held that:
With respect to the propriety of the penalty imposed, the Court agrees with the
finding of the RTC that there is no concurrence of the aggravating circumstances of the
victims minority and her relationship to the accused-appellant which would warrant the
imposition of the death penalty. Hence, accused-appellant was properly meted the
penalty of reclusion perpetua in Criminal Case No. 3169-C. On the other hand, the Court
noted that the rape under Criminal Case No. 3170-C was committed with the use of an
ice pick, which is a deadly weapon. Article 335 of the Revised Penal Code provides that
whenever the rape is committed with the use of a deadly weapon x x x, the penalty shall
be reclusion perpetua to death. In relation thereto, Article 63 of the same Code prescribes
that when a penalty is composed of two (2) indivisible penalties, and there are neither
mitigating nor aggravating circumstances in the commission of the deed, as in this case,
the lesser penalty shall be applied. Accordingly, no reversible error was likewise
committed by the RTC in imposing the penalty of reclusion perpetua against accused-
appellant in the latter case.[11]
On November 20, 2006, we required the parties to submit their respective supplemental
briefs
[12]
but both manifested that they are adopting the allegations and arguments in their respective
appellants/appellees briefs and would thus no longer submit their supplemental briefs.[13]
Our Ruling
We AFFIRM with MODIFICATION the Decision of the Court of Appeals.

Guided by the principles that: a) an accusation for rape is easy to make, difficult to prove and
even more difficult to disprove; b) in view of the intrinsic nature of the crime, the testimony of the
complainant must be scrutinized with utmost caution and c) the evidence of the prosecution must stand
on its own merits and cannot draw strength from the weakness of the evidence for the defense,[14] we
hold that both the trial court and the Court of Appeals correctly found appellant guilty of two counts of
rape committed on November 21, 1998.
Findings of the trial court on the credibility of

witnesses and their testimonies are accorded
great weight and respect.
The trial court found the testimony of Maria to be clear, straightforward and credible. Thus:
This Court painstakingly scrutinized with great caution the testimony of private
complainant Maria in the cases at bar and found the same to be clear, straightforward,
credible and convincing.[15] x x x.
xxxx
Again, it is worth repeating that this Court found the testimony of private complainant
Maria to be clear, straightforward and convincing thus, worthy of credence. She
categorically testified that accused Reynaldo Albalate, Jr. through force and intimidation
ha[d] carnal knowledge of her against her will on two separate incidents that occurred in
the morning and in the evening of November 21, 1998 x x x.[16]
On appeal, said finding was affirmed by the Court of Appeals.
We find no reason to deviate from the said findings. In rape cases, the evaluation of the credibility
of witnesses is addressed to the sound discretion of the trial judge whose conclusion thereon deserves
much weight and respect, because the judge has the direct opportunity to observe them on the stand
and ascertain whether they are telling the truth or not.[17] We have long adhered to the rule that findings
of the trial court on the credibility of witnesses and their testimonies are accorded great respect unless it
overlooked substantial facts and circumstances, which if considered, would materially affect the result of
the case.[18]
Jurisprudence is replete with rulings that an appellant could justifiably be convicted based solely
on the credible testimony of the victim. Besides, there is nothing in the records which would indicate that
the trial court and the Court of Appeals overlooked or failed to appreciate some facts which if considered
would change the outcome of the case.
The prosecution failed to satisfactorily establish

the minority of the victim.
The Informations alleged that Maria was a 12-year old minor when she was ravished by her uncle,
a relative by consanguinity within the 3rd civil degree. The prosecutions evidence as to the age of the
victim constituted merely of the victims testimony. We find this bare testimony insufficient proof of her
age. As we held in People v. Manalili,[19] the minority of the victim and her relationship to the offender
must be alleged in the criminal complaint or information and proved conclusively and indubitably as the
crime itself. We also ruled in People v. Tabanggay[20] that -
x x x there must be independent evidence proving the age of the victim, other
than the testimonies of prosecution witnesses and the absence of denial by the accused. x
xx
As such, both the trial court and the Court of Appeals correctly held that the minority of the
victim was not satisfactorily established. Corollarily, we held in
People v. Lopit[21] that:
In the prosecution of criminal cases, especially those involving the extreme

penalty of death, nothing but proof beyond reasonable doubt of every fact necessary to
constitute the crime with which an accused is charged must be established. Qualifying
circumstances or special qualifying circumstances must be proved with equal certainty
and clearness as the crime itself; otherwise, there can be no conviction of the crime in its
qualified form. As a qualifying circumstance of the crime of rape, the concurrence of the
victims minority and her relationship to the accused-appellant must be both alleged and
proven beyond reasonable doubt.[22]
We also reiterate the guidelines set forth in People v. Pruna[23] in appreciating the age, either as
an element of the crime or as a qualifying circumstance, viz:
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.
Appellants denial and alibi deserve no

consideration at all.
When appellant took the witness stand, he denied that he raped the victim. However, other than his self-
serving testimony, he offered no evidence to support his denial. We have held that, denial, if
unsubstantiated by clear and convincing evidence, is a negative and self-serving evidence, which deserves
no weight in law and cannot be given greater evidentiary value over the testimonies of credible witnesses
who testify on affirmative matters.[24] In this case, appellants denial crumbles under the weight of Marias
positive identification of appellant as her lecherous attacker.
Likewise, we afford no evidentiary value to appellants claim that the filing of the rape charges was
orchestrated by the victims parents, particularly her father who allegedly harbored ill-feelings towards
appellant. Other than the fact that this claim was unsubstantiated, we find appellants claim too general to
be believed. He merely claimed that he fought with the victims father when they were both still young. But
he failed to provide any detail as to when this alleged incident happened.
The alibi proffered by the appellant must be rejected. Both the trial court and the Court of Appeals correctly
noted that appellant failed to make any mention about this alleged alibi when he was placed on the
witness stand. It was only when defense witness Florentina Escleto (Escleto) testified that this alibi
cropped up. At any rate, the same deserves no consideration at all. Escleto claimed to be a friend of the
appellant. It is settled jurisprudence that an alibi becomes less plausible when it is corroborated by relatives
and friends who may not be impartial witnesses.[25]Much less in the instant case considering that appellant
himself did not proffer any alibi; it was only Escleto who thought of offering this defense of alibi. Besides,
the defense failed to establish that it was physically impossible for the appellant to be at the crime scene
at the time the rape incidents were committed.
Propriety of the penalties imposed.
The rape incidents were committed on November 21, 1998 and thus are governed by Articles
266-A and 266-B of the Revised Penal Code, as amended by Republic Act No. 8353 which took effect
on October 22, 1997. Articles 266-A and 266-B of the Revised Penal Code read thus:
ART. 266-A. Rape, When and How Committed. Rape is committed
1. By a man who shall have carnal knowledge of a woman under any of

the following circumstances:
a) Through force, threat or intimidation;
b) When the offended party is deprived of reason or is otherwise

unconscious;
c) By means of fraudulent machinations or grave abuse of authority;
d) When the offended party is under twelve (12) years of age or is

demented, even though none of the circumstances mentioned should be
present;
xxxx
ART. 266-B. Penalties. Rape under paragraph 1 of the next preceding article shall
be punished by reclusion perpetua.
Whenever the rape is committed with the use of a deadly weapon or by two or
more persons, the penalty shall be reclusion perpetua to death.
xxxx
The death penalty shall also be imposed if the crime of rape is committed with
any of the following aggravating/qualifying 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 within the
third civil degree, or the common law spouse of the parent of the victim.
x x x x.
Due to the failure of the prosecution to prove the qualifying circumstance of minority, appellant
could only be held liable for simple rape on two counts. Thus, the trial court and the Court of Appeals
correctly sentenced appellant to reclusion perpetua and to pay the amounts of P50,000.00 as civil
indemnity and P50,000.00 as moral damages for each count of rape.[26] In addition, the award of
exemplary damages in the amount of P30,000.00[27] is proper considering the presence of the aggravating
circumstance of relationship.[28]
WHEREFORE, the Decision of the Court of Appeals dated May 3, 2006 in CA-G.R. CR No. 00213
finding appellant Reynaldo Albalate, Jr. guilty beyond reasonable doubt of two counts of rape and
sentencing him to suffer the penalty of reclusion perpetua and to pay Maria the amounts P50,000.00 as
civil indemnity and P50,000.00 as moral damages, for each count, is AFFIRMED with
the MODIFICATION that appellant is further ordered to pay the amount of P30,000.00 as exemplary
damages, for each count of rape.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
Per Special Order No. 775 dated November 3, 2009.
**
Additional member per Special Order No. 776 dated November 3, 2009.
[1]
The identity of the victim or any information to establish or compromise her identity, as well as those
of her immediate family or household members, shall be withheld pursuant to Republic Act No. 7610,
An Act Providing for Stronger Deterrence and Special Protection Against Child Abuse, Exploitation and
Discrimination, and for Other Purposes; Republic Act No. 9262, An Act Defining Violence Against
Women and Their Children, Providing for Protective Measures for Victims, Prescribing Penalties
Therefor, and for Other Purposes; and Section 40 of A.M. No. 04-10-11-SC, known as the rule on
Violence Against Women and Their Children, effective November 5, 2004.
[2]
[3]
Id. at 18-19.
[4]
Id. at 25-41; penned by Judge Mariano A. Morales, Jr.
[5]
Id. at 34-36.
[6]
Id. at 38.
[7]
Id. at 39-40.
[8]
Id. at 40-41.
[9]
Id. at 131-137; penned by Associate Justice Estela M. Perlas-Bernabe and concurred in by Associate
Justices Remedios A. Salazar-Fernando and Hakim S. Abdulwahid.
[10]
WHEREFORE, premises considered, the instant appeal is DENIED and the assailed Decision
dated July 24, 2002 of the RTC of Calauag, Quezon, Branch 63, is hereby AFFIRMED in toto.
SO ORDERED.
[11]
[12]
Rollo, p. 10.
[13]
Id. at 11-12 & 13-15.
[14]
[15]
CA rollo, p. 34.
[16]
Id. at 38.
[17]
People v. Manalili, supra note 14.
[18]
Id.
[19]
Id.
[20]
390 Phil. 67, 91 (2000).
[21]
G.R. No. 177742, December 17, 2008, 574 SCRA 372.
[22]
Id. at 383.
[23]
439 Phil. 440, 471 (2002).
[24]
[25]
Id.
[26]
Id. See People v. Araojo, G.R. No. 185203, September 17, 2009; People v. Arcosiba, G.R. No. 181081,
September 4, 2009; People v. Gragasin, G.R. No. 186496, August 25, 2009.
[27]
[28]
Article 2230 of the Civil Code provides: In criminal offenses, exemplary damages as a part of the civil
liability may be imposed when the crime was committed with one or more aggravating
circumstances. Such damages are separate and distinct from fines and shall be paid to the offended
party.
SECOND DIVISION
MOF COMPANY, INC., G.R. No. 172822

Petitioner,
Present:
BRION,
DEL CASTILLO, and
ABAD, JJ.
SHIN YANG BROKERAGE
CORPORATION, Promulgated:
Respondent. December 18, 2009
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The necessity of proving lies with the person who sues.
The refusal of the consignee named in the bill of lading to pay the freightage on the claim that it
is not privy to the contract of affreightment propelled the shipper to sue for collection of money, stressing
that its sole evidence, the bill of lading, suffices to prove that the consignee is bound to pay. Petitioner
now comes to us by way of Petition for Review on Certiorari[1] under Rule 45 praying for the reversal of
the Court of Appeals' (CA) judgment that dismissed its action for sum of money for insufficiency of
evidence.
Factual Antecedents
On October 25, 2001, Halla Trading Co., a company based in Korea, shipped
to Manila secondhand cars and other articles on board the vessel Hanjin Busan 0238W. The bill of lading
covering the shipment, i.e., Bill of Lading No. HJSCPUSI14168303,[2] which was prepared by the carrier
Hanjin Shipping Co., Ltd. (Hanjin), named respondent Shin Yang Brokerage Corp. (Shin Yang) as the
consignee and indicated that payment was on a Freight Collect basis, i.e., that the consignee/receiver of
the goods would be the one to pay for the freight and other charges in the total amount of P57,646.00.[3]
The shipment arrived in Manila on October 29, 2001. Thereafter, petitioner MOF Company, Inc.
(MOF), Hanjins exclusive general agent in the Philippines, repeatedly demanded the payment of ocean
freight, documentation fee and terminal handling charges from Shin Yang. The latter, however, failed and
refused to pay contending that it did not cause the importation of the goods, that it is only the Consolidator
of the said shipment, that the ultimate consignee did not endorse in its favor the original bill of lading and
that the bill of lading was prepared without its consent.
Thus, on March 19, 2003, MOF filed a case for sum of money before
the Metropolitan Trial Court of Pasay City (MeTC Pasay) which was docketed as Civil Case No. 206-03 and
raffled to Branch 48. MOF alleged that Shin Yang, a regular client, caused the importation and shipment
of the goods and assured it that ocean freight and other charges would be paid upon arrival of the goods
in Manila. Yet, after Hanjin's compliance, Shin Yang unjustly breached its obligation to pay. MOF argued
that Shin Yang, as the named consignee in the bill of lading, entered itself as a party to the contract and
bound itself to the Freight Collect arrangement. MOF thus prayed for the payment of P57,646.00
representing ocean freight, documentation fee and terminal handling charges as well as damages and
attorneys fees.
Claiming that it is merely a consolidator/forwarder and that Bill of Lading No. HJSCPUSI14168303 was not
endorsed to it by the ultimate consignee, Shin Yang denied any involvement in shipping the goods or in
promising to shoulder the freightage. It asserted that it never authorized Halla Trading Co. to ship the
articles or to have its name included in the bill of lading. Shin Yang also alleged that MOF failed to present
supporting documents to prove that it was Shin Yang that caused the importation or the one that assured
payment of the shipping charges upon arrival of the goods in Manila.
On June 16, 2004, the MeTC of Pasay City, Branch 48 rendered its Decision[4] in favor of MOF. It ruled
that Shin Yang cannot disclaim being a party to the contract of affreightment because:
x x x it would appear that defendant has business transactions with plaintiff. This is
evident from defendants letters dated 09 May 2002 and 13 May 2002 (Exhibits 1 and 2,
defendants Position Paper) where it requested for the release of refund of container
deposits x x x. [In] the mind of the Court, by analogy, a written contract need not be
necessary; a mutual understanding [would suffice]. Further, plaintiff would have not
included the name of the defendant in the bill of lading, had there been no prior
agreement to that effect.
In sum, plaintiff has sufficiently proved its cause of action against the defendant
and the latter is obliged to honor its agreement with plaintiff despite the absence of a
written contract.[5]
The dispositive portion of the MeTC Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and
against the defendant, ordering the latter to pay plaintiff as follows:
1. P57,646.00 plus legal interest from the date of demand until fully paid,
2. P10,000.00 as and for attorneys fees and
3. the cost of suit.
SO ORDERED.[6]
The Regional Trial Court (RTC) of Pasay City, Branch 108 affirmed in toto the Decision of the MeTC. It
held that:
MOF and Shin Yang entered into a contract of affreightment which Blacks Law Dictionary
defined as a contract with the ship owner to hire his ship or part of it, for the carriage of
goods and generally take the form either of a charter party or a bill of lading.
The bill of lading contain[s] the information embodied in the contract.
Article 652 of the Code of Commerce provides that the charter party must be in writing;
however, Article 653 says: If the cargo should be received without charter party having
been signed, the contract shall be understood as executed in accordance with what
appears in the bill of lading, the sole evidence of title with regard to the cargo for
determining the rights and obligations of the ship agent, of the captain and of the
charterer. Thus, the Supreme Court opined in the Market Developers, Inc. (MADE) vs.
Honorable Intermediate Appellate Court and Gaudioso Uy, G.R. No. 74978, September 8,
1989, this kind of contract may be oral. In another case, Compania Maritima vs. Insurance
Company of North America, 12 SCRA 213 the contract of affreightment by telephone was
recognized where the oral agreement was later confirmed by a formal booking.
xxxx
Defendant is liable to pay the sum of P57,646.00, with interest until fully paid, attorneys
fees of P10,000.00 [and] cost of suit.
Considering all the foregoing, this Court affirms in toto the decision of the Court a quo.
SO ORDERED.[7]

Seeing the matter in a different light, the CA dismissed MOFs complaint and refused to award any form
of damages or attorneys fees. It opined that MOF failed to substantiate its claim that Shin Yang had a
hand in the importation of the articles to the Philippines or that it gave its consent to be a consignee of
the subject goods. In its March 22, 2006 Decision,[8] the CA said:
This Court is persuaded [that except] for the Bill of Lading, respondent has not presented
any other evidence to bolster its claim that petitioner has entered [into] an agreement of
affreightment with respondent, be it verbal or written. It is noted that the Bill of Lading
was prepared by Hanjin Shipping, not the petitioner. Hanjin is the principal while
respondent is the formers agent. (p. 43, rollo)
The conclusion of the court a quo, which was upheld by the RTC Pasay City, Branch 108
xxx is purely speculative and conjectural. A court cannot rely on speculations, conjectures
or guesswork, but must depend upon competent proof and on the basis of the best
evidence obtainable under the circumstances. Litigation cannot be properly resolved by
suppositions, deductions or even presumptions, with no basis in evidence, for the truth
must have to be determined by the hard rules of admissibility and proof (Lagon vs.
Hooven Comalco Industries, Inc. 349 SCRA 363).
While it is true that a bill of lading serves two (2) functions: first, it is a receipt for the
goods shipped; second, it is a contract by which three parties, namely, the shipper, the
carrier and the consignee who undertake specific responsibilities and assume stipulated
obligations (Belgian Overseas Chartering and Shipping N.V. vs. Phil. First Insurance Co.,
Inc., 383 SCRA 23), x x x if the same is not accepted, it is as if one party does not accept
the contract. Said the Supreme Court:
A bill of lading delivered and accepted constitutes the contract of

carriage[,] even though not signed, because the acceptance of a paper
containing the terms of a proposed contract generally constitutes an
acceptance of the contract and of all its terms and conditions of which
the acceptor has actual or constructive notice (Keng Hua Paper Products
Co., Inc. vs. CA, 286 SCRA 257).
In the present case, petitioner did not only [refuse to] accept the bill of lading, but it
likewise disown[ed] the shipment x x x. [Neither did it] authorize Halla Trading Company
or anyone to ship or export the same on its behalf.
It is settled that a contract is upheld as long as there is proof of consent, subject matter
and cause (Sta. Clara Homeowners Association vs. Gaston, 374 SCRA 396). In the case
at bar, there is not even any iota of evidence to show that petitioner had given its consent.
He who alleges a fact has the burden of proving it and a mere allegation
is not evidence (Luxuria Homes Inc. vs. CA, 302 SCRA 315).
The 40-footer van contains goods of substantial value. It is highly improbable for
petitioner not to pay the charges, which is very minimal compared with the value of the
goods, in order that it could work on the release thereof.
For failure to substantiate its claim by preponderance of evidence, respondent has not
established its case against petitioner.[9]
Petitioners filed a motion for reconsideration but it was denied in a Resolution[10] dated May 25,
2006. Hence, this petition for review on certiorari.
In assailing the CAs Decision, MOF argues that the factual findings of both the MeTC and RTC are entitled
to great weight and respect and should have bound the CA. It stresses that the appellate court has no
justifiable reason to disturb the lower courts judgments because their conclusions are well-supported by
the evidence on record.
MOF further argues that the CA erred in labeling the findings of the lower courts as purely speculative and
conjectural. According to MOF, the bill of lading, which expressly stated Shin Yang as the consignee, is
the best evidence of the latters actual participation in the transportation of the goods. Such document,
validly entered, stands as the law among the shipper, carrier and the consignee, who are all bound by the
terms stated therein. Besides, a carriers valid claim after it fulfilled its obligation cannot just be rejected by
the named consignee upon a simple denial that it ever consented to be a party in a contract of
affreightment, or that it ever participated in the preparation of the bill of lading. As against Shin Yangs
bare denials, the bill of lading is the sufficient preponderance of evidence required to prove MOFs
claim. MOF maintains that Shin Yang was the one that supplied all the details in the bill of lading and
acquiesced to be named consignee of the shipment on a Freight Collect basis.
Lastly, MOF claims that even if Shin Yang never gave its consent, it cannot avoid its obligation to
pay, because it never objected to being named as the consignee in the bill of lading and that it only
protested when the shipment arrived in the Philippines, presumably due to a botched transaction between
it and Halla Trading Co. Furthermore, Shin Yangs letters asking for the refund of container deposits
highlight the fact that it was aware of the shipment and that it undertook preparations for the intended
release of the shipment.
Echoing the CA decision, Shin Yang insists that MOF has no evidence to prove that it consented to take
part in the contract of affreightment. Shin Yang argues that MOF miserably failed to present any evidence
to prove that it was the one that made preparations for the subject shipment, or that it is an actual
shipping practice that forwarders/consolidators as consignees are the ones that provide carriers details
and information on the bills of lading.
Shin Yang contends that a bill of lading is essentially a contract between the shipper and the
carrier and ordinarily, the shipper is the one liable for the freight charges. A consignee, on the other hand,
is initially a stranger to the bill of lading and can be liable only when the bill of lading specifies that the
charges are to be paid by the consignee. This liability arises from either a) the contract of agency between
the shipper/consignor and the consignee; or b) the consignees availment of the stipulation pour
autrui drawn up by and between the shipper/ consignor and carrier upon the consignees demand that
the goods be delivered to it. Shin Yang contends that the fact that its name was mentioned as the
consignee of the cargoes did not make it automatically liable for the freightage because it never benefited
from the shipment. It never claimed or accepted the goods, it was not the shippers agent, it was not
aware of its designation as consignee and the original bill of lading was never endorsed to it.
Issue
The issue for resolution is whether a consignee, who is not a signatory to the bill of lading, is bound by
the stipulations thereof. Corollarily, whether respondent who was not an agent of the shipper and who
did not make any demand for the fulfillment of the stipulations of the bill of lading drawn in its favor is
liable to pay the corresponding freight and handling charges.
Our Ruling
Since the CA and the trial courts arrived at different conclusions, we are constrained to depart from the
general rule that only errors of law may be raised in a Petition for Review on Certiorari under Rule 45 of
the Rules of Court and will review the evidence presented.[11]
The bill of lading is oftentimes drawn up by the shipper/consignor and the carrier without the intervention
of the consignee. However, the latter can be bound by the stipulations of the bill of lading when a) there
is a relation of agency between the shipper or consignor and the consignee or b) when the consignee
demands fulfillment of the stipulation of the bill of lading which was drawn up in its favor.[12]
In Keng Hua Paper Products Co., Inc. v. Court of Appeals,[13] we held that once the bill of lading
is received by the consignee who does not object to any terms or stipulations contained therein, it
constitutes as an acceptance of the contract and of all of its terms and conditions, of which the acceptor
has actual or constructive notice.
In Mendoza v. Philippine Air Lines, Inc.,[14] the consignee sued the carrier for damages but
nevertheless claimed that he was never a party to the contract of transportation and was a complete
stranger thereto. In debunking Mendozas contention, we held that:
x x x First, he insists that the articles of the Code of Commerce should be applied; that he
invokes the provisions of said Code governing the obligations of a common carrier to
make prompt delivery of goods given to it under a contract of transportation. Later, as
already said, he says that he was never a party to the contract of transportation and was
a complete stranger to it, and that he is now suing on a tort or a violation of his rights as
a stranger (culpa aquiliana). If he does not invoke the contract of carriage entered into
with the defendant company, then he would hardly have any leg to stand on. His right to
prompt delivery of the can of film at the Pili Air Port stems and is derived from the contract
of carriage under which contract, the PAL undertook to carry the can of film safely and to
deliver it to him promptly. Take away or ignore that contract and the obligation to carry
and to deliver and right to prompt delivery disappear. Common carriers are not obligated
by law to carry and to deliver merchandise, and persons are not vested with the right to
prompt delivery, unless such common carriers previously assume the obligation. Said
rights and obligations are created by a specific contract entered into by the parties. In
the present case, the findings of the trial court which as already stated, are
accepted by the parties and which we must accept are to the effect that the
LVN Pictures Inc. and Jose Mendoza on one side, and the defendant company
on the other, entered into a contract of transportation (p. 29, Rec. on Appeal).
One interpretation of said finding is that the LVN Pictures Inc. through
previous agreement with Mendoza acted as the latter's agent. When he
negotiated with the LVN Pictures Inc. to rent the film 'Himala ng Birhen' and
show it during the Naga town fiesta, he most probably authorized and
enjoined the Picture Company to ship the film for him on the PAL on
September 17th. Another interpretation is that even if the LVN Pictures Inc.
as consignor of its own initiative, and acting independently of Mendoza for the
time being, made Mendoza a consignee. [Mendoza made himself a party to
the contract of transportaion when he appeared at the Pili Air Port armed with
the copy of the Air Way Bill (Exh. 1) demanding the delivery of the shipment
to him.] The very citation made by appellant in his memorandum supports this view.
Speaking of the possibility of a conflict between the order of the shipper on the one hand
and the order of the consignee on the other, as when the shipper orders the shipping
company to return or retain the goods shipped while the consignee demands their
delivery, Malagarriga in his book Codigo de Comercio Comentado, Vol. 1, p. 400, citing a
decision of the Argentina Court of Appeals on commercial matters, cited by Tolentino in
Vol. II of his book entitled 'Commentaries and Jurisprudence on the Commercial Laws of
the Philippines' p. 209, says that the right of the shipper to countermand the
shipment terminates when the consignee or legitimate holder of the bill of
lading appears with such bill of lading before the carrier and makes himself a
party to the contract. Prior to that time he is a stranger to the contract.
Still another view of this phase of the case is that contemplated in Art.
1257, paragraph 2, of the old Civil Code (now Art. 1311, second paragraph)
which reads thus:
Should the contract contain any stipulation in favor of a

third person, he may demand its fulfillment provided he has
given notice of his acceptance to the person bound before the
stipulation has been revoked.'
Here, the contract of carriage between the LVN Pictures Inc. and the
defendant carrier contains the stipulations of delivery to Mendoza as
consignee. His demand for the delivery of the can of film to him at
the Pili Air Port may be regarded as a notice of his acceptance of the
stipulation of the delivery in his favor contained in the contract of carriage and
delivery. In this case he also made himself a party to the contract, or at least
has come to court to enforce it. His cause of action must necessarily be
founded on its breach.[15] (Emphasis Ours)
In sum, a consignee, although not a signatory to the contract of carriage between the shipper and the
carrier, becomes a party to the contract by reason of either a) the relationship of agency between the
consignee and the shipper/ consignor; b) the unequivocal acceptance of the bill of lading delivered to the
consignee, with full knowledge of its contents or c) availment of the stipulation pour autrui, i.e., when the
consignee, a third person, demands before the carrier the fulfillment of the stipulation made by the
consignor/shipper in the consignees favor, specifically the delivery of the goods/cargoes shipped.[16]
In the instant case, Shin Yang consistently denied in all of its pleadings that it authorized Halla
Trading, Co. to ship the goods on its behalf; or that it got hold of the bill of lading covering the shipment
or that it demanded the release of the cargo. Basic is the rule in evidence that the burden of proof lies
upon him who asserts it, not upon him who denies, since, by the nature of things, he who denies a fact
cannot produce any proof of it.[17] Thus, MOF has the burden to controvert all these denials, it being
insistent that Shin Yang asserted itself as the consignee and the one that caused the shipment of the
goods to the Philippines.
In civil cases, the party having the burden of proof must establish his case by preponderance of
evidence,[18] which means evidence which is of greater weight, or more convincing than that which is
offered in opposition to it.[19] Here, MOF failed to meet the required quantum of proof. Other than
presenting the bill of lading, which, at most, proves that the carrier acknowledged receipt of the subject
cargo from the shipper and that the consignee named is to shoulder the freightage, MOF has not adduced
any other credible evidence to strengthen its cause of action. It did not even present any witness in
support of its allegation that it was Shin Yang which furnished all the details indicated in the bill of lading
and that Shin Yang consented to shoulder the shipment costs. There is also nothing in the records which
would indicate that Shin Yang was an agent of Halla Trading Co. or that it exercised any act that would
bind it as a named consignee. Thus, the CA correctly dismissed the suit for failure of petitioner to establish
its cause against respondent.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated March 22,
2006 dismissing petitioners complaint and the Resolution dated May 25, 2006denying the motion for
reconsideration are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
Rollo, pp. 9-38.
[2]
Id. at 79.
[3]
Id. at 80.
[4]
Id. at 90-94; penned by Judge Estrellita M. Paas.
[5]
Id. at 93.
[6]
Id. at 94.
[7]
Id. at 103-104; penned by Judge Priscilla C. Mijares.
[8]
Id. at 40-45; penned by Associate Justice Eliezer R. De Los Santos and concurred in by Associate
Justices Jose C. Reyes, Jr. and Arturo G. Tayag.
[9]
Id. at 43-44.
[10]
Id. at 48.
[11]
Wallem Phils. Shipping Inc. v. Prudential Guarantee & Assurance Inc., 445 Phil. 136, 149
(2003).
[12]
See Sea-Land Service v. Intermediate Appellate Court, 237 Phil. 531, 535-536 (1987).
[13]
349 Phil. 925, 933 (1998).
[14]
90 Phil. 836, 846 (1952).
[15]
Id. at 845-847.
[16]
CIVIL CODE OF THE PHILIPPINES, Article 1311, 2nd paragraph: If a contract should contain some
stipulation in favor of a third person, he may demand its fulfillment provided he communicated his
acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not
sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third
person.
[17]
Acabal v. Acabal, 494 Phil. 528, 541 (2005).
[18]
New Testament Church of God v. Court of Appeals, 316 Phil. 330, 333 (1995).
[19]
Condes v. Court of Appeals, G.R. No. 161304, July 27, 2007, 528 SCRA 339, 352.
Supreme Court
Manila
SECOND DIVISION
ARSENIO S. QUIAMBAO, G.R. No. 171023

Petitioner,
Present:

BRION,
DEL CASTILLO, and
ABAD, JJ.
MANILA ELECTRIC
COMPANY, Promulgated:
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - x
DECISION
DEL CASTILLO, J.:

The liberality of the law can never be extended to the unworthy and undeserving. In several instances,
the policy of social justice has compelled this Court to accord financial assistance in the form of separation
pay to a legally terminated employee. This liberality, however, is not without limitations. Thus, when the
manner and circumstances by which the employee committed the act constituting the ground for his
dismissal show his perversity or depravity, no sympathy or mercy of the law can be invoked.
This petition for review on certiorari[1] assails the Decision[2] dated October 28, 2005 and
Resolution[3] dated January 12, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 85332, which reversed
the February 4, 2004 Decision[4] of the National Labor Relations Commission (NLRC) awarding petitioner
Arsenio S. Quiambao separation pay in the amount of P126,875.00.
Factual Antecedents
On July 16, 1986, petitioner was employed as branch teller by respondent Manila Electric Company. He
was assigned at respondents Mandaluyong office and was responsible for the handling and processing of
payments made by respondents customers.
It appears from his employment records, however, that petitioner has repeatedly violated the Company
Code of Employee Discipline and has exhibited poor performance in the latter part of his
employment. Thus:
EMPLOYEES PROFILE
A. INFRACTIONS -
DATE
Nature FROM TO ACTION TAKEN
1. Excessive absences 11/11/99 11/24/99 10-day suspension
4. Assaulting others with 02/17/99 02/17/99 Reprimand
bodily harm over work
matters
5. Excessive tardiness 02/08/99 02/08/99 Reprimand
7. Simple Absence 03/11/97 03/11/97 Reprimand
B. PERFORMANCE RATING
His merit ratings from 1995 to 1999 are as follows:
YEAR RATING
1999 Poor
1998 Needs Improvement
1997 Needs Improvement
1996 Satisfactory
1995 Satisfactory[5]
On March 10, 2000, a Notice of Investigation[6] was served upon petitioner for his unauthorized and
unexcused absences on November 10, 25, 26, 29, 1999; December 1, 2, 14, 15, 16, 17, 20, 21, 22, 2000;
and from February 17, 2000 up to the date of such notification letter. Petitioner was likewise required to
appear at the investigation and to present his evidence in support of his defense. However, despite receipt
of such notice, petitioner did not participate in the investigation. Consequently, in a
Memorandum[7] dated March 21, 2000, the legal department recommended petitioners dismissal from
employment due to excessive, unauthorized, and unexcused absences, which constitute (i) abandonment
of work under the provisions of the Company Code of Employee Discipline (ii) and gross and habitual
neglect of duty under Article 282 of the Labor Code of the Philippines. Through a Notice of
Dismissal[8] dated March 28, 2000, petitioners employment was terminated effective March 29, 2000.
Proceedings before the Labor Arbiter
On July 3, 2001, petitioner filed a complaint before the Arbitration Branch of the NLRC against respondent
assailing the legality of his dismissal. While petitioner did not dispute his absences, he nonetheless averred
that the same were incurred with the corresponding approved application for leave of absence. He also
claimed that he was denied due process.
On November 29, 2002, the Labor Arbiter rendered a Decision[9] dismissing petitioners complaint for lack
of merit. The Labor Arbiter ruled that no evidence was presented to prove that the absences of petitioner
were authorized; that petitioner was deprived of due process; and that petitioners habitual absenteeism
without leave did not violate the companys rules and regulations which justified his termination on the
ground of gross and habitual neglect of duties under Article 282(b) of the Labor Code.
Proceedings before the NLRC
Petitioner appealed to the NLRC which affirmed the legality of his dismissal due to habitual
absenteeism. Nonetheless, the NLRC awarded separation pay in favor of petitioner citing the case
of Philippine Geothermal, Inc. v. National Labor Relations Commission.[10] The dispositive portion of the
NLRC Decision reads:
WHEREFORE, the decision appealed from is hereby MODIFIED to the extent that the
respondent is hereby ordered to pay the complainant separation pay amounting
to P126,875.00 (P18,125.00 x 14 yrs./2 = P126,875.00).
SO ORDERED.[11]
Respondent filed a Motion for Reconsideration[12] impugning the

grant of separation pay, which motion was denied by the NLRC in a
Resolution[13] dated May 20, 2004.

Aggrieved, respondent filed with the CA a petition for certiorari. On October 28, 2005, the CA nullified the
NLRCs Decision and reinstated the Labor Arbiters Decision dismissing the complaint. It ruled that the
award of separation pay is neither justified nor warranted under the circumstances. Thus:
We find, then, that the award of separation pay was capricious, whimsical, and
unwarranted, both for the award being without factual and legal basis and for ignoring
that the valid cause of dismissal was serious misconduct on the part of the employee.
Respondent Quiambao was dismissed for excessive unauthorized absences. His dismissal
was, in fact, upheld by both the Labor Arbiter and the NLRC. We should agree with their
determination.
But we should hold here further that Quiambao committed a serious misconduct that
merited no consideration or compassion. He was guilty not of mere absenteeism only, for
such absences, unexcused and habitual, reflected worse than inefficiency, but a gross and
habitual neglect of duty bordering on dishonesty. He had no compelling reason to be
absent from work, substantially prejudicing his employer, which was a public utility whose
distribution of electricity to its customers within its franchise area was a service that was
very vital and of utmost necessity to the lives of all its customers. The responsibility
required of the petitioners employees was, in fact, publicly imposed by the petitioner in
its Company Code On Employee Discipline, aforequoted, whereby it gave primacy to the
maintenance of discipline as a matter of fundamental importance.[14]
Petitioner moved for a reconsideration, but to no avail.
Issue
Hence, this petition for review on certiorari raising the sole issue of whether or not a validly dismissed
employee may be entitled to separation pay.
Petitioner contends that the CA grievously erred in concluding that he is guilty of serious misconduct and
in deleting the award of separation pay. He argues that the NLRC, whose findings are entitled to great
respect and finality, regarded his unauthorized absences as gross and habitual neglect of duty
only. Citing Philippine Geothermal, Inc. v. National Labor Relations Commission,[15] where an employee
who was terminated on similar ground of gross and habitual neglect of duties because of continued and
unexplained absences, and who was nonetheless granted separation pay, petitioner claims that the same
accommodation should likewise be extended to him. He insists that his absences do not amount to serious
misconduct considering that his infractions did not reflect on his moral character. It did not create
imminent or substantial injury to the companys operation and the consuming public, and were not
committed for self-interest or unlawful purpose but on account of domestic and marital problems. Taking
into account all these and his 14 years of service in the company, petitioner invokes the principles of social
justice and equity in justifying his entitlement to separation pay.
Our Ruling
The Labor Arbiter, the NLRC and the Court of Appeals

found petitioner guilty of gross and habitual neglect of
duty.
The Labor Arbiter and the NLRC are one in holding that petitioners unauthorized absences and
repeated infractions of company rules on employee discipline manifest gross and habitual neglect of duty
that merited the imposition of the supreme penalty of dismissal from work. The only difference in their
ruling is that the NLRC awarded separation pay. The CA, after reviewing the records of the case, affirmed
the findings of the labor tribunals. And, on the basis of these findings, further concluded that petitioners
infractions are worse than inefficiency; they border on dishonesty constituting serious misconduct.
We have examined the records which indeed show that petitioners unauthorized absences as well as
tardiness are habitual despite having been penalized for past infractions. In Gustilo v. Wyeth Philippines,
Inc.,[16] we held that a series of irregularities when put together may constitute serious misconduct. We
also held that gross neglect of duty becomes serious in character due to frequency of instances.[17] Serious
misconduct is said to be a transgression of some established and definite rule of action, a forbidden act,
a dereliction of duty, willful in character, and indicative of wrongful intent and not mere error of
judgment.[18] Oddly, petitioner never advanced any valid reason to justify his absences. Petitioners
intentional and willful violation of company rules shows his utter disregard of his work and his employers
interest. Indeed, there can be no good faith in intentionally and habitually incurring unexcusable
absences. Thus, the CA did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction in equating petitioners gross neglect of duty to serious misconduct.
Petitioner is not entitled to separation pay.
Besides, even assuming that the ground for petitioners dismissal is

gross and habitual neglect of duty, still, he is not entitled to severance pay. In Central Philippines Bandag
Retreaders, Inc. v. Diasnes,[19] we discussed the parameters of awarding separation pay to dismissed
employees as a measure of financial assistance, viz:
To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the
award of separation pay based on social justice when an employees dismissal is based on
serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud
or willful breach of trust; or commission of a crime against the person of the employer or
his immediate family - grounds under Art. 282 of the Labor Code that sanction dismissals
of employees. They must be most judicious and circumspect in awarding separation pay
or financial assistance as the constitutional policy to provide full protection to labor is not
meant to be an instrument to oppress the employers. The commitment of the Court to
the cause of labor should not embarrass us from sustaining the employers when they are
right, as here. In fine, we should be more cautious in awarding financial assistance to the
undeserving and those who are unworthy of the liberality of the law.[20] (Emphasis
supplied.)
WHEREFORE, the petition is DENIED for lack of merit. The assailed October 28, 2005 Decision
and January 12, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 85332 are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
Rollo, pp. 9-18.
[2]
Id. at 35-42; penned by Associate Justice Lucas P. Bersamin and concurred in by Associate Justices
Renato C. Dacudao and Celia C. Librea-Leagogo.
[3]
Id. at 44-45.
[4]
Id. at 27-31; penned by Commissioner Angelita A. Gacutan and concurred in by Presiding Commissioner
Raul T. Aquino and Commissioner Victoriano R. Calaycay.
[5]
[6]
Id. at 36.
[7]
Id. at 37-38.
[8]
Id. at 39.
[9]
Rollo, pp. 21-26.
[10]
G.R. No. 106370, September 8, 1994, 236 SCRA 371. We pronounced in this case that an employee
whose dismissal was found to have been justified by unauthorized absences may recover separation
pay equivalent to one-half month pay for every year of service.
[11]
Rollo, p. 31.
[12]
[13]
Id. at 24-25.
[14]
Rollo, pp. 40-41.
[15]
Supra note 10.
[16]
483 Phil. 69, 78 (2004), citing Piedad v. Lanao del Norte Electric Cooperative, Inc., 237 Phil. 481, 488
(1987)
[17]
Divina Luz P. Aquino-Simbulan v. Nicasio Bartolome, AM No. MTJ-05-1588, June 5, 2009.
[18]
Philippine Long Distance Company v. The Late Romeo F. Bolso, G.R. No. 159701, August 17, 2007,
530 SCRA 550, 560.
[19]
G.R. No. 163607, July 14, 2008, 558 SCRA 194.
[20]
Id. at 207.

Supreme Court
Manila
SECOND DIVISION
EFREN M. HERRERA and ESTHER C. G.R. No. 166570

GALVEZ, for and on their behalf and
on behalf of OTHER SEPARATED,
UNREHIRED and RETIRED
EMPLOYEES OF THE NATIONAL Present:
POWER CORPORATION,
Petitioners, CARPIO,* J., Chairperson,
LEONARDO-DE CASTRO,**
- versus - BRION,
DEL CASTILLO, and
NATIONAL POWER CORPORATION, ABAD, JJ.
THE DEPARTMENT OF BUDGET
AND MANAGEMENT and THE
OFFICE OF THE SOLICITOR
GENERAL, Promulgated
Respondents. December 18, 2009
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The question at the heart of this case is whether petitioners, former employees of the National Power
Corporation (NPC) who were separated from service due to the governments initiative of restructuring the
electric power industry, are entitled to their retirement benefits in addition to the separation pay granted
by law.
Absent explicit statutory authority, we cannot provide our imprimatur to the grant of separation
pay and retirement benefits from one single act of involuntary separation from the service, lest there be
duplication of purpose and depletion of government resources. Within the context of government
reorganization, separation pay and retirement benefits arising from the same cause, are in consideration
of the same services and granted for the same purpose. Whether denominated as separation pay or
retirement benefits, these financial benefits reward government service and provide monetary assistance
to employees involuntarily separated due to bona fide reorganization.
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court on a pure question of law
against the Decision[1] dated December 23, 2004 rendered by the Regional Trial Court (RTC), Branch 101,
Quezon City in SCA No. Q-03-50681 (for Declaratory Relief) entitled National Power Corporation v.
Napocor Employees and Workers Union (NEWU), NAPOCOR Employees Consolidated Union (NECU), NPC
Executive Officers Association, Inc. (NPC-EXA), Esther Galvez and Efren Herrera, for and on their behalf
and in behalf of other separated, unrehired, and retired employees of the National Power Corporation, the
Department of Budget and Management (DBM), the Office of the Solicitor General (OSG), the Civil Service
Commission (CSC) and the Commission on Audit (COA). Said Decision ruled that the petitioners are not
entitled to receive retirement benefits under Commonwealth Act No. 186 (CA No. 186),[2] as amended,
over and above the separation benefits they received under Republic Act (RA) No. 9136,[3] otherwise
known as the Electric Power Industry Reform Act of 2001 (EPIRA).
Legal and factual background
RA No. 9136 was enacted on June 8, 2001 to provide a framework for the restructuring of the electric
power industry, including the privatization of NPCs assets and liabilities.[4] One necessary consequence of
the reorganization was the displacement of employees from the Department of Energy, the Energy
Regulatory Board, the National Electrification Administration and the NPC. To soften the blow from the
severance of employment, Congress provided in Section 63 of the EPIRA, for a separation package
superior than those provided under existing laws, as follows:
SEC. 63. Separation Benefits of Officials and Employees of Affected Agencies. National
government employees displaced or separated from the service as a result of the
restructuring of the [electric power] industry and privatization of NPC assets pursuant to
this Act, shall be entitled to either a separation pay and other benefits in
accordance with existing laws, rules or regulations or be entitled to avail of
the privileges provided under a separation plan which shall be one and one-
half month salary for every year of service in the government: Provided,
however, That those who avail of such privilege shall start their government service anew
if absorbed by any government-owned successor company. In no case shall there be any
diminution of benefits under the separation plan until the full implementation of the
restructuring and privatization. x x x (Emphasis supplied)
The implementing rules of the EPIRA, approved by the Joint Congressional Power Commission on
February 27, 2002,[5] further expounded on the separation benefits, viz:
RULE 33. Separation Benefits

Section 1. General Statement on Coverage.
This Rule shall apply to all employees in the National Government service as of June 26,
2001 regardless of position, designation or status, who are displaced or separated from
the service as a result of the restructuring of the electric [power] industry and privatization
of NPC assets: Provided, however, That the coverage for casual or contractual employees
shall be limited to those whose appointments were approved or attested [to] by the Civil
Service Commission (CSC).
Section 2. Scope of Application.
This Rule shall apply to affected personnel of DOE, ERB, NEA and NPC.
Section 3. Separation and Other Benefits.
(a) The separation benefit shall consist of either a separation pay
and other benefits granted in accordance with existing laws, rules and
regulations or a separation plan equivalent to one and one half (1-1⁄2)
months salary for every year of service in the government, whichever is
higher; Provided, That the separated or displaced employee has rendered at least one
(1) year of service at the time of effectivity of the Act.
xxxx
(e) For this purpose, Salary, as a rule, refers to the basic pay including the
thirteenth (13th) month pay received by an employee pursuant to his appointment,
excluding per diems, bonuses, overtime pay, honoraria, allowances and any other
emoluments received in addition to the basic pay under existing laws.
(f) Likewise, Separation or Displacement refers to the severance of
employment of any official or employee, who is neither qualified under
existing laws, rules and regulations nor has opted to retire under existing
laws, as a result of the Restructuring of the electric power industry or Privatization of NPC
assets pursuant to the Act. (Emphasis supplied)
On February 28, 2003, all NPC employees, including the petitioners, were separated from the service. As
a result, all the employees who held permanent positions at the NPC as of June 26, 2001 opted for and
were paid the corresponding separation pay equivalent to one and a half months salary per year of
service. Nonetheless, in addition to the separation package mandated by the EPIRA, a number of NPC
employees also claimed retirement benefits under CA No. 186,[6] as amended by RA No. 660[7] and RA
No. 1616.[8] Under these laws, government employees who have rendered at least 20 years of service are
entitled to a gratuity equivalent to one months salary for every year of service for the first 20 years, one
and a half months salary for every year of service over 20 but below 30 years, and two months salary for
every year of service in excess of 30 years.[9]
The NPC, on the other hand, took the position that the grant of retirement benefits to displaced employees
in addition to separation pay was inconsistent with the constitutional proscription on the grant of a double
gratuity. Unable to amicably resolve this matter with its former employees, the NPC filed on September
18, 2003, a Petition for Declaratory Relief[10] against several parties,[11] including the petitioners, before the
RTC of Quezon City, to obtain confirmation that RA No. 9136 did not specifically authorize NPC to grant
retirement benefits in addition to separation pay.[12] The case was docketed as SCA No. Q-03-50681 and
raffled to Branch 101 of said court.
After submission of the respondents respective Answers and Comments,[13] the parties agreed that the
court a quo would resolve the case based on the arguments raised in their memoranda[14] since only a
question of law was involved.[15] In due course, the court a quo rendered the assailed Decision, finding
that employees who received the separation benefit under RA No. 9136 are no longer entitled to
retirement benefits:
The aforementioned law speaks of two (2) options for the employee to choose from, that
is: (1) to receive separation pay and other benefits in accordance with existing laws, rules,
and regulations or (2) to avail of the privileges provided under a separation plan (under
R.A. 9136), which shall be one and one half months salary for every year of service in the
government.
Under Section 3(f) of Rule 33 of the Implementing Rules and Regulations of R.A. 9136,
separation or displacement refers to the severance of employment of any official or
employee, who is neither qualified under existing laws, rules, and regulations nor has
opted to retire under existing laws as a result of the Restructuring of the electric power
industry or Privatization of NPC assets pursuant to the act. Thus, it is clear that the receipt
of benefits under the EPIRA law, by employees who opted to retire under such law bars
the receipt of retirement benefits under R.A. 1616.
Moreover, Section 8 of Article IX-B of the 1987 Constitution prohibits the grant of both
separation pay and retirement benefits. x x x
xxxx
In said constitutional provision, it is x x x clear that additional or indirect compensation is

barred by law and only [allowed] when so specifically authorized by law. Furthermore, on
the Private Respondents' contention that the second paragraph should be applied in their
[case], the same will not hold water. This is so because retirement benefits [are] not
synonymous to pension or gratuities as contemplated by law.
R.A. 9136 did not clearly and unequivocally authorize the payment of additional benefits
to Private Respondents as the benefits referred to in such law should not be interpreted
to include retirement benefits in addition to their separation pay. Separation from service
due to [the] restructuring of the [electric] power industry should not be interpreted to
mean retirement as both are different in every respect. The law specifically defines the
meaning of separation by virtue of the restructuring. x x x
xxxx
Thus, the Respondent-Employees are not entitled to receive retirement benefits under
Republic Act No. 1616 over and above the separation benefits they received under
Republic Act No. 9136.[16]
Petitioners sought recourse from the assailed Decision directly before this court on a pure question of
law. The Department of Budget and Management (DBM) submitted its Comment on June 30,
2005,[17] while the NPC, through the Office of the Solicitor General, filed its Comment on August 23,
2005.[18] Petitioners then filed their Consolidated Reply by registered mail on November 18,
2005.[19] After the parties filed their respective memoranda,[20] the case was
submitted for decision.
Before us, petitioners argue that:
1) The EPIRA does not bar the application of CA No. 186, as amended. Petitioners are therefore
entitled to their retirement pay in addition to separation pay.
2) Petitioners have vested rights over their retirement benefits.
3) The payment of both retirement pay and separation pay does not constitute double
compensation, as the Constitution provides that pensions or gratuities shall not be
considered as additional, double or indirect compensation.
Respondents arguments
Respondents NPC and the DBM, on the other hand, maintain that:
1) Section 63 of RA No. 9136 and Section 3, Rule 33 of its Implementing Rules and Regulations
do not authorize the grant of retirement benefits in addition to the separation pay already
received. Rather, Section 63 requires separated employees to choose between a separation
plan under existing laws or the separation package under the EPIRA.
2) The grant of both separation pay and retirement benefit amounts to double gratuity in direct
contravention of the Constitution.
3) No law authorizes the payment of both separation pay and retirement benefits to petitioners.
Issue
The sole issue in this case is whether or not NPC employees who were separated from the service
because of the reorganization of the electric power industry and who received their separation pay under
RA No. 9136 are still entitled to receive retirement benefits under CA No. 186, as amended.
Our Ruling
We deny the petition and affirm the court a quos Decision dated December 23, 2004 in SCA No.
Q-03-50681.
Absent clear and unequivocal statutory authority,

the grant of both separation pay and retirement
benefits violates the constitutional proscription
on additional compensation.
Section 8 of Article IX(B) of the Constitution provides that [n]o elective or appointive public officer
or employee shall receive additional, double, or indirect compensation, unless specifically authorized by
law. In prior decisions, we have ruled that there must be a clear and unequivocal statutory provision to
justify the grant of both separation pay and retirement benefits to an employee.[21] Here, absent an
express provision of law, the grant of both separation and retirement benefits would amount to double
compensation from one single act of separation from employment.
Petitioners claim that Section 9 of RA No. 6656[22] amounts to sufficient statutory basis for the
grant of both retirement benefits and separation pay. Section 9 provides:
x x x Unless also separated for cause, all officers and employees, who have been
separated pursuant to reorganization shall, if entitled thereto, be paid the appropriate
separation pay and retirement and other benefits under existing laws within ninety
(90) days from the date of the effectivity of their separation or from the date of the receipt
of the resolution of their appeals as the case may be. Provided, That application for
clearance has been filed and no action thereon has been made by the corresponding
department or agency. Those who are not entitled to said benefits shall be paid a
separation gratuity in the amount equivalent to one (1) month salary for every year of
service. Such separation pay and retirement benefits shall have priority of payment out of
the savings of the department or agency concerned.(Emphasis supplied)
Unfortunately for the petitioners, their interpretation has little legal precedent. The CSC has
previously ruled that employees similarly situated to petitioners herein were not entitled to both separation
pay and retirement benefits; instead, the concerned employee must either avail of the separation benefit
or opt to retire if qualified under existing laws. In CSC Resolution No. 021112,[23] the CSC interpreted the
phrase separation pay and retirement in RA No. 6656 as follows:
x x x While the aforequoted provision of law used the conjunctive "and" between the
words "separation pay" and "retirement", this does not mean that both benefits shall be
given to an affected employee. This interpretation is supported by the phrase "if entitled
thereto" found before the phrase "be paid the appropriate separation pay and retirement
and other benefits under existing laws". Thus, payment of both separation and retirement
benefits is not absolute.
Also, in CSC Resolution No. 00-1957,[24] the CSC declared:
The aforequoted provision of law says: separation pay and retirement and other benefits
under existing laws. Be it noted that the conjunctive and is used between separation pay
and retirement, which in its elementary sense would mean that they are to be taken
jointly. (Ruperto G. Martin, Statutory Construction, sixth edition, p. 88) Obviously,
therefore, separation pay and retirement refer to only one benefit, of which an employee
affected by the reorganization, if entitled thereto, must be paid plus other benefits under
existing laws, i.e. terminal leave pay, etc.
Further, in Cajiuat v. Mathay,[25] we found that in the absence of express provisions to the
contrary, gratuity laws should be construed against the grant of double compensation. Cajiuat involved
employees of the Rice and Corn Administration who exercised their option to retire under CA No. 186 and
received the appropriate retirement benefits. Subsequently, the Rice and Corn Administration was
abolished by Presidential Decree No. 4.[26] Said Decree also provided for the payment of a gratuity in
Section 26, paragraph 3:
Permanent officials and employees of the Rice and Corn Administration who cannot be
absorbed by the Administration, or who cannot transfer or to be transferred to other
agencies, or who prefer to retire, if qualified for retirement, or to be laid off, shall be given
gratuity equivalent to one month salary for every year of service but in no case more than
twenty-four months salary, in addition to all other benefits to which they are entitled under
existing laws and regulations. x x x
On the basis of this provision, the retired employees of the Rice and Corn Administration claimed
that they were entitled to the separation gratuity, over and above the retirement benefits already received.
We disagreed and held that:
x x x [t]here must be a provision, clear and unequivocal, to justify a double pension. The
general language employed in paragraph 3, Section 26 of Presidential Decree No. 4 fails
to meet that test. All that it states is that permanent employees of the Rice and Corn
Administration who are retirable are entitled to gratuity equivalent to one month salary
for every year of service but in no case more than twenty four months salary in addition
to other benefits to which they are entitled under existing laws and regulations. To grant
double gratuity is unwarranted. No reliance can be placed [on] the use of the term other
benefits found in the paragraph relied upon. As clearly stated in the memorandum of the
Solicitor General, they refer to those receivable by a retiree under the general retirement
laws, like the refund of contributions to the retirement fund and the money value of the
accumulated vacation and sick leaves of said official employee. The clause in addition to
all other benefits to which they are entitled under existing laws and regulations was
inserted to insure the payment to the retiree of the refund of the contributions to the
retirement fund and the money value of the accumulated vacation and sick leaves of said
official or employee.[27]
Nothing in the EPIRA justifies the grant of both

the separation package and retirement benefits.
The EPIRA, a legislative enactment dealing specifically with the privatization of the electric power
industry, provides:
SEC. 63. Separation Benefits of Officials and Employees of Affected Agencies. National
government employees displaced or separated from the service as a result of the
restructuring of the [electric power] industry and privatization of NPC assets pursuant to
this Act, shall be entitled to either a separation pay and other benefits in
accordance with existing laws, rules or regulations or be entitled to avail of
the privileges provided under a separation plan which shall be one and one-
half month[s] salary for every year of service in the government: Provided,
however, That those who avail of such privilege shall start their government service anew
if absorbed by any government-owned successor company. In no case shall there be any
diminution of benefits under the separation plan until the full implementation of the
restructuring and privatization. x x x (Emphasis supplied)
A careful reading of Section 63 of the EPIRA affirms that said law did not authorize the grant of
both separation pay and retirement benefits. Indeed, the option granted was either to a separation pay
and other benefits in accordance with existing laws, rules and regulations or to a separation plan which
shall be one and one-half months salary for every year of service in the government. The options were
alternative, not cumulative. Having chosen the separation plan, they cannot now claim additional
retirement benefits under CA No. 186.
This position finds further support in Section 3(f), Rule 33 of RA No. 9136s Implementing Rules
and Regulations, which provides:
(f) likewise, separation or displacement refers to the severance of

employment of any official or employee, who is neither qualified under existing laws, rules
and regulations nor has opted to retire under existing laws, as a result of the restructuring
of the electric power industry or privatization of NPC assets pursuant to the act.
As worded, Rule 33, Section 3(f) of the Implementing Rules and Regulations of RA No. 9136
precludes the receipt of both separation and retirement benefits. A separated or displaced employee,
as defined by the implementing rules, does not include one who is qualified or has opted to retire
under existing laws. Consequently, a separated employee must choose between retirement under
applicable laws or separation pay under the EPIRA.
Within the context of reorganization, petitioners

cannot claim a vested right over their retirement
benefits.
Petitioners claim that having religiously paid their premiums, they have vested rights to their retirement
gratuities which may not be revoked or impaired. However, petitioners fail to consider that under the
retirement laws that they themselves invoke, separation from the service, whether voluntary or
involuntary, is a distinct compensable event from retirement.[28] Nothing in said laws permits an employee
to claim both separation pay and retirement benefits in the event of separation from the service due to
reorganization.
Thus, absent an express provision of law to the contrary, separation due to reorganization gives
rise to two possible scenarios: first, when the separated employee is not yet entitled to retirement benefits,
second, when the employee is qualified to retire. In the first case, the employees separation pay shall be
computed based on the period of service rendered in the government prior to the reorganization. In the
second case, where an employee is qualified to retire, he or she may opt to claim separation or retirement
benefits.
Contradistinction with Larao v. Commission on
Audit
We are, of course, aware that in Larao v. Commission on Audit[29] we held that employees, who
were separated from the service because of the reorganization of the Metropolitan Waterworks and
Sewerage System (MWSS) and Local Waterworks and Utilities Administration (LWUA) pursuant to RA No.
8041, were entitled to both a separation package and retirement benefits.[30]
In Larao, however, the Early Retirement Incentive Plan submitted to and approved by then
President Fidel V. Ramos explicitly provided for a separation package that would be given over and
above the existing retirement benefits. Therein lies the fundamental difference. Hence, unlike in this
case, there was specific authority for the grant of both separation pay and retirement benefits.
WHEREFORE, the petition is DENIED. The Decision dated December 23, 2004 of the Regional
Trial Court of Quezon City, Branch 101 in SCA No. Q-03-50681 holding that petitioners are not entitled to
receive retirement benefits under Commonwealth Act No. 186, as amended
is AFFIRMED with MODIFICATION that petitioners are entitled to a refund of their contributions to the
retirement fund, and the monetary value of any accumulated vacation and sick leaves.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
Records, pp. 249-253; penned by Judge Normandie B. Pizarro, now Associate Justice of the Court of
Appeals.
[2]
An Act to Create and Establish a Government Service Insurance System, To Provide for its
Administration and To Appropriate the Necessary Funds Therefor.
[3]
An Act Ordaining Reforms In The Electric Power Industry, Amending For The Purpose Certain Laws And
For Other Purposes (2001).
[4]
EPIRA, Secs. 2(i) & 3.
[5]
Under Sec. 62 of the EPIRA, the Joint Congressional Power Commission was authorized to set the
guidelines and overall framework to monitor and ensure the proper implementation of the EPIRA.
[6]
Supra note 2.
[7]
An Act To Amend Commonwealth Act Numbered One Hundred And Eighty-Six Entitled "An Act To
Create And Establish A Government Service Insurance System, To Provide For Its Administration, And
To Appropriate The Necessary Funds Therefor", And To Provide Retirement Insurance And For Other
Purposes (1951).
[8]
An Act Further Amending Section Twelve Of Commonwealth Act Numbered One Hundred Eighty-Six,
As Amended, By Prescribing Two Other Modes Of Retirement And For Other Purposes (1957).
[9]
Sec. 12(c) of CA No. 186, as amended by RA No. 1616, provides:
(c) Retirement is likewise allowed to any official or employee, appointive or elective, regardless of age and
employment status, who has rendered a total of at least twenty years of service, the last three years
of which are continuous. The benefit shall, in addition to the return of his personal contributions with
interest compounded monthly and the payment of the corresponding employer's premiums described
in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to one
month's salary for every year of the first twenty years of service, plus one and one-half
months salary for every year of service over twenty but below thirty years and two
months salary for every year of service over thirty years in case of employees based on
the highest rate received and in case of elected officials on the rates of pay as provided
by law. This gratuity is payable on the rates of pay as provided by law. This gratuity is payable
by the employer or officer concerned which is hereby authorized to provide the
necessary appropriation or pay the same from any unexpended items of appropriations
or savings in its appropriations. Officials and employees retired under this Act shall be entitled to
the commutation of the unused vacation and sick leave, based on the highest rate received, which
they may have to their credit at the time of retirement. x x x (Emphasis supplied)
[10]
Records, pp. 1-17.
[11]
Namely, the Napocor Employees and Workers Union (NEWU), NAPOCOR Employees Consolidated
Union (NECU), NPC Executive Officers Association, Inc. (NPC-EXA), Esther Galvez and Efren Herrera,
for and on their behalf and on behalf of other separated, unrehired, and retired employees of the
National Power Corporation, the Department of Budget and Management (DBM), The Office of the
Solicitor General (OSG), the Civil Service Commission (CSC), and the Commission on Audit (COA).
[12]
Records, pp. 1-33.
[13]
Esther Galvez and Efren Herrera (petitioners herein) filed their Answer on January 22, 2004, id. at 60-
71. This Answer was adopted by Abner P. Eleria, for and on his own behalf and on behalf of other
separated and [un]rehired NPC employees in a Manifestation dated February 2, 2004, id. at 74-76.
The Department of Budget and Management filed its Comment on March 17, 2004, id. at 80-99.
[14]
The NPC submitted its Memorandum dated July 12, 2004, id. at 155-159. Abner Eleria and all other
separated and [un]rehired employees filed their Memorandum dated July 23, 2004, id. at 170-184.
Herrera and Galvez submitted their Memorandum dated July 31, 2004, id. at 187-205. DBM submitted
its Position paper dated September 24, 2004, id at. 222-248.
[15]
Order dated June 16, 2004; id. at 196-197.
[16]
[17]
Rollo, pp. 61-95.
[18]
Id. at 113-136.
[19]
Id. at 145-154.
[20]
The Memorandum for Petitioners was filed on July 10, 2006, see rollo, pp 177-200. The Memorandum
for the DBM was filed on September 12, 2006, id. at 218-260; finally, the Memorandum for NPC was
filed on November 20, 2006, id. at 277-306.
[21]
Nunal v. Commission on Audit, G.R. No. 78648, January 24, 1989, 169 SCRA 356, 361-362; Cajiuat v.
Mathay, Sr., 209 Phil. 579, 583 (1983).
[22]
An Act To Protect The Security Of Tenure Of Civil Service Officers And Employees In The
Implementation Of Government Reorganization.
[23]
Re Aurora Enerio Cerilles, Query on Retirement Benefits dated August 22, 2002.
[24]
Re Teofilo Naungayan dated August 30, 2000. See also CSC Resolution No. 021204 dated September
23, 2002 (Re Carlito H. Millan, Motion for Reconsideration of CSC Resolution No. 01-1534 dated
September 14, 2001).
[25]
Supra note 21.
[26]
As amended by Presidential Decree Nos. 699 and 1485, Proclaiming The Creation Of The National
Grains Authority and Providing Funds Therefor (1972).
[27]
[28]
Section 9 of CA No. 186 provides for the following benefits in case of involuntary separation from the
service, which are distinct from retirement benefits:
In other cases of separation before maturity of a policy, the Government contributions shall cease,
and the insured member shall have the following options: (a) to collect the cash surrender value of
the policy; or (b) to continue the policy by paying the full premiums thereof; or (c) to obtain a paid up
or extended term insurance in such amount or period, respectively, as the paid premiums may
warrant, in accordance with the conditions contained in said policy; or (d) to avail himself of such
other options as may be provided in the policy.
On the other hand, under RA No. 8291, the involuntary separation benefits are as follows:
SEC. 12. Unemployment or Involuntary Separation Benefits. - Unemployment benefits in
the form of monthly cash payments equivalent to fifty percent (50%) of the average
monthly compensation shall be paid to a permanent employee who is involuntarily
separated from the service due to the abolition of his office or position usually resulting
from reorganization: Provided, That he has been paying integrated contributions for
at least one (1) year prior to separation. Unemployment benefits shall be paid in
accordance with the following schedules:
[29]
G.R. No. 164542, December 18, 2007, 540 SCRA 553.
[30]
In said case, to cushion adverse financial effects on the said employees, an Early Retirement Incentive
Package (ERIP) was offered to those who had rendered at least one year of service. Thus, employees
affected by the reorganization were paid the corresponding benefits under the ERIP. In Larao, as
here, those employees who had rendered more than 20 years of service filed their claims for payment
of retirement benefits under RA No. 1616. When brought before this Court, we ruled that affected
officials and employees of the MWSS who were qualified to retire could claim retirement benefits,
notwithstanding their receipt of benefits under the ERIP. Id. at 570-572.

Supreme Court
Manila
SECOND DIVISION
EVELYN S. CABUNGCAL, G.R. No. 160367

ELVIRA J. CANLAS,
MARIANITA A. BULANAN,
REMEDIOS S. DE JESUS, and
NUNILON J. MABINI,
Petitioners,
- versus -
SONIA R. LORENZO, in her capacity Present:

as Municipal Mayor of San Isidro,
Nueva Ecija, CECILIO DE GUZMAN,
Vice Mayor, CESARIO LOPEZ, JR., CARPIO,* J., Chairperson,
EMILIO PACSON, BONIFACIO LEONARDO-DE CASTRO,**
CACERES, JR., NAPOLEON BRION,
OCAMPO, MARIO CRUZ, DEL CASTILLO, and
PRISCILA REYES, ROLANDO ABAD, JJ.
ESQUIVEL, and CRISENCIANO
CABLAO in their capacity as members of
the Sangguniang Bayan of San Isidro,
Nueva Ecija, and EDUARDO N.
JOSON IV, Vice Governor, BELLA
AURORA A. DULAY, BENJAMIN V.
MORALES, CHRISTOPHER L.
VILLAREAL, JOSE T. DEL
MUNDO, SOLITA C. SANTOS,
RENATO C. TOMAS, JOSE
BERNARDO V. YANGO, IRENEO S.
DE LEON, NATHANIEL B. BOTE,
RUDY J. DE LEON, RODOLFO M. Promulgated:
LOPEZ, MA. LOURDES C. LAHOM, December 18, 2009
and JOSE FRANCIS STEVEN M. DIZON,
in their capacity as members of the
Sangguniang Panlalawigan of the Province
of Nueva Ecija,
Respondents.
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
As a rule, judicial intervention is allowed only after exhaustion of administrative remedies. This principle
goes hand-in-hand with the doctrine of primary jurisdiction, which precludes courts from resolving, in the
first instance, controversies falling under the jurisdiction of administrative agencies. Courts recognize that
administrative agencies are better equipped to settle factual issues within their specific field of expertise
because of their special skills and technical knowledge. For this reason, a premature invocation of the
courts judicial power is often struck down, unless it can be shown that the case falls under any of the
applicable exceptions.
Assailed in this Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court are the March 20,
2003 Decision[2] of the Court of Appeals (CA) dismissing petitioners petition for lack of merit and its October
6, 2003 Resolution[3] denying the motion for reconsideration.
Factual Antecedents
On July 9, 2001, the Sangguniang Bayan of San Isidro, Nueva Ecija, issued Resolution No. 27 s.
2001 declaring the reorganization of all offices of the municipal government. On July 23, 2001, the
[4]
Resolution was approved by the Sangguniang Panlalawigan via Resolution No. 154 s. 2001.[5]
Thereafter, on November 12, 2001, the Sangguniang Bayan passed Resolution No. 80 s.
2001, approving
[6]
and adopting the proposed new staffing pattern of the municipal
government. On November 26, 2001, the Sangguniang Panlalawigan approved the same through
Resolution No. 299 s. 2001.[7]
On December 21, 2001, the Municipal Mayor of San Isidro, Nueva Ecija, herein respondent Sonia
R. Lorenzo, issued a memorandum[8] informing all employees of the municipal government that, pursuant
to the reorganization, all positions were deemed vacant and that all employees must file their respective
applications for the newly created positions listed in the approved staffing pattern on or before January
10, 2002. Otherwise, they would not be considered for any of the newly created positions.
Instead of submitting their respective applications, petitioners, on January 17, 2002, filed with the
CA a Petition for Prohibition and Mandamus with application for issuance of Writ of Preliminary Injunction
and Restraining Order.[9] They alleged that they were permanent employees of the Rural Health Unit of
the Municipality of San Isidro, Nueva Ecija, with the corresponding salary grade and date of
employment:[10]
Salary
Name Position Grade Date of employment
Evelyn S. Cabungcal Dentist II 16 April 4, 1983
Elvira J. Canlas Nurse III 16 December 19, 1978
Marianita A. Bulanan Midwife III 11 May 21, 1981
Remedios S. De Jesus Dental Aide 4 June 6, 1989
Nunilon J. Mabini Sanitation 6 January 2, 1990
Inspector I
Respondents Sonia R. Lorenzo, Cecilio De Guzman, Cesario Lopez, Jr., Emilio Pacson, Bonifacio
Caceres, Jr., Napoleon Ocampo, Mario Cruz, Priscila Reyes, Rolando Esquivel, and Crisenciano Cablao
were sued in their capacity as Mayor, as Vice Mayor, and as members of
the Sangguniang Bayan respectively, of San Isidro, Nueva Ecija. On the other hand, respondents Eduardo
N. Joson IV, Bella Aurora A. Dulay, Benjamin V. Morales, Christopher L. Villareal, Jose T. Del Mundo, Solita
C. Santos, Renato C. Tomas, Jose Bernardo V. Yango, Ireneo S. De Leon, Nathaniel B. Bote, Rudy J. De
Leon, Rodolfo M. Lopez, Ma. Lourdes C. Lahom, and Jose Francis Steven M. Dizon were sued in their
capacity as Vice Governor and as members of the Sangguniang Panlalawigan, respectively.
Petitioners sought to prohibit respondents from implementing the reorganization of the municipal
government of San Isidro, Nueva Ecija, under Resolution Nos. 27 and 80 s. 2001 of
the Sangguniang Bayan. They likewise prayed for the nullification of said Resolutions.
While the case was pending, respondent Mayor Sonia R. Lorenzo issued a letter terminating the
services of those who did not re-apply as well as those who were not selected for the new positions
effective April 21, 2002.[11]
On March 20, 2003, the CA rendered a Decision dismissing the petition for lack of merit. It ruled:
Going through the arguments of the parties, we find respondents contentions to

be more in line with existing laws and jurisprudence. It cannot be denied that indeed,
petitioners severance from employment is a sad tale to tell; however, petitioners allegation
of grave abuse of discretion on the part of public respondents particularly Mayor Lorenzo,
can hardly be justified. The assailed acts of respondents are clearly authorized under
Section 76 of the Local Government Code of 1991 as quoted above.
xxxx
Culled from the records of the case, the reorganization of the municipal
government of San Isidro yielded an organization structure suitable for a 4th class
municipality, which created savings in an estimated amount of more or less Four Million
pesos (P4,000,000.00), which can be used for implementation of other local projects for
delivery of basic services and additional benefits for its employees. As shown by the
respondents, the original plantilla x x x of one hundred and thirty one (131) [positions]
has been trimmed down to eighty-eight (88) [positions] under the new staffing
pattern. Thus, We find plausible the [claim] of respondents about budgetary [savings],
comparing the old with new staffing pattern, in that:
Prior to the reorganization, this LGU had a budget appropriation
of P18,322,933.00 for personal services [including enterprise workers]
leaving a measly sum of [sic] P4,127,703.00 as revolving fund for the
whole year. With the advent of the new staffing pattern, more
tha[n] P7,000,000.00 can be channeled by this LGU for its plans and
programs. Under Section 325 of the Local Government Code, LGUs are
limited by law to appropriate only forty five percent [45%] in case of first
to third class LGUs or fifty five percent [55%] in case of fourth to fifth
class municipalities of their annual income for personal services.The LGU
of San Isidro being a fourth class municipality has certainly exceeded the
55% appropriation limit under the Local Government Code because for
the year 2000 alone, [P16,787,961.00, or roughly 78% of its annual
income of P22,450,636.00, have already been allocated to personal
services. That certainly is] way above the ceiling allowed by Section 325
of the Local Government Code.
xxxx
Verily, there was no bad faith on the part of respondents when they chose to
follow the recommendations of the management committee, [to create] a new staffing
pattern [thereby generating savings] to provide more basic services [and] livelihood
projects x x x.
xxxx
Valid reasons had been shown by respondents which support the reorganization
of the municipal government of San Isidro. No personal or political motives having been
shown to be involved in this strongly assailed reorganization of the Municipality of San
Isidro, petitioners, therefore, had miserably failed to show and prove to this Court that
respondents violated R.A. No. 7305 (Magna Carta of Health Workers).
We must point out that good faith is presumed. It is incumbent upon the
petitioners to prove that the reorganization being implemented in the Municipality of San
Isidro is tainted with bad faith. Absent any showing that respondents acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in the passage and
implementation of Resolution Nos. 27 and 80, this petition must fail.
Finally, respondents were correct when they stated that the extraordinary writ of
mandamus is not applicable in this case because the act being sought by petitioners to
be done is discretionary and not a ministerial duty. In other words, mandamus lies only
to compel the performance, x x x of a ministerial duty, but not to compel the performance
of a discretionary duty. Since grave abuse of discretion is not evident in this case, the
exceptional remedy of mandamus is unavailable. x x x
WHEREFORE, in view of all the foregoing and finding that the assailed
Resolution No. 27 dated July 9, 2001 and Resolution No. 80 dated November 12, 2001
were not issued by respondents with grave abuse of discretion amounting to lack or
excess of jurisdiction, the instant appeal [sic] is DENIED DUE COURSE and,
accordingly, DISMISSED for lack of merit. The validity of the assailed resolutions, being
in accordance with law and jurisprudence, is UPHELD.
SO ORDERED.[12]
Petitioners moved for a reconsideration[13] which was denied by the CA in its October 6,
2003 Resolution.
Hence, petitioners availed of this recourse.
Petitioners contend that the March 20, 2003 Decision and October 6, 2003 Resolution of the CA
were not in accordance with Republic Act (RA) No. 6656, otherwise known as An Act to Protect the Security
of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization,
specifically Section 2[14] thereof and RA 7305, otherwise known as the Magna Carta of Health Workers.
Respondents Argument
Respondents, for their part, argue that petitioners separation from service was a result of a valid
reorganization done in accordance with law and in good faith.
Both parties filed their memoranda.[15] Thereafter, in a Resolution[16] dated August 6, 2008, we
required the parties to submit supplemental memoranda discussing therein their respective positions on
the issue of jurisdiction.
Issues
1) Whether petitioners automatic resort to the Court of Appeals is proper.
2) Whether the case falls under the exceptions to the rule on exhaustion of administrative
remedies.
Our Ruling
Petitioners recourse should have been with the
Civil Service Commission and not with the Court
of Appeals
Section 2 (1) and Section 3, Article IX-B of the Constitution provide that:
Section 2. (1) The civil service embraces all branches, subdivisions,

instrumentalities and agencies of the Government, including government-owned or
controlled corporations with original charters.
Section 3. The Civil Service Commission, as the central personnel agency of the
Government, shall establish a career service and adopt measures to promote morale,
efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service. It
shall strengthen the merit and rewards system, integrate all human resources
development programs for all levels and ranks, and institutionalize a management climate
conducive to public accountability. It shall submit to the President and the Congress an
annual report on its personnel programs.
Corollary thereto, Section 4 of CSC Memorandum Circular No. 19-99, states that:
Section 4. Jurisdiction of the Civil Service Commission. The Civil Service

Commission shall hear and decide administrative cases instituted by, or brought before it,
directly or on appeal, including contested appointments, and shall review decisions and
actions of its offices and of the agencies attached to it.
Except as otherwise provided by the Constitution or by law, the Civil Service

Commission shall have the final authority to pass upon the removal,
separation and suspension of all officers and employees in the civil service and
upon all matters relating to the conduct, discipline and efficiency of such officers and
employees. (Emphasis supplied)
Pursuant to the foregoing provisions, the CSC, as the central personnel agency of the Government,
has jurisdiction over disputes involving the removal and separation of all employees of government
branches, subdivisions, instrumentalities and agencies, including government-owned or controlled
corporations with original charters. Simply put, it is the sole arbiter of controversies relating to the civil
service.[17]
In this case, petitioners are former local government employees whose services were terminated
due to the reorganization of the municipal government under Resolution Nos. 27 and 80 of
the Sangguniang Bayan of San Isidro, Nueva Ecija. Considering that they belong to the civil service, the
CSC has jurisdiction over their separation from office.
Even the laws upon which petitioners anchor their claim vest jurisdiction upon the CSC. Under RA
6656 and RA 7305, which were cited by the petitioners in their petition, it is the CSC which determines
whether an employees dismissal or separation from office was carried out in violation of the law or without
due process. Accordingly, it is also the CSC which has the power to reinstate or reappoint an unlawfully
dismissed or terminated employee. Quoted hereunder are Section 9 of RA 6656 and Section 8 of RA 7305:
SECTION 9. All officers and employees who are found by the Civil Service
Commission to have been separated in violation of the provisions of this Act,
shall be ordered reinstated or reappointed as the case may be without loss of
seniority and shall be entitled to full pay for the period of separation. Unless
also separated for cause, all officers and employees, who have been separated pursuant
to reorganization shall, if entitled thereto, be paid the appropriate separation pay and
retirement and other benefits under existing laws within ninety (90) days from the date
of the effectivity of their separation or from the date of the receipt of the resolution of
their appeals as the case may be: Provided, That application for clearance has been filed
and no action thereon has been made by the corresponding department or agency. Those
who are not entitled to said benefits shall be paid a separation gratuity in the amount
equivalent to one (1) month salary for every year of service. Such separation pay and
retirement benefits shall have priority of payment out of the savings of the department or
agency concerned. (Emphasis supplied)
xxxx
SECTION 8. Security of Tenure. In case of regular employment of public health workers,

their services shall not be terminated except for cause provided by law and after due
process: Provided, That if a public health worker is found by the Civil Service
Commission to be unjustly dismissed from work, he/she shall be entitled to
reinstatement without loss of seniority rights and to his/her back wages with twelve
percent (12%) interest computed from the time his/her compensation was withheld from
him/her up to the time of reinstatement. (Emphasis supplied)
All told, we hold that it is the CSC which has jurisdiction over appeals from personnel actions taken
by respondents against petitioners as a result of reorganization. Consequently, petitioners resort to the
CA was premature. The jurisdiction lies with the CSC and not with the appellate court.
The case does not fall under any of the

exceptions to the rule on exhaustion of
administrative remedies
The rule on exhaustion of administrative remedies provides that a party must exhaust all
administrative remedies to give the administrative agency an opportunity to decide the matter and to
prevent unnecessary and premature resort to the courts.[18] This, however, is not an ironclad rule as it
admits of exceptions,[19] viz:
1. when there is a violation of due process;
2. when the issue involved is purely a legal question;
3. when the administrative action is patently illegal amounting to lack or excess of jurisdiction;
4. when there is estoppel on the part of the administrative agency concerned;
5. when there is irreparable injury;
6. when the respondent is a department secretary whose acts as an alter ego of the President
bears the implied and assumed approval of the latter;
7. when to require exhaustion of administrative remedies would be unreasonable;
8. when it would amount to a nullification of a claim;
9. when the subject matter is a private land in land case proceedings;
10. when the rule does not provide a plain, speedy and adequate remedy; and
11. when there are circumstances indicating the urgency of judicial intervention.
The instant case does not fall under any of the exceptions. Petitioners filing of a petition for
mandamus and prohibition with the CA was premature. It bears stressing that the remedies of mandamus
and prohibition may be availed of only when there is no appeal or any other plain, speedy and adequate
remedy in the ordinary course of law.[20] Moreover, being extraordinary remedies, resort may be had only
in cases of extreme necessity where the ordinary forms of procedure are powerless to afford relief.[21]
Thus, instead of immediately filing a petition with the CA, petitioners should have first brought the
matter to the CSC which has primary jurisdiction over the case.[22] Thus, we find that the CA correctly
dismissed the petition but not the grounds cited in support thereof. The CA should have dismissed the
petition for non-exhaustion of administrative remedies.[23]
Considering our above findings, we find no cogent reason to resolve the other issues raised by
the petitioners in their petition.
WHEREFORE, the instant petition is DENIED. The March 20, 2003 Decision of the Court of
Appeals dismissing the petition and its October 6, 2003 Resolution denying the motion for reconsideration
are AFFIRMED but on the ground that petitioners failed to exhaust the administrative remedies available
to them.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
TERESITA J. LEONARDO-DE CASTROAssociate Justice ARTURO D. BRION

Associate Justice
ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
Rollo, pp. 320.
[2]
Id. at 2136; penned by Associate Justice Sergio L. Pestao and concurred in by Acting Presiding Justice
Cancio C. Garcia and Associate Justice Eloy R. Bello, Jr.
[3]
Id. at 4243.
[4]
CA rollo, p. 44.
[5]
Id. at 2829.
[6]
Rollo, pp. 4548.
[7]
CA rollo, pp. 34 35.
[8]
Id. at 3637.
[9]
Id. at 226.
[10]
Rollo, p. 6.
[11]
Id. at 79.
[12]
Id. at 2936.
[13]
Id. at 3741.
[14]
SECTION 2. No officer or employee in the career service shall be removed except for a valid cause and
after due notice and hearing. A valid cause for removal exists when, pursuant to a bona
fide reorganization, a position has been abolished or rendered redundant or there is a need to merge,
divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes
allowed by the Civil Service Law. The existence of any or some of the following circumstances may be
considered as evidence of bad faith in the removals made as a result of reorganization, giving rise to
a claim for reinstatement or reappointment by an aggrieved party:
(a) Where there is a significant increase in the number of positions in the new staffing pattern of the
department or agency concerned;
(b) Where an office is abolished and another performing substantially the same functions is created;
(c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance
and merit;
(d) Where there is a reclassification of offices in the department or agency concerned and the reclassified
offices perform substantially the same function as the original offices;
(e) Where the removal violates the order of separation provided in Section 3 hereof.
[15]
Rollo, pp. 92110 and 116139.
[16]
Id. at 214216.
[17]
Pangasinan State University v. Court of Appeals, G.R. No. 162321, June 29, 2007, 526 SCRA 92, 98.
[18]
Republic of the Phils. v. Express Telecommunication Co., Inc., 424 Phil. 372, 399 (2002).
[19]
Buston-Arendain v. Gil, G.R. No. 172585, June 26, 2008, 555 SCRA 561, 573.
[20]
Sections 2 & 3 of Rule 65 of the Rules of Court.
[21]
ACWS, Ltd. v. Dumlao, 440 Phil. 787, 803 (2002).
[22]
See Pan v. Pea, G.R. No. 174244, February 13, 2009, 579 SCRA 314.
[23]
See Casimina v. Legaspi, G.R. No. 147530, June 29, 2005, 462 SCRA 171, 182.

Supreme Court
Manila
SECOND DIVISION
MANUEL N. MAMBA, G.R. No. 165109

RAYMUND P. GUZMAN and
LEONIDES N. FAUSTO,
Petitioners,
- versus -
EDGAR R. LARA, Present:

JENERWIN C. BACUYAG,
WILSON O. PUYAWAN, CARPIO,* J., Chairperson,
ALDEGUNDO Q. CAYOSA, JR., CARPIO-MORALES,**
NORMAN A. AGATEP, LEONARDO-DE CASTRO,***
ESTRELLA P. FERNANDEZ, DEL CASTILLO, and
VILMER V. VILORIA, ABAD, JJ.
BAYLON A. CALAGUI,
CECILIA MAEVE T. LAYOS,
PREFERRED VENTURES CORP.,
ASSET BUILDERS CORP.,
RIZAL COMMERCIAL BANKING
CORPORATION, MALAYAN
INSURANCE CO., and LAND BANK
OF THE PHILIPPINES, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:

The decision to entertain a taxpayers suit is discretionary upon the Court. It can choose to strictly apply
the rule or take a liberal stance depending on the controversy involved. Advocates for a strict application
of the rule believe that leniency would open floodgates to numerous suits, which could hamper the
government from performing its job. Such possibility, however, is not only remote but also negligible
compared to what is at stake - the lifeblood of the State. For this reason, when the issue hinges on the
illegal disbursement of public funds, a liberal approach should be preferred as it is more in keeping with
truth and justice.
This Petition for Review on Certiorari with prayer for a Temporary Restraining Order/Writ of Preliminary
Injunction, under Rule 45 of the Rules of Court, seeks to set aside the April 27, 2004 Order[1] of the
Regional Trial Court (RTC), Branch 5, Tuguegarao City, dismissing the Petition for Annulment of Contracts
and Injunction with prayer for the issuance of a Temporary Restraining Order/Writ of Preliminary
Injunction,[2] docketed as Civil Case No. 6283. Likewise assailed in this Petition is the August 20,
2004 Resolution[3] of RTC, Branch 1, TuguegaraoCity denying the Motion for Reconsideration of the
dismissal.
Factual Antecedents
On November 5, 2001, the Sangguniang Panlalawigan of Cagayan passed Resolution No. 2001-
272 authorizing Governor Edgar R. Lara (Gov. Lara) to engage the services of and appoint Preferred
[4]
Ventures Corporation as financial advisor or consultant for the issuance and flotation of bonds to fund the
priority projects of the governor without cost and commitment.
On November 19, 2001, the Sangguniang Panlalawigan, through Resolution No. 290-
2001,[5] ratified the Memorandum of Agreement (MOA)[6] entered into by Gov. Lara and Preferred
Ventures Corporation. The MOA provided that the provincial government of Cagayan shall pay Preferred
Ventures Corporation a one-time fee of 3% of the amount of bonds floated.
On February 15, 2002, the Sangguniang Panlalawigan approved Resolution No. 2002-061-
A[7] authorizing Gov. Lara to negotiate, sign and execute contracts or agreements pertinent to the flotation
of the bonds of the provincial government in an amount not to exceed P500 million for the construction
and improvement of priority projects to be approved by the Sangguniang Panlalawigan.
On May 20, 2002, the majority of the members of the Sangguniang Panlalawigan of Cagayan
approved Ordinance No. 19-2002,[8] authorizing the bond flotation of the provincial government in an
amount not to exceed P500 million to fund the construction and development of the new Cagayan Town
Center. The Resolution likewise granted authority to Gov. Lara to negotiate, sign and execute contracts
and agreements necessary and related to the bond flotation subject to the approval and ratification by
the Sangguniang Panlalawigan.
On October 20, 2003, the Sangguniang Panlalawigan approved Resolution No. 350-
2003 ratifying the Cagayan Provincial Bond Agreements entered into by the provincial government,
[9]
represented by Gov. Lara, to wit:
a. Trust Indenture with the Rizal Commercial Banking Corporation (RCBC) Trust
and Investment Division and Malayan Insurance Company, Inc. (MICO).
b. Deed of Assignment by way of security with the RCBC and the Land Bank of
the Philippines (LBP).
c. Transfer and Paying Agency Agreement with the RCBC Trust and Investment
Division.
d. Guarantee Agreement with the RCBC Trust and Investment Division and MICO.
e. Underwriting Agreement with RCBC Capital Corporation.
On even date, the Sangguniang Panlalawigan also approved Resolution No. 351-2003,[10] ratifying
the Agreement for the Planning, Design, Construction, and Site Development of the New Cagayan Town
Center[11] entered into by the provincial government, represented by Gov. Lara and Asset Builders
Corporation, represented by its President, Mr. Rogelio P. Centeno.
On May 20, 2003, Gov. Lara issued the Notice of Award to Asset Builders Corporation, giving to
the latter the planning, design, construction and site development of the town center project for a fee
of P213,795,732.39.[12]
On December 12, 2003, petitioners Manuel N. Mamba, Raymund P. Guzman and Leonides N.
Fausto filed a Petition for Annulment of Contracts and Injunction with prayer for a Temporary Restraining
Order/Writ of Preliminary Injunction[13] against Edgar R. Lara, Jenerwin C. Bacuyag, Wilson O.
Puyawan, Aldegundo Q. Cayosa, Jr., Norman A. Agatep, Estrella P. Fernandez, Vilmer V. Viloria, Baylon A.
Calagui, Cecilia Maeve T. Layos, Preferred Ventures Corporation, Asset Builders Corporation, RCBC, MICO
and LBP.
At the time of the filing of the petition, Manuel N. Mamba was the Representative of the
3rd Congressional District of the province of Cagayan[14] while Raymund P. Guzman and Leonides N.
Fausto were members of the Sangguniang Panlalawigan of Cagayan.[15]
Edgar R. Lara was sued in his capacity as governor of Cagayan,[16] while Jenerwin C. Bacuyag,
Wilson O. Puyawan, Aldegundo Q. Cayosa, Jr., Norman A. Agatep, Estrella P. Fernandez, Vilmer V. Viloria,
Baylon A. Calagui and Cecilia Maeve T. Layos were sued as members of the Sangguniang Panlalawigan of
Cagayan.[17] Respondents Preferred Ventures Corporation, Asset Builders Corporation, RCBC, MICO and
LBP were all impleaded as indispensable or necessary parties.
Respondent Preferred Ventures Corporation is the financial advisor of

the province of Cagayan regarding the bond flotation undertaken by the province.[18] Respondent Asset
Builders Corporation was awarded the right to plan, design, construct and develop the proposed town
center.[19] Respondent RCBC, through its Trust and Investment Division, is the trustee of the seven-year
bond flotation undertaken by the province for the construction of the town center,[20] while respondent
MICO is the guarantor.[21] Lastly, respondent LBP is the official depositary bank of the province.[22]
In response to the petition, public respondents filed an Answer with Motion to Dismiss,[23] raising
the following defenses: a) petitioners are not the proper parties or they lack locus standi in court; b) the
action is barred by the rule on state immunity from suit and c) the issues raised are not justiciable questions
but purely political.
For its part, respondent Preferred Ventures Corporation filed a Motion to Dismiss[24] on the
following grounds: a) petitioners have no cause of action for injunction; b) failure to join an indispensable
party; c) lack of personality to sue and d) lack of locus standi. Respondent MICO likewise filed a Motion to
Dismiss[25] raising the grounds of lack of cause of action and legal standing. Respondent RCBC similarly
argued in its Motion to Dismiss[26] that: a) petitioners are not the real parties-in-interest or have no legal
standing to institute the petition; b) petitioners have no cause of action as the flotation of the bonds are
within the right and power of both respondent RCBC and the province of Cagayan and c) the viability of
the construction of a town center is not a justiciable question but a political question.
Respondent Asset Builders Corporation, on the other hand, filed an Answer[27] interposing special
and affirmative defenses of lack of legal standing and cause of action. Respondent LBP also filed an
Answer[28] alleging in the main that petitioners have no cause of action against it as it is not an
indispensable party or a necessary party to the case.
Two days after the filing of respondents respective memoranda on the issues raised during the
hearing of the special and/or affirmative defenses, petitioners filed a Motion to Admit Amended
Petition[29] attaching thereto the amended petition.[30] Public respondents opposed the motion for the
following reasons: 1) the motion was belatedly filed; 2) the Amended Petition is not sufficient in form and
in substance; 3) the motion is patently dilatory and 4) the Amended Petition was filed to cure the defect
in the original petition.[31]
Petitioners also filed a Consolidated Opposition to the Motion to Dismiss[32] followed by

supplemental pleadings[33] in support of their prayer for a writ of preliminary injunction.
On April 27, 2004, the RTC issued the assailed Order denying the Motion to Admit Amended
Petition and dismissing the petition for lack of cause of action. It ruled that:
The language of Secs. 2 & 3 of Rule 10 of the 1997 Rules of Civil Procedure
dealing on the filing of an amended pleading is quite clear. As such, the Court rules that
the motion was belatedly filed. The granting of leave to file amended pleadings is a matter
peculiarly within the sound discretion of the trial court. But the rule allowing amendments
to pleadings is subject to the general but inflexible limitation that the cause of action or
defense shall not be substantially changed or the theory of the case altered to the
prejudice of the other party (Avecilla vs. Yatcvo, 103 Phil. 666).
On the assumption that the controversy presents justiciable issues which this
Court may take cognizance of, petitioners in the present case who presumably presented
legitimate interests in the controversy are not parties to the questioned
contract. Contracts produce effect as between the parties who execute them. Only a party
to the contract can maintain an action to enforce the obligations arising under said
contract (Young vs. CA, 169 SCRA 213). Since a contract is binding only upon the parties
thereto, a third person cannot ask for its rescission if it is in fraud of his rights. One who
is not a party to a contract has no rights under such contract and even if the contrary may
be voidable, its nullity can be asserted only by one who is a party thereto; a third person
would have absolutely no personality to ask for the annulment (Wolfson vs. Estate of
Martinez, 20 Phil. 340; Ibaez vs. Hongkong & Shanghai Bank, 22 Phil. 572; Ayson vs. CA,
G.R. Nos. L-6501 & 6599, May 21, 1955).
It was, however, held that a person who is not a party obliged principally or
subsidiarily in a contract may exercise an action for nullity of the contract if he is prejudiced
in his rights with respect to one of the contracting parties and can show the detriment
which would positively result to him from the contract in which he had no intervention
(Baez vs. CA, 59 SCRA 15; Anyong Hsan vs. CA, 59 SCRA 110, 112-113; Leodovica vs.
CA, 65 SCRA 154-155). In the case at bar, petitioners failed to show that they were
prejudiced in their rights [or that a] detriment x x x would positively result to
them. Hence, they lack locus standi in court.
xxxx
To the mind of the Court, procedural matters in the present controversy may be
dispensed with, stressing that the instant case is a political question, a question which the
court cannot, in any manner, take judicial cognizance. Courts will not interfere with purely
political questions because of the principle of separation of powers (Taada vs. Cuenco,
103 Phil. 1051). Political questions are those questions which, under the Constitution, are
to be decided by the people in their sovereign capacity or in regard to which full
discretionary authority has been delegated to the legislative or [to the] executive branch
of the government (Nuclear Free Phils. Coalition vs. NPC, 141 SCRA 307 (1986); Torres
vs. Gonzales, 152 SCRA 272; Citizens Alliance for Consumer Protection vs. Energy
Regulatory Board, G.R. No. 78888-90, June 23, 1988).
The citation made by the provincial government[, to] which this Court is inclined
to agree, is that the matter falls under the discretion of another department, hence the
decision reached is in the category of a political question and consequently may not be
the subject of judicial jurisdiction (Cruz in Political Law, 1998 Ed., page 81) is correct.
It is [a] well-recognized principle that purely administrative and discretionary

functions may not be interfered with by the courts (Adm. Law Test & Cases, 2001 Ed.,
De Leon, De Leon, Jr.).
The case therefore calls for the doctrine of ripeness for judicial review. This
determines the point at which courts may review administrative action. The basic principle
of ripeness is that the judicial machinery should be conserved for problems which are real
and present or imminent and should not be squandered on problems which are future,
imaginary or remote. This case is not ripe for judicial determination since there is no
imminently x x x substantial injury to the petitioners.
In other words, the putting up of the New Cagayan Town Center by the province
over the land fully owned by it and the concomitant contracts entered into by the same
is within the bounds of its corporate power, an undertaking which falls within the ambit
of its discretion and therefore a purely political issue which is beyond the province of the
court x x x. [Consequently, the court cannot,] in any manner, take judicial cognizance
over it. The act of the provincial government was in pursuance of the mandate of the
Local Government Code of 1991.
xxxx
Indeed, adjudication of the procedural issues presented for resolution by the

present action would be a futile exercise in exegesis.
What defeats the plea of the petitioners for the issuance of a writ of preliminary
injunction is the fact that their averments are merely speculative and founded on
conjectures. An injunction is not intended to protect contingent or future rights nor is it a
remedy to enforce an abstract right (Cerebo vs. Dictado, 160 SCRA 759; Ulang vs. CA,
225 SCRA 637). An injunction, whether preliminary or final, will not issue to protect a right
not in in esse and which may never arise, or to restrain an act which does not give rise to
a cause of action. The complainants right on title, moreover, must be clear and
unquestioned [since] equity, as a rule, will not take cognizance of suits to establish title
and will not lend its preventive aid by injunction where the complainants title or right is
doubtful or disputed. The possibility of irreparable damage, without proof of violation of
an actual existing right, is no ground for injunction being a mere damnum, absque
injuria (Talisay-Silay Milling Company, Inc. vs. CFI of Negros Occidental, et. al. 42 SCRA
577, 582).
xxxx
For lack of cause of action, the case should be dismissed.
The facts and allegations [necessarily] suggest also that this court may dismiss
the case for want of jurisdiction.
The rule has to be so because it can motu propio dismiss it as its only jurisdiction
is to dismiss it if it has no jurisdiction. This is in line with the ruling in Andaya vs. Abadia,
46 SCAD 1036, G.R. No. 104033, Dec. 27, 1993 where the court may dismiss a complaint
even without a motion to dismiss or answer.
Upon the foregoing considerations, the case is hereby dismissed without costs.
SO ORDERED.[34]
Petitioners filed a Motion for Reconsideration[35] to which respondents filed their respective
Oppositions.[36] Petitioners then filed a Motion to Inhibit, which the court granted.Accordingly, the case
was re-raffled to Branch 1 of the RTC of Tuguegarao City.[37]
On August 20, 2004, Branch 1 of the RTC of Tuguegarao City issued a Resolution denying
petitioners plea for reconsideration. The court found the motion to be a mere scrap of paper as the notice
of hearing was addressed only to the Clerk of Court in violation of Section 5, Rule 15 of the Rules of
Court. As to the merits, the court sustained the findings of Branch 5 that petitioners lack legal standing to
sue and that the issue involved is political.
Issues
Hence, the present recourse where petitioners argue that:
A. The lower court decided a question of substance in a way not in

accord with law and with the applicable decision of the Supreme Court, and
B. The lower court has so far departed from the accepted and
usual course of judicial proceedings as to call for an exercise of the power of
supervision in that:
I. It denied locus standi to petitioners;
II. [It] determined that the matter of contract

entered into by the provincial government is in the nature of a
political question;
III. [It] denied the admission of Amended

Petition; and
IV. [It] found a defect of substance in the petitioners

Motion for Reconsideration.[38]
Our Ruling
The petition is partially meritorious.
Petitioners have legal standing to sue as

taxpayers
A taxpayer is allowed to sue where there is a claim that public funds are illegally disbursed, or that
the public money is being deflected to any improper purpose, or that there is wastage of public funds
through the enforcement of an invalid or unconstitutional law.[39] A person suing as a taxpayer, however,
must show that the act complained of directly involves the illegal disbursement of public funds derived
from taxation.[40] He must also prove that he has sufficient interest in preventing the illegal expenditure of
money raised by taxation and that he will sustain a direct injury because of the enforcement of the
questioned statute or contract.[41] In other words, for a taxpayers suit to prosper, two requisites must be
met: (1) public funds derived from taxation are disbursed by a political subdivision or instrumentality and
in doing so, a law is violated or some irregularity is committed and (2) the petitioner is directly affected by
the alleged act.[42]
In light of the foregoing, it is apparent that contrary to the view of the RTC,
a taxpayer need not be a party to the contract to challenge its validity.[43] As long as taxes are involved,
people have a right to question contracts entered into by the government.
In this case, although the construction of the town center would be primarily sourced from the
proceeds of the bonds, which respondents insist are not taxpayers money, a government support in the
amount of P187 million would still be spent for paying the interest of the bonds.[44] In fact, a Deed of
Assignment[45] was executed by the governor in favor of respondent RCBC over the Internal Revenue
Allotment (IRA) and other revenues of the provincial government as payment and/or security for the
obligations of the provincial government under the Trust Indenture Agreement dated September 17,
2003. Records also show that on March 4, 2004, the governor requested the Sangguniang
Panlalawigan to appropriate an amount of P25 million for the interest of the bond.[46] Clearly, the first
requisite has been met.
As to the second requisite, the court, in recent cases, has relaxed the stringent direct injury test bearing
in mind that locus standi is a procedural technicality.[47] By invoking transcendental importance,
paramount public interest, or far-reaching implications, ordinary citizens and taxpayers were allowed to
sue even if they failed to show direct injury.[48] In cases where serious legal issues were raised or where
public expenditures of millions of pesos were involved, the court did not hesitate to give standing to
taxpayers.[49]
We find no reason to deviate from the jurisprudential trend.
To begin with, the amount involved in this case is substantial. Under the various agreements entered into
by the governor, which were ratified by the Sangguniang Panlalawigan, the provincial government of
Cagayan would incur the following costs:[50]
Compensation to Preferred Ventures - P 6,150,000.00

(3% of P205M)[51] Resolution No. 290-2001
Management and Underwriting Fees - 3,075,000.00
(1.5% of P205M)[52]
Documentary Tax - 1,537,500.00

(0.75% of P205M)[53]
Guarantee Fee[54] - 7,350,000.00
Construction and Design of town center[55] - 213,795,732.39

Total Cost - P231,908,232.39
What is more, the provincial government would be shelling out a total amount of P187 million for the
period of seven years by way of subsidy for the interest of the bonds. Without a doubt,the resolution of
the present petition is of paramount importance to the people of Cagayan who at the end of the day
would bear the brunt of these agreements.
Another point to consider is that local government units now possess more powers, authority and
resources at their disposal,[56] which in the hands of unscrupulous officials may be abused and misused to
the detriment of the public. To protect the interest of the people and to prevent taxes from being
squandered or wasted under the guise of government projects, a liberal approach must therefore be
adopted in determining locus standi in public suits.
In view of the foregoing, we are convinced that petitioners have sufficient standing to file the present
suit. Accordingly, they should be given the opportunity to present their case before the RTC.
Having resolved the core issue, we shall now proceed to the remaining issues.
The controversy involved is justiciable
A political question is a question of policy, which is to be decided by the people in their sovereign
capacity or by the legislative or the executive branch of the government to which full discretionary
authority has been delegated.[57]
In filing the instant case before the RTC, petitioners seek to restrain public respondents from
implementing the bond flotation and to declare null and void all contracts related to the bond flotation and
construction of the town center. In the petition before the RTC, they alleged grave abuse of discretion
and clear violations of law by public respondents. They put in issue the overpriced construction of the
town center; the grossly disadvantageous bond flotation; the irrevocable assignment of the provincial
governments annual regular income, including the IRA, to respondent RCBC to cover and secure the
payment of the bonds floated; and the lack of consultation and discussion with the community regarding
the proposed project, as well as a proper and legitimate bidding for the construction of the town center.
Obviously, the issues raised in the petition do not refer to the wisdom but to the legality of the
acts complained of. Thus, we find the instant controversy within the ambit of judicial review. Besides, even
if the issues were political in nature, it would still come within our powers of review under the expanded
jurisdiction conferred upon us by Section 1, Article VIII of the Constitution, which includes the authority
to determine whether grave abuse of discretion amounting to excess or lack of jurisdiction has been
committed by any branch or instrumentality of the government.[58]
The Motion to Admit Amended Petition

was properly denied
However, as to the denial of petitioners Motion to Admit Amended Petition, we find no reason to reverse
the same. The inclusion of the province of Cagayan as a petitioner would not only change the theory of
the case but would also result in an absurd situation. The provincial government, if included as a petitioner,
would in effect be suing itself considering that public respondents are being sued in their official capacity.
In any case, there is no need to amend the petition because petitioners, as we have said, have
legal standing to sue as taxpayers.
Section 5, Rule 15 of the Rules of Court

was substantially complied with
This brings us to the fourth and final issue.
A perusal of the Motion for Reconsideration filed by petitioners would show that the notice of
hearing was addressed only to the Clerk of Court in violation of Section 5, Rule 15 of the Rules of Court,
which requires the notice of hearing to be addressed to all parties concerned. This defect, however, did
not make the motion a mere scrap of paper. The rule is not a ritual to be followed blindly.[59] The purpose
of a notice of hearing is simply to afford the adverse parties a chance to be heard before a motion is
resolved by the court.[60] In this case, respondents were furnished copies of the motion, and consequently,
notified of the scheduled hearing. Counsel for public respondents in fact moved for the postponement of
the hearing, which the court granted.[61] Moreover, respondents were afforded procedural due process as
they were given sufficient time to file their respective comments or oppositions to the motion. From the
foregoing, it is clear that the rule requiring notice to all parties was substantially complied with.[62] In effect,
the defect in the Motion for Reconsideration was cured.
We cannot overemphasize that procedural rules are mere tools to aid the courts in the speedy,
just and inexpensive resolution of cases.[63] Procedural defects or lapses, if negligible, should be excused
in the higher interest of justice as technicalities should not override the merits of the case. Dismissal of
cases due to technicalities should also be avoided to afford the parties the opportunity to present their
case. Courts must be reminded that the swift unclogging of the dockets although a laudable objective
must not be done at the expense of substantial justice.[64]
WHEREFORE, the instant Petition is PARTIALLY GRANTED. The April 27, 2004 Order of
Branch 5 and the August 20, 2004 Resolution of Branch 1 of the Regional Trial Court of Tuguegarao City
are hereby REVERSED and SET ASIDE insofar as the dismissal of the petition is concerned. Accordingly,
the case is hereby REMANDED to the court a quo for further proceedings.
SO ORDERED.
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
CONCHITA CARPIO MORALES TERESITA J. LEONARDO-DE CASTRO

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
In lieu of Justice Arturo D. Brion who is on leave per Special Order No. 807 dated December
7, 2009.
***
[1]
Rollo, pp. 221-230; penned by Judge Elmo M. Alameda.
[2]
Id. at 36-54.
[3]
Id. at 256 -258; penned by Judge Jimmy H. F. Luczon, Jr.
[4]
Id. at 55-56.
[5]
Id. at 57-59.
[6]
Id. at 60-63.
[7]
Id. at 64-65.
[8]
Id. at 66-68.
[9]
Id. at 69-70.
[10]
Id. at 71-72.
[11]
Id. at 78-90.
[12]
Id. at 440.
[13]
Id. at 36-54.
[14]
Id. at 36.
[15]
Id. at 36-37.
[16]
Id. at 37.
[17]
Id.
[18]
Id. at 437.
[19]
Id.
[20]
Id.
[21]
Id.
[22]
Id.
[23]
Id. at 126-141.
[24]
Id. at 142-150.
[25]
Id. at 179-189.
[26]
Id. at 163-171.
[27]
Id. at 151-162.
[28]
Id. at 172-178.
[29]
Id. at 98-100.
[30]
Id. at 101-118.
[31]
Id. at 119-125.
[32]
Id. at 190-204.
[33]
Id. at 205-215 and 216-220.
[34]
Id. at 224-230.
[35]
Id. at 231-241.
[36]
Id. at 242-246 and 247-254.
[37]
Id. at 718.
[38]
Id. at 15.
[39]
Constantino, Jr. v. Cuisia, G.R. No. 106064, October 13, 2005, 472 SCRA 505, 518-519.
[40]
Bayan (Bagong Alyansang Makabayan v. Zamora, 396 Phil. 623, 647 (2000).
[41]
Bugnay Construction and Development Corporation v. Judge Laron, 257 Phil. 245, 256 (1989).
[42]
Bagatsing v. San Juan, 329 Phil. 8, 13 (1996).
[43]
Abaya v. Ebdane, Jr., G.R. No. 167919, February 14, 2007, 515 SCRA 720, 758.
[44]
Rollo, p. 129; Answer with Motion to Dismiss of public respondents.
[45]
Id. at 93-95.
[46]
Id. at 215.
[47]
Garcillano v. House of Representatives Committees on Public Information, Public Order and Safety,
National Defense and Security, Information and Communications Technology, and Suffrage and
Electoral Reforms, G.R. Nos. 1708338 & 179275, December 23, 2008, 575 SCRA 170, 185.
[48]
David v. Macapagal-Arroyo, G.R. Nos. 171396, 171409, 171485, 171483, 171400, 171489 &
171424, May 3, 2006, 489 SCRA 160.
[49]
See Constantino, Jr. v. Cuisia, supra at note 39; Abaya v. Ebdane, Jr., supra at note 43; Province of
North Cotabato v. Government of the Republic of the Philippines Peace Panel on Ancestral Domain
(GRP), G.R. Nos. 183591, 183752, 183893, 183951 & 183962, October 14, 2008, 568 SCRA
402; Garcillano v. House of Representatives Committees on Public Information, Public Order and
Safety, National Defense and Security, Information and Communications Technology, and Suffrage
and Electoral Reforms, supra at note 47.
[50]
See Rollo, p. 11.
[51]
Id. at 58; Resolution No. 290-2001.
[52]
Id. at 73; Underwriting Agreement, paragraph 7.1.
[53]
Id. at 74; Underwriting Agreement, paragraph 7.3.
[54]
Id. at 77; Guarantee Agreement, paragraph 3.1.
[55]
Id. at 83; Agreement for the Planning, Design, Construction and Site Development of
the New Cagayan Town Center, paragraph 7.1.
[56]
REPUBLIC ACT NO. 7160, Section 2, otherwise known as the Local Government Code of 1991.
[57]
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. Nos.
78742, 79310, 79744 & 79777, July 14, 1989, 175 SCRA 343, 377.
[58]
Daza v. Singson, G.R. No. 86344, December 21, 1989, 180 SCRA 496, 507.
[59]
KKK Foundation, Inc. v. Calderon-Bargas, G.R. No. 163785, December 27, 2007, 541 SCRA 432, 441.
[60]
Vlason Enterprises Corporation v. Court of Appeals, 369 Phil. 269, 299 (1999).
[61]
Rollo, p. 255.
[62]
See Philippine National Bank v. Paneda, G.R. No. 149236, February 14, 2007, 515 SCRA 639, 652.
[63]
Incon Industrial Corporation v. Court of Appeals, G.R. No. 161871, July 24, 2007, 528 SCRA 139, 144.
[64]
Tacloban II Neighborhood Association, Inc. v. Office of the President, G.R. No. 168561, September 26,
2008, 566 SCRA 493, 510.
Supreme Court
Manila
SECOND DIVISION
ARSENIO OLEGARIO and G.R. No. 147951

HEIRS OF ARISTOTELES F.
OLEGARIO, represented by
CARMELITA GUZMAN- Present:
OLEGARIO,
Petitioners, CARPIO,* J., Chairperson,
CARPIO-MORALES,**
LEONARDO-DE CASTRO,***
- versus - DEL CASTILLO, and
ABAD, JJ.
PEDRO C. MARI, represented by

LILIA C. MARI-CAMBA, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Possession, to constitute the foundation of acquisitive prescription, must be possession under a

claim of title or must be adverse. Acts of a possessory character performed by one who holds the property
by mere tolerance of the owner are clearly not in the concept of an owner and such possessory acts, no
matter how long continued, do not start the running of the period of prescription.
In the present Petition for Review on Certiorari,[1] petitioners assail the April 18, 2001 Decision[2] of the
Court of Appeals (CA) in CA-G.R. CV No. 52124, reversing the October 13, 1995 Decision[3] of the Regional
Trial Court (RTC) of Pangasinan, Branch 39. The CA declared the respondent herein as the owner of Lot
Nos. 17553, 17526 and 14356 of the Mangatarem cadastral survey.
Factual antecedents
As early as 1916,[4] Juan Mari, the father of respondent, declared his ownership over a parcel of land in
Nancasalan, Mangatarem for tax purposes. He took possession of the same by delineating the limits with
a bamboo fence,[5] planting various fruit bearing trees and bamboos[6] and constructing a house
thereon.[7] After a survey made in 1950, Tax Declaration No. 8048[8] for the year 1951 specified the subject
realty as a residential land with an area of 897 square meters and as having the following
boundaries: North - Magdalena Fernandez; South - Catalina Cacayorin; East - Camino Vecinal; and West
- Norberto Bugarin. In 1974, the subject realty was transferred to respondent, Pedro Mari, by virtue of a
deed of sale.
Meanwhile, in 1947, Wenceslao Olegario, the husband of Magdalena Fernandez and father of petitioner
Arsenio Olegario, filed a new tax declaration[9] for a certain 50-square meter parcel of land, indicating the
following boundaries: North - Cesario and Antonio Fernandez; South - Juan Mari; East - Barrio Road; and
West - Norberto Bugarin. Then on May 14, 1961, Wenceslao Olegario executed a "Deed of Quit-Claim of
Unregistered Property"[10] in favor of Arsenio Olegario transferring to the latter inter alia the
aforementioned 50-square meter property.
In the cadastral survey conducted from 1961 to 1962, the subject realty was identified as Lot Nos. 17526,
17553 and 14356 of the Mangatarem Cadastre. At this time, Wenceslao Olegario disputed Juan Maris
claim over Lot Nos. 17526 and 17553. Hence, on the two corresponding survey notification cards
dated September 28, 1968,[11] the claimant appeared as "Juan Mari v. Wenceslao Olegario". With regard
to Lot No. 14356, the survey notification card named Juan Mari as the claimant.
Sometime around 1988, respondent filed with the Department of Environment and Natural Resources
Regional Office in Pangasinan a protest against the petitioners because of their encroachment into the
disputed realty. After investigation, said office decided in favor of the respondent and found the latter to
be the owner of Lot Nos. 17526, 17553 and 14356. Petitioners did not appeal and the said decision
became final and executory.
In 1989, Arsenio Olegario caused the amendment of his tax declaration[12] for the 50-square meter
property to reflect 1) an increased area of 341 square meters; 2) the Cadastral Lot No. as 17526, Pls-768-
D;[13] and 3) the boundaries as: North-NE Lot 16385 & Road; South-NW-Lots 14363 & 6385, Pls-768-D;
East-SE-Lot 17552, Pls-768-D and West-SW-Lot 14358, Pls-768-D.

In 1990, after discovering the amended entries in Arsenio Olegario's Tax Declaration No. 4107-R,
respondent filed a complaint[14] with the RTC of Lingayen, Pangasinan, for Recovery of Possession and
Annulment of Tax Declaration No. 4107-R. Respondent alleged, inter alia, that Juan Mari, and
subsequently his successor, was deprived by the Olegarios of the possession of portions of subject realty
which respondent owned. Trial thereafter ensued.
On October 13, 1995, the RTC rendered judgment in favor of the petitioners, viz:
WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered

as follows:
1. Declaring the defendants-Olegario the owners of Lots 17553 and 17526 of the
Mangatarem cadastral survey.
2. Dismissing the plaintiff's Complaint on the ground of prescription of action and on the
further ground that [he] failed to prove [his] ownership of any portion of the two lots
mentioned in the next preceding paragraph (assuming arguendo that [his] action has not
prescribed);
3. Ordering the plaintiff to pay the costs of this suit. No damages are awarded by the
Court.
SO ORDERED.[15]
Respondent appealed to the CA which reversed the trial court's findings. The CA found respondent to
have adduced stronger evidence of prior possession and ownership of the disputed realty.The dispositive
portion of the CA Decision states:
WHEREFORE, the trial court's Decision dated October 13, 1995 is REVERSED and SET
ASIDE and a new one is hereby entered declaring appellant Pedro C. Mari represented by
Lilia C. Mari-Camba the lawful owner of Lot Nos. 17526, 17553 and 14356 of the
Mangatarem Cadastre, without pronouncement as to costs.
SO ORDERED.[16]
Petitioners, without filing a motion for reconsideration of the CA Decision, thereafter filed the present
petition for review.
Issues
1. Whether or not there was failure on [the part of] the Court of Appeals to appreciate
and give weight to the evidence presented by the petitioners;
2. Whether or not the Court of Appeals erred in its decision in adjudicating ownership of
the said lots in favor of the respondent and [in] giving great weight to the respondents
evidence;
3. Whether or not the Court of Appeals erred in its failure to declare the action as barred
by laches;
4. Whether or not the Court of Appeals failed to find an[d] declare the petitioners as
having acquired ownership of the disputed lots by acquisitive prescription;
5. Whether or not the Court of Appeals erred in adjudicating the lot in favor of respondent
and also [in] denying award of damages to petitioners.[17]
Petitioners contend that they have been in possession of the disputed lots since 1948 or thereabouts, or
for more than 30 years already. Hence, they acquired ownership thereover by virtue of prescription. They
also impute negligence or failure on the part of respondent to assert his alleged rights within a reasonable
time.
On the other hand, respondent asserts that petitioners claim ownership over only a certain 50-square
meter parcel of land, as evidenced by their tax declaration which consistently declared only such area. It
was only in September 1989 that petitioners sought to expand the area of their claim to 341 square meters
by virtue of a letter to the Provincial Assessor of Pangasinan. Hence, respondent asserts that prescription
has not set in. Respondent also contends that petitioners' occupancy has been illegal from the point of
inception and thus, such possession can never ripen into a legal status.
Our Ruling
The petition has no merit.

Petitioners' Evidence is Weak
Considering the conflicting findings of the RTC and the CA, a circumstance that constitutes an
exception[18] to the general rule that only questions of law are proper subjects of a petition under Rule 45,
we shall assess and weigh the evidence adduced by the parties and shall resolve the questions of fact
raised by petitioners.
A study of the evidence presented by petitioners shows that the CA did not err in finding such evidence
weaker than that of respondent. Arsenio Olegario testified that as early as 1937 their family had built a
nipa house on the land where they lived. Yet he also testified that the former owner of the land was his
mother, Magdalena Fernandez.[19] Significantly, Magdalena Fernandez has never claimed and was never
in possession or ownership of Lot Nos. 17553, 17526 and 14356. Petitioners evidence thus supports the
conclusion that in 1937 they were in possession, not of Lot No. 17526, but of their mothers land, possibly
50 square meters of it, which is the approximate floor area of the house. Conversely, petitioners' evidence
fails to clearly prove that in 1937 they were already occupying the disputed lots. The records, in fact, do
not show exactly when the Olegarios entered and started occupying the disputed lots.
The evidence shows that a hollow block fence, an improvement introduced by the Olegarios in 1965, now
exists somewhere along the disputed lots. Petitioners' claim that they were in possession of the disputed
lots even prior to 1965 based on the existence of the bamboo fence on the boundary of their land
preceding the existence of the hollow block fence, however, holds no water. The testimony of Marcelino
Gutierrez shows that formerly there was a bamboo fence demarcating between the land of the Olegarios
and the Maris and that in 1964 or 1965 a hollow block fence was constructed. He did not say, however,
that the place where the hollow block fence was constructed was the exact same place where the bamboo
boundary fence once stood. Even the testimony of Arsenio Olegario was ambiguous on this matter, viz:
Q When was the [concrete] hollow block [fence] separating your property [from] the
property of Juan Mari constructed?
A It was constructed in 1965.
Q Before the construction of that concrete hollow block fence between your land and
the land of Juan Mari [in] 1965, what was the visible boundary between your land
and the land of Juan Mari?
A Bamboo fence, sir.[20]
Arsenio merely testified that a bamboo fence was formerly the visible boundary between his land and
the land of Juan Mari; and that a concrete hollow block fence was constructed in 1965. His testimony
failed to show that the concrete hollow block fence was constructed in the same position where the
bamboo boundary fence once stood.
On the other hand, there is ample evidence on record, embodied in Tax Declaration No. 9404 for the year
1947; the survey sketch plan of 1961; and the survey plan of 1992, that the boundary claimed by the
Olegarios kept moving in such a way that the portion they occupied expanded from 50 square meters (in
the land of his mother) to 377 square meters.[21] Viewed in relation to the entire body of evidence
presented by the parties in this case, these documents cannot plausibly all be mistaken in the areas
specified therein. As against the bare claim of Arsenio[22] that his predecessor merely made an inaccurate
estimate in providing 50 square meters as the area claimed by the latter in 1947 in the tax
declaration,[23] we find it more plausible to believe that each of the documents on record stated the true
area measurements of the parties' claims at the particular time each document was executed.
As correctly found by the CA, the earliest that petitioners can be considered to have occupied the disputed
property was in 1965 when the concrete hollow block fence was constructed on the disputed lots.
Ownership and Prescription
As previously mentioned, respondent's predecessor, Juan Mari, had declared the disputed realty[24] for tax
purposes as early as 1916. The tax declarations show that he had a two storey house on the realty. He
also planted fruit bearing trees and bamboos thereon. The records[25] also show that the 897-square meter
property had a bamboo fence along its perimeter. All these circumstances clearly show that Juan Mari
was in possession of subject realty in the concept of owner, publicly and peacefully since 1916 or long
before petitioners entered the disputed realty sometime in 1965.
Based on Article 538 of the Civil Code,[26] the respondent is the preferred possessor because, benefiting
from his father's tax declaration of the subject realty since 1916, he has been in possession thereof for a
longer period. On the other hand, petitioners acquired joint possession only sometime in 1965.
Despite 25 years of occupying the disputed lots, therefore, petitioners did not acquire ownership. Firstly,
they had no just title. Petitioners did not present any document to show how the titles over Lot Nos. 17526
and 17533 were transferred to them, whether from respondent, his predecessor, or any other
person.[27] Petitioners, therefore, could not acquire the disputed real property by ordinary prescription
through possession for 10 years. Secondly, it is settled that ownership cannot be acquired by mere
occupation. Unless coupled with the element of hostility towards the true owner, occupation and use,
however long, will not confer title by prescription or adverse possession.[28] In other words, possession, to
constitute the foundation of a prescriptive right, must be possession under claim of title, that is, it must
be adverse.[29]
Petitioners' acts of a possessory character - acts that might have been merely tolerated by the owner -
did not constitute possession. No matter how long tolerated possession is continued, it does not start the
running of the prescriptive period.[30] Mere material possession of land is not adverse possession as against
the owner and is insufficient to vest title, unless such possession is accompanied by the intent to possess
as an owner. There should be a hostile use of such a nature and exercised under such circumstance as
to manifest and give notice that the possession is under a claim of right.[31]
Petitioners have failed to prove that their possession was adverse or under claim of title or right. Unlike
respondent, petitioners did not have either the courage or forthrightness to publicly declare the disputed
lots as owned by them for tax purposes. Tax declarations "prove that the holder has a claim of title over
the property. Aside from manifesting a sincere desire to obtain title thereto, they announce the holder's
adverse claim against the state and other interested parties".[32] Petitioners' omission, when viewed in
conjunction with respondent's continued unequivocal declaration of ownership over, payment of taxes on
and possession of the subject realty, shows a lack of sufficient adverseness of the formers possession to
qualify as being one in the concept of owner.
The only instance petitioners assumed a legal position sufficiently adverse to respondent's ownership of
the disputed properties was when they declared Lot No. 17526 for tax purposes in their name in
1989.[33] Since then and until the filing of the complaint for recovery of possession in 1990, only one year
had elapsed. Hence, petitioners never acquired ownership through extraordinary prescription of the
subject realty.
On the other hand, being the sole transferree of his father, respondent showed through his tax
declarations which were coupled with possessory acts that he, through his predecessor, had been in
possession of the land for more than 30 years since 1916. "Open, exclusive and undisputed possession of
alienable public land for the period prescribed by law creates the legal fiction whereby the land, upon
completion of the requisite period - ipso jure and without the need of judicial or other sanction, ceases to
be public land and becomes private property."[34] Ownership of immovable property is acquired by
extraordinary prescription through possession for 30 years.[35] For purposes of deciding the instant case,
therefore, the possession by respondent and his predecessor had already ripened into ownership of the
subject realty by virtue of prescription as early as 1946.
Laches
Petitioners cannot find refuge in the principle of laches. It is not just the lapse of time or delay that
constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained
length of time, to do that which, through due diligence, could or should have been done earlier, thus
giving rise to a presumption that the party entitled to assert it had earlier abandoned or declined to assert
it.
The essential elements of laches are: (a) conduct on the part of the defendant, or of one under whom he
claims, giving rise to the situation complained of; (b) delay in asserting complainant's rights after he had
knowledge of defendant's acts and after he has had the opportunity to sue; (c) lack of knowledge or
notice by defendant that the complainant will assert the right on which he bases his suit and (d) injury or
prejudice to the defendant in the event the relief is accorded to the complainant.[36]
In the instant case, the second and third elements are missing. Petitioners had notice and knew all along
the position of the respondent and his predecessor Juan Mari - they were standing pat on his ownership
over the subject realty. This stand of respondent and his predecessor was recorded and clearly visible
from the notification survey cards.[37] From 1968, the date of the cards, until 1989 there was nothing to
indicate any change in the position of any of the parties. Moreover, that respondent had not conceded
ownership and possession of the land to petitioners is clear also from the fact that Pedro Mari continued
to declare the entire 897-square meter property in his name and pay taxes for the entire area after his
father transferred the property to him.
On the other hand, it was petitioners who suddenly changed their position in 1989 by changing the area
of the property declared in their name from 50 square meters to 341 square meters and specifying the
details to make it appear that the tax declaration for the 50-square meter property pertained to Lot No.
17526. As previously discussed, it was only at this point, in 1989, that it can be clearly stated that
petitioners were making their claim of ownership public and unequivocal and converting their possession
over Lot No. 17526 into one in the concept of owner.
Upon discovery of this clear and unequivocal change in status of petitioners position over the disputed
land respondent immediately acted. He filed in 1990 the complaint for recovery of possession and
nullification of tax declaration. Hence, we find no laches in the instant case.
In conclusion, we find no reversible error on the part of the CA in recognizing the ownership and right of
possession of respondent over Lot Nos. 17526, 17553 and 14356. There is, thus, also no basis for an
award of damages and attorneys fees in favor of petitioners.
WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals dated April
18, 2001 is AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
CONCHITA CARPIO MORALES TERESITA J. LEONARDO-DE CASTRO

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
In lieu of Justice Arturo D. Brion who is on leave per Special Order No. 807 dated December
7, 2009.
***
[1]
Rollo, pp. 18-43.
[2]
CA rollo, pp. 81-92; penned by Associate Justice Fermin A. Martin, Jr. and concurred in by
Associate Justices Portia Alio-Hormachuelos and Mercedes Gozo-Dadole.
[3]
Records, pp. 280-286; penned by Judge Eugenio G. Ramos.
[4]
Tax No. 17893.
[5]
Records, p. 68.
[6]
Id. at 189.
[7]
See tax declarations.
[8]
This cancelled Tax No. 32661 which in turn cancelled Tax No. 17893.
[9]
Exhibit 12, records, p. 216.
[10]
Exhibit R, id. at 220.
[11]
Exhibits A and B, id. at 202-203.
[12]
No. 4107-R.
[13]
Prior to 1989 this item remained blank.
[14]
Records, pp. 1-4.
[15]
Id. at 286.
[16]
[17]
Rollo, pp. 200-201.
[18]
Philippine Phosphate Fertilizer Corporation v. Kamalig Resources, Inc., G.R. No. 165608, December 13,
2007, 540 SCRA 139, 151; Republic v. Enriquez, G.R. No. 160990, September 11, 2006, 501 SCRA
436, 442.
[19]
[20]
TSN, Nov. 3, 1993, p. 9.
[21]
341 square meters of Lot No. 17526 plus 36 square meters of Lot No. 14356.
[22]
He testified that the 50-square meter area was just an estimate of the floor area of the house but not
of the entire lot area claimed by them.
[23]
Significantly, the same area of 50 square meters was mentioned in the Deed of Quit-Claim of
Unregistered Real property dated May 14, 1961.
[24]
Surveyed as Lots No. 17553, 17526 and 14356.
[25]
Records, p. 68.
[26]
Art. 538 of the Civil Code states:
Possession as a fact cannot be recognized at the same time in two different personalities except in the
cases of co-possession. Should a question arise regarding the fact of possession, the present
possessor shall be preferred; if there are two possessors, the one longer in possession; if the dates of
the possession are the same, the one who presents a title; and if all these conditions are equal, the
thing shall be placed in judicial deposit pending determination of its possession or ownership through
proper proceedings.
[27]
What is on record is a Deed of Quitclaim of Unregistered Real Property over a 50-square meter
realty, which has not been proven to be the same as Lots 17526 and 17533.
[28]
Cequea v. Bolante, 386 Phil. 419, 430 (2000).
[29]
Bogo-Medellin Milling Co., Inc. v. Court of Appeals, 455 Phil. 285, 298-299 (2003).
[30]
Larena v. Mapili, 455 Phil. 944, 954-955 (2003).
[31]
Bogo-Medellin Milling Co., Inc. v. Court of Appeals, supra note 29 at 300; The Director of Lands v.
Court of Appeals, 367 Phil. 597 (1999).
[32]
Cequea v. Bolante, supra note 28 at 430, citing Republic of the Phils. v. Court of Appeals, 328 Phil.
238, 248 (1996).
[33]
Exhibit U, records p. 223.
[34]
San Miguel Corporation v. Court of Appeals, G.R. No. 57667, May 28, 1990, 185 SCRA 722, 724-725.
[35]
CIVIL CODE, ART. 1137.
[36]
Bogo-Medellin Milling Co., Inc. v. Court of Appeals, supra note 29 at 302 citing Avisado v. Rumbaua,
406 Phil. 704 (2001).
[37]
Exhibits A and B, records, pp. 202-203.

Supreme Court
Manila
SECOND DIVISION
JOSEPHINE WEE, G.R. No. 177384

Petitioner,
Present:

BRION,
DEL CASTILLO, and
ABAD, JJ.
REPUBLIC OF THE PHILIPPINES, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
In land registration cases, the applicant has the burden to show that he or she is the real and
absolute owner in fee simple of the land sought to be registered.[1] It is also important to bear in mind
that one who seeks registration of title must prove his or her claim with well-nigh incontrovertible
evidence.[2] In this case, petitioner miserably failed to show that she is the real and absolute owner in fee
simple of the land sought to be registered.
Assailed in this Petition for Review on Certiorari[3] under Rule 45 of the Rules of Court are the April
28, 2006 Decision[4] of the Court of Appeals (CA) and its subsequent Resolution[5] dated April 3, 2007 in
CA-G.R. CV No. 76519. Said Decision and Resolution reversed and set aside the April 2, 2002
Judgment[6] of the Regional Trial Court (RTC) of Tagaytay City, Branch 18 and held that petitioner was
not entitled to the requested registration of title.

On December 22, 1994, petitioner filed an Application for Registration of Title[7] over a 4,870-
square meter parcel of land situated in Barangay Puting Kahoy, Silang, Cavite, designated as Lot No. 8349
(Cadastral Lot. No. 452-D).
In brief, petitioner alleged in her application that she is the owner in fee simple of the subject
property by virtue of a Deed of Absolute Sale[8] dated February 1, 1993 executed by Julian Gonzales in
her favor. Petitioner claimed the benefits of the Property Registration Decree[9] or, should said Decree be
inapplicable, the benefits of Chapter VIII of Commonwealth Act No. 141 (1936),[10] because she and her
predecessor-in-interest have been in open, continuous, public, peaceful and adverse possession of the
land since time immemorial.
On March 15, 1995, the Republic of the Philippines, through the Office of the Solicitor General
(OSG), filed its Opposition[11] alleging that neither the petitioner nor her predecessor-in-interest has been
in open, continuous, exclusive and notorious possession and occupation of Lot No. 8349 since June 12,
1945 or prior thereto. The OSG likewise averred that the muniments of title and tax payment receipts
submitted by the petitioner do not constitute competent or sufficient evidence of a bona fide acquisition
of the subject lot, or of the petitioners open, continuous, exclusive and notorious possession and
occupation thereof in the concept of owner since June 12, 1945 or prior thereto. It asserted that Lot No.
8349 is part of the public domain and consequently prayed for the dismissal of the application for
registration.
Petitioner presented the following pieces of documentary evidence before the trial court:
1) Deed of Absolute Sale between Josephine Wee and Julian Gonzales

dated February 1, 1993;[12]
2) Tax Declarations in the name of Julian Gonzales for the years 1957,
1961, 1967, 1980, and 1985;[13]
3) Tax Declarations in the name of Josephine Wee from 1993 onwards;[14]
4) Receipts for tax payments made by Josephine Wee from 1993-1999;[15]
5) Affidavit of Seller-Transferor executed by Julian Gonzales on February

10, 1993;[16]
6) Affidavit of Ownership, Aggregate Land Holding and Non-Tenancy

executed by Julian Gonzales on February 10, 1993;[17]
7) Affidavit of Non-Tenancy executed by Julian Gonzales on February 10,

1993; [18]
8) Salaysay executed by Juana Macatangay Gonzales, Erlinda Gonzales

Batingal and Remedios Gonzales Bayan;[19]
9) Certification dated March 2, 2000 by the Department of Environment

and Natural Resources (DENR) stating that Lot No. 8349 was shown to be within the
Alienable or Disposable Land per Land Classification Map No. 3013 established under FAO-
4-1656 on March 15, 1982;[20]
10) Survey Plan of Lot No. 8349;[21] and
11) Surveyors Certificate, Technical Description and Tracing Cloth.[22]

She also presented the testimonies of the following witnesses who were all cross-examined by
the Republic through the public prosecutor:
1) Josephine Wee, who testified that she purchased Lot No. 8349 from
Julian Gonzales through a Deed of Absolute Sale dated February 1, 1993 and immediately
took possession thereof after the sale; that she did not cultivate it because it is planted
with coffee; that she paid for all the real property taxes subsequent to the sale; that she
caused the preparation of a survey plan; that the property is not part of the public domain
or any river or military reservation; that there are no adverse claimants and no cases were
filed against her after the sale involving said lot and that she is not doing anything with
the property because it is not productive.[23]
2) Juana Gonzales, the 75-year old widow of Julian Gonzales, who declared
that she and her husband sold Lot No. 8349 to the petitioner and identified her husbands
signature and her own thumbmark. She testified that she and her late husband had been
in possession of Lot No. 8349 prior to the sale to Josephine Wee; that her husband
inherited the property from his parents a long time ago; that her husband already had
the property when they got married and that she and Julian Gonzales began living
together in 1946. She also identified and affirmed the due execution and authenticity of
her Salaysay, as well as the documents signed by her husband.[24]
3) Remedios Gonzales Bayan, the 39-year old daughter of Julian and Juana
Gonzales, who testified that she witnessed the execution of the Deed of Absolute Sale
between her father whose signature she identified and the applicant in February
1993. She also identified and affirmed the due execution and authenticity of
her Salaysay.[25]
On April 2, 2002, the RTC promulgated in favor of the petitioner a Judgment,[26] pertinent portions
of which read:
Culled from the evidence on record, both testimonial and documentary, are facts which
satisfactorily establish applicants ownership in fee simple of the parcel of land, subject
matter of the instant proceedings, to wit: that by means of an appropriate deed of sale,
the applicant has acquired said property by purchase from Julian Gonzales on February
1, 1993; that the same parcel was declared for taxation purposes; that all the realty taxes
due thereon have been duly paid. Likewise, this Court could well-discern from the survey
plan covering the same property and other documents presented, more particularly the
tracing cloth plan which was presented as additional evidence in support of the
application, that the land sought to be registered is agricultural and not within any forest
zone or the public domain; that the land is not covered by any public land
application/patent, and that there is no other adverse claimant thereof; and further, that
tacking her predecessors-in-interests possession to applicants, the latter appears to be in
continuous and public possession thereof for more than thirty (30) years.
On the basis of the foregoing facts and considering that applicant is a Filipino citizen not
otherwise disqualified from owning real property, this Court finds that she has satisfied all
the conditions essential to the grant of her application pursuant to the provisions of the
Land Registration Law, as amended.
WHEREFORE, this Court hereby approves this application for registration and thus places
under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property
Registration Law, the lands described in Plan Ap-04-010262, Lot 8349 and containing an
area of Four Thousand Eight Hundred Seventy (4,870) Square Meters as supported by its
technical description now forming part of the record of this case, in addition to other
proofs adduced in the name of JOSEPHINE WEE, who is of legal age, single and with
residence at 1345 Claro M. Recto Avenue, Sta, Cruz, Manila.
Once this Decision becomes final and executory, the corresponding decree of registration
shall forthwith issue.
SO ORDERED.
Unsatisfied, the Republic, through the OSG, filed its Notice of Appeal on April 26, 2002, alleging
that the RTC erred in granting the application for registration considering that petitioner failed to comply
with all the legal requirements for judicial confirmation of her alleged title. In particular, the OSG claimed
that Lot No. 8349 was classified as alienable and disposable land only on March 15, 1982, as per
Certification issued by the DENR. Thus, petitioner and her predecessor-in-interest could not have been in
possession of the property since June 12, 1945, or earlier. The OSG also pointed out that the tax
declarations presented by petitioner are fairly recent and do not show petitioner and her predecessor-in-
interests nature of possession.Furthermore, the original tracing cloth plan was not presented in evidence.
The CA reversed the RTC Judgment. It held that petitioner failed to prove that she and her
predecessor-in-interest have been in possession and occupation of the subject lot under a bonafide claim
of ownership since June 12, 1945. Thus:
In granting the application for registration of title, the court a quo merely relied on the
deed of sale executed by Julian Gonzales, in favor of applicant-appellee on February 1,
1993, the tax declarations and tax receipts. It is interesting to note that Juana Gonzales,
widow of Julian Gonzales, after identifying the deed of sale executed by her deceased
husband in favor of applicant-appellee, merely stated that the lot subject thereof was
inherited by Julian from his parents a long time ago and that Julian was in possession of
the lot since 1946 when they started living together. For her part, applicant-appellee
testified that she immediately took possession of the subject lot, which was planted with
coffee, after acquiring the same and that she is not doing anything on the lot because it
is not productive. As pointed out by the Republic, applicant-appellee and Juana Gonzales
failed to specify what acts of development, cultivation, and maintenance were done by
them on the subject lot. x x x
xxxx
In the case at bar, applicant-appellee merely claimed that the subject lot is planted with
coffee. However, no evidence was presented by her as to who planted the coffee trees
thereon. In fact, applicant-appellee admitted that she is not doing anything on the subject
lot because it is not productive, thereby implying that she is not taking care of the coffee
trees thereon. Moreover, tax declarations and tax receipts are not conclusive evidence of
ownership but are merely indicia of a claim of ownership, aside from the fact that the
same are of recent vintage.[27]
Issues
1) The testimony of Juana Gonzales proves that petitioners predecessor-in-interest, Julian Gonzales,
occupied Lot No. 8349 even prior to 1946;
2) The fact that the property is planted with coffee, a fruit bearing tree, reveals that the lot is planted,
cultivated and cared for. Thus, there was not only effective and active possession and occupation
but actual cultivation and tending of the coffee plantation; and
3) The fact that the land was declared for tax purposes as early as 1957 shows that the land was actively
possessed and occupied by petitioner and her predecessor-in-interest.
Respondents arguments:
1) Since Lot No. 8349 became part of the alienable and disposable land only on
March 15, 1982, petitioner could not have been considered as having been in open, continuous,
exclusive and notorious possession and occupation of subject property under a bona fide claim of
ownership; and
2) There is no proof that petitioner or Julian Gonzales undertook any clear act of
dominion or ownership over Lot No. 8349, since there are no structures, improvements, or
plantings on the property.
Our Ruling
Petitioner failed to prove open, continuous,

exclusive and notorious possession of the subject
property.
In Director, Land Management Bureau v. Court of Appeals,[28] we explained that
x x x The phrase "adverse, continuous, open, public, peaceful and in concept of owner,"
by which characteristics private respondent describes his possession and that of his
parents, are mere conclusions of law requiring evidentiary support and substantiation.
The burden of proof is on the private respondent, as applicant, to prove by clear, positive
and convincing evidence that the alleged possession of his parents was of the nature and
duration required by law. His bare allegations without more, do not amount to
preponderant evidence that would shift the burden of proof to the oppositor.
Here, we find that petitioners possession of the lot has not been of the character and length of
time required by law. The relevant provision of the Property Registration Decree relied upon by petitioner
reads
SEC. 14. Who may apply. The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether personally or through their
duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in

open, continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June
12, 1945, or earlier.
(2) Those who have acquired ownership of private lands by prescription under the
provisions of existing laws. x x x
Unfortunately, petitioner failed to prove that she and her predecessor-in-interest have been in
open, continuous, exclusive and notorious possession and occupation of the subject property under
a bona fide claim of ownership since June 12, 1945.
First, there is nothing in the records which would substantiate her claim that Julian Gonzales was
in possession of Lot No. 8349 since 1945, other than the bare allegations of Juana Gonzales.[29] Certainly,
these unsubstantiated statements do not meet the required quantum of evidence in land registration
cases. In fact, contrary to her testimony that her late husband inherited the property from his parents a
long time ago, or even prior to 1945, the earliest tax declaration that was presented in this case is one
declared by Julian Gonzales only in 1957 long after June 1945.
It bears stressing that petitioner presented only five tax declarations (for the years 1957, 1961,
1967, 1980 and 1985) for a claimed possession and occupation of more than 45 years (1945-1993). This
type of intermittent and sporadic assertion of alleged ownership does not prove open, continuous,
exclusive and notorious possession and occupation. In any event, in the absence of other competent
evidence, tax declarations do not conclusively establish either possession or declarants right to registration
of title.[30]
Petitioner failed to prove possession in the

concept of an owner.
Second, and more importantly, we agree with the CA that petitioner was unable to demonstrate
that the alleged possession was in the concept of an owner, since she could not point to any acts of
occupation, development, cultivation or maintenance over the property. Petitioner claims that because the
property is planted with coffee, a fruit-bearing tree, it automatically follows that the lot is cultivated,
showing actual possession and occupation. However, petitioner failed to explain who planted the coffee,
whether these plants are maintained or harvested or if any other acts were undertaken by petitioner or
her predecessor-in-interest to cultivate the property.
Even if we were to assume that the coffee was planted by petitioners predecessor-in-interest,
mere casual cultivation of the land does not amount to exclusive and notorious possession that would give
rise to ownership.[31] The presence of an unspecified number of coffee plants, without proof that petitioner
or her predecessor-in-interest actually and deliberately cultivated them is not sufficient to support a claim
of title. In fact, the five tax declarations in the name of Julian Gonzales described the lot as unirrigated
riceland. No improvements or plantings were declared or noted in any of these tax declarations. It was
only in petitioners 1993 tax declaration that the land was described as planted with coffee. We are,
therefore, constrained to conclude that the mere existence of an unspecified number of coffee
plants, sans any evidence as to who planted them, when they were planted, whether cultivation or
harvesting was made or what other acts of occupation and ownership were undertaken, is not sufficient
to demonstrate petitioners right to the registration of title in her favor.
WHEREFORE, the petition is DENIED. The Court of Appeals April 28, 2006 Decision in CA-G.R.
CV No. 76519 and its Resolution dated April 3, 2007 denying petitioners Motion for Reconsideration are
both AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
Diaz-Enriquez v. Republic of the Phils., 480 Phil. 787, 800 (2004).
[2]
Turquesa v. Valera, 379 Phil. 618, 631 (2000).
[3]
Rollo, pp. 9-33.
[4]
CA rollo, pp. 94-101; penned by Associate Justice Marina L. Buzon and concurred in by Associate
Justices Aurora Santiago-Lagman and Arcangelita Romilla-Lontok.
[5]
Id. at 135-137.
[6]
Records, pp. 241-242, penned by Presiding Judge Alfonso S. Garcia.
[7]
Id. at 1-12. Petitioner attached the following documents to her Application: Plan Ap. 04-006774 in
tracing cloth and blueprint, technical descriptions, tax declaration no. 32282-A, receipts of payments
of real estate taxes and the Deed of Absolute Sale between Julian Gonzales and Josephine Wee.
[8]
Id. at 7-9.
[9]
Presidential Decree No. 1529 (1978).
[10]
The Public Land Act.
[11]
Records, pp. 17-19.
[12]
Id. at 7-9.
[13]
Id. at 103-109.
[14]
Id. at 110-113.
[15]
Id. at 114-121.
[16]
Id. at 130, stating that the land sold to Josephine Wee is his only land owned, in compliance with
Department of Agrarian Reform Administrative Order No. 1 (series 1989).
[17]
Id. at 131, indicating the technical description of Lot No. 8349.
[18]
Id. at 132, stating that Julian Gonzales is the absolute and register[ed] owner of a certain parcel of
land situated at Puting Kahoy, Silang Cavite covered by Tax Declaration 15196 of the Assessors Office
of Silang x x x.
[19]
Id. at 125-126, affirming the due execution and authenticity of the documents signed by Julian
Gonzales.
[20]
Id. at 202.
[21]
Id.
[22]
Id. at 211-213.
[23]
TSN, February 24, 2000, pp. 1-25.
[24]
TSN, March 9, 2000, pp. 1-16.
[25]
TSN, May 18, 2000, pp. 1-8.
[26]
Records, pp. 241-242; reference as to exhibits were omitted.
[27]
[28]
381 Phil. 761, 772 (2000).
[29]
In the hearing on March 9, 2000 (TSN, pp. 14-15), Juana Gonzales testified as follows:
Q. How did you and your husband, Mr. Julian Gonzales, acquire the
property?
A. My husband inherited it from his parents, sir.
Q. Can you recall, more or less, when your husband inherited this
property?
A. Long time ago, sir.
COURT When you were already married to him or before your marriage?
A. When we got married, it was already with him, sir.
FISCAL And do you still recall when you got married with Mr. Julian Gonzales?
VELAZCO:
WITNESS Since the year 1946, we started living together, sir.
FISCAL And you continuously owned and possessed this property up to the
VELAZCO: time you sold the same?
A. Yes, sir.
[30]
Director of Forestry v. Villareal, 252 Phil. 622, 635 (1989); Government of the Philippine Islands v.
Adriano, 41 Phil. 112 (1920); Cruado v. Bustos and Escaler, 34 Phil. 17 (1916); Evangelista v.
Tabayuyong, 7 Phil 607 (1907).
[31]
Director of Lands v. Judge Reyes, 160-A Phil. 832, 851 (1975); Ramirez v. Director of lands, 60 Phil.
114 (1934).

Supreme Court
Manila
SECOND DIVISION
JESUS CAMPOS and ROSEMARIE G.R. No. 175994
CAMPOS-BAUTISTA,
Petitioners,
- versus - Present:
NENITA BUENVENIDA PASTRANA,

ROGER BUENVENIDA, CARPIO,* J., Chairperson,
SONIA BUENVENIDA, LEONARDO-DE CASTRO,**
TEDDY BUENVENIDA, BRION,
VICTOR BUENVENIDA, DEL CASTILLO, and
HARRY BUENVENIDA, ABAD, JJ.
MILDRED BUENVENIDA,
MANOLITO BUENVENIDA
and DAISY BUENVENIDA,
represented by their Attorney-in-Fact Promulgated:
CARLITO BUENVENIDA,***
x-----------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
It sometimes happens that a creditor, after securing a judgment against a debtor, finds that the
debtor had transferred all his properties to another leaving nothing to satisfy the obligation to the
creditor. In this petition for review on certiorari,[1] petitioners ask us to set aside the November 23, 2005
Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 68731 declaring as null the sale of several
parcels of land made by their parents in their favor, for being absolutely simulated transactions. Also
assailed is the November 21, 2006 Resolution.[3]
Factual antecedents
This is the third case between essentially the same parties and the second among those cases to
reach this Court on appeal, spanning a period of close to three decades.
The first case arose from the refusal of Carlito Campos (Carlito), the father of herein petitioners,
to surrender the possession of a fishpond he leased from respondents mother, Salvacion Buenvenida,
despite the expiration of their contract of lease in 1980. Alleging that he was an agricultural lessee, Carlito
filed an agrarian case docketed as CAR Case No. 1196 (Agrarian Case) against his lessor. After trial,
the Regional Trial Court of Roxas City, Branch 14, found that Carlito was not an agricultural tenant. He
then appealed to the CA and subsequently to this Court, but was unsuccessful.
While the appeal in the Agrarian Case was pending before the CA, herein respondents filed the
second case, Civil Case No. V-5417, against Carlito for Recovery of Possession and Damages with
Preliminary Mandatory Injunction (Possession Case) involving the same fishpond subject of the earlier
agrarian case. On November 27, 1990, the Regional Trial Court of Roxas City, Branch 16, rendered a
Decision[4] finding Carlito to have retained possession of the fishpond notwithstanding the expiration of
the contract of lease and ordering him to pay rentals, the value of the produce and damages to the herein
respondents. The Decision became final and executory and a Writ of Execution[5] was issued on February
7, 1995. Subsequently, on September 19, 1995, an Alias Writ of Execution[6] was also issued. Both were
returned unsatisfied as per Sheriffs Return of Service dated November 14, 1995.
During the pendency of the Agrarian Case, as well as prior to the filing of the Possession Case,
Carlito was the registered owner of the following properties:
1. Residential Lots 3715-A and 3715-B-2 covered by Transfer Certificates of Title Nos.
18205[7] and 18417,[8] respectively and
2. Agricultural Lots 850 and 852 covered by Original Certificates of Title

Nos. P-9199[9] and P-9200,[10] respectively.
When the respondents were about to levy these properties to satisfy the judgment in the
Possession Case, they discovered that spouses Carlito and Margarita Campos transferred these lots to
their children Rosemarie and Jesus Campos, herein petitioners, by virtue of Deeds of Absolute Sale dated
October 18, 1985[11] and November 2, 1988.[12] Specifically, spouses Campos sold the residential lots (Lots
3715-A and 3715-B-2), with a total area of 1,393 square meters, to their daughter Rosemarie
for P7,000.00 and the agricultural lots (Lots 850 and 852) with a combined area of 7,972 square meters,
to their son Jesus for P5,600.00.

Civil Case No. V-7028
On February 18, 1997, respondents instituted the third case, Civil Case No.
V-7028 (Nullity of Sale Case),[13] subject of this appeal, seeking to declare as null the aforesaid deeds of
sale and the transfer certificates of title issued pursuant thereto. They alleged that the contracts of sale
between spouses Campos and petitioners were simulated for the sole purpose of evading the levy of the
abovementioned properties in satisfaction of a money judgment that might be rendered in the Possession
Case.
In their Answer with Counterclaim,[14] spouses Campos and petitioners averred that Rosemarie
and Jesus Campos acquired the lots in question in good faith and for value because they were sold to
them before they had any notice of the claims or interests of other persons thereover.
On August 21, 2000, the Regional Trial Court of Roxas City, Branch 14, dismissed the
complaint.[15] It held that
In the Resolution of this case the issue is whether or not the spouses Carlito
Campos and Margarita Arduo, sensing that an unfavorable judgment might be rendered
against them in Civil Case No. V-5417 filed in Branch 16 on July 17, 1987 by the same
plaintiffs for Recovery of Possession and Damages with Preliminary Mandatory Injunction,
in evident bad faith and wanton disregard of the law, maliciously and fraudulently,
executed a purely fictitious and simulated sale of their properties thereby ceding and
transferring their ownership thereto to their children Rosemarie Campos-Bautista and
Jesus Campos.
A close scrutiny of the defendants documentary exhibits and testimonies showed

that as early as 1981 defendant Jesus Campos was already leasing a fishpond in Brgy.
Majanlud, Sapi-an, Capiz from Victorino Jumpay and defendant Rosemarie Campos was
engaged in the sari-sari store business starting 1985 so that they were able to purchase
the properties of their parents out of their profits derived therefrom.
The Deed of Absolute Sale (Exh. 6 & 10) executed by the spouses Carlito Campos
and Margarita Arduo to Rosemarie Campos and Jesus Campos were dated October 17,
1985 and November 2, 1988, respectively.
It can readily [be] gleaned from the records that Civil Case No. V-5417 was filed
on July 7, 1987 and was decided on November 27, 1990. Furthermore, the alias writ of
execution was issued only on July 5, 1995 for which the Sheriffs Return of Service was
returned unsatisfied on November 14, 1995.
WHEREFORE, the complaint of the plaintiffs against the defendants is
DISMISSED. Their claim for damages is likewise DISMISSED. The counter-claim of the
defendants must also be DISMISSED as the case was not filed in evident bad faith and
with malicious intent.
SO ORDERED.[16]
Upon review of the evidence presented, the CA found that the conveyances were made in 1990,
and not in 1985 or 1988, or just before their actual registration with the Registry of Deeds, evidently to
avoid the properties from being attached or levied upon by the respondents. The CA likewise noted that
the zonal value of the subject properties were much higher than the value for which they were actually
sold. The appellate court further observed that despite the sales, spouses Campos retained possession of
the properties in question. Finally, the CA took note of the fact that the writ of execution and alias writ
issued in the Possession Case remained unsatisfied as the lower court could not find any other property
owned by the spouses Campos that could be levied upon to satisfy its judgment, except the parcels of
land subject of the assailed transactions.
On these bases, the CA ruled that the assailed contracts of sale were indeed absolutely simulated
transactions and declared the same to be void ab initio. The dispositive portion of the Decision of the CA
reads:
WHEREFORE, the instant appeal is GRANTED. The decision of

the Regional Trial Court of Roxas City, Branch 14, dated August 21, 2000 in Civil Case No.
V-7028 is REVERSED and SET ASIDE. Let a copy of this Decision be furnished to the
Register of Deeds of the Province of Capiz who is hereby ordered to cancel Transfer
Certificates of Title Nos. T-26092 and T-26093 in the name of Rosemarie Campos, and
Transfer Certificates of Title Nos. T-23248 and 23249 in the name of Jesus Campos and
restore said titles in the name of the previous owner, Carlito Campos.
SO ORDERED.
Only petitioners moved for reconsideration[17] but the CA denied the same.[18]
Issues
Hence, this petition for review on certiorari raising the following errors:
I.
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN APPLYING ARTICLE 1409,
CIVIL CODE, INSTEAD OF ARTICLE 1381 (3), CIVIL CODE, AND IN SPECULATING THAT
A CAUSE OF ACTION OF SUPPOSED SALE IN FRAUD OF CREDITORS EXISTS DESPITE
NON-EXHAUSTION OF REMEDIES TO ENFORCE THE JUDGMENT IN CIVIL CASE NO. V-
5417.
II.
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW OVERLOOKING THAT THE
CAUSE OF ACTION HAD PRESCRIBED, THE COMPLAINT HAVING BEEN FILED AFTER
SEVEN (7) YEARS OR ONLY ON 14 OCTOBER 1997, FROM THE TIME THE TITLES WERE
ISSUED IN 1990.
III.
THE COURT OF APPEALS ERRONEOUSLY ANCHORED ITS IMPUGNED JUDGMENT ON
MISAPPREHENSION OF FACTS THAT THE SALE WERE ANTEDATED, HENCE SIMULATED
DESPITE GLARING ABSENCE OF EVIDENCE IN SUPPORT THEREOF.
IV.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN CASTING
ASIDE OVERWHELMING EVIDENCE DULY APPRECIATED BY THE TRIAL COURT THAT
PETITIONERS ARE BUYERS IN GOOD FAITH AND FOR VALUE, WHO EXERCISED
DOMINION OVER THE SUBJECT LOTS, WHICH IF PROPERLY CONSIDERED, SHALL
WARRANT THE SINGULAR CONCLUSION THAT THE SALE AND TRANSFER OF TITLES
ARE VALID.[19]
Petitioners assail the application of Article 1409[20] of the Civil Code on void
contracts as against Article 1381(3)[21] of the Civil Code on rescissible contracts in fraud of creditors,
considering that the questioned conveyances executed by the spouses Campos to their children were
allegedly done to evade the enforcement of the writ of execution in the Possession Case.[22] In addition,
petitioners allege that the CA misappreciated the facts of this case when it found that the questioned
transactions were tainted with badges of fraud.[23]
Respondents arguments
Respondents argue that the application of Article 1409 on void contracts was a natural and logical
consequence of the CAs finding that subject deeds of sale were absolutely simulated and fictitious,
consistent with the nature of the respondents cause of action which was for declaration of nullity of said
contracts and the transfer certificates of titles issued pursuant thereto.[24]Respondents also stressed that
the CAs finding is conclusive upon us and that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court.[25]
Our Ruling
Well-settled is the rule that this Court is not a trier of facts. When supported by substantial
evidence, the findings of fact of the CA are conclusive and binding, and are not reviewable by this Court,
unless the case falls under any of the following recognized exceptions:
(1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;
(2) When the inference made is manifestly mistaken, absurd or impossible;
(3) Where there is a 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 the CA in making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee;
(7) When the findings are contrary to those of the trial court;
(8) When the findings of fact are conclusions without citation of specific evidence on which they
are based;
(9) When the facts set forth in the petition as well as in the petitioners main and reply briefs are
not disputed by the respondents; and
(10) When the findings of fact of the CA are premised on the supposed absence of evidence and
contradicted by the evidence on record.
None of these exceptions is present in this case. We find that the Decision of the CA is supported
by the required quantum of evidence.
The subject Deeds of Absolute Sale executed by

the Spouses Campos to their children (herein
petitioners) are absolutely simulated and
fictitious.
The CA correctly held that the assailed Deeds of Absolute Sale were executed when the Possession
Case was already pending, evidently to avoid the properties subject thereof from being attached or levied
upon by the respondents. While the sales in question transpired on October 18, 1985 and November 2,
1988, as reflected on the Deeds of Absolute Sale, the same were registered with the Registry of Deeds
only on October 25, 1990 and September 25, 1990.
We also agree with the findings of the CA that petitioners failed to explain the reasons for the
delay in the registration of the sale, leading the appellate court to conclude that the conveyances were
made only in 1990 or sometime just before their actual registration and that the corresponding Deeds of
Absolute Sale were antedated. This conclusion is bolstered by the fact that the supposed notary public
before whom the deeds of sale were acknowledged had no valid notarial commission at the time of the
notarization of said documents.[26]
Indeed, the Deeds of Absolute Sale were executed for the purpose of putting the lots in question
beyond the reach of creditors. First, the Deeds of Absolute Sale were registered exactly one month apart
from each other and about another one month from the time of the promulgation of the judgment in the
Possession Case. The Deeds of Absolute Sale were antedated and that the same were executed when the
Possession Case was already pending.
Second, there was a wide disparity in the alleged consideration specified in the Deeds of Absolute
Sale and the actual zonal valuation of the subject properties as per the BIR Certification, as follows:
Consideration Market Value Computed Zonal
specified in Deed as per Tax Valuation (BIR
of Absolute Sale Declaration Certification)
Residential Lots:
From Spouses P 7,000.00 P 83,580.00[27] P 417,900.00[28]
Campos to daughter,
Rosemarie Campos
Agricultural Lots:
From Spouses P 5,600.00 P 25,000.19[29] P 39,860.00[30]
Campos to son,
Jesus Campos
As correctly noted by the CA, the appraised value of the properties subject of this controversy
may be lower at the time of the sale in 1990 but it could not go lower than P7,000.00 and P5,600.00. We
likewise find the considerations involved in the assailed contracts of sale to be inadequate considering the
market values presented in the tax declaration and in the BIR zonal valuation.
Third, we cannot believe that the buyer of the 1,393-square meter[31] residential land could not
recall the exact area of the two lots she purchased. In her cross-examination, petitioner Rosemarie
Campos stated:
Q: Can you tell us the total area of those two (2) lots that they sold to you?
A: It consists of One Thousand (1,000) Square Meters.[32]
xxxx
Q: By the way, for how much did you buy this [piece] of land consisting of 1,000 square
meters?
A: Seven Thousand Pesos (P7,000.00) Your Honor.[33]
Fourth, it appears on record that the money judgment in the Possession Case has not been
discharged with. Per Sheriffs Service Return dated November 14, 1995, the Alias Writ of Execution and
Sheriffs Demand for Payment dated September 19, 1995 remain unsatisfied.
Finally, spouses Campos continue to be in actual possession of the properties in
question. Respondents have established through the unrebutted testimony of Rolando Azoro that
spouses Campos have their house within Lot 3715-A and Lot 3715-B-2 and that they reside there
together with their daughter Rosemarie.[34] In addition, spouses Campos continued to cultivate the rice
lands which they purportedly sold to their son Jesus.[35] Meantime, Jesus, the supposed new owner of said
rice lands, has relocated to Bulacan[36] where he worked as a security guard.[37] In other words, despite
the transfer of the said properties to their children, the latter have not exercised complete dominion over
the same. Neither have the petitioners shown if their parents are paying rent for the use of the properties
which they already sold to their children.
In Suntay v. Court of Appeals,[38] we held that:
The failure of the late Rafael to take exclusive possession of the property allegedly
sold to him is a clear badge of fraud. The fact that, notwithstanding the title transfer,
Federico remained in actual possession, cultivation and occupation of the disputed lot
from the time the deed of sale was executed until the present, is a circumstance which is
unmistakably added proof of the fictitiousness of the said transfer, the same being
contrary to the principle of ownership.
While in Spouses Santiago v. Court of Appeals,[39] we held that the failure of petitioners to take
exclusive possession of the property allegedly sold to them, or in the alternative, to collect rentals from
the alleged vendor x x x is contrary to the principle of ownership and a clear badge of simulation that
renders the whole transaction void and without force and effect, pursuant to Article 1409 of the Civil Code.
The issuance of transfer certificates of title to

petitioners did not vest upon them ownership of
the properties.
The fact that petitioners were able to secure titles in their names did not operate to vest upon
them ownership over the subject properties. That act has never been recognized as a mode of acquiring
ownership.[40] The Torrens system does not create or vest title. It only confirms and records title already
existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the
commission of fraud.[41]
In the instant case, petitioner Rosemarie Campos supposedly bought the residential properties in
1985 but did not have the assailed Deed of Absolute Sale registered with the proper Registry of Deeds for
more than five years, or until a month before the promulgation of the judgment in the Possession
Case. Hence, we affirm the finding of the CA that the purported deed was antedated. Moreover, her failure
to take exclusive possession of the property allegedly sold, or, alternatively, to collect rentals is contrary
to the principle of ownership and a clear badge of simulation. On these grounds, we cannot hold that
Rosemarie Campos was an innocent buyer for value.
Likewise, petitioner Jesus Campos supposedly bought the rice land from his parents in 1988 but
did not have the assailed Deed of Absolute Sale registered with the proper Registry of Deeds for more
than two years, or until two months before the promulgation of the judgment in the Possession
Case. Thus, we likewise affirm the finding of the CA that the purported deed was antedated. In addition,
on cross, he confirmed that he had knowledge of the prior pending cases when he supposedly purchased
his parents rice land stating that:
Q: You never knew that your parents and the plaintiffs in this case have cases in the past
prior to this case now, is that right?
A: Yes, sir. I knew about it.
Q: And in spite of your knowledge, that there was a pending case between your parents
and the plaintiffs here, you still purchased these two (2) lots 850 and 852 from
your parents, is that what you are telling us?
A: All I knew was that, that case was a different case from the subject matter then [sic]
the lot now in question.[42]
On these findings of fact, petitioner Jesus Campos cannot be considered as an innocent buyer
and for value.
Since both the transferees, Rosemarie and Jesus Campos, are not innocent purchasers for value,
the subsequent registration procured by the presentation of the void deeds of absolute sale is likewise null
and void.
The action for the declaration of the inexistence

of the assailed Deeds of Absolute Sale does not
prescribe.
Petitioners argue that respondents cause of action had prescribed when they filed the Nullity of
the Sale Case on October 14, 1997, or seven years after the registration of the questioned sales in 1990.
We cannot agree. As discussed above, the sale of subject properties to herein petitioners are null
and void. And under Article 1410 of the Civil Code, an action or defense for the declaration of the
inexistence of a contract is imprescriptible. Hence, petitioners contention that respondents cause of action
is already barred by prescription is without legal basis.
Since the assailed Deeds of Absolute Sale are

null and void, the Civil Code provisions on
rescission have no application in the instant case.
Finally, petitioners argument that the applicable law in this case is Article 1381(3) of the Civil Code
on rescissible contracts and not Article 1409 on void contracts is not a question of first impression. This
issue had already been settled several decades ago when we held that an action to rescind is founded
upon and presupposes the existence of a contract.[43] A contract which is null and void is no contract at all
and hence could not be the subject of rescission.[44]
In the instant case, we have declared the Deeds of Absolute Sale to be fictitious and inexistent for
being absolutely simulated contracts. It is true that the CA cited instances that may constitute badges of
fraud under Article 1387 of the Civil Code on rescissible contracts. But there is nothing else in the appealed
decision to indicate that rescission was contemplated under the said provision of the Civil Code. The
aforementioned badges must have been considered merely as grounds for holding that the sale is
fictitious. Consequently, we find that the CA properly applied the governing law over the matter under
consideration which is Article 1409 of the Civil Code on void or inexistent contracts.
WHEREFORE, the petition is DENIED. Costs against petitioners.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
***
The Court of Appeals was deleted as co-respondent from the title pursuant to Section 4, Rule
45 of the Rules of Court.
[1]
Rollo, pp. 4-29.
[2]
CA rollo, pp. 144-154; penned by Associate Justice Ramon M. Bato, Jr. and concurred in by Associate
Justices Isaias P. Dicdican and Apolinario D. Bruselas, Jr.
[3]
Id. at 201-202; penned by Associate Justice Isaias P. Dicdican and concurred in by Associate
Justices Romeo F. Barza and Priscilla Baltazar-Padilla.
[4]
Records, pp. 195-200; penned by Judge Manuel E. Autajay.
[5]
Id. at 220-221.
[6]
Id. at 222-223.
[7]
Id. at 206.
[8]
Id. at 207.
[9]
Id. at 208-209.
[10]
Id. at 210-211.
[11]
Id. at 307.
[12]
Id. at 310.
[13]
Id. at 1-8.
[14]
Id. at 46-52.
[15]
Id. at 321-324; penned by Judge Salvador S. Gubaton.
[16]
Id. at 324.
[17]
[18]
Id. at 201-202.
[19]
Rollo, pp. 11-12.
[20]
The following contracts are inexistent and void from the beginning:
xxxx
(2) Those which are absolutely simulated or fictitious;
xxxx
These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.
[21]
The following contracts are rescissible:
xxxx
(3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims
due them.
xxxx
[22]
Rollo, p. 127.
[23]
Id. at 144-145.
[24]
Id. at 110-113.
[25]
Id at 107-10.
[26]
[27]
Rollo, p. 37; Aggregate of the market value of P24,780.00 for Lot 3714-A and P58,800.00
for Lot 3715-B-2.
[28]
Id.; Aggregate land area of 1,393 square meters multiplied by the zonal valuation of P300/square
meter.
[29]
Id. at 38; Aggregate of the market value of P14,698.43 for Lot 850 and P10,301.76 for Lot 852.
[30]
Id. at 37; Aggregate land area of 7,972 square meters multiplied by the zonal valuation of P5/square
meter.
[31]
Id. at 44-45; Lot 3715-A consists of 413 square meters while Lot 3715-B-2 consists of 980 square
meters or a total area of 1,393 square meters.
[32]
TSN, May 10, 1999, p. 12.
[33]
Id. at 14.
[34]
Rollo, p. 38.
[35]
Id.
[36]
Id.
[37]
TSN, May 11, 1999, p. 3.
[38]
321 Phil. 809, 832 (1995).
[39]
343 Phil. 612, 622 (1997).
[40]
Berico v. Court of Appeals, G.R. No. 96306, August 20, 1993, 225 SCRA 469, 480.
[41]
Spouses Santiago v. Court of Appeals, supra note 39 at 623.
[42]
TSN, June 22, 1999, p. 11.
[43]
Onglengco v. Ozaeta, 70 Phil 43, 47 (1940).
[44]
Perez v. Court of Appeals, 380 Phil. 592, 602 (2000).

Supreme Court
Manila
SECOND DIVISION
LYNN PAZ T. DELA CRUZ, G.R. No. 161929

FERNANDO SERRANO,
NATHANIEL LUGTU, and
JANET S. PINEDA, Present:
Petitioners,
BRION,
SANDIGANBAYAN, THE DEL CASTILLO, and
SPECIAL PROSECUTOR and ABAD, JJ.
THE PEOPLE OF THE
PHILIPPINES, Promulgated:
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The principle of the law of the case is an established rule in this jurisdiction. Thus, when an
appellate court passes on a question and remands the case to the lower court for further proceedings,
the question there settled becomes the law of the case upon subsequent appeal. The court reviewing the
succeeding appeal will not re-litigate the case but instead apply the ruling in the previous appeal. This
enables the appellate court to perform its duties satisfactorily and efficiently which would be impossible if
a question, once considered and decided by it, were to be litigated anew in the same case and upon any
and subsequent appeal.[1] While the applicability of this principle in this case is straightforward, the cunning
attempt of the parties to evade the application thereof is what we unequivocally deplore here. The accused
often decry the snail pace of the administration of justice but when they themselves give cause for the
delay, they have no reason to complain. We again remind the parties and their counsels to act with candor
and not to test the patience of this Court.
This is a Petition for Certiorari and Prohibition assailing the Sandiganbayans (1) December 8, 2003
Resolution[2] in Criminal Case No. 26042, which ordered petitioners suspension pendente lite and its (2)
February 5, 2004 Resolution,[3] which denied petitioners motion for reconsideration.
Factual Antecedents
The instant criminal complaint arose from the construction and/or renovation project involving
several multi-purpose halls located in various barangays in the City of Tarlac. Upon post audit, the
Provincial Auditor of the Commission on Audit (COA) issued Notice of Disallowance No. 99-001-100(98)
dated January 29, 1999 and Notice of Disallowance No. 99-003-101(98) dated July 22, 1999 on the ground
that what were actually constructed and/or renovated were barangay chapels in violation of Section
29(2),[4] Article VI of the Constitution and Section 335[5] of the Local Government Code prohibiting public
expenditure for religious purposes.[6] On February 6, 1998, private complainants Jesus B. David and Ana
Alamo Aguas filed a complaint with the Office of the Ombudsman in connection with the approval and
implementation of the aforesaid projects against several local government officials of the City of Tarlac,
namely:
Gelacio R. Manalang- Mayor

Alfredo D. Baquing- Engineer
Nathaniel B. Lugtu- Accountant
Lynn Paz T. Dela Cruz- Assistant Accountant
Fernando L. Serrano- Budget Officer
Janet S. Pineda- Planning & Development Officer
for violation of Section 3(e)[7] of Republic Act (RA) No. 3019[8] or The Anti-Graft and Corrupt Practices
Act. In his July 13, 1999 Resolution,[9] the Ombudsman dismissed the complaint for insufficiency of
evidence and prematurity. On September 8, 1999, private complainants moved for reconsideration. As a
result, the Ombudsman referred the case to the Office of the Chief Legal Counsel for review and
recommendation. In its April 13, 2000 Memorandum,[10] the Office of the Chief Legal Counsel
recommended that the corresponding information be filed against the aforesaid local officials because
there is probable cause to hold them liable for violation of the anti-graft law. Acting favorably thereon, on
May 16, 2000, the Ombudsman issued an Order[11] directing the Office of the Special Prosecutor to file the
necessary information with the Sandiganbayan, viz:
That sometime on 6 February 1998 or thereabouts, in the City of Tarlac, province

of Tarlac, Philippines and within the jurisdiction of this Honorable Court, accused Gelacio
R. Manalang, Alfredo D. Baquing, Lynn Paz T. dela Cruz, Fernando Serrano, Nathaniel
Lugtu and Janet S. Pineda, accused Gelacio R. Manalang being the mayor of Tarlac City,
Tarlac, a high ranking officer pursuant to R.A. 8249 in relation to Sec. 455(d) of R.A. 7160,
and all the other accused then occupying different positions in the government of Tarlac
City, conspiring and confederating with one another, committing the crime herein charged
in relation to their office, taking advantage of their official position, acting with evident
bad faith and manifest partiality, or gross inexcusable negligence, did then and there,
wilfully, unlawfully and criminally, cause undue injury to the government and give
unwarranted benefits, advantage or preference to a specific group of constituents by
approving and releasing the amount of Five Hundred Forty Three Thousand Eight
Hundred Pesos (P543,800.00) for the construction of the multi-purpose halls in barangays
Sapang Tagalog, Sapang Maragul and Dalayap in Tarlac City despite the fact, as Accused
knew fully well, that what were being constructed are in truth chapels which would serve
private purposes, and not barangay multi-purpose halls and, thereafter, proceeded to
implement such construction.[12]
The case was docketed as Criminal Case No. 26042 and raffled to the Fourth Division. The accused
then moved for reinvestigation on the ground that they were not given an opportunity to be heard when
the Ombudsman reversed his earlier finding of lack of probable cause.
In its July 17, 2000 Order,[13] the Sandiganbayan granted the motion and gave the prosecution
20 days to re-evaluate the evidence and submit a report to the court. On July 31, 2001, the prosecution
filed a Manifestation[14] with the Sandiganbayan that after conducting its reinvestigation, it found probable
cause to charge the accused with violation of the anti-graft law and prayed that the case be set for
arraignment. As a consequence, the Sandiganbayan in its August 8, 2001 Resolution[15] set the case for
arraignment and pre-trial.
Undeterred, the accused filed separate motions[16] to quash the information and/or to dismiss the
case. On April 24, 2003, the Sandiganbayan issued a Resolution[17] which denied all of the aforesaid
motions and upheld the validity of the subject information. It ruled that the information contained sufficient
allegations to charge the accused with violation of Section 3(e) of RA No. 3019, that there exists probable
cause to indict the accused and that the motions raise factual issues that cannot be resolved without an
adversarial proceeding.
The accused then moved for reconsideration which was denied by the Sandiganbayan in its June
2, 2003 Resolution.[18] In addition to the reasons stated in its April 24, 2003 Resolution,
the Sandiganbayan held that there was no violation of the right of the accused to due process based on
the records forwarded to the court by the Ombudsman.
On May 12, 2003, the accused were arraigned and pleaded not guilty.[19] The prosecution subsequently
filed a motion[20] to suspend the accused pendente lite.
On June 10, 2003, the accused filed a consolidated petition for certiorari and prohibition before this Court
against public respondents Fourth Division of the Sandiganbayan, the Ombudsman and the People of the
Philippines. They ascribed grave abuse of discretion on the public respondents for filing the information
and upholding the validity of the same despite the violation of the right of the accused to due process and
the patent lack of probable cause. On June 17, 2003, we resolved to dismiss the petition for lack of merit.
Sandiganbayans Ruling
On December 8, 2003, the Sandiganbayan issued the assailed Resolution which granted the
prosecutions motion and ordered the preventive suspension of the accused for a period of 90 days. It
ruled that the validity of the information has been previously settled in its April 24, 2003 Resolution. Thus,
under Section 13 of RA No. 3019, the preventive suspension of the accused becomes
mandatory. Petitioners thereafter filed a motion for reconsideration which was denied by
the Sandiganbayan in its February 5, 2004 Resolution.
From the aforesaid adverse rulings, only accused Dela Cruz, Serrano, Lugtu and Pineda
(petitioners) sought review before this Court via the instant petition for prohibition and certiorari under
Rule 65 of the Rules of Court.
Issues
Petitioners raise the following issues for our resolution:
1. Whether the subject criminal case was prematurely instituted considering the pendency
of petitioners appeals before the COA En Banc.
2. Whether the Ombudsman may still reconsider his Resolution dated July 13, 1999,
dismissing the complaint, after the same has already become final and executory.
3. Whether the subject information is fatally defective.
4. Whether, on the basis of the admitted or undisputed facts, there is probable cause to
prosecute petitioners and their co-accused for violation of Section 3(e) of RA No. 3019.[21]
First, petitioners claim that they have been exonerated by the COA En Banc, thus, there is no
more basis to prosecute them for violation of the anti-graft law. The filing of the subject criminal case
against them was based on the results of a post-audit showing the alleged illegal disbursement of public
funds for religious purposes. Consequently, the Provincial Auditor issued notices of disallowance against
petitioners and their co-accused Manalang and Baquing. Petitioners thereafter appealed from said notices.
Considering that these cases were still on appeal before the COA En Banc, the Ombudsman gravely
abused his discretion when he ordered the filing of the subject criminal case against petitioners and their
co-accused.
Moreover, in the interim and after a series of separate appeals, petitioners Lugtu, Dela Cruz and
Serrano were exonerated by the COA En Banc on the common ground that as Accountant, Assistant
Accountant and Budget Officer, respectively, they did not take part in the review of the plans and
specifications as well as in the implementation, prosecution and supervision of the subject construction
and/or renovation project. As for petitioner Pineda, no notice of disallowance was ever issued to her. Thus,
with more reason subject criminal case should be dismissed in order to save petitioners from an expensive
and vexatious trial.
In the same vein, there is no probable cause to hold petitioners liable for violation of the anti-graft
law because the Ombudsman himself admitted that what were built were multi-purpose halls and not
chapels in his November 16, 1999 Decision in OMB-ADM-1-99-0759 which absolved petitioners co-accused
Baquing from administrative liability.
Second, petitioners contend that the subject information is fatally defective because of the
irregularities and due process violations committed during the preliminary investigation of this case. The
Ombudsman acted without jurisdiction when he reversed his July 13, 1999 Resolution, which dismissed
the criminal complaint, considering that this resolution had long become final and executory. Assuming
that private complainants timely moved for reconsideration, the same was defective for failure to furnish
all the accused with copies of said motion. The information should, thus, have been quashed under Section
3(d)[22] of Rule 117 of the Rules of Court for lack of authority of the Ombudsman to file the same.
Finally, petitioners argue that the allegations in the subject information do not constitute an
offense because the alleged specific group that was benefited by the construction and/or renovation of
the barangay chapels as well as the alleged private purposes served thereby were sufficiently identified
and described. Hence, the right of the accused to be informed of the nature and cause of the accusation
against them was violated.
First, respondents counter that the COA is not vested with jurisdiction to determine the criminal
liability of petitioners. Its power is limited to the determination of the violation of its accounting and auditing
rules and regulations. Hence, the COA En Bancs exclusion of petitioners from liability under the notices of
disallowance only relates to the administrative aspect of their accountability. This, however, does not
foreclose the Ombudsmans authority to investigate and determine whether there is a crime to be
prosecuted. For similar reasons, the exoneration of Baquing from administrative liability by the
Ombudsman in his November 16, 1999 Decision in OMB-ADM-1-99-0759, specifically, the finding therein
that what were constructed were multi-purpose halls and not chapels is not binding on the subject criminal
case against petitioners and their co-accused. The dismissal of an administrative case does not necessarily
bar the filing of a criminal prosecution for the same or similar acts which were the subject of the
administrative complaint.
Second, respondents aver that there was no denial of due process during the preliminary
investigation stage. Private complainants timely moved for reconsideration from the July 13, 1999
Resolution of the Ombudsman. They received a copy of the aforesaid Resolution on August 25, 1999 and
filed a letter seeking reconsideration on September 8, 1999 or within the 15-day reglementary period
under the Rules of Procedure of the Ombudsman. The Sandiganbayan also found that there was no due
process violation as borne out by the records forwarded to said court by the Ombudsman. Further, any
defect in the preliminary investigation should be deemed cured because the Sandiganbayan ordered the
reinvestigation of this case in its July 17, 2000 Order. After the reinvestigation, the Ombudsman
maintained that there is probable cause to indict petitioners and their co-accused. This was affirmed by
the Sandiganbayan when it set the case for arraignment and pre-trial.
Finally, respondents assert that the identity of the specific group and the private purposes served
by the subject construction and/or renovation project are evidentiary matters that should be threshed out
during the trial on the merits of this case.
Our Ruling
The preventive suspension of the accused under

Section 13 of RA No. 3019 is mandatory upon a
finding that the information is valid.
Section 13 of RA No. 3019 provides:
Section 13. Suspension and loss of benefits - Any public officer against whom
any criminal prosecution under a valid information under this Act or under the
provisions of the Revised Penal Code on bribery is pending in court, shall be
suspended from office. Should he be convicted by final judgment, he shall lose all
retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled
to reinstatement and to the salaries and benefits which he failed to receive during
suspension, unless in the meantime administrative proceedings have been filed
against him.
Pursuant to this provision, it becomes mandatory for the court to immediately issue the suspension order
upon a proper determination of the validity of the information.[23] The court possesses no discretion to
determine whether a preventive suspension is necessary to forestall the possibility that the accused may
use his office to intimidate witnesses, or frustrate his prosecution, or continue committing
malfeasance. The presumption is that unless the accused is suspended, he may frustrate his prosecution
or commit further acts of malfeasance or do both.[24]
In Luciano v. Mariano,[25] we laid down the guidelines for the exercise of the courts power to
suspend the accused:
(c) By way of broad guidelines for the lower courts in the exercise of the
power of suspension from office of public officers charged under a valid information
under the provisions of Republic Act 3019 or under the provisions of the Revised Penal
Code on bribery, pursuant to Section 13 of said Act, it may be briefly stated that upon
the filing of such information, the trial court should issue an order with proper notice
requiring the accused officer to show cause at a specific date of hearing why he
should not be ordered suspended from office pursuant to the cited mandatory
provisions of the Act. Where either the prosecution seasonably files a motion for an
order of suspension or the accused in turn files a motion to quash the information or
challenges the validity thereof, such show-cause order of the trial court would no
longer be necessary. What is indispensable is that the trial court duly hear the parties
at a hearing held for determining the validity of the information, and thereafter hand
down its ruling, issuing the corresponding order of suspension should it uphold the
validity of the information or withholding such suspension in the contrary case.
(d) No specific rules need be laid down for such pre-suspension hearing.
Suffice it to state that the accused should be given a fair and adequate opportunity
to challenge the validity of the criminal proceedings against him, e.g. that he has not
been afforded the right of due preliminary investigation; that the acts for which he
stands charged do not constitute a violation of the provisions of Republic Act No. 3019
or of the bribery provisions of the Revised Penal Code which would warrant his
mandatory suspension from office under Section 13 of the Act; or he may present a
motion to quash the information on any of the grounds provided in Rule 117 of the
Rules of Court. The mandatory suspension decreed by the Act upon determination of
the pendency in court of a criminal prosecution for violation of the Anti-graft Act or
for bribery under a valid information requires at the same time that the hearing be
expeditious, and not unduly protracted such as to thwart the prompt suspension
envisioned by the Act. Hence, if the trial court, say, finds the ground alleged in the
quashal motion not to be indubitable, then it shall be called upon to issue the
suspension order upon its upholding the validity of the information and setting the
same for trial on the merits.[26]
The issues proper for a pre-suspension hearing are, thus, limited to ascertaining whether: (1) the accused
had been afforded due preliminary investigation prior to the filing of the information against him, (2) the
acts for which he was charged constitute a violation of the provisions of RA No. 3019 or of the provisions
of Title 7, Book II of the Revised Penal Code, or (3) the information against him can be quashed under
any of the grounds provided in Section 2, Rule 117 of the Rules of Court.[27]
While ordinarily we would proceed to determine whether the ruling of

the Sandiganbayan upholding the validity of the information and directing the preventive suspension
suffer from the vice of grave abuse of discretion, the peculiar circumstances of this case constrain us to
dismiss the petition outright. As will be discussed hereunder, all of the above issues proper in a pre-
suspension hearing were previously passed upon by the Sandiganbayan and then by us via G.R. No.
158308. Petitioners conveniently failed to reveal that this is the second time that they are appealing before
us, raising the same issues and arguments, via the instant petition. The present recourse is, thus, but a
futile attempt to reopen settled rulings with the deplorable consequence of delaying the prompt disposition
of the main case.
The validity of the subject information has been
raised and resolved in G.R. No. 158308. Under
the principle of the law of the case, this issue can
no longer be re-litigated.
Upon a review of the records of this case, we find that the issue as to the validity of the
information, inclusive of all matters proper for a pre-suspension hearing, has already been passed upon
by us. As stated earlier, the records indicate that on June 10, 2003, petitioners, along with their co-accused
Manalang and Baquing, filed a consolidated petition for certiorari and prohibition before this Court against
public respondents Fourth Division of the Sandiganbayan, the Ombudsman and the People of the
Philippines. This case was docketed as G.R. No. 158308. Petitioners, Manalang and Baquing assailed
therein, for having been issued with grave abuse of discretion, the following: (1) Sandiganbayans April
24, 2003 Resolution which upheld the validity of the information charging them with violation of Section
3(e) of RA No. 3019, (2) Sandiganbayans June 2, 2003 Resolution which denied petitioners, Manalang
and Baquings separate motions for reconsideration and (3) Ombudsmans May 16, 2000 Order which
directed the Office of the Special Prosecutor to file the aforesaid information.
In its April 24 and June 2, 2003 Resolutions, the Sandiganbayan had earlier ruled, among others,
that the subject information contains sufficient allegations to charge the accused with violation of the anti-
graft law; that there was no denial of due process during the preliminary investigation stage; that there
exists probable cause to indict the accused; and that the accuseds other arguments, including the
pendency of petitioners separate appeals before the COA En Banc, lacked merit. On June 17, 2003, the
Court En Banc issued a Resolution dismissing the petition for failure to sufficiently show that the public
respondents committed grave abuse of discretion in rendering the assailed issuances and for having raised
factual issues. This Resolution became final and executory on July 31, 2003 as per the entry of
judgment.[28]
The issues and arguments in the instant petition were already included in the issues and
arguments raised and resolved in G.R. No. 158308.[29] The Court En Bancs June 17, 2003 Resolution
should, thus, have put to rest the issue of the validity of the subject information. Yet, petitioners would
have us now revisit the same issue in the instant petition. This cannot be done. Under the principle of the
law of the case, when a question is passed upon by an appellate court and the case is subsequently
remanded to the lower court for further proceedings, the question becomes settled upon a subsequent
appeal. Whatever is once irrevocably established as the controlling legal rule or decision between the
same parties in the same case continues to be the law of the case, whether correct on general principles
or not, so long as the facts on which such decision was predicated continue to be the facts of the case
before the court.[30] Thus, considering that the validity of the information has long been settled in G.R. No.
158308, the Sandiganbayan properly granted the motion to suspend the accused pendente lite.
In conclusion, we note with deep disapproval the failure of petitioners to properly apprise this
Court of the proceedings previously taken in G.R. No. 158308. Petitioners did not act forthrightly when
they omitted in their statement of facts that they had earlier challenged the validity of the subject
information before the Sandiganbayan and this Court, which issue they now seek to resuscitate in the
instant petition. That the accused should be allowed to arduously and zealously defend his life, liberty and
property is not in question. But this is so only within the permissible limits of the framework of our criminal
laws and rules of procedure. Indubitably, the accused should not give ground for delay in the
administration of criminal justice, much less, hide from this Court the patent unworthiness of his cause.
WHEREFORE, the petition is DISMISSED. The Sandiganbayans December 8, 2003 Resolution,

which ordered petitioners suspension pendente lite and February 5, 2004 Resolution, which denied
petitioners motion for reconsideration, are AFFIRMED. This case is REMANDED to
the Sandiganbayan for further proceedings.
Treble costs against petitioners.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
Ariola v. Philex Mining Corporation, G.R. No. 147756, August 9, 2005, 466 SCRA 152, 176-177.
[2]
Records, Vol. III, pp. 158-164; penned by Associate Justice Gregory S. Ong and concurred in by
Associate Justices Rodolfo G. Palattao and Norberto Y. Geraldez.
[3]
Id. at 234-235. The Resolution was adopted by Associate Justices Gregory S. Ong, Norberto Y. Geraldez
and Efren N. De la Cruz.
[4]
Section 29(2). No public money or property shall be appropriated, applied, paid, or employed, directly
or indirectly, for the use, benefit, or support of any sect, church, denomination, sectarian institution,
or system of religion, or of any priest, preacher, minister, or other religious teacher, or dignitary as
such, except when such priest, preacher, minister, or dignitary is assigned to the armed forces, or to
any penal institution, or government orphanage or leprosarium.
[5]
Section 335. Prohibitions Against Expenditures for Religious or Private Purposes. No public money or
property shall be appropriated or applied for religious or private purposes.
[6]
[7]
Section 3. Corrupt practices of public officers - In addition to acts or omissions of public officers already
penalized by existing law, the following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:
xxxx
(e) Causing any undue injury to any party, including the Government, or giving any private party any
unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or government corporations charged with the grant of
licenses or permits or other concessions.
[8]
Effective: August 17, 1960.
[9]
[10]
Id. at 7, 9-10.
[11]
Id. at 8.
[12]
Id at 1.
[13]
Id. at 253.
[14]
Id at. 292-294.
[15]
Id. at 299.
[16]
Motion to Dismiss dated February 15, 2002 filed by accused Dela Cruz, Serrano, Lugtu and Pineda;
Supplemental Motion to Dismiss dated March 4, 2002 filed by accused Serrano; Omnibus Motion dated
March 21, 2002 (to dismiss for lack of probable cause and violation of due process, to suspend
proceedings and to hold in abeyance the pre-trial) filed by accused Manalang; and Motion to Dismiss
dated October 29, 2002 filed by accused Bacquing.
[17]
Records, Vol. II, pp. 353-358; penned by Associate Justice Rodolfo G. Palattao and concurred in by
Associate Justices Gregory S. Ong and Ma. Cristina G. Cortez-Estrada.
[18]
Id. at 429-432.
[19]
Id. at 413.
[20]
[21]
Rollo, p. 191.
[22]
SECTION 3. Grounds. The accused may move to quash the complaint or information on any of the
following grounds:
xxxx
(d) That the officer who filed the information had no authority to do so; x x x
[23]
Socrates v. Sandiganbayan, 324 Phil. 151, 179 (1996).
[24]
Id. at 180.
[25]
148-B Phil. 178 (1971).
[26]
Id. at 192-193.
[27]
[28]
Rollo (G.R. No. 158308), p. 197.
[29]
In G.R. No. 158308, petitioners, Manalang and Baquing raised the following arguments:
I. The Honorable Sandiganbayan committed grave abuse of discretion amounting to lack
or excess of jurisdiction in not finding that the dismissal of the complaint by the Ombudsman himself,
upon the recommendation of the Deputy Ombudsman for Luzon after conducting preliminary
investigation, is valid for it was based on findings supported by evidence and done so within the vast
powers vested by law in the Ombudsman and his deputies;
II. The Honorable Sandiganbayan committed grave abuse of discretion amounting to lack or
excess of jurisdiction in not finding that the Ombudsman committed grave abuse of discretion
amounting to lack or excess of jurisdiction when the latter ordered the filing of the information
considering that:
1. After the previous resolution of dismissal by the Ombudsman became final and
executory, the subsequent filing of the information is flawed as it is deemed null and void because
of lack of authority of the Hon. Ombudsman pursuant to section 3, paragraph (d) of Rule 117 of
the Rules of Criminal Procedure on the ground of a motion to quash that the officer who filed the
information had no authority to do so. And that the action taken by the Hon. Ombudsman was
without or in excess of authority.
2. The accused were effectively deprived of their right to a preliminary investigation
pursuant to sections 2 & 4, Rule II of Administrative Order No. 07 (Rules of Procedure of the
Office of the Ombudsman), when the previous resolutions dismissing the complaint that the
Ombudsman himself approved were reversed by him, merely because of the recommendation of
a legal counsel and even though no motion for reconsideration was filed by private complainants;
and
3. That even assuming that the review and recommendation of the legal counsel and
the approval thereof by the Ombudsman were part of preliminary investigation, there was
inordinate delay in terminating the same thereby depriving the accused of their rights to due
process and to a speedy disposition of the case.
III. The Honorable Sandiganbayan committed grave abuse of discretion amounting to lack or
excess of jurisdiction in not finding that there is no probable cause or any sufficient basis, in fact and
in law, to charge the petitioners for allegedly violating section 3(e) of R.A. 3019 in that:
1. There was an appropriation ordinance passed by the Sangguniang Panlungsod of
Tarlac authorizing the expenditures for such purpose;
2. Petitioners acted in good faith and were clothed with full legal authority by
the Sangguniang Panlungsod when the questioned contracts were entered into for the
construction of such multi-purpose halls in various barangays;
3. The petitioners had only to rely upon the certifications issued by the duly authorized
technical and financial personnel of the city that the projects were properly constructed and funds
disbursed pursuant to the approved purpose;
4. The fact that the Commission on Audit and the Ombudsman had already acquitted
several of the petitioners in administrative proceedings lending considerable credence to the
veracity of their claim of innocence and reflecting the glaring lack of probable cause of the action.
IV. That The Honorable Sandiganbayan committed grave abuse of discretion in denying the
corresponding motions to dismiss or quash for lack of probable cause x x x on the ground that the
issuance of the warrant of arrest already presupposes the existence of probable cause, in that:
1. A question as to the existence of probable cause, or absence thereof, may be raised
and resolved even after the issuance of a warrant of arrest and even after the arraignment.
2. The lack of probable cause, though not included in the grounds enumerated by the
Rules of Procedure in a motion to quash, is nonetheless a long established ground in jurisprudence
and such ground, once proven, is fatal to any criminal action.
V. That the petitioners have no plain, speedy and adequate remedy in the ordinary course of law.
[Rollo (G.R. No. 158308), pp. 15-17.]
[30]
Cucueco v. Court of Appeals, G.R. No. 139278, October 25, 2004, 441 SCRA 290, 301.
SECOND DIVISION
JOVEN YUKI, JR., G.R. No. 178527

Petitioner,
Present:

BRION,
DEL CASTILLO, and
ABAD, JJ.
WELLINGTON CO, Promulgated:

Respondent. November 27, 2009
x-------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The lessee-petitioners attempt to hold on to the property subject of the instant unlawful detainer
case, by resorting to fraudulent machinations such as refusing to receive the notices to vacate, must not
be countenanced. His stubborn refusal to receive the notices to vacate should not prejudice the right of
the lessor-respondent, to use and enjoy the fruits of his property.
This Petition for Review on Certiorari[1] assails the November 23, 2008 Decision[2] of the Court of
Appeals (CA) in CA-G.R. SP No. 89228 granting respondents Petition for Review[3] and setting aside the
March 7, 2005 Decision[4] of the Regional Trial Court (RTC), Branch 14, Manila. The RTC reversed and set
aside the Decision[5] dated September 21, 2004 of the Metropolitan Trial Court (MeTC), Branch 15, Manila,
granting respondents Complaint for unlawful detainer[6] and ordering petitioner to vacate the premises
subject matter of this case.
Factual Antecedents
Mr. Joseph Chua was the registered owner of a parcel of land, together with a commercial building erected
thereon, situated at the corner of Espaa and Instruccion Sts., Sampaloc, Manila. In 1981, he leased a
portion of the building to petitioner Joven Yuki, Jr., who put up a business therein under the name and
style Supersale Auto Supply. The contract of lease between Mr. Chua and petitioner had a term of five
years but was not reduced into writing. Thereafter, the lease was renewed through a series of verbal and
written agreements,[7] the last of which was a written Contract of Lease[8] covering the period of January
1, 2003 to December 31, 2003 at a monthly rental of P7,000.00.
In November 2003, Mr. Chua informed petitioner that he sold the property to respondent Wellington Co
and instructed petitioner to thenceforth pay the rent to the new owner.
Proceedings before the Metropolitan Trial Court
After the expiration of the lease contract, petitioner refused to vacate and surrender the leased
premises. Thus, respondent filed a Complaint for unlawful detainer[9] before the MeTC of Manila. The
material allegations of the complaint read as follows:
xxxx
3. Plaintiff [herein respondent] is the registered owner of that parcel of land

together with the building existing thereon situated at 2051 Espaa St. cor. Instruccion St.,
Sampaloc, Manila. Plaintiffs title to said property is evidenced by the Transfer Certificate
of Title No. 261682 of the Registry of Deeds of Manila, photocopy of which is attached
hereto as Annex A and the tax declarations for the lot and improvement are attached
hereto as Annexes B and B-1, respectively;
xxxx
5. Prior to the sale of the lot and building by the previous owner to herein plaintiff,
Joseph Chua sent a notice to defendant [herein petitioner] informing him that the property
is for sale giving the defendant the opportunity to exercise his pre-emptive right. Copy of
said Notice is attached hereto as Annex D;
6. Defendant waived his right to exercise his pre-emptive right and the real
property was eventually sold to herein plaintiff;
7. Plaintiff, being the new owner of the lot and building, informed defendant that
his Contract of Lease with the former lessor-owner Joseph Chua will no longer be renewed
as per letter dated November 3, 2003, copy of which was left at defendants store, for his
refusal to acknowledge the receipt of the same. A copy of said Notice is attached hereto
and made an integral part hereof as Annex E;
8. For failure and refusal of the defendant to vacate and surrender the leased unit
to plaintiff, plaintiffs counsel in turn sent a formal demand upon defendant to vacate the
leased premises within ten (10) days from receipt of the formal demand in view of the
expiration of the contract of lease. Copy of said letter dated January 13, 2004 is attached
hereto as Annex F. A copy was sent by registered mail but defendant failed to claim the
same as evidenced by the Certification from the Central Post Office, copy of which is
attached hereto as Annex G. Another copy of the same demand letter was personally
served at defendants address as attested by the sworn statement of Wilberto Co who
served the said formal demand as well as the notice earlier sent by plaintiff. Copy of the
Affidavit of Wilberto Co is attached hereto as Annex H;
xxxx
Respondent prayed that petitioners possession of subject premises be declared unlawful and that
petitioner be ordered to vacate it. He also sought reasonable compensation for the use of the property
until such time that it is surrendered to him and for the petitioner to pay him moral damages and attorneys
fees.
In his Answer with Counterclaim,[10] petitioner denied having been served with copies of the
alleged notice of sale and notice to vacate. By way of affirmative defenses, he claimed that the complaint
should be dismissed for being premature as there was no allegation therein of prior referral to
the barangay. Petitioner also asserted that since he was not notified by the former owner of the sale, he
was deprived of his preemptive rights. Moreover, respondent has no cause of action against him because
respondent is not the true owner of the property but merely acts as a representative of persons whom
respondent refused to disclose. Further, petitioner argued that there was an implied renewal of lease
considering that a) he did not receive a notice to vacate, b) the two months deposit and one month
advance payment he gave to Mr. Chua were never returned to him, and c) respondent accepted his
payments for the months of January and February 2004.
Petitioner also asserted that his property rights would be violated if he is evicted because he has
been operating his business in the premises for more than 20 years and has established goodwill in the
area. He thus proposed that he be compensated the amount of not less than P1 million or be allowed to
dispose of his stocks within a reasonable period of time, before he vacates the premises.
On September 21, 2004, the MeTC-Branch 15 rendered a Decision[11] in favor of the respondent,
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against

the defendant ordering the defendant and all persons claiming right under him:
1. to VACATE and surrender the subject property peacefully to plaintiff;
2. to PAY the plaintiff reasonable compensation for the use and
occupancy of the subject premises in the amount of eight thousand (P8,000.00) pesos
per month from January 1, 2004 until such time that he and all persons claiming rights
under him have fully vacated the premises;
3. to PAY the plaintiff thirty thousand (P30,000.00) pesos as attorneys

fees and litigation expenses.
SO ORDERED.[12]
In time, petitioner went on appeal to the RTC contending that
A. THE LOWER COURT ERRED WHEN IT RULED THAT THE PLAINTIFF-APPELLEE

[herein respondent] HAD A CAUSE OF ACTION TO EVICT HEREIN DEFENDANT-
APPELLANT [herein petitioner] FROM THE PREMISES.
B. THE LOWER COURT ERRED WHEN IT RULED THAT THERE WAS NO IMPLIED
NEW LEASE CREATED BY PLAINTIFF-APPELLEES ACCEPTANCE OF THE RENTALS
MADE BY DEFENDANT-APPELLANT.
C. THE LOWER COURT ERRED WHEN IT RULED THAT VALID NOTICE [TO]
VACATE WAS SERVED UPON DEFENDANT-APPELLANT BY THE PLAINTIFF-
APPELLEE.
D. THE LOWER COURT GRAVELY ERRED WHEN IT RULED THAT DEFENDANT-

APPELLANT WAS NOT DENIED HIS PREEMPTIVE RIGHT TO PURCHASE THE
PROPERTY HE HAS BEEN OCCUPYING.
E. THE LOWER COURT GRAVELY ERRED WHEN IT DENIED THE MOTION FOR
CLARIFICATORY HEARING FILED BY DEFENDANT-APPELLANT AS WELL AS HAVING
DENIED THE MOTION FOR VOLUNTARY INHIBITION.
F. THE LOWER COURT ERRED WHEN IT AWARDED ATTORNEYS FEES

AMOUNTING TO THIRTY THOUSAND (P30,000.00) IN FAVOR OF PLAINTIFF-
APPELLEE.
On March 7, 2005, the RTC-Branch 14 rendered a Decision[13] with the following disposition:
WHEREFORE, all premises considered, the Court finds and so holds

preponderance of evidence on the part of the defendant-appellant. Accordingly, the
Decision appealed from is hereby REVERSED, and the complaint for Unlawful Detainer is
dismissed.
Finally, there is on record a defendant-appellants Motion for Reconsideration as
regards the amount of the supersedeas bond. By the dismissal of the case, the resolution
thereof is thereby rendered moot and academic.
SO ORDERED.[14]
In reversing the ruling of the MeTC, the RTC found no proof on record that petitioner actually
received the notice to vacate, thereby making the Complaint fatally defective. The RTC likewise opined
that the resolution of the case hinges on the existence of implied new lease, a question which is incapable
of pecuniary estimation and, therefore, beyond the MeTCs jurisdiction.
Respondent filed with the CA a Petition for Review[15] under Rule 42 of the Rules of Court assailing
the RTC Decision. On November 23, 2006, the CA promulgated the now assailed Decision[16] granting the
petition. Its fallo reads:
WHEREFORE, the instant petition is hereby GRANTED. The Decision dated 7

March 2005 rendered by the Regional Trial Court (RTC) of Manila, Branch 14 is SET ASIDE
and the Decision dated 21 September 2004 of the Metropolitan Trial Court (MeTC)
of Manila, Branch 15 is REINSTATED.
SO ORDERED.[17]
Issues
Petitioner interposed the present recourse imputing upon the CA the following errors:
A. x x x THE COURT OF APPEALS COMMITTED GRAVE ERROR WHEN IT RULED

NOT TO DISMISS THE PETITION INTERPOSED BY RESPONDENT AND INSTEAD
PROCEEDED TO REVERSE THE DECISION DATED MARCH 7, 2005 OF THE
REGIONAL TRIAL COURT, BRANCH 14 DESPITE RESPONDENT (THEN PETITIONER)
HAVING FAILED TO COMPLY WITH THE PROCEDURAL REQUIREMENTS UNDER
RULE 42 OF THE 1997 RULES OF CIVIL PROCEDURE.[18]
B. THE COURT OF APPEALS ERRED WHEN IT FOUND ERRORS COMMITTED BY

THE RTC IN REVERSING THE DECISION OF THE MTC.[19]
Our Ruling
The allegations in respondents petition are

supported by material portions of the record.
Petitioner contends that the Petition for Review[20] filed by the respondent with the CA is procedurally
infirmed and that the appellate court should have outrightly dismissed the same. Specifically, petitioner
points out that while respondent attached to the petition the parties respective position papers, he failed
to attach to said position papers the annexes thereto. This, petitioner insists, warrants the dismissal of
respondents petition per Section 2, Rule 42 of the Rules of Court,[21] in relation to Section 3[22] of the same
Rule.
We do not agree. Section 2 of Rule 42 does not require that all the pleadings and documents
filed before the lower courts must be attached as annexes to the petition. Aside from clearly legible
duplicate originals or true copies of the judgments or final orders of both lower courts, it merely requires
that the petition be accompanied by copies of pleadings and other material portions of the record as would
support the allegations of the petition. As to what these pleadings and material portions of the record are,
the Rules grants the petitioner sufficient discretion to determine the same. This discretion is of course
subject to CAs evaluation whether the supporting documents are sufficient to make out a prima
facie case.[23] Thus, Section 3 empowers the CA to dismiss the petition where the allegations contained
therein are utterly bereft of evidentiary foundation. Since in this case the CA gave due course to
respondents Petition for Review and proceeded to decide it on the merits, it can be fairly assumed that
the appellate court is satisfied that respondent has sufficiently complied with Section 2 of Rule 42.
Besides, our own examination of the CA rollo reveals that the annexes to the position papers can
be found somewhere else in the petition. The annexes to the parties respective position papers are the
same annexes attached to the Complaint and the Answer. In fact, Annexes A to H of the Complaint
respectively pertain to the same documents marked as Annexes A to H of respondents Position Paper. And
while respondents Position Paper as attached to the petition does not contain any annexes, said annexes
are nonetheless appended to the Complaint which is also attached to the petition.
The same is true with Annexes 1 to 6 of petitioners Position Paper. Annexes 1, 2, and 3 are
attached to the Petition for Review as Annexes 3, 4, and 5, respectively, of the Answer.Annex 4 of
petitioners Position Paper is the Contract of Lease marked as Annex C of the Complaint, while Annexes 5
and 6 are marked and attached as Annexes 1 and 2, respectively, of the Answer. To our mind, these are
more than substantial compliance with the requirements of the rules. Indeed, if we are to apply the rules
of procedure in a very rigid and technical sense as what the petitioner suggests in this case, the ends of
justice would be defeated. In Lanaria v. Planta,[24] we emphasized that courts should not be so strict about
procedural lapses that do not really impair the proper administration of justice, for rules of procedure are
intended to promote, and not to defeat, substantial justice.[25]
Allegations of implied new

lease or tacita reconduccion cannot oust the
MeTC of jurisdiction over unlawful detainer
cases.
Petitioner also contends that the CA grievously erred in reversing the Decision of the RTC. He maintains
that the RTC correctly held that the key issue to be resolved in this case is the existence of an implied new
lease, a matter which is incapable of pecuniary estimation and, therefore, beyond the MeTCs jurisdiction.
The argument is bereft of merit. The allegation of existence of implied new lease or tacita
reconduccion will not divest the MeTC of jurisdiction over the ejectment case. It is an elementary rule that
the jurisdiction of the court in ejectment cases is determined by the allegations pleaded in the
complaint[26] and cannot be made to depend upon the defenses set up in the answer or pleadings filed by
the defendant.[27] This principle holds even if the facts proved during trial do not support the cause of
action alleged in the complaint.[28] In connection with this, it is well to note that in unlawful detainer cases
the elements to be proved and resolved are the facts of lease and expiration or violation of its terms.[29]
Here, no interpretative exercise is needed to conclude that respondent has complied with such
requirement. In respondents Complaint, he specifically alleged that (1) the former owner, Mr. Chua, and
petitioner entered into a contract of lease; (2) subsequently, respondent purchased the leased premises
from Mr. Chua and became the owner thereof; (3) thereafter, the lease contract between Mr. Chua and
petitioner expired; and (4) petitioner refused to vacate the premises despite the expiration and non-
renewal of the lease.
Besides, we do not agree with the RTC that the MeTC does not have jurisdiction to resolve the
issue of existence of implied new lease in the unlawful detainer case. Tacita reconduccion refers to the
right of the lessee to continue enjoying the material or de facto possession of the thing leased within a
period of time fixed by law. During its existence, the lessee can prevent the lessor from evicting him from
the disputed premises. On the other hand, it is too well-settled to require a citation that the question to
be resolved in unlawful detainer cases is, who is entitled to de facto possession. Therefore, since tacita
reconduccion is determinative of who between the parties is entitled to de facto possession, the MeTC has
jurisdiction to resolve and pass upon the issue of implied new lease in unlawful detainer case. In Mid-Pasig
Land Development Corporation v. Court of Appeals,[30] we ruled that the MeTC is clothed with exclusive
original jurisdiction over an unlawful detainer case even if the same would entail compelling the plaintiff
therein to recognize an implied lease agreement.
Respondent did not acquiesce to petitioners

continued possession of subject premises.
Petitioner likewise claims that the RTC correctly held that there was no sufficient evidence on
record that he received the alleged notice to vacate. While he admits that a notice to vacate is no longer
necessary when the ground for unlawful detainer is the expiration of the lease, proof that he actually
received said notice is still important in this case in view of his allegation of implied new lease. Citing Article
1670 of the Civil Code,[31] petitioner contends that if at the expiration of the contract of lease the lessee
continued to enjoy the leased property for 15 days with the acquiescence of the lessor, there is an implied
new lease. In this case, the determination of whether or not his continued stay in the leased premises is
with the acquiescence of the lessor hinges on whether or not he received the notice to vacate. And, as
correctly found by the RTC, he did not receive any notice to vacate.
We are not swayed. Under Article 1670, an implied new lease will set in if it is shown that: (a) the
term of the original contract of lease has expired; (b) the lessor has not given the lessee a notice to vacate;
and (c) the lessee continued enjoying the thing leased for 15 days with the acquiescence of the lessor. This
acquiescence may be inferred from the failure of the lessor to serve notice to vacate upon the lessee.[32]
In the instant case, however, the MeTC and the CA correctly found that there was a valid demand
to vacate. Thus:
Prior to the sale of the property by previous owner Joseph Chua to herein plaintiff,
defendant was formally notified by the previous owner in a letter dated September 1,
2003 (Annex D of Complaint, Records, p. 12) of his intention to sell the property but herein
defendant failed to exercise his pre-emptive right to purchase the property.
Thus, the subject premises was sold to plaintiff who became the registered owner
thereof as evidenced by TCT No. 261682 (Annex A, Complaint, Records, p. 7). Plaintiff,
as new owner/vendee, informed defendant through a letter dated November 3,
2003 (Annex E, Complaint, Records, p. 13), even prior to the expiration of the contract
that he will be needing the premises thus the contract will not be renewed or no contract
will be executed, and directed defendant to vacate the premises by January 1, 2004. The
said notice was sent by registered mail and by personal service. The notice sent by
registered mail was returned to sender for failure of the defendant to claim the same at
the post office. The unclaimed letter is attached to the plaintiffs position paper as Annex
F (Records, p. 93). Despite notice given to him, defendant failed to vacate and a formal
demand letter dated January 13, 2004 was served to him personally on January 21,
2004 which he refused to acknowledge that he received the same. A copy of that same
letter was sent by registered mail but defendant refused to claim the same for which it
was returned to sender. The unclaimed letter which was returned to sender is attached
to the plaintiffs position paper as Annex G-1 (Records, p. 96) and the certification from
the post office attesting to the fact that defendant failed to claim the same is attached to
the plaintiffs position paper as Annex G (Records, p. 95). The demand letter
dated January 13, 2004 pertains to the premises presently occupied by defendant. The
Contract of Lease (Annex C, of Complaint, Records, pp. 10-11) which expired
on December 31, 2003 speaks of only one (1) unit which is the subject matter of this
case. Defendant failed to show that the portion being occupied by him which is the subject
matter of this case is covered by another lease contract.
The Court therefore finds that there was a valid demand to vacate.[33]
This finding of the MeTC, which was affirmed by the CA, is a factual matter that is not ordinarily
reviewable in a petition for review on certiorari filed under Rule 45 of the Rules of Court. It is settled that
in a petition for review on certiorari, only questions of law may be raised by the parties and passed upon
by this court.
Besides, even if we do review the case, there is no cogent reason to disturb the finding of said
courts. Under the rules, if the addressee refuses to accept delivery, service by registered mail is deemed
complete if the addressee fails to claim the mail from the postal office after five days from the date of first
notice of the postmaster.[34] Further, the absence of personal service of notice to vacate in this case could
only be attributed to petitioners unexplainable refusal to receive the same. In Co Keng Kian v.
Intermediate Appellate Court,[35] we held that [t]he Court cannot countenance an unfair situation where
the plaintiff in an eviction case suffers further injustice by the unwarranted delay resulting from the
obstinate refusal of the defendant to acknowledge the existence of a valid demand.
The formal demands to vacate sent to petitioner, coupled with the filing of an ejectment suit, are
categorical acts on the part of respondent showing that he is not amenable to another renewal of the
lease contract. Therefore, petitioners contention that his stay in the subject premises is with the
acquiescence of the respondent, has no leg to stand on.
Petitioners alleged preferential right to buy subject

premises has no basis.
In view of the above disquisition, petitioners claim that he was deprived of his preemptive rights
because he was not notified of the intended sale, likewise crumbles. Besides, the right of first refusal, also
referred to as the preferential right to buy, is available to lessees only if there is a stipulation thereto in the
contract of lease or where there is a law granting such right to them (i.e., Presidential Decree No. 1517
(1978),[36] which vests upon urban poor dwellers[37] who merely lease the house where they have been
residing for at least ten years, preferential right to buy the property located within an area proclaimed as
an urban land reform zone). Unlike co-owners and adjacent lot owners,[38] there is no provision in the Civil
Code which grants to lessees preemptive rights. Nonetheless, the parties to a contract of lease may
provide in their contract that the lessee has the right of first refusal.
In this case, there is nothing in the Contract of Lease which grants petitioner preferential right to
buy the subject premises. We are likewise unaware of any applicable law which vests upon him priority
right to buy the commercial building subject matter of this case. In fact, aside from the sweeping
statement that his preferential right to buy was violated, petitioner failed to cite in his
Petition,[39] Reply,[40] or Memorandum[41] any specific provision of a law granting him such right. In other
words, petitioner failed to lay the basis for his claim that he enjoys a preferential right to buy.
And even assuming that he has, the same will not prevent the ejectment case filed by the
respondent from taking its due course. A contract of sale entered into in violation of preemptive right is
merely rescissible and the remedy of the aggrieved party whose right was violated is to file an appropriate
action to rescind the sale and compel the owner to execute the necessary deed of sale in his
favor. In Wilmon Auto Supply Corp. v. Court of Appeals,[42] we categorically held that an action for unlawful
detainer cannot be abated or suspended by an action filed by the defendant-lesseee to judicially enforce
his right of preemption.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
Rollo, pp. 11-27.
[2]
Id. at 33-43; penned by Associate Justice Monina Arevalo-Zenarosa and concurred in by
Associate Justices Martin S. Villarama, Jr. and Lucas P. Bersamin (both now members of this
Court).
[3]
CA rollo, pp. 2-32.
[4]
Rollo, pp. 178-181; penned by Judge Cesar M. Solis.
[5]
Id. at 131-138; penned by Judge Sarah Alma M. Lim.
[6]
Id. at 44-49.
[7]
A written contract of lease with a term of five years commencing in 1987 to 1992 (rollo, pp.
94-97), followed by verbal lease contract from 1993 to 1995. Then, petitioner and Mr. Chua
entered into a one-year lease contract covering the period January 1996 to December 1996
(rollo, pp. 98-99) and another written contract of lease from January 1, 1997 to December 30,
1997 (rollo, pp. 100-103). The last verbal contract between them has a term of five years
commencing in 1998 until 2002.
[8]
[9]
Supra note 6; docketed as Civil Case No. 177321.
[10]
Rollo, pp. 58-66.
[11]
Supra note 5.
[12]
Id. at 138.
[13]
Supra note 4.
[14]
Id. at 181.
[15]
Supra note 3.
[16]
[17]
Rollo, p. 297.
[18]
Id. at 433.
[19]
Id. at 435.
[20]
Supra note 3.
[21]
SEC. 2. Form and contents. The petition shall be filed in seven (7) legible copies, with
the original copy intended for the court being indicated as such by the petitioner,
and shall (a) state the full names of the parties to the case, without impleading the lower
courts or judges thereof either as petitioners or respondents; (b) indicate the specific material
dates showing that it was filed on time; (c) set forth concisely a statement of the matters
involved, the issues raised, the specification of errors of fact or law, or both, allegedly
committed by the Regional Trial Court, and the reasons or arguments relied upon for the
allowance of the appeal; (d) be accompanied by clearly legible duplicate originals or true
copies of the judgments or final orders of both lower courts, certified correct by the clerk of
court of the Regional Trial Court, the requisite number of plain copies thereof and of the
pleadings and other material portions of the record as would support the
allegations of the petition. x x x (Emphasis ours)
[22]
SEC. 3. Effect of failure to comply with requirements. The failure of the petitioner to
comply with any of the foregoing requirements regarding the payment of the docket
and other lawful fees, the deposit for costs, proof of service of the petition, and the contents
of and the documents which should accompany the petition shall be sufficient
ground for the dismissal thereof. (Emphasis ours)
[23]
Atillo v. Bombay, 404 Phil. 179, 188 (2001).
[24]
G.R. No. 172891, November 22, 2007, 538 SCRA 79, 97.
[25]
Navalta v. Muli, G.R. No. 150642, October 23, 2006, 505 SCRA 66, 75.
[26]
Cajayon v. Batuyong, G.R. No. 149118, February 16, 2006, 482 SCRA 461, 469.
[27]
Santos v. Sps. Ayon, 497 Phil. 415, 420 (2005); Roxas v. Court of Appeals, 439 Phil. 966, 978-
979 (2002).
[28]
Habagat Grill v. DMC-Urban Property Developer, Inc., 494 Phil. 603, 611(2005).
[29]
CIVIL CODE OF THE PHILIPPINES, Article 1673(1); Manuel v. Court of Appeals, G.R. No.
95469, July 25, 1991, 199 SCRA 603, 608.
[30]
459 Phil. 560, 573 (2003).
[31]
Art. 1670. If at the end of the contract the lessee should continue enjoying the thing leased
for fifteen days with the acquiescence of the lessor, and unless a notice to the contrary by
either party has previously been given, it is understood that there is an implied new lease, not
for the period of the original contract, but for the time established in Articles 1682 and
1687. The other terms of the original contract shall be revived.
[32]
Arevalo Gomez Corporation v. Lao Hian Liong, 232 Phil. 343, 348 (1987).
[33]
Rollo, pp. 135-136.
[34]
[35]
Co Keng Kian v. Intermediate Appellate Court, G.R. No. 75676, August 29, 1990, 189 SCRA
112, 116.
[36]
URBAN LAND REFORM ACT. Section 6 thereof provides:
SECTION 6. Land Tenancy in Urban Land Reform Areas. Within the Urban Zones legitimate
tenants who have resided on the land for ten years or more who have built their homes on the
land and residents who have legally occupied the lands by contract, continuously for the last
ten years shall not be dispossessed of the land and shall be allowed the right of first refusal to
purchase the same within a reasonable time and at reasonable prices, under terms and
conditions to be determined by the Urban Zone Expropriation and Land Management
Committee created by Section 8 of this Decree.
[37]
See Inducil v. Tops Taxi, Inc, 497 Phil. 362 (2005).
[38]
See CIVIL CODE OF THE PHILIPPINES, Book IV, Title VI, Chapter 7, Section 2.
[39]
Rollo, pp. 11-27.
[40]
Id. at 315-324.
[41]
Id. at 429-444.
[42]
G.R. No. 97637, April 10, 1992, 208 SCRA 108, 115.
SECOND DIVISION
METROPOLITAN BANK & G.R. No. 170906

TRUST CO.,
CARPIO,* J.,
- versus - Chairperson,
LEONARDO-DE CASTRO,**
BRION,
LAMB CONSTRUCTION DEL CASTILLO, and
CONSORTIUM CORPORATION, ABAD, JJ.
represented by Victor T. Nubla and
Edgardo C. Santos, Promulgated:
x----------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
A petition for the issuance of a writ of possession is ex parte, non-adversarial, and summary in
nature because the only issue involved is the purchasers right to possession. In fact, Section 7 of Act 3135
(1924)[1] expressly provides that it is the ministerial duty of the cadastral court to issue a writ of possession
in favor of the purchaser even during the redemption period, unless the case falls under the exceptions
provided by law[2] and jurisprudence.[3] As a rule, mere inadequacy or surplus in the purchase price does not
affect the purchasers entitlement to a writ of possession. In case there is a surplus, the mortgagor is entitled
to receive the same from the purchaser. The failure or refusal of the mortgagee-purchaser to return the
surplus does not affect the validity of the sale but gives the mortgagor a cause of action against the
mortgagee-purchaser.
This Petition for Review[4] on Certiorari, under Rule 45 of the Rules of Court, seeks to set aside the September
12, 2005 Decision[5] of the Court of Appeals (CA) in CA-G.R. CV No. 72240, insofar as it ordered petitioner
to pay respondent the excess of the bid price in the amount of P488,289.35 with legal interest from January
27, 2000 until it is fully paid. Likewise assailed is the CAs December 12, 2005 Resolution[6] denying petitioners
Motion for Partial Reconsideration.[7]
Factual antecedents
On March 6, 1998, respondent Lamb Construction Consortium Corporation obtained a P5.5 million loan from
petitioner Metropolitan Bank & Trust Co., subject to 18% interest per annum.[8] To secure the loan,
respondent executed a Real Estate Mortgage[9] in favor of petitioner involving six parcels of land covered by
Transfer Certificates of Title Nos. 101233,[10] 101234,[11] 101235,[12] 101236,[13] 101238,[14] and 101248.[15]
Respondent failed to pay the loan upon maturity hence petitioner filed a petition for the extra-judicial
foreclosure of the said properties. During the auction sale held on January 27, 2000, petitioner emerged as
the highest bidder with the bid amount of P6,669,765.75 and was accordingly issued a Certificate of Sale.

On June 23, 2000 and during the period of redemption, petitioner filed a verified petition for issuance
of a writ of possession. Petitioner alleged that notwithstanding its demands, respondent refused and failed
to turn over actual possession of the foreclosed properties. The case was docketed as LRC Case No. 00-
0096 and raffled to Branch 257 of the Regional Trial Court (RTC) of Paraaque City. While the petition was
pending with the trial court, respondent redeemed the property covered by Transfer Certificate of Title No.
101234.[16]
On May 25, 2001, the RTC rendered a Decision[17] denying petitioners application for the issuance of a writ
of possession because it failed to deposit the surplus proceeds from the foreclosure sale. It ruled that:
While the outstanding obligation of the corporation as of August 25,

1999 is P5,251,705.67 (Exh. C), the property was sold at public auction for P6,669,756.75
on January 27, 2000. Under the law, the buyer of the property is obligated to pay the
contract price of P6,669,756.75 less the obligation of P5,251,705.67. Hence, the purchaser
of the property should still pay the auctioneer the amount of P1,418,060.08. x x x
Metropolitan Bank and Trust Co. has obligation to pay the amount
of P1,418,060.08, which is the difference of the purchase price to the outstanding
obligation. Since the outstanding obligation as of August 25, 1999 was only P5,251,705.67
while the purchase price is P6,669,765.75, the highest bidder of the property is still obligated
to pay the price difference of P1,418,060.08. The amount should be deposited at the Office
of the Clerk of Court in trust for the mortgagor.
WHEREFORE, for failure of petitioner to deposit the amount of P1,418,060.08 to

the Clerk of Court in trust for [the] mortgagor, the petition for writ of possession is DENIED.
SO ORDERED.[18]
Petitioner moved for reconsideration but the same was denied in an Order dated July 18, 2001.[19]
The CA ruled that petitioner is entitled to a writ of possession, the issuance of which is ministerial
upon the court.[20] At the same time, the appellate court ruled that petitioner is also obliged to return the
excess of the bid price over the outstanding obligation, since the application of the proceeds from the sale
of the mortgaged property to the mortgagors obligation is an act of payment, not payment by dation. It
then found imperative that an assessment of the total outstanding debt be made in order to resolve whether
there was any surplus proceeds which must be returned to respondent. Thus, based on its computation, the
appellate court held that petitioner must deliver to respondent the surplus proceeds of P488,289.35.[21]
The CA disposed of the case in this wise:

WHEREFORE, the foregoing considered, the appeal is GRANTED and the assailed
Decision REVERSED and SET ASIDE. Let [a] writ of possession issue against respondent.
Accordingly, petitioner is ordered to pay respondent, through the notary public, the
excess of its bid price in the sum of P488,289.35 with legal interest from 27 January
2000 until it is paid, which amount represents the balance of the obligation as well as
interest and penalty charges at the time of foreclosure sale.
SO ORDERED.[22]
Dissatisfied, petitioner filed a Motion for Partial Reconsideration[23] which was denied by the CA in
its December 12, 2005 Resolution.[24]
Issues
Hence, the instant recourse, where petitioner interposes that:
THE COURT A QUO HAS DEPARTED FROM THE USUAL COURSE OF PROCEEDING OR
SANCTIONED SUCH DEPARTURE BY THE LOWER COURT IN THAT THE PROCEEDINGS
IN A PETITION FOR ISSUANCE OF WRIT OF POSSESSION FILED IN ACCORDANCE WITH
ACT NO. 3135, AS AMENDED DOES NOT REQUIRE THE PRESENTATION OF EVIDENCE
INSOFAR AS THE EXCESS, IF ANY, OF THE PURCHASE PRICE IS CONCERNED, NOR IS IT
AN ISSUE IN THE SAME CASE.
THE COURT A QUO HAS DECIDED A QUESTION IN A WAY NOT IN ACCORD WITH LAW
OR WITH THE APPLICABLE DECISIONS OF THE HON. SUPREME COURT WHEN IT
OVERLOOKED THE FACT THAT NO OTHER MATTER MAY BE PASSED UPON BY
THE LOWER COURT EXCEPT TO HAVE THE WRIT OF POSSESSION ISSUED AND
IMPLEMENTED.[25]
In essence, petitioner argues that in a petition for the issuance of a writ of possession, it is improper
for the RTC and the CA to rule upon the surplus or excess of the purchase price because the only issue that
must be resolved is the purchasers entitlement to the writ. According to petitioner, if there is any surplus or
excess, the remedy of the respondent is to file an independent action for collection of surplus.
Our Ruling

As a general rule, the issuance of a writ of
possession is ministerial. Nevertheless, in Sulit v.
Court of Appeals, we withheld the issuance of the
writ considering the peculiar circumstances
prevailing in said case.
In Sulit v. Court of Appeals,[26] we withheld the issuance of a writ of possession because the
mortgagee failed to deliver the surplus from the proceeds of the foreclosure sale which is equivalent to
approximately 40% of the total mortgage debt. Sulit was considered as an exception to the general rule that
it is ministerial upon the court to issue a writ of possession even during the period of redemption. We
explained that equitable considerations prevailing in said case demand that a writ of possession should not
issue. Thus:
The governing law thus explicitly authorizes the purchaser in a foreclosure sale to
apply for a writ of possession during the redemption period by filing an ex parte motion
under oath for that purpose in the corresponding registration or cadastral proceeding in the
case of property with Torrens title. Upon the filing of such motion and the approval of the
corresponding bond, the law also in express terms directs the court to issue the order for a
writ of possession.
No discretion appears to be left to the court. Any question regarding the regularity
and validity of the sale, as well as the consequent cancellation of the writ, is to be
determined in a subsequent proceeding as outlined in Section 8, and it cannot be raised as
a justification for opposing the issuance of the writ of possession since, under the Act, the
proceeding for this is ex parte. Such recourse is available to a mortgagee, who effects the
extrajudicial foreclosure of the mortgage, even before the expiration of the period of
redemption provided by law and the Rules of Court.
The rule is, however, not without exception. Under Section 35, Rule 39 of the Rules
of Court, which is made applicable to the extrajudicial foreclosure of real estate mortgages
by Section 6 of Act 3135, the possession of the mortgaged property may be awarded to a
purchaser in the extrajudicial foreclosure unless a third party is actually holding the property
adversely to the judgment debtor.
Thus, in the case of Barican, et al. vs. Intermediate Appellate Court, et al., this Court
took into account the circumstances that long before the mortgagee bank had sold the
disputed property to the respondent therein, it was no longer the judgment debtor who
was in possession but the petitioner spouses who had assumed the mortgage, and that
there was a pending civil case involving the rights of third parties. Hence, it was ruled therein
that under the circumstances, the obligation of a court to issue a writ of possession in favor
of the purchaser in a foreclosure of mortgage case ceases to be ministerial.
Now, in forced sales low prices are generally offered and the mere inadequacy of
the price obtained at the sheriffs sale, unless shocking to the conscience, has been held
insufficient to set aside a sale. This is because no disadvantage is caused to the
mortgagor. On the contrary, a mortgagor stands to gain with a reduced price because he
possesses the right of redemption. When there is the right to redeem, inadequacy of price
becomes immaterial since the judgment debtor may reacquire the property or sell his right
to redeem, and thus recover the loss he claims to have suffered by reason of the price
obtained at the auction sale.
However, also by way of an exception, in Cometa, et al. vs. Intermediate

Appellate Court, et al. where the properties in question were found to have been sold at an
unusually lower price than their true value, that is, properties worth at least P500,000.00
were sold for only P57,396.85, this Court, taking into consideration the factual milieu
obtaining therein as well as the peculiar circumstances attendant thereto, decided to
withhold the issuance of the writ of possession on the ground that it could work injustice
because the petitioner might not be entitled to the same.
The case at bar is quite the reverse, in the sense that instead of an inadequacy in
price, there is due in favor of private respondent, as mortgagor, a surplus from the proceeds
of the sale equivalent to approximately 40% of the total mortgage debt, which excess is
indisputably a substantial amount. Nevertheless, it is our considered opinion, and we so
hold, that equitable considerations demand that a writ of possession should also not issue
in this case.
Rule 68 of the Rules of Court provides:
Sec. 4. Disposition of proceeds of sale. The money realized from the sale
of mortgaged property under the regulations hereinbefore prescribed shall, after
deducting the costs of the sale, be paid to the person foreclosing the mortgage,
and when there shall be any balance or residue, after paying off such mortgage or
other incumbrances, the same shall be paid to the junior incumbrancers in the order
of their priority, to be ascertained by the court, or if there be no such incumbrancers
or there be a balance or residue after payment of such incumbrancers, then to the
mortgagor or his agent, or to the person entitled to it.
The application of the proceeds from the sale of the mortgaged property to the
mortgagors obligation is an act of payment, not payment by dation; hence, it is the
mortgagees duty to return any surplus in the selling price to the mortgagor. Perforce, a
mortgagee who exercises the power of sale contained in a mortgage is considered a
custodian of the fund, and, being bound to apply it properly, is liable to the persons entitled
thereto if he fails to do so. And even though the mortgagee is deemed a trustee for the
mortgagor or owner of the equity of redemption.
Commenting on the theory that a mortgagee, when he sells under a power, cannot
be considered otherwise than as a trustee, the vice-chancellor in Robertson vs. Norris (1
Giff. 421) observed: That expression is to be understood in this sense: that with the power
being given to enable him to recover the mortgage money, the court requires that he shall
exercise the power of sale in a provident way, with a due regard to the rights and interests
of the mortgagor in the surplus money to be produced by the sale.
The general rule that mere inadequacy of price is not sufficient to set aside a
foreclosure sale is based on the theory that the lesser the price the easier it will be for the
owner to effect the redemption. The same thing cannot be said where the amount of the
bid is in excess of the total mortgage debt. The reason is that in case the mortgagor decides
to exercise his right of redemption. Section 30 of Rule 39 provides that the redemption price
should be equivalent to the amount of the purchase price, plus one percent monthly interest
up to the time of the redemption, together with the amount of any assessments or taxes
which the purchaser may have paid thereon after purchase, and interest on such last-
named amount at the same rate.
Applying this provision to the present case would be highly iniquitous if the amount
required for redemption is based on P7,000,000.00, because that would mean exacting
payment at a price unjustifiably higher than the real amount of the mortgage obligation.
We need not elucidate on the obvious. Simply put, such a construction will undeniably be
prejudicial to the substantive rights of private respondent and it could even effectively
prevent her from exercising the right of redemption.[27]
In the subsequent case of Saguan v. Philippine Bank of Communications,[28] however, we clarified

that the exception made in Sulit does not apply when the period to redeem has already expired or when
ownership over the property has already been consolidated in favor of the mortgagee-purchaser. In other
words, even if the mortgagee-purchaser fails to return the surplus, a writ of possession must still be issued. In
the instant case, the period to redeem has already lapsed. Thus, following the ruling in Saguan, the issuance
of a writ of possession in favor of the petitioner is in order.
The failure of the mortgagee to deliver the surplus

proceeds does not affect the validity of the
foreclosure sale. It gives rise to a cause of action
for the mortgagee to file an action to collect the
surplus proceeds.
Relatedly, we held in Sulit that if the mortgagee is retaining more of the proceeds of the sale than
he is entitled to, this fact alone will not affect the validity of the sale but simply gives the mortgagor a cause
of action to recover such surplus.[29]
In the instant case, the cadastral court is without jurisdiction to order petitioner to deliver to
respondent the surplus or excess of the purchase price. The only issue in a petition for the issuance of a writ
of possession is the purchasers entitlement to possession. No documentary or testimonial evidence is even
required for the issuance of the writ as long as the verified petition states the facts sufficient to entitle the
purchaser to the relief requested.[30] As held in Saguan, when the mortgagee-purchaser fails to return the
surplus, the remedy of a mortgagor lies in a separate civil action for collection of a sum of money, thus:
However, petitioners remedy lies in a separate civil action for collection of a sum of
money. We have previously held that where the mortgagee retains more of the proceeds
of the sale than he is entitled to, this fact alone will not affect the validity of the sale but
simply gives the mortgagor a cause of action to recover such surplus. In the same case,
both parties can establish their respective rights and obligations to one another, after a
proper liquidation of the expenses of the foreclosure sale, and other interests and claims
chargeable to the purchase price of the foreclosed property. The court can then determine
the proper application of compensation with respect to respondents claim on petitioners
remaining unsecured obligations. In this regard, respondent is not precluded from itself filing
a case to collect on petitioners remaining debt.[31]
An action to collect the surplus proceeds is

improper where there is a pending action for the
nullification of the foreclosure proceedings.
However, unlike in the case of Saguan where the mortgagors did not challenge the validity of the
foreclosure but only demanded the return of the surplus, respondent in this case sought to set aside the
foreclosure sale. In fact, a Complaint for Nullification of Foreclosure Proceedings and Damages was filed
before the RTC of Paraaque docketed as Civil Case No. 00-0513 and raffled to Branch 194.[32] The filing of a
separate case for the collection of surplus by respondent would therefore be improper while the annulment
case is still pending.
It bears stressing that the collection of surplus is inconsistent with the annulment of foreclosure
because in suing for the return of the surplus proceeds, the mortgagor is deemed to have affirmed the
validity of the sale since nothing is due if no valid sale has been made.[33] It is only after the dismissal of
complaint for annulment or when the foreclosure sale is declared valid that the mortgagor may recover the
surplus in an action specifically brought for that purpose.[34] However, to avoid multiplicity of suits, the better
recourse is for the mortgagor to file a case for annulment of foreclosure with an alternative cause of action
for the return of the surplus, if any.[35]
A similar recourse was done by respondent. In its complaint for nullification of foreclosure
proceedings and damages pending before Branch 194 of the RTC of Paraaque City, it alleged, among others,
that the payments made by the [respondent] on the interest and principal were misapplied and therefore a
re-computation is necessary to determine the amount of the obligation.[36]Consequently, there is no need
for respondent to file a separate case for collection of surplus in case the court affirms the validity of the
foreclosure sale. Once the foreclosure is declared valid and a re-computation of the total amount of obligation
is made, the court in the same case may order petitioner to return the surplus, if any, pursuant to the legal
maxim, Nemo cum alterius detrimento locupletari potest no person shall be allowed to enrich himself
unjustly at the expense of others.
WHEREFORE, the petition is hereby GRANTED. The Decision of the Court of Appeals in CA-G.R.
CV No. 72240 dated September 12, 2005 is MODIFIED by deleting the portion ordering petitioner to pay
respondent, through the notary public, the excess of its bid price in the sum of P488,289.35 with legal
interest from January 27, 2000 until it is paid.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons attestation, it is hereby
certified that the conclusions in the above Decision had been reached in consultation before the case was
REYNATO S. PUNO
Chief Justice
*
**
[1]
An Act to Regulate the Sale of Property Under Special Powers Inserted In or Annexed to Real
Estate Mortgages, Section 7. In any sale made under the provisions of this Act, the purchaser
may petition the [Regional Trial Court] of the province or place where the property or any
part thereof is situated, to give him possession thereof during the redemption period,
furnishing bond in an amount equivalent to the use of the property for a period of twelve
months, to indemnify the debtor in case it be shown that the sale was made without violating
the mortgage or without complying with the requirements of this Act. Such petition shall be
made under oath and filed in form of an ex parte motion in the registration or cadastral
proceedings if the property is registered, or in special proceedings in the case of property
registered under the Mortgage Law or under section one hundred and ninety-four of the
Administrative Code, or of any other real property encumbered with a mortgage duly
registered in the office of any register of deeds in accordance with any existing law, and in
each case the clerk of the court shall, upon the filing of such petition, collect the fees specified
in paragraph eleven of section one hundred and fourteen of Act Numbered Twenty-eight
hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of
possession issue, addressed to the sheriff of the province in which the property is situated,
who shall execute said order immediately.
[2]
RULES OF COURT, Rule 39, Section 33, which is made applicable to the extrajudicial foreclosure of real
estate mortgages by Section 6 of Act 3135.
[3]
See Cometa v. Intermediate Appellate Court, 235 Phil. 569 (1987); Sulit v. Court of Appeals, 335 Phil. 914
(1997).
[4]
Rollo, pp. 3-26.
[5]
Id. at 27-35; penned by Associate Justice Josefina Guevara-Salonga and concurred in by Associate
Justices Ruben T. Reyes and Fernanda Lampas-Peralta.
[6]
Id. at 36-37.
[7]
Id. at 98-107.
[8]
Id. at 42.
[9]
Id. at 43.
[10]
Id. at 44-45.
[11]
Id. at 46-47.
[12]
Id. at 48-49.
[13]
Id. at 50-51.
[14]
Id. at 52-53.
[15]
Id. at 54-55.
[16]
Id. at 9.
[17]
Id. at 38- 40.
[18]
Id. at 39-40.
[19]
Id. at 41.
[20]
Id. at 30.
[21]
Id. at 33.
[22]
Id. at 34.
[23]
Supra note 7.
[24]
Supra note 6.
[25]
Id. at 13.
[26]
Supra at note 3.
[27]
Id. at 924-928.
[28]
G.R. No. 159882, November 23, 2007, 538 SCRA 390.
[29]
[30]
Spouses Santiago v. Merchants Rural Bank of Talavera, Inc., 493 Phil. 862, 870 (2005).
[31]
[32]
Rollo, pp. 108-114, 120.
[33]
Sulit v. Court of Appeals, supra note 3.
[34]
See Kleinman v. Neubert, 172 N.W. 315 (1999).
[35]
RULES OF COURT, Rule 8, Sec. 2. See Keramik Industries, Inc. v. Hon. Guerrero, 158 Phil. 915, 918
(1974) and LCK Industries Inc. v. Planters Development Bank, G.R. No. 170606, November 23, 2007,
538 SCRA 634.
[36]
Rollo, p. 110.
SECOND DIVISION
SPS. ISAGANI CASTRO and G.R. No. 168940

DIOSDADA CASTRO,
- versus - CARPIO,* J.,

Chairperson,
ANGELINA DE LEON TAN, LEONARDO-DE CASTRO,**
SPS. CONCEPCION T. CLEMENTE BRION,
and ALEXANDER C. CLEMENTE, DEL CASTILLO, and
SPS. ELIZABETH T. CARPIO and ABAD, JJ.
ALVIN CARPIO, SPS. MARIE ROSE
T. SOLIMAN and ARVIN SOLIMAN Promulgated:
and JULIUS AMIEL TAN, November 24, 2009
Respondents.
x---------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The imposition of an unconscionable rate of interest on a money debt, even if knowingly and
voluntarily assumed, is immoral and unjust. It is tantamount to a repugnant spoliation and an iniquitous
deprivation of property, repulsive to the common sense of man. It has no support in law, in principles of
justice, or in the human conscience nor is there any reason whatsoever which may justify such imposition
as righteous and as one that may be sustained within the sphere of public or private morals.[1]
In this Petition for Review on Certiorari,[2] petitioners assail the October 29, 2004 Decision[3] and July
18, 2005 Resolution[4] of the Court of Appeals (CA) in CA-G.R. CV No. 76842, affirming the June 11, 2002
Decision[5] of the Regional Trial Court of Bulacan, Branch 79, which equitably reduced the stipulated interest
rate in an agreement entered into by the parties from 60% per annum (or 5% per month) to 12% per
annum, with the modification that herein respondents may redeem the mortgaged property notwithstanding
the lapse of redemption period on grounds of equity and substantial justice.
Factual antecedents
Respondent Angelina de Leon Tan, and her husband Ruben Tan were the former registered owners
of a 240-square meter residential lot, situated at Barrio Canalate, Malolos, Bulacan and covered by Transfer
Certificate of Title No. T-8540. On February 17, 1994, they entered into an agreement with petitioners
spouses Isagani and Diosdada Castro denominated as Kasulatan ng Sanglaan ng Lupa at Bahay (Kasulatan)
to secure a loan of P30,000.00 they obtained from the latter. Under the Kasulatan, the spouses Tan
undertook to pay the mortgage debt within six months or until August 17, 1994, with an interest rate of 5%
per month, compounded monthly.
When her husband died on September 2, 1994, respondent Tan was left with the responsibility of
paying the loan. However, she failed to pay the same upon maturity. Thereafter, she offered to pay
petitioners the principal amount of P30,000.00 plus a portion of the interest but petitioners refused and
instead demanded payment of the total accumulated sum of P359,000.00.
On February 5, 1999, petitioners caused the extrajudicial foreclosure of the real estate mortgage
and emerged as the only bidder in the auction sale that ensued. The period of redemption expired without
respondent Tan having redeemed the property; thus title over the same was consolidated in favor of
petitioners. After a writ of possession was issued, the Sheriff ejected respondents from the property and
delivered the possession thereof to petitioners.
On September 26, 2000, respondent Tan, joined by respondents Sps. Concepcion T. Clemente and
Alexander C. Clemente, Sps. Elizabeth T. Carpio and Alvin Carpio, Sps. Marie Rose T. Soliman and Arvin
Soliman and Julius Amiel Tan filed a Complaint for Nullification of Mortgage and Foreclosure and/or Partial
Rescission of Documents and Damages[6] before the Regional Trial Court of Malolos, Bulacan. They
alleged, inter alia, that the interest rate imposed on the principal amount of P30,000.00 is unconscionable.[7]
On June 11, 2002, the trial court rendered judgment in favor of respondents, viz:
PREMISES CONSIDERED, this Court cannot declare the mortgage and foreclosure null and
void but the x x x Kasulatan ng Sanglaan ng Lupa x x x herebelow quoted:
2. Na ang nasabing pagkakautang ay aming babayaran sa loob ng anim

(6) na buwan simula sa petsa ng kasulatang ito o dili kaya ay sa bago
dumating ang Agosto 17, 1994 na may pakinabang na 5% bawat
buwan.Na ang tubo ay aani pa rin ng tubong 5% bawat buwan.
Is partially rescinded to only 12% interest per annum and additional one percent a month
penalty charges as liquidated damages beginning February 17, 1994 up to June 21, 2000
per Delivery of Possession x x x and/or for the defendants to accept the offer of P200,000.00
by the plaintiffs to redeem or reacquire the property in litis.
The Court is not inclined to award moral damages since plaintiffs failed to buttress her claim
of moral damages and/or proof of moral damages. x x x
No award of attorneys fees because the general rule is that no [premium] should be placed
on the right to litigate. x x x
The counterclaim of the defendants is hereby DISMISSED for lack of merit.
Costs against the defendants.
SO ORDERED.[8]

Petitioners appealed to the Court of Appeals which affirmed the trial courts finding that the interest
rate stipulated in the Kasulatan is iniquitous or unconscionable and, thus, its equitable reduction to the legal
rate of 12% per annum is warranted.[9] At the same time, the appellate court declared that respondents
may redeem the mortgaged property notwithstanding the expiration of the period of redemption, in the
interest of substantial justice and equity.[10] The dispositive portion of said Decision reads:
WHEREFORE, the appealed judgment is hereby AFFIRMED with the

MODIFICATION that plaintiffs-appellees may redeem the mortgaged property by paying
the defendants-appellants spouses Isagani and Diosdada Castro the amount of P30,000.00,
with interest thereon at 12% per annum from February 17, 1994 until fully paid plus penalty
charges at the same rate from February 17, 1994 to June 21, 2000.
SO ORDERED.[11]
Petitioners Motion for Reconsideration was denied by the Court of Appeals in a Resolution dated July
18, 2005.
Issues
Hence, the present Petition for Review on Certiorari raising the following issues:
1. THE COURT OF APPEALS GROSSLY ERRED IN NULLIFYING THE INTEREST RATE

VOLUNTARILY AGREED UPON BY THE PETITIONERS AND RESPONDENTS AND
EXPRESSLY STIPULATED IN THE CONTRACT OF MORTGAGE ENTERED INTO BETWEEN
THEM.
2. THE COURT OF APPEALS GROSSLY ERRED IN MAKING A CONTRACT BETWEEN THE

PETITIONERS AND RESPONDENTS BY UNILATERALLY CHANGING THE TERMS AND
CONDITIONS OF THE CONTRACT OF MORTGAGE ENTERED INTO BETWEEN THEM.
3. THE COURT OF APPEALS GROSSLY ERRED IN EXTENDING THE PERIOD OF

REDEMPTION IN FAVOR OF THE RESPONDENTS IN VIOLATION OF THE CLEAR AND
UNEQUIVOCAL PROVISIONS OF ACT NO. 3135 PROVIDING A PERIOD OF ONLY ONE
YEAR FOR THE REDEMPTION OF A FORECLOSED REAL PROPERTY.[12]
Petitioners contend that with the removal by the Bangko Sentral of the ceiling on the rate of interest
that may be stipulated in a contract of loan,[13] the lender and the borrower could validly agree on any
interest rate on loans. Thus, the Court of Appeals gravely erred when it declared the stipulated interest in
the Kasulatan as null as if there was no express stipulation on the compounded interest.[14]
On the other hand, respondents assert that the appellate court correctly struck down the said
stipulated interest for being excessive and contrary to morals, if not against the law.[15] They also point out
that a contract has the force of law between the parties, but only when the terms, clauses and conditions
thereof are not contrary to law, morals, public order or public policy.[16]
Our Ruling
The Court of Appeals correctly found that the 5%

monthly interest, compounded monthly, is
unconscionable and should be equitably reduced
to the legal rate of 12% per annum.
While we agree with petitioners that parties to a loan agreement have wide latitude to stipulate on
any interest rate in view of the Central Bank Circular No. 905 s. 1982 which suspended the Usury Law ceiling
on interest effective January 1, 1983, it is also worth stressing that interest rates whenever unconscionable
may still be declared illegal. There is certainly nothing in said circular which grants lenders carte
blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a
hemorrhaging of their assets.[17]
In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests
are contrary to morals, if not against the law. In Medel v. Court of Appeals,[18] we annulled a stipulated 5.5%
per month or 66% per annum interest on a P500,000.00 loan and a 6% per month or 72% per annum
interest on a P60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and
exorbitant. In Ruiz v. Court of Appeals,[19] we declared a 3% monthly interest imposed on four separate
loans to be excessive. In both cases, the interest rates were reduced to 12% per annum.
In this case, the 5% monthly interest rate, or 60% per annum, compounded monthly, stipulated in
the Kasulatan is even higher than the 3% monthly interest rate imposed in the Ruiz case.Thus, we similarly
hold the 5% monthly interest to be excessive, iniquitous, unconscionable and exorbitant, contrary to morals,
and the law. It is therefore void ab initio for being violative of Article 1306[20] of the Civil Code. With this, and
in accord with the Medel and Ruiz cases, we hold that the Court of Appeals correctly imposed the legal
interest of 12% per annum in place of the excessive interest stipulated in the Kasulatan.
The Court of Appeals did not unilaterally change

the terms and conditions of the Contract of
Mortgage entered into between the petitioners
and the respondents.
Petitioners allege that the Kasulatan was entered into by the parties freely and voluntarily.[21] They
maintain that there was already a meeting of the minds between the parties as regards the principal amount
of the loan, the interest thereon and the property given as security for the payment of the loan, which must
be complied with in good faith.[22] Hence, they assert that the Court of Appeals should have given due respect
to the provisions of the Kasulatan.[23] They also stress that it is a settled principle that the law will not relieve
a party from the effects of an unwise, foolish or disastrous contract, entered into with all the required
formalities and with full awareness of what he was doing.[24]
Petitioners contentions deserve scant consideration. In Abe v. Foster Wheeler Corporation,[25] we

held that the freedom of contract is not absolute. The same is understood to be subject to reasonable
legislative regulation aimed at the promotion of public health, morals, safety and welfare. One such legislative
regulation is found in Article 1306 of the Civil Code which allows the contracting parties to establish such
stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order or public policy.
To reiterate, we fully agree with the Court of Appeals in holding that the compounded interest rate
of 5% per month, is iniquitous and unconscionable. Being a void stipulation, it is deemed inexistent from the
beginning. The debt is to be considered without the stipulation of the iniquitous and unconscionable interest
rate. Accordingly, the legal interest of 12% per annum must be imposed in lieu of the excessive interest
stipulated in the agreement, in line with our ruling in Ruiz v. Court of Appeals,[26] thus:
The foregoing rates of interests and surcharges are in accord with Medel vs. Court
of Appeals, Garcia vs. Court of Appeals, Bautista vs. Pilar Development Corporation, and the
recent case of Spouses Solangon vs. Salazar. This Court invalidated a stipulated 5.5% per
month or 66% per annum interest on a P500,000.00 loan in Medel and a 6% per month or
72% per annum interest on a P60,000.00 loan in Solangon for being excessive, iniquitous,
unconscionable and exorbitant. In both cases, we reduced the interest rate to 12% per
annum. We held that while the Usury Law has been suspended by Central Bank Circular
No. 905, s. 1982, effective on January 1, 1983, and parties to a loan agreement have been
given wide latitude to agree on any interest rate, still stipulated interest rates are illegal if
they are unconscionable. Nothing in the said circular grants lenders carte blanche authority
to raise interest rates to levels which will either enslave their borrowers or lead to a
hemorrhaging of their assets. On the other hand, in Bautista vs. Pilar Development Corp.,
this Court upheld the validity of a 21% per annum interest on a P142,326.43 loan, and
in Garcia vs. Court of Appeals, sustained the agreement of the parties to a 24% per annum
interest on an P8,649,250.00 loan. It is on the basis of these cases that we reduce the 36%
per annum interest to 12%. An interest of 12% per annum is deemed fair and reasonable.
While it is true that this Court invalidated a much higher interest rate of 66% per annum
in Medel and 72% in Solangon it has sustained the validity of a much lower interest rate of
21% in Bautista and 24% in Garcia. We still find the 36% per annum interest rate in the
case at bar to be substantially greater than those upheld by this Court in the two (2)
aforecited cases. (Emphasis supplied, citations omitted)
From the foregoing, it is clear that there is no unilateral alteration of the terms and conditions of
the Kasulatan entered into by the parties. Surely, it is more consonant with justice that the subject interest
rate be equitably reduced and the legal interest of 12% per annum is deemed fair and reasonable.[27]
The additional 1% per month penalty awarded as
liquidated damages does not have any legal basis.
In its June 11, 2002 Decision,[28] the trial court granted an additional 1% per month penalty as
liquidated damages[29] beginning February 17, 1994 up to June 21, 2000.[30] Since respondents did not file
their appellees brief despite notice, the appellate court declared this to be not in issue.[31]
Although the issue of the liquidated damages was not presented squarely in either Memorandum of
the parties, this does not prevent us from ruling on the matter. In the exercise of our appellate jurisdiction,
we are clothed with ample authority to review findings and rulings of lower courts even if they are not
assigned as errors. This is especially so if we find that their consideration is necessary in arriving at a just
decision of the case. We have consistently held that an unassigned error closely related to an error properly
assigned, or upon which a determination of the question raised by the error properly assigned is dependent,
will be considered notwithstanding the failure to assign it as an error.[32] On this premise, we deem it proper
to pass upon the matter of liquidated damages.
Article 2226 of the Civil Code provides that [L]iquidated damages are those agreed upon by the
parties to a contract, to be paid in case of breach thereof.
In the instant case, a cursory reading of the Kasulatan would show that it is devoid of any stipulation
with respect to liquidated damages. Neither did any of the parties allege or prove the existence of any
agreement on liquidated damages. Hence, for want of any stipulation on liquidated damages in
the Kasulatan entered into by the parties, we hold that the liquidated damages awarded by the trial court
and affirmed by the Court of Appeals to be without legal basis and must be deleted.
The foreclosure proceedings held on March 3,
1999 cannot be given effect.
The Court of Appeals modified the judgment of the trial court by holding that respondents, in the
interest of substantial justice and equity, may redeem the mortgaged property notwithstanding the lapse of
the period of redemption.
Petitioners argue that this cannot be done because the right of redemption had long expired and
same is no longer possible beyond the one-year period provided under Act No. 3135.[33]
On the other hand, respondents insist that to disallow them to redeem the property would render
meaningless the declaration that the stipulated interest is null and void.
It is undisputed that sometime after the maturity of the loan, respondent Tan attempted to pay the
mortgage debt of P30,000.00 as principal and some interest. Said offer was refused by petitioners because
they demanded payment of the total accumulated amount of P359,000.00.[34] Moreover, the trial court also
mentioned an offer by respondent Tan of the amount of P200,000.00 to petitioners in order for her to
redeem or re-acquire the property in litis.[35]
From these, it is evident that despite considerable effort on her part, respondent Tan failed to
redeem the mortgaged property because she was unable to raise the total amount of P359,000.00, an
amount grossly inflated by the excessive interest imposed. Thus, it is only proper that respondents be given
the opportunity to repay the real amount of their indebtedness.
In the case of Heirs of Zoilo Espiritu v. Landrito,[36] which is on all fours with the instant case, we
held that:
Since the Spouses Landrito, the debtors in this case, were not given an
opportunity to settle their debt, at the correct amount and without the
iniquitous interest imposed, no foreclosure proceedings may be instituted. A
judgment ordering a foreclosure sale is conditioned upon a finding on the correct amount
of the unpaid obligation and the failure of the debtor to pay the said amount. In this case,
it has not yet been shown that the Spouses Landrito had already failed to pay the correct
amount of the debt and, therefore, a foreclosure sale cannot be conducted in order to
answer for the unpaid debt. The foreclosure sale conducted upon their failure to
pay P874,125.00 in 1990 should be nullified since the amount demanded as the outstanding
loan was overstated; consequently it has not been shown that the mortgagors the Spouses
Landrito, have failed to pay their outstanding obligation. x x x
As a result, the subsequent registration of the foreclosure sale cannot transfer any
rights over the mortgaged property to the Spouses Espiritu. The registration of the
foreclosure sale, herein declared invalid, cannot vest title over the mortgaged property. x x
x (Emphasis supplied)
On this basis, we nullify the foreclosure proceedings held on March 3, 1999 since the amount
demanded as the outstanding loan was overstated. Consequently, it has not been shown that the
respondents have failed to pay the correct amount of their outstanding obligation. Accordingly, we declare
the registration of the foreclosure sale invalid and cannot vest title over the mortgaged property.
Anent the allegation of petitioners that the Court of Appeals erred in extending the period of
redemption, same has been rendered moot in view of the nullification of the foreclosure proceedings.
WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals dated
October 29, 2004 as well as the Resolution dated July 18, 2005 are AFFIRMEDwith
the MODIFICATION that the award of 1% liquidated damages per month be DELETED and that
petitioners are ORDERED to reconvey the subject property to respondents conditioned upon the payment
of the loan together with the rate of interest fixed herein.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
See Ibarra v. Aveyro, 37 Phil. 273, 282 (1917).
[2]
Rollo, pp. 9-21.
[3]
Id. at 144-161; penned by Associate Justice Ruben T. Reyes and concurred in by Associate Justices Perlita
J. Tria Tirona and Jose C. Reyes, Jr.
[4]
Id. at 168-169; penned by Associate Justice Ruben T. Reyes and concurred in by Associate Justices
Eugenio S. Labitoria and Jose C. Reyes, Jr.
[5]
Id. at 48-82; penned by Judge Arturo G. Tayag.
[6]
Id. at 22-37.
[7]
Id. at 26.
[8]
Id. at 82.
[9]
Id. at 155.
[10]
Id. at 158.
[11]
Id. at 160.
[12]
Id. at 12.
[13]
Id. at 197.
[14]
Id.
[15]
Id at 213.
[16]
Id at 214.
[17]
Cuaton v. Salud, G.R. No. 158382, January 27, 2004, 421 SCRA 278, 282; Almeda v. Court of
Appeals, 326 Phil. 309, 319 (1996)
[18]
359 Phil. 820 (1998).
[19]
449 Phil. 419 (2003).
[20]
Article 1306 of the CIVIL CODE provides:
The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
[21]
Rollo, p. 199.
[22]
Id.
[23]
Id at 200.
[24]
Id at 201.
[25]
Nos. L-14785 and L-14923, 110 Phil. 198, 203 (1960).
[26]
Supra note 19.
[27]
Spouses Solangon v. Salazar, 412 Phil. 816, 823 (2001).
[28]
Rollo, pp. 48-82.
[29]
Id. at 82.
[30]
This is the date the Sheriff delivered possession to the petitioners of the subject property by virtue of a
Writ of Possession.
[31]
Rollo, p. 11.
[32]
Cuaton v. Salud, supra note 17, at 283.
[33]
Rollo, p. 201.
[34]
Rollo, p. 146.
[35]
June 11, 2002 Decision of the Regional Trial Court reads:
PREMISES CONSIDERED, this Court cannot declare the mortgage and foreclosure null and void but the
documents [sic] Kasulatan ng Sanglaan ng Lupa x x x
xxxx
Is partially rescinded to only 12% interest per annum and additional one percent a month
penalty charges as liquidated damage beginning February 17, 1994 up to June 21, 2000 per
Delivery of Possession Exh. 9, by the Sheriff of Branch 78 by virtue of the Writ of
Possession and/or for the defendants to accept [sic] offer of P200,000.00 by the
plaintiffs to redeem or reacquire the property in litis. x x x (Emphasis supplied)
[36]
G.R. No. 169617, April 3, 2007, 520 SCRA 383, 396-397.

Supreme Court
Manila
SECOND DIVISION
JOSE FELICIANO LOY, JR., G.R. No. 164886

RAYMUNDO HIPOLITO III, and
EDGARDO RIDAO,
Petitioners,
Present:
- versus -
CARPIO,* J.,
SAN MIGUEL CORPORATION Chairperson,
EMPLOYEES UNION-Philippine LEONARDO-DE CASTRO,**
Transport and General Workers BRION,
Organization (SMCEU-PTGWO), DEL CASTILLO, and
as represented by its President Ma. ABAD, JJ.
Pilar B. Aquino and SAN MIGUEL
CORPORATION CREDIT
COOPERATIVE, INC., as
represented by its President Promulgated:
Daniel Borbon, November 24, 2009
Respondents.
x---------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Summary judgments are sanctioned by the Rules of Court as a device to simplify and expedite the resolution
of cases when, as shown by pleadings, affidavits, depositions or admissions on the records, there are no
genuine issues which would entail an expensive, lengthy and protracted trial. However, if there is a genuine
issue of material fact which calls for the presentation of evidence, resort to summary judgment would not
be proper. Stated otherwise, if there exists an issue of fact, the motion for summary judgment should be
denied.
The instant case is not ripe for summary judgment because the determination of the amount of reasonable
attorneys fees requires presentation of evidence and a full-blown trial.
This Petition for Review on Certiorari[1] assails the Decision[2] dated September 29, 2003 of the Court
of Appeals in CA-G.R. CV No. 66261. The Court of Appeals nullified the Decision[3] rendered by the Regional
Trial Court (RTC) of Manila, Branch 53, in Civil Case No. 93-67275, which granted the motion for summary
judgment and ordered the release of the P3 million garnished funds in favor of petitioners Jose Feliciano
Loy, Jr. (Loy, Jr.), Raymundo Hipolito III (Hipolito III) and Edgardo Ridao (Ridao), as payment for their claim
for attorneys fees.
Petitioners Factual Allegations
Petitioners filed a Complaint with Application for Preliminary Attachment[4] for the collection of unpaid
attorneys fees for the legal services they rendered to respondent San Miguel Corporation Employees Union
- Philippine Transport and General Workers Organization (SMCEU-PTGWO), herein referred to as
the Union. Also impleaded as defendants in said complaint were Raymundo Hipolito, Jr. (Hipolito, Jr.), Efren
Carreon (Carreon), Josefina Tongol (Tongol) and Pablo Dee (Dee), who were then the President, Vice-
President, Treasurer and Auditor of the Union, respectively.
Petitioners averred that they acted as counsel for the Union in the negotiations of the 1992-1995 Collective
Bargaining Agreement (CBA) between the management of three corporations (San Miguel Corporation,
Magnolia Corporation and San Miguel Foods, Incorporated) and the Union. They claimed that the legal
services they rendered to the Union amounted to at least P3 million.In support of their claim, petitioners
presented Board Resolution No. 93-02-28[5] allegedly issued by the Unions Board of Directors on February
27, 1993 where it was allegedly resolved that herein petitioners are entitled to 5% attorneys fees based on
the 10% assessment fee collected from union members and 10% agency fee collected from non-union
members. Petitioners also alleged that pending resolution of the case, they are entitled to the protection of
attachment of some of the Unions properties.
On August 24, 1993, the RTC issued an Order[6] attaching all the properties of the Union.
Respondents Factual Allegations
The Union, Carreon and Tongol filed a Motion to Discharge Writ of Attachment and Dismiss
Complaint.[7] They alleged that Board Resolution No. 93-02-28 was not validly passed by the Unions Board
or ratified by the Unions general membership. Carreon also alleged that no demand to pay attorneys fees
was made to the Union or any of the defendants and that petitioners had already been paid for their services.
On the other hand, defendants Hipolito, Jr. and Dee filed an Answer with Cross-Claim.[8] They admitted that
demand was made for the Union to pay attorneys fees and that the Union was liable therefor. They,
however, denied any personal liability over the same. They also claimed that Carreon and Tongol have
absconded with the Unions money. Thus, by way of cross-claim, Hipolito, Jr. and Dee prayed that Carreon
and Tongol be ordered to indemnify them in the event they shall be adjudged personally liable to pay
petitioners.
By way of Reply with Counterclaim (to Answer with Cross Claim),[9] Carreon and Tongol denied the
allegations against them and reiterated their position regarding the defective board resolution.
On January 3, 1994, the RTC denied the Motion to Discharge Writ of Attachment and Dismiss
Complaint.[10] In its Order dated January 4, 1994,[11] the RTC ordered the garnishees San Miguel Corporation,
Magnolia Corporation, San Miguel Foods, Inc., and United Coconut Planters Bank (UCPB) to deliver the
garnished funds to the Clerk of Court, RTC-Manila. Meanwhile, San Miguel Corporation Credit Cooperative,
Inc. (Credit Cooperative) moved to intervene in the case claiming that the garnished funds included
cooperative dues, the seed capital of which appears to have come from the union funds. In its Answer in
Intervention,[12] the Credit Cooperative prayed for the lifting of the garnishment of its funds, arguing that
said funds do not belong to or are owned by the Union but actually came from the individual share capital
of its members.
On September 29, 1994, a Compromise Agreement[13] was entered into by petitioners and Hipolito, Jr., the
latter acting in his capacity as President of the Union and obligating the Union to pay petitioners claim for
attorneys fees in the reduced amount of P1.5 million. This Compromise Agreement, although initially
approved by the RTC, was later on invalidated and set aside by the trial court on the ground of irregularities
surrounding its execution.[14]
The case was then set for pre-trial conference.
Meanwhile, in a local union election of officers held on August 21,

1996, Ma. Pilar B. Aquino (Aquino) and Marcial A. Frisnedi (Frisnedi) were elected as the President and Vice-
President, respectively. As newly elected officers of the Union, they filed a Motion for
Substitution/Intervention,[15]
which was granted in an Order of the RTC dated May 7, 1997. [16]
The RTC also
allowed the Union, under its new set of officers, to amend its answer to the complaint. As a result, an Answer
with Counterclaim[17] was filed on September 29, 1997.
The RTC ordered the garnished funds of the Union in the amount of P3 million to be deposited with the
Philippine National Bank.[18] On May 6, 1999, the trial court denied the Unions motion to resume pre-trial
and instead, set the trial of the case on June 17, July 1 and 15, 1999.[19]
However, on June 16, 1999, petitioners filed a Motion for Summary Judgment.[20] They averred that the case
was ripe for Summary Judgment because there was a judicial admission that legal services were indeed
rendered which resulted to the benefits enjoyed by the workers in the 1992-1995 CBA.
The Union opposed the motion arguing that it only admitted the allegation in the complaint insofar as the
benefits enjoyed by the workers in the 1992-1995 CBA are concerned but not the legal services allegedly
rendered by petitioners. Further, it alleged that the amount claimed as attorneys fees was unconscionable.
On September 14, 1999, the trial court rendered its Decision granting the motion for summary judgment. It
held that the case was ripe for summary judgment in view of the Unions admission, through Hipolito, Jr., of
its monetary obligation to petitioners in the amount of P3 million for the legal services they rendered. The
WHEREFORE, premises considered, the Motion for Summary Judgment is granted and
judgment is hereby rendered in favor of the plaintiffs as alleged in their complaint.
The PNB, Escolta Branch, is therefore ordered to release immediately the Three Million
Pesos (P3,000,000.00) garnished funds in the name of Regional Trial Court of Manila,
Branch 53, in connection with Civil Case No. 93-67275 in favor of herein plaintiffs, in
compliance with this judgment.
SO ORDERED.[21]
The Union appealed to the Court of Appeals which rendered the assailed September 29,
2003 Decision,[22] nullifying the RTCs Decision and remanding the case to the trial court for further
proceedings. The appellate court noted that in the amended answer, the Union denied the legal services
which petitioners claimed to have been rendered. It was also alleged therein that Hipolito, Jr. fraudulently
executed the compromise agreement where he acceded, allegedly on behalf of the Union, to pay the
reduced amount of P1.5 million as attorneys fees. Moreover, it was claimed that Board Resolution No. 93-
02-28 was not validly acted upon by the Board or ratified by the general membership of the Union. The P3
million attorneys fees was also described as unconscionable. Finally, the intervenor Credit Cooperative denied
that the Union owned the funds that were garnished. As found by the Court of Appeals, these were issues
which required the presentation of evidence and which could only be resolved through full-blown trial and
proceedings.

WHEREFORE, finding merit in the appeal, the assailed decision of September 14, 1999 is
NULLIFIED and SET ASIDE. Let the records be remanded to the court a quo for further
proceedings.
SO ORDERED.[23]
Petitioners filed a motion for reconsideration but it was denied.

Issues
Hence, this petition anchored on the following grounds:
THE HONORABLE COURT OF APPEALS HAS DECIDED THE CASE CONTRARY TO

LAW ON SUMMARY JUDGMENT AND TOTALLY IGNORING THE TWO (2) APPLICABLE AND
SIMILAR DECISION[24] AND RESOLUTION[25] OF THE HONORABLE SUPREME COURT
INVOLVING THE SAME PARTIES, SAME ISSUES AND/OR SAME INCIDENT.
THE HONORABLE COURT OF APPEALS ERRONEOUSLY RECOGNIZED

INTERVENOR-RESPONDENT SAN MIGUEL CORPORATION EMPLOYEES CREDIT
COOPERATIVE INC., CONTRARY TO LAW UNDER ARTICLE 242 (D) AND (F) OF THE
LABOR CODE, AS AMENDED AND WHOSE IDENTITY TO BE THAT OF THE DEFENDANT
UNION HAD ALREADY BEEN FINALLY RULED BY THE COURT A QUO.[26]
Petitioners contend that there are no genuine issues necessitating a full-blown trial in view of the Answer
with Cross-Claim[27] filed by Hipolito, Jr. and Dee, which essentially admitted all the allegations of the
complaint. They argue that the Court of Appeals erred in holding that the Answer with Cross-Claim was
superseded and replaced by the Amended Answer with Counterclaim[28]filed by the Union through its new
set of officers in 1997. They allege that their right to be compensated for their legal services and the
reasonableness of the amount of their claim were already heard, tried and upheld in Hipolito, Jr. v. Ferrer-
Calleja[29] and Aquino and Frisnedi v. Atty. Raymundo Hipolito III. [30] Therefore, the controversy cannot
anymore be heard again on the theory of conclusiveness of judgment. Finally, they claim that the Credit
Cooperative has no locus standi before the Court of Appeals and this Court since it did not appeal from the
RTCs Decision as well as the RTCs Order[31] declaring that its funds were part of union funds and were,
therefore, properly garnished. Hence, the Court of Appeals should not have remanded the case to the RTC
but instead affirmed the September 14, 1999 Decision.
Our Ruling
The petition is partially meritorious.

The Answer with Counterclaim filed by Aquino and Frisnedi
merely supplemented the Answer with Cross-Claim filed
by Hipolito, Jr. and Dee; it cannot be deemed to have
replaced the same.
The voluminous records of this case disclose that on September 23, 1993, an Answer with Cross-
Claim[32] essentially admitting all the allegations of the Complaint[33] was filed by defendants Hipolito, Jr. and
Dee, as incumbent officers of the Union. Four years later, or on September 29, 1997, another Answer with
Counterclaim[34] was filed by the Union through its new set of officers. Petitioners contend that it was error
for the Court of Appeals to consider the first answer as expunged by the subsequent answer filed by the
new Union officers. In refutation, respondent Unionasserts that the former answer has been superseded by
its amended answer, which disputes the material allegations of the complaint.
On this point, we agree with petitioners contention that the first answer cannot be deemed to have been
replaced by the subsequent answer filed by the new Union officers. Pleadings are amended in order to allege
facts which occurred prior to the filing of the original pleading. An amended pleading supersedes the pleading
that it amends.[35] In the case at bar, the subsequent answer could neither validly amend the first answer
nor result in the withdrawal of the latter. It is to be noted that the new Union officers, upon their election,
moved for their intervention and substitution on the premise that they became the real party in interest since
the defendants in the case have ceased to be the legal representatives of the Union. Certainly, their election
as new officers is an occurrence which arose after the filing of the first answer. Hence, the purported
amended answer should have been designated as a supplemental answer. A supplemental pleading states
the transactions, occurrences or events which took place since the time the pleading sought to be
supplemented was filed.[36] A supplemental pleading is meant to supply deficiencies in aid of the original
pleading and not to dispense with or substitute the latter. It does not supersede the original, but assumes
that the original pleading is to stand.[37] As such, the Answer with Counterclaim filed by Aquino and Frisnedi
did not result in the withdrawal of the Answer with Cross-Claim filed by the original defendants in this case,
but was merely supplemented by the subsequent answer.
There is an implied admission that petitioners rendered

legal services to the Union.
The supplemental answer contains an averment that petitioners were already duly paid for their
legal services as shown by a Statement of Receipt and Disbursements[38] issued by the union officers
confirming payment of petitioners legal fees. The same averment was likewise evident in the Motion to
Discharge Writ of Attachment and Dismiss Complaint[39] filed by defendants Carreon and
Tongol. Indubitably, even without considering the first answer, which admitted the allegations in the
complaint, an implied admission that petitioners rendered legal services for the Union is apparent in the
pleadings filed by the defendants in the case.
At any rate, the records of the case reveal that petitioners indeed took part in the negotiations for
the consummation of the CBA. The letter of the Union President addressed to San Miguel Corporation
dated July 8, 1992, regarding the Unions CBA proposals for 1992,[40] as well as the Minutes of the First CBA
Negotiation Meeting held on July 23, 1992,[41] indicated petitioners as members of the union negotiating
panel. Furthermore, the Integrated Bar of the Philippines (IBP) confirmed petitioners representation for
the Union in the 1992-1995 collective bargaining negotiations, as shown in an investigation conducted in
connection with the disbarment case filed against petitioner Hipolito III.
Based on the foregoing, we find that petitioners indeed rendered legal services to the Union.
The absence of an express authority from the Board is not

a bar to the recovery of attorneys fees.
The validity of the board resolution put forth by petitioners as basis for their claim as well as the absence of
a written agreement as to the amount of attorneys fees were questioned. However, it is relevant to mention
that in Hipolito, Jr. v. Ferrer-Calleja,[42] we ruled that, notwithstanding the absence of an express authority
from the board, a lawyer who represented the union with the knowledge and acquiescence of the board,
and the acceptance of benefits arising from the service rendered, is entitled to a reasonable value of his
professional services on a quantum meruit basis.This finds application in this case considering that the record
establishes clearly that petitioners acted as union counsel in the negotiation and consummation of the 1992-
1995 CBA and that the benefits from the CBA had been enjoyed by the Union.
In Research and Services Realty, Inc. v. Court of Appeals,[43] we enunciated that quantum meruit simply
means as much as he deserves. In no case, however, must a lawyer be allowed to recover more than what
is reasonable, pursuant to Section 24, Rule 138 of the Rules of Court.[44]
The determination of the amount of reasonable attorneys

fees would require presentation of evidence and a full-
blown trial.
The Rules of Court allows the rendition of a summary judgment if the pleadings, supporting affidavits,
depositions and admissions on file, show that, except as to the amount of damages, there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.[45] There
can be no summary judgment where questions of fact are in issue or where material allegations of the
pleadings are in dispute.[46]
In fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit,
the elements to be considered are generally (1) the importance of the subject matter in controversy, (2) the
extent of services rendered and (3) the professional standing of the lawyer. A determination of these factors
would indispensably require nothing less than a full-blown trial where the party can adduce evidence to
establish the right to lawful attorney's fees and for the other party to oppose or refute the same.[47]
The Union considers the attorneys fees in the amount of P3 million as unreasonable, unconscionable and
without basis. In fixing said amount of attorneys fees, the RTC ratiocinated that the issue of the
reasonableness of the amount claimed as attorneys fees had been heard by the IBP in the disbarment
case. It also relied on the testimony given by Ms. Oswalda Abuerne (Abuerne), the Credit Cooperatives
bookkeeper, on October 4, 1994, as follows:
Q Now, according to your earlier statement in open Court you said that P589,992.83 of the
money now in the possession of the San Miguel Corporation Employees Credit
Cooperative, Inc., came from union members?
A Yes, sir.
Q How did you happen to collect these from the union members, to receive these from the
union members?
A Based on the records of the cooperative, I think it was 1990 CBA, that the union, I mean,
there is an agreement between the members, that the members of the union, I think
all the employees of the San Miguel Corporation signed an agreement that the lump
sum money they will receive they will give five (5%) percent for attorneys fee and
that five (5%) percent, 4% is for attorneys fee and one (1%) percent is for the
seed capital of the cooperative.[48]
Based on this testimony, the RTC concluded that:
The question of unconscionableness of P3,000,000,00 Attorneys fees of Atty. Hipolito has

been heard and tried by the Integrated Bar of the Philippines. Hence, all defenses and
claims of defendant Union now through the new president Aquino shall be dismissed under
Section 7, Rule 9, 1997 Rules of Civil Procedure necessitating a Summary judgment,
attaching therewith the various transcripts of stenographic notes of the Integrated Bar of
the Philippines. That there is [sic] no more triable issues otherwise what was heard by the
IBP on unconscionable attorneys fees would be heard again. That if the defendant Union in
1990 prior to the instant case paid a single lone-lawyer of the Union of 5% broken down as
follows: 4% (2.3 Million as Attorneys fees) and 1% (670,799.52 as seed capital of the
Unions cooperative) as shown in the Courts T.S.N. dated October 4, 1994; the defendant
Union can not now claim the P3 Million Attorneys fees for three (3) lawyers with a higher
and subsequent 1993 CBA benefits as unconscionable.[49]
We find that the RTC erroneously ruled on this matter. First, it does not appear from the Report and
Recommendation[50] of Commissioner Jaime M. Vibar, the IBP Commissioner who tried the disbarment case,
that a pronouncement was made as to how much Hipolito III (petitioner herein) should receive as attorneys
fees. The IBP merely sustained Hipolito IIIs entitlement to compensation for acting as union counsel in
collaboration with Loy, Jr. and Ridao (co-petitioners herein) in concluding the 1992-1995 CBA, but refused
to fix an amount as the matter was already being heard in court. Second, the testimony of Abuerne was
unsubstantiated by evidence, thereby making her an incompetent witness to testify on such matters. The
records of the Credit Cooperative were not presented to substantiate Abuernes statements. The lawyer who
was allegedly paid P2.3 million attorneys fees in 1990 was not also presented to testify. No proof was
proffered to show that Hipolito III was entitled to or actually received the amount. Hence, the RTC arbitrarily
fixed petitioners attorneys fees at P3 million despite insufficient factual basis.
When material allegations are disputed, it cannot be asserted that there is no real issue necessitating
a formal trial.[51] We deem it necessary, therefore, that further inquiry should be made in order for petitioners
to prove the extent of the services they rendered, the time they consumed in the negotiations and such
other matters necessary for the determination of the reasonable value of their services.
Mindful that the instant case has been pending for more than a decade, we painstakingly reviewed
the records. Unfortunately, we find them inadequate and insufficient to determine the reasonableness of the
amount claimed or to fix, for that matter, a reasonable amount of attorneys fees in order to finally resolve
the present controversy. Thus, in order to adequately afford both parties ample opportunity to present their
evidence in support of their respective claims, a remand is inevitable, but only for the purpose of determining
the reasonable amount of attorneys fees on quantum meruit basis.
The imposition of interest on the amount claimed is not

warranted.
The imposition of any interest, as prayed for in this instant petition, on any amount payable to
petitioners is, however, unwarranted. Contracts for attorneys services are unlike any other contracts for the
payment of compensation for any other services which allow the imposition of interest in case of delay under
the provisions of the Civil Code.[52] The practice of law is a profession, not a moneymaking venture.[53]
The Credit Cooperative has no locus standi for failure to

file an appeal.
Petitioners correctly argue that the Credit Cooperative has no locus standi on appeal, since it failed
to file a notice of appeal to the RTCs September 14, 1999 Decision granting the motion for summary
judgment. It was only the Union which appealed the case through a notice of appeal filed by its counsel,
Atty. Luciano R. Caraang (Atty. Caraang). There is also no showing that Atty. Caraang represented both
the Union and the Credit Cooperative in filing such notice of appeal. In fact, the Credit Cooperative did not
deny its failure to file an appeal; however, it argued that it filed with the Court of Appeals an appellants brief
in compliance with the appellate courts directive to submit one. Suffice it to state that the Court of Appeals
directive for the Credit Cooperative to file its brief did not clothe the Credit Cooperative with locus standi on
appeal. The purpose of the filing of the brief is merely to present, in coherent and concise form, the points
and questions in controversy, and by fair argument on the facts and law of the case, to assist the court in
arriving at a just and proper conclusion.[54] The Court of Appeals may have ordered the Credit Cooperative
to submit its brief to enable it to properly dispose of the case on appeal. However, in the Credit Cooperatives
brief, not only did it ask for the reversal of the Summary Judgment but also prayed for the return of its
garnished funds. This cannot be allowed. It would be grave error to grant the relief prayed for without
violating the well-settled rule that a party who does not appeal from the decision may not obtain any
affirmative relief from the appellate court other than what he has obtained from the lower court, if any,
whose decision is brought up on appeal.[55] The rule is clear that no modification of judgment could be
granted to a party who did not appeal.[56]
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals
is AFFIRMED with MODIFICATION that the case is ordered remanded to the court of origin for further
trial but only for the purpose of fixing the petitioners attorneys fees (without interest) on quantum
meruit basis, to be conducted with deliberate dispatch in accordance with this Decision.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
Additional member per Special Order dated November 3, 2009.
[1]
Rollo, pp. 10-41.
[2]
Id. at 43-56; penned by Associate Justice Roberto A. Barrios and concurred in by Associate
Justices Juan Q. Enriquez, Jr. and Arsenio J. Magpale.
[3]
Id. at 58-72; penned by Judge Manuel T. Muro.
[4]
[5]
Id. at 8-9.
[6]
Id. at 12-13; penned by Judge Rosalio G. De La Rosa.
[7]
Id. at 28-34.
[8]
Id. at 43-46.
[9]
Id. at 70-75.
[10]
Id. at 165; penned by Judge Maximo A. Savellana, Jr.
[11]
Id. at 166.
[12]
Id. at 300-306.
[13]
[14]
RTC Order dated August 16, 1996 and August 25, 1997, Records, Vol. III, pp. 933-934 and
1101, respectively.
[15]
Id. at 978-985.
[16]
Id. at 1013.
[17]
Id. at 1112-1117.
[18]
RTC Order dated June 23, 1997, id. at 1073.
[19]
RTC Order dated May 6, 1999, id. at 1250.
[20]
Id. at 1254-1258.
[21]
Rollo, p. 72.
[22]
[23]
Rollo, p. 52.
[24]
In Hipolito, Jr. v. Ferrer-Calleja, G.R. No. 81830, October 1, 1990, 190 SCRA 182, we ruled in
favor of Atty. Raymundo Hipolito IIIs (one of the petitioners in the case at bar) entitlement to
a reasonable value of his professional services on a quantum meruit basis in the amount
of P130,000.00, for acting as union counsel in the negotiation and consummation of the 1986
CBA between the San Miguel Corporation management and SMCEU-PTGWO (herein
respondent Union), although his appointment as union counsel was not authorized by a board
resolution since the legal services were rendered with the knowledge and acquiescence of the
board and that such services redounded to the benefit of the union.
[25]
In the Minute Resolution dated September 19, 2001 in Administrative Case CBD No. 97-521,
entitled Ma. Pilar B. Aquino and Marcial Frisnedi v. Atty. Raymundo Hipolito III, we affirmed
the Integrated Bar of the Philippines (IBP) Resolution dismissing the disbarment case filed by
SMCEU-PTGWOs President Ma. Pilar Aquino and Vice President Marcial Frisnedi (respondents
in the case at bar), against Atty. Raymundo Hipolito III (one of the petitioners in the case at
bar). The IBP upheld Atty. Hipolito IIIs right to attorneys fees for acting in collaboration with
two other lawyers, Atty. Jose Feliciano Loy and Atty. Edgardo Ridao, in representing the Union
SMCEU-PTGWO, whose endeavors led to the conclusion of the 1992-1995 CBA between the
Union and the management.
[26]
Rollo, p. 24.
[27]
Supra note 8.
[28]
Supra note 17.
[29]
Supra note 24.
[30]
Supra note 25.
[31]
RTC Order dated January 4, 1994, Records, Vol. I, p.166; Annex K / L of the Petition, rollo,
pp. 110-112.
[32]
Supra note 8.
[33]
Supra note 4.
[34]
Supra note 17.
[35]
[36]
De Rama v. Court of Appeals, 405 Phil. 531, 547 (2001).
[37]
Asset Privatization Trust v. Court of Appeals, 381 Phil. 530, 545(2000).
[38]
Annex A of the Unions Answer with Counterclaim, Records, Vol. III, p. 1118.
[39]
Supra note 7.
[40]
[41]
Id. at 117.
[42]
Supra note 24.
[43]
334 Phil. 652, 668 (1997).
[44]
Sec. 24. Compensation of attorneys; agreement as to fees. An attorney shall be entitled to
have and recover from his client no more than a reasonable compensation for his services,
with a view to the importance of the subject matter of the controversy, the extent of the
services rendered, and the professional standing of the attorney. No court shall be bound by
the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard
such testimony and base its conclusion on its own professional knowledge. A written contract
for services shall control the amount to be paid therefor unless found by the court to be
unconscionable or unreasonable.
[45]
RULES OF COURT, Rule 35.
[46]
Cotabato Timberland Co., Inc. v. C. Alcantara and Sons, Inc., G.R. No. 145469, May 28, 2004,
430 SCRA 227, 236.
[47]
Rilloraza, Africa, De Ocampo and Africa v. Eastern Telecommunication Phils., Inc., 369 Phil. 1,
11-12 (1999).
[48]
TSN, October 4, 1994, Records, Vol. III, pp. 1166-1167.
[49]
[50]
Annex F of the Petition for Review on Certiorari, rollo, pp. 75-82.
[51]
Cotabato Timberland Co., Inc. v. C. Alcantara and Sons, Inc., supra note 46.
[52]
Cortes v. Court of Appeals, 443 Phil. 42, 54 (2003).
[53]
Atty. Victoriano V. Orocio v. Edmund P. Anguluan, Lorna T. Dy and National Power
Corporation, G.R. Nos. 179892-93, January 30, 2009.
[54]
Philippine Coconut Authority v. Corona International, Inc., 395 Phil. 742, 750 (2000).
[55]
Go v. Court of Appeals, 188 Phil. 540, 543 (1980).
[56]
Pepsi Cola Products (Phils) v. Patan, Jr., 464 Phil. 517, 523 (2004).
Supreme Court
Manila
SECOND DIVISION
POWER SITES AND SIGNS, INC., G.R. No. 163406
Petitioner,
Present:
BRION,
DEL CASTILLO, and
ABAD, JJ.
UNITED NEON (a Division of Ever
Corporation), Promulgated:
x---------------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Before a court grants injunctive relief, the following must be demonstrated: that complainant is entitled to
the relief sought, the actual or threatened violation of complainants rights, the probability of irreparable
injury, and the inadequacy of pecuniary compensation as relief.[1] Otherwise, there is no basis for the
issuance of a writ of injunction.
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court of the Decision[2] dated January
29, 2004 and the Resolution[3] dated April 28, 2004 of the Court of Appeals in CA-G.R. SP No. 72689.
Petitioner's Factual Allegations
Power Sites and Signs, Inc. (Power Sites) is a corporation engaged in the business of installing outdoor
advertising signs or billboards. It applied for, and was granted, the necessary permits to construct a billboard
on a site located at Km. 23, East Service Road, Alabang, Muntinlupa (the site).[4] After securing all the
necessary permits, Power Sites began to construct its billboard on the site.
Subsequently, in March 2002, petitioner discovered that respondent United Neon, a Division of Ever
Corporation (United Neon), had also began installation and erection of a billboard only one meter away from
its site and which completely blocked petitioners sign. Thus, on March 5, 2002, petitioner requested United
Neon to make adjustments to its billboard to ensure that petitioners sign would not be
obstructed.[5] However, petitioners repeated requests that respondent refrain from constructing its billboard
were ignored,[6] and attempts to amicably resolve the situation failed.[7]
Respondent's Factual Allegations
In January 2002, United Neon and Power Sites separately negotiated with Gen. Pedro R. Balbanero to lease
a portion of a property located at East Service Road, South Superhighway, Alabang, Muntinlupa City, in order
to build a billboard on the premises.[8] Gen. Balbanero rejected Power Sites proposal and decided to lease
the premises to United Neon. Thus, on January 26, 2002, United Neon and Gen. Balbanero entered into a
Contract of Lease (the lease contract).[9]
On January 28, 2002, United Neon registered the lease contract with the Outdoor Advertising Association of
the Philippines (OAAP), in accordance with Article 11, Sec. 3.6 of the OAAP Code of Ethics/Guidelines.[10] By
virtue of its registration of the Contract of Lease with the OAAP, United Neon alleged that it obtained the
exclusive right to the line of sight over the leased property, in accordance with Article 11, Section 3.7 of the
OAAP Code of Ethics/Guidelines.[11]
Sometime in February 2002, United Neon started construction of its billboard. Power Sites, after failing to
lease the premises from Gen. Balbanero, negotiated with the owner of the adjacent property and secured
its own lease in order to erect a billboard that would disrupt United Neons exclusive line of sight.[12] To protect
its rights, on March 6, 2002, United Neon urged Power Sites to relocate the latters sign to another location,
or to construct it in such a way that the sign would not obstruct the view of United Neons billboard.[13]
Legal Proceedings
In a letter-complaint dated June 29, 2002, petitioner requested the Muntinlupa City Engineer and Building
Official to revoke United Neons building permit and to issue a Cease and Desist Order against it.[14] On July
4, 2002, the City Building Official, Engineer Robert M. Bunyi, referred the complaint to United Neon for
comment:
This refers to your ongoing construction of signboard located at East Service Road, Alabang,
City of Muntinlupa, which was granted Building Permit No. 12-02-05-357 dated May 22,
2002 and which is the object of an attached formal complaint x x x
Relative to the foregoing and per inspection conducted by this office, we have noted that
your sign is 4 meters away from an existing and on going sign construction with building
permit no. 12-02-02-111 which was granted earlier than your permit.
We therefore direct you to submit your position and all your related supporting evidence
whether or not you violated the Code of Ethics of Advertisement which is expressly
supported by the National Building Code (PD 1096) Rule V, Section 2.1 of the General
Provision and to maintain status quo by desisting from all construction activities in the
meantime that this matter is being studied for resolution by this office.[15]
However, before a resolution could be made by the City Building Official, Power Sites filed on July
1, 2002, a Petition for Injunction with Writ of Preliminary Injunction and Prayer for Temporary Restraining
Order and Damages[16] against United Neon before the Regional Trial Court (RTC) of Muntinlupa City, which
was raffled to Branch 256 and docketed as Civil Case No. 02-143.
After the filing of the parties respective memoranda,[17] which took the place of testimonial evidence,
the RTC granted petitioners prayer for the issuance of a preliminary injunction in an Order dated August 1,
2002.[18] The Writ of Injunction was issued on the same day.[19] The RTC ruled:
After considering the arguments raised by both parties in their respective Memoranda, this
Court finds that the plaintiff is entitled to the relief sought considering that the commission
and/or continuance of the act of installing the signage by the respondent during the litigation
would work grave injustice and irreparable damage to petitioner since it would surely cause
immense loss in profit and possible damage claims from its clients because it would certainly
cover the sign of the petitioner's clients.
xxxx
WHEREFORE, this Court finds the plaintiffs application for the issuance of a Writ of
Preliminary Injunction to be meritorious and well taken.
Let therefore a Writ of Preliminary Injunction be issued against the respondent UNITED
NEON to cease and desist from constructing/installing the signage and to dismantle any
existing sign, girds [sic] or post that support said sign.
x x x x[20]
United Neon then filed a Petition for Prohibition and Certiorari with Application for Temporary
Restraining Order and/or Writ of Preliminary Injunction[21] before the Court of Appeals, which was docketed
as CA-G.R. SP No. 72689. In brief, United Neon claimed that the grant of preliminary injunction was
unwarranted, particularly because Power Sites only prayed for a prohibitory injunction in its original petition,
but the Order went as far as to grant a mandatory injunction in favor of Power Sites. United Neon prayed
that the Court of Appeals invalidate the RTCs Order and Writ dated August 1, 2002, issue a temporary
restraining order enjoining the RTC from further proceeding with Civil Case No. 02-143, and, after hearing,
enjoin the RTC from enforcing the August 1, 2002 Order.
After the parties exchange of pleadings, the Court of Appeals invalidated the Order of the RTC dated
August 1, 2002 and the Writ of Preliminary Injunction, but denied the prayer for prohibition, to wit:
To warrant the issuance of an injunction, whether prohibitory or mandatory, private
respondent's right to the line of sight must be clear. In this case, there is a cloud of doubt
as to private respondent's right to the claimed line of sight as petitioner had manifested prior
registration of its billboard with the Outdoor Advertising Association of the Philippines
(OAAP) which allegedly gave petitioner a protection of its exclusive right to the line of sight.
Injunction should be issued when there is a substantial challenge to the claimed right. The
conflicting claims by the parties to the right to the line of sight present an impression that
the right claimed by private respondent as its basis for the prayer for the injunctive relief is
far from clear. While it is not required that private respondent's right be conclusively
established at this stage, it is nevertheless necessary to show, at least tentatively, that it
exists and is not vitiated by any substantial challenge or contradiction, such as has been
made by petitioner.
Even the issue of the status quo ante cannot be determined clearly in this case. The status
quo ante referred to by private respondent was seriously challenged by petitioner by
claiming it was the first to build its structure. Hence, public respondent had no clear basis
for the status quo ordered in the injunctive order.
xxxx
On the matter of the prayer for prohibition, it is incorrect and improper to declare public
respondent incapable of rendering a fair trial due to the erroneous injunctive order issued.
Petitioner may avail of other legal remedies if it truly believes that public respondent can no
longer deliver fair judgment in this case.
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED, as follows:
1. The assailed Order dated August 1, 2002 and the Writ of Preliminary Injunction
issued by public respondent in Civil Case No. 02-143 are hereby declared NULL
AND VOID for having issued with grave abuse of discretion amounting to lack
or excess of jurisdiction; and
2. The prayer for prohibition is hereby DENIED for lack of merit.

SO ORDERED.[22]
Petitioners Motion for Partial Reconsideration was denied by the Court of Appeals in a Resolution
dated April 28, 2004.[23] Hence, this petition.
Arguments
In essence, Power Sites claims that the Court of Appeals gravely erred in invalidating the Writ of
Preliminary Injunction for the following reasons:
1) Power Sites has a better right over the line of sight because it constructed its billboard ahead of the
respondent and is therefore entitled to protection under the National Building Code. United Neon
could not have begun construction ahead of Power Sites (allegedly in February 2002), since it only
obtained its Building Permit in May of 2002. Further, the alleged registration of the lease contract
with the OAAP does not bind Power Sites, since the latter is not a member of the OAAP. In any
event, proof of the alleged registration of the lease contract was not presented before the trial court;
all that was submitted in evidence was an application letter to the OAAP.
2) Even if its original petition did not contain a prayer for the issuance of a mandatory injunction, its
Memorandum before the trial court requested the grant of a mandatory injunction.[24] United Neon
was still in the initial stages of construction at the time the original petition was filed; hence, Power
Sites only prayed for the issuance of a preliminary prohibitory injunction to preserve the status
quo. However, at the time the parties were required to file their respective memoranda, United
Neons structure was already fully completed. Thus, a preliminary mandatory injunction was
required.
3) The Court of Appeals should have dismissed outright the Petition for Certiorari, since United Neon failed
to attach all the relevant pleadings, in disregard of the Rules of Court.
On the other hand, United Neon claims that the Court of Appeals Decision and Resolution were
correct, and the trial courts Order dated August 1, 2002 and the writ of injunction were patently illegal, for
the following reasons:
1) Power Sites has no clear and unmistakable right to be protected, since it failed to register its lease contract
with the OAAP. In contrast, it is United Neon that has the exclusive right to the line of sight because
United Neon began construction ahead of Power Sites, and registered its lease with the OAAP.
2) The issuance of the preliminary mandatory injunction by the RTC, which went beyond the allegations and
prayer in the initiatory petition, constituted grave abuse of discretion amounting to lack or excess of
jurisdiction.
3) Power Sites did not even have the required permits to construct a billboard, since all the permits issued
by the Muntinlupa City government were issued to HCLC Resources and Development Corporation,
and not to Power Sites.
4) Power Sites willfully violated the rules against forum shopping, since it sought the same relief from the
Muntinlupa City Building Official and before the RTC.
Our Ruling
We find the grant of a preliminary mandatory injunction by the trial court not warranted.
Consequently, we affirm the Decision of the Court of Appeals dated January 29, 2004 and its Resolution
dated April 28, 2004 in CA-G.R. SP No. 72689.
Procedural Issue
The Court of Appeals properly exercised its

discretion in giving due course to the petition
Power Sites claims that the Court of Appeals should not have entertained the petition
for certiorari because United Neon failed to attach the requisite documentary evidence to its petition.
We are not persuaded. Section 1 of Rule 65 of the Rules of Court provides:
Section 1. Petition for certiorari. x x x
The petition shall be accompanied by a certified true copy of the judgment, order
or resolution subject thereof, copies of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum shopping as provided in the third paragraph
of Section 3, Rule 46.
A plain reading of the provision indicates that there is no specific enumeration of the documents
that must be appended to the petition, other than a certified true copy of the assailed judgment, order, or
resolution. In Condes v. Court of Appeals,[25] we held that the acceptance or rejection by the Court of Appeals
of a petition for certiorari rests in its sound discretion. Thus:
x x x The initial determination of what pleadings, documents or orders are relevant and
pertinent to the petition rests on the petitioner. Thereafter, the CA will review the petition
and determine whether additional pleadings, documents or orders should have been
attached thereto.
The appellate court found the present petition sufficient in form when it proceeded to decide
the case on the merits, without raising any question as to the sufficiency of the
petition. Acceptance of a petition for certiorari, as well as granting due course
thereto is addressed to the sound discretion of the court. Where it does not
appear, as in this case, that in giving due course to the petition for certiorari,
the CA committed any error that prejudiced the substantial rights of the parties,
there is no reason to disturb its determination that the copies of the pleadings
and documents attached to the petition were sufficient to make out a prima
facie case. (Emphasis supplied)
In the same manner, we find no reversible error when the Court of Appeals gave due course to the
petition, since it evidently found that the documents attached to the petition were sufficient.
Substantive Issues
The applicant must show that it is entitled to the
relief sought, and that acts are being undertaken
in violation of the applicants rights
We emphasize that at this stage of the proceedings, we are not concerned with the merits of the
case, but only with the propriety of the issuance of the preliminary injunction by the trial court. After a
painstaking review of the arguments and evidence presented by the parties, we find that petitioner was not
entitled to the grant of a preliminary injunction for two reasons: first, the alleged right sought to be protected
by the petitioner was not clearly demonstrated; second, the requirement of grave and irreparable injury is
absent.
A preliminary injunction may be granted only where the plaintiff appears to be clearly entitled to the
relief sought[26] and has substantial interest in the right sought to be defended.[27]While the existence of the
right need not be conclusively established, it must be clear.[28] The standard is even higher in the case of a
preliminary mandatory injunction, which should only be granted
x x x in cases of extreme urgency; where the right is very clear; where considerations of
relative inconvenience bear strongly in complainant's favor; where there is a willful and
unlawful invasion of plaintiff's right against his protest and remonstrance, the injury being a
continuing one; and where the effect of the mandatory injunction is rather to reestablish
and maintain a preexisting continuing relation between the parties, recently and arbitrarily
interrupted by the defendant, than to establish a new relation x x x.[29]
The evidence presented before us in support of a preliminary injunction is weak and inconclusive,
and the alleged right sought to be protected by petitioner is vehemently disputed. We note that both parties
allege that: (1) they began construction of their respective billboards first; (2) the billboard of the other party
blocks the others exclusive line of sight; (3) they are entitled to protection under the provisions of the National
Building Code and OAAP Code of Ethics/Guidelines.[30] However, we are not in a position to resolve these
factual matters, which should be resolved by the trial court. The question of which party began construction
first and which party is entitled to the exclusive line of sight is inextricably linked to whether or not petitioner
has the right that deserves protection through a preliminary injunction. Indeed, the trial court would be in
the best position to determine which billboard was constructed first, their actual location, and whether or
not an existing billboard was obstructed by another.
At this juncture, it is not even clear to us what relationship Power Sites has to the billboard that
would entitle it to seek an injunction, since the documents before us indicate that the barangay clearance
and the Billboard/Signboard permit were issued to HCLC Resource and Development Corporation, while the
Building Permit and Electrical Permit were issued to Mr. Renato Reyes So.[31] As regards the identity of these
parties, the explanation thus far presented was
HCLC Resource and Development Corp. (HCLC) is a corporation whose majority shares of
stock are owned by Mr. Renato So, the same majority owner and President of Power Sites.
HCLC and Power Sites are closely connected. HCLC was the entity which constructs the
billboards of Power Sites, while the latter remains the owner of the billboards.
Needless to say, this flies in the face of the basic principle in corporation law that a corporation has
a personality separate and distinct from those of its stockholders and other corporations to which it may be
connected. Nonetheless, these are matters that are better resolved in the course of trial.
The damages alleged by petitioner can be

quantified; it cannot be considered as Grave and
Irreparable Injury as understood in law
It is settled that a writ of preliminary injunction should be issued only to prevent grave and
irreparable injury, that is, injury that is actual, substantial, and demonstrable. Here, there is no irreparable
injury as understood in law. Rather, the damages alleged by the petitioner, namely, immense loss in profit
and possible damage claims from clients and the cost of the billboard which is a considerable amount of
money[32] is easily quantifiable, and certainly does not fall within the concept of irreparable damage or injury
as described in Social Security Commission v. Bayona:[33]
Damages are irreparable within the meaning of the rule relative to the issuance of
injunction where there is no standard by which their amount can be measured
with reasonable accuracy. An irreparable injury which a court of equity will enjoin
includes that degree of wrong of a repeated and continuing kind which produce hurt,
inconvenience, or damage that can be estimated only by conjecture, and not
by any accurate standard of measurement. An irreparable injury to authorize an
injunction consists of a serious charge of, or is destructive to, the property it affects, either
physically or in the character in which it has been held and enjoined, or when the property
has some peculiar quality or use, so that its pecuniary value will not fairly
recompense the owner of the loss thereof. (Emphasis supplied)
Here, any damage petitioner may suffer is easily subject to mathematical computation and, if
proven, is fully compensable by damages.[34] Thus, a preliminary injunction is not warranted. As previously
held in Golding v. Balatbat,[35] the writ of injunction
should never issue when an action for damages would adequately compensate the injuries
caused. The very foundation of the jurisdiction to issue the writ rests in the probability of
irreparable injury, the inadequacy of pecuniary compensation, and the prevention of the
multiplicity of suits, and where facts are not shown to bring the case within these conditions,
the relief of injunction should be refused.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated January 29, 2004 in
CA-G.R. SP No. 72689 declaring as null the August 1, 2002 Order of the Regional Trial Court of Muntinlupa
City, Branch 256 and the Writ of Injunction in Civil Case No. 02-143, and denying the prayer for
prohibition, and its Resolution dated April 28, 2004 denying the Motion for Reconsideration, are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ROBERTO A. ABAD
Associate Justice
ATTESTATION
ANTONIO T. CARPIO
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
**
[1]
See Golding v. Balatbat, 36 Phil. 941 (1917).
[2]
Rollo, pp. 36-46; penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by
Associate Justices Eubolo G. Verzola and Edgardo F. Sundiam.
[3]
Id. at 48-50; penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by Associate
Justices Mario L. Guaria III and Edgardo F. Sundiam.
[4]
Id. at 68-74; the records reflect that a barangay clearance was granted to HCLC Resources and
Development Corporation on February 1, 2002. Mr. Renato Reyes So was granted a Building Permit and
an Electrical Permit by the Muntinlupa City Engineer and Building Official on February 21, 2002. On that
same date, HCLC Resources and Development Corporation was granted a Signboard/Building Permit.
Mr. Renato So obtained an exemption from securing a Contractor's Permit and a Temporary Use Permit
on February 15, 2001, and paid the required fees on February 21, 2002.
[5]
Id. at 75.
[6]
Id. at 77; on June 18, 2002, petitioner again wrote a letter to respondent reiterating that the proposal to
share space was turned down, and appealing to respondent's sense of justice and fair play.
[7]
Id. at 76; United Neons President, Mr. Danny Lim, suggested that the space be shared on the site.
However, petitioner's client was unwilling to accede to the suggestion. Thus, Mr. Lim's offer was declined.
This decision was made known to respondent in a letter dated May 10, 2002.
[8]
Id. at 117.
[9]
Id. at 118-119.
[10]
The trade practices of the outdoor advertising industry are regulated by the Outdoor Advertising
Association of the Philippines (OAAP). Article 11, Section 3.6 of the OAAP Code of Ethics/Guidelines
provides:
3.6 A duly signed memorandum of agreement, lease agreement or contract of lease with
the site owner shall be required before an outdoor company can put up markers on a leased
site. Markers must include a prominent sign indicating the company that has leased the site.
It is highly suggested that said document, together with the general details of the
intended billboard structure, (such as display dimensions, whether single or double
face and structure height), be registered with the Secretariat for recording
purposes to protect its intended line of sight rights against possible challenge or
debate by other outdoor companies.
[11]
Article 11, Section 3.7 provides:
3.7 Once registered with the OAAP, the outdoor advertising firm shall have exclusive rights
to the intended line-of-sight for the structure for a period of four (4) months from the date
of registration. Failure to start construction of the structure within the prescribed four (4)
month period to its registered dimensions shall render the said line-of-sight open.
The outdoor advertising firm shall have a period of one (1) year from the date of registration
to complete the structure in accordance with its registered dimensions. At the expiration of
the one (1) year period, the outdoor advertising firms exclusive right to the line-of-sight shall
pertain only to the line-of-sight of the structure, taking into consideration the dimensions
thereof at the time.
[12]
Rollo, pp. 121-123.
[13]
Id. at 120.
[14]
Id. at 96-108.
[15]
Id. at 109.
[16]
Id. at 52-59.
[17]
Id. at 60-123; on July 28, 2002, petitioner and respondent simultaneously filed their respective
Memoranda.
[18]
Id. at 124-125; penned by Judge Alberto L. Lerma.
[19]
Id. at 434.
[20]
Id. at 124-125.
[21]
Id. at 126-177.
[22]
Id. at 45-46.
[23]
Id. at 48-50.
[24]
The Memorandum stated:
WHEREFORE, premises considered, it is respectfully prayed that the Honorable Court issue
a Writ of Preliminary Injunction directing respondent UNITED NEON to dismantle any
existing sign, grids or post that support said sign and to cease and desist from installing the
signage until the final resolution of the case.
[25]
G.R. No. 161304, July 27, 2007, 528 SCRA 339, 349-350.
[26]
RULES OF COURT, Rule 58; Sec. 3. See also Buayan Cattle Co., Inc. v. Quintillan, 213 Phil. 244, 254
(1984); Toyota Motor Philippines Corporation v. Court of Appeals, G.R. No. 102881, December 7, 1992,
216 SCRA 236, 251.
[27]
Angela Estate, Inc. v. Court of First Instance of Negros Occidental, 133 Phil. 561, 572 (1968).
[28]
Developers Group of Companies, Inc. v. Court of Appeals, G.R. No. 104583, March 8, 1993, 219 SCRA
715, 721.
[29]
Manila Electric Railroad and Light Company v. Del Rosario, 22 Phil. 433 (1912).
[30]
Rule V(B), Sec. 1 of the National Building Codes Implementing Rules provides that signs shall adhere to
the Code of Ethics for Advertising and Promotions and to the rules and regulations of the appropriate
agency in charge of the conduct of business. In this connection, Sec. 3.3 of the OAAP Code of
Ethics/Guidelines provides that parties must avoid installation of an advertising sign that will cover another
sign which has been existing.
[31]
Supra note 4.
[32]
Id.
[33]
115 Phil. 105, 110 (1962).
[34]
Ollendorff v. Abrahamson, 38 Phil. 585 (1918).
[35]

Supreme Court
Manila
EN BANC
EUGENIO S. CAPABLANCA, G.R. No. 179370

Petitioner,
Present:
PUNO, C. J.,
CARPIO,
CORONA,
CARPIO MORALES,
CHICO-NAZARIO,
VELASCO, JR.,
- versus - NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD, and
VILLARAMA, JJ.
CIVIL SERVICE COMMISSION,* Promulgated:

x--------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Uniformed members of the Philippine National Police (PNP) are considered employees of the
National Government, and all personnel of the PNP are subject to civil service laws and
regulations.[1] Petitioner cannot evade liability under the pretense that another agency has primary
jurisdiction over him. Settled is the rule that jurisdiction is conferred only by the Constitution or the
law.[2] When it clearly declares that a subject matter falls within the jurisdiction of a tribunal, the party
involved in the controversy must bow and submit himself to the tribunal on which jurisdiction is conferred.
Factual Antecedents
On October 3, 1996, the PNP-Regional Office 10 appointed petitioner Eugenio S. Capablanca into the PNP
service with the rank of Police Officer 1 (PO1) with a temporary status[3] and was assigned at the PNP Station
in Butuan City. On November 29, 1998, petitioner took the PNP Entrance Examination conducted by the
National Police Commission (NAPOLCOM)[4] and passed the same. On July 28, 2000, he took the Career
Service Professional Examination-Computer Assisted Test (CSP-CAT) given by the Civil Service Commission
(CSC)[5] and likewise passed the same. Thereafter, or on October 3, 2000, the Regional Director of Police
Regional Office XIII conferred upon petitioner the permanent status as PO1.[6]
Proceedings before the Civil Service Commission
On October 15, 2001, the CSC Caraga Regional Office XIII (CSC Caraga) through its Regional Director
Lourdes Clavite-Vidal informed PO1 Capablanca about certain alleged irregularities relative to the CSP-CAT
which he took on July 28, 2000. According to the CSC, the person in the picture pasted in the Picture Seat
Plan (PS-P) is different from the person whose picture is attached in the Personal Data Sheet (PDS) and that
the signature appearing in the PS-P was different from the signature affixed to the PDS.[7] The CSC further
informed petitioner that such findings of alleged examination irregularities constituted the offense of
dishonesty if prima facie evidence was established.
A Preliminary Investigation was scheduled on November 16, 2001;[8] petitioner failed to appear but was
represented by counsel who moved to dismiss the proceedings. He argued that it is the NAPOLCOM which
has sole authority to conduct entrance and promotional examinations for police officers to the exclusion of
the CSC, pursuant to Civil Service Commission v. Court of Appeals.[9] Thus, the CSP-CAT conducted on July
28, 2000 was void. Moreover, he alleged that the administrative discipline over police officers falls under the
jurisdiction of the PNP and/or NAPOLCOM.[10]
In an Order[11] dated November 16, 2001, the CSC Caraga held that there was no dispute that it was the
NAPOLCOM which had the sole authority to conduct the entrance and promotional examinations of police
officers. However, since petitioner submitted a CSC Career Service Professional eligibility and not a
NAPOLCOM eligibility to support his appointment on a permanent status, then the CSC had jurisdiction to
conduct the preliminary investigation.
The dispositive portion of the CSC Order dated November 16, 2001, reads:
WHEREFORE, the Motion to Dismiss filed by Atty. Poculan, for his client, Eugenio
S. Capablanca is hereby DENIED for lack of merit. Accordingly, Capablanca is directed to
submit his counter-affidavit within five (5) days from receipt hereof.[12]
To prevent the CSC Caraga from further proceeding with the conduct of the administrative investigation,
PO1 Capablanca filed on January 16, 2002 a Petition[13] for prohibition and injunction with a prayer for the
issuance of a temporary restraining order and writ of preliminary injunction with the Regional Trial Court of
Butuan. The said court issued a 20-day temporary restraining order and set the case for summary hearing
on February 8, 2002 to resolve the application for preliminary injunction.[14]
Instead of filing its Answer, the CSC Caraga moved to dismiss the case,[15] arguing inter alia that: a) PO1
Capablanca failed to exhaust administrative remedies by appealing before the CSC Central Office instead of
filing a petition before the trial court; b) PO1 Capablancas reliance on Civil Service Commission v. Court of
Appeals[16] was misplaced because what he took was a career service professional examination and not a
police entrance examination; and c) the CSC was not stripped of its original disciplinary jurisdiction over all
cases involving civil service examination anomalies.
In its March 8, 2002 Resolution,[17] the trial court denied CSCs Motion to Dismiss for lack of merit. It held that
the CSC had no jurisdiction to conduct the preliminary investigation, much less to prosecute PO1
Capablanca. The dispositive portion of the Resolution, reads:
WHEREFORE, in view of all the foregoing, respondents motion to dismiss is denied for lack
of merit. As a consequence and for want of jurisdiction, herein respondent, its Regional
Director, Region 13 Caraga, or its officers, attorneys agents, or any person acting for and
its behalf, is hereby ordered to finally, permanently and perpetually desist, cease and stop
from proceeding or conducting any administrative investigation against the petitioner
Eugenio S. Capablanca.
No pronouncement as to costs.
Its Motion for Reconsideration[19] unheeded,[20] the CSC Caraga filed a Petition
for Certiorari[21] before the Court of Appeals praying for the nullification of the Resolution of the trial court,
and at the same time insisting on its jurisdictional power to prosecute the administrative case involving
dishonesty and that PO1 Capablanca failed to exhaust administrative remedies.
In his Comment,[22] the petitioner contended that there was no need to exhaust administrative remedies
because the proceeding before the CSC was an absolute nullity, and that it was the NAPOLCOM, the Peoples
Law Enforcement Board (PLEB), or PNP which had primary jurisdiction over the alleged irregularities in the
CSP-CAT. He alleged that the case involved a purely legal issue and that he would suffer irreparable injury
if he should still await the outcome of the administrative action before the CSC Central Office. PO1
Capablanca stressed that the July 28, 2000 CSP-CAT was ineffectual as far as he was concerned, because it
was in the nature of a promotional examination for policemen and was solely within
the province of NAPOLCOM.
On March 22, 2006, the Court of Appeals rendered its Decision[23] granting CSCs petition. The Court of
Appeals found that PO1 Capablanca prematurely resorted to court intervention when the remedy of appeal
to the CSC Central Office was available. Upholding the jurisdiction of the CSC Caraga, the appellate court
declared that the subject of the latters preliminary investigation was not with respect to PO1 Capablancas
acts in the conduct of his duties as a police officer, but with respect to the authenticity of the documents he
submitted before the CSC Caraga in support of his application for permanent status as well as the veracity
of its contents. It held that pursuant to the CSC's constitutional duty to protect the integrity of the civil service
system, it acted within its authority to investigate irregularities or anomalies involving civil service
examinations, and to ascertain whether a prospective civil service appointee is qualified in accordance with
all the legal requirements.
Petitioner PO1 Capablanca assigns the following errors:
1
THE HONORABLE COURT OF APPEALS, WITH DUE RESPECT, GRAVELY ERRED IN
DECLARING THAT RESPONDENT CSC HAS JURISDICTION AND DISCIPLINARY
AUTHORITY OVER HEREIN PETITIONER, A MEMBER OF THE PHILIPPINE NATIONAL
POLICE.
1-A
GRANTING THAT IT HAS, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT
DECLARING THAT IT HAS ONLY APPELLATE JURISDICTION OVER THE CASE AND IT IS
THE NATIONAL POLICE COMMISSION (NAPOLCOM) WHICH HAS THE JURISDICTION TO
CONDUCT INITIATORY INVESTIGATION OF THE CASE, AS HELD IN THE CASE
OF MIRALLES VS. GO, G.R. NO. 139943, JANUARY 18, 2001.
II
THE HONORABLE COURT OF APPEALS, WITH DUE RESPECT GRAVELY ERRED IN
DECLARING THAT HEREIN PETITIONER FAILED TO EXHAUST ADMINISTRATIVE
REMEDIES.[24]
The CSC, through the Office of the Solicitor General (OSG) argues that in pursuing a case against one who
undermines the integrity of the CSC examinations, the CSC Caraga was only acting within its mandated
powers and duties. The OSG clarifies that the PNP does not have exclusive jurisdiction over disciplinary
cases. Rather, its jurisdiction over such cases is concurrent with that of the CSC. It also argues that Civil
Service Commission v. Court of Appeals[25] is irrelevant to petitioner's situation because the ruling therein
does not affect the authority of the CSC to conduct the CSP examination and to investigate examination
anomalies. Lastly, the OSG contends that petitioner should not have directly resorted to court action, because
the CSC proper could still review the decisions and actions of the CSC Caraga.[26]
Issue
The case at bar boils down to the issue of whether the CSC Caraga has jurisdiction to conduct the preliminary
investigation of a possible administrative case of dishonesty against PO1 Capablanca for alleged CSP
examination irregularity.
Our Ruling
The CSC, as the central personnel agency of the Government, is mandated to establish a career service, to
strengthen the merit and rewards system, and to adopt measures to promote morale, efficiency and integrity
in the civil service.[27] The civil service embraces all branches, subdivisions, instrumentalities, and agencies of
the government, including government-owned or controlled corporations with original
charters.[28] Specifically, Section 91 of Republic Act (RA) No. 6975 (1990) or the Department of Interior and
Local Government Act of 1990 provides that the Civil Service Law and its implementing rules and regulations
shall apply to all personnel of the Department, to which herein petitioner belongs.
Section 12 of Executive Order (EO) No. 292 or the Administrative Code of 1987, enumerates the powers
and functions of the CSC, to wit:
SEC. 12. Powers and Functions. - The Commission shall have the following powers
and functions:
(1) Administer and enforce the constitutional and statutory provisions on the merit system
for all levels and ranks in the Civil Service;
xxxx
(7) Control, supervise and coordinate Civil Service examinations. x x x
xxxx
(11) Hear and decide administrative cases instituted by or brought before it directly or on
appeal, including contested appointments, and review decisions and actions of its
offices and of the agencies attached to it. x x x
In addition, Section 28, Rule XIV of the Omnibus Civil Service Rules and Regulations specifically
confers upon the CSC the authority to take cognizance over any irregularities or anomalies connected with
the examinations, thus:
Sec. 28. The Commission shall have original disciplinary jurisdiction over all its officials and
employees and over all cases involving civil service examination anomalies or irregularities.
To carry out this mandate, the CSC issued Resolution No. 991936, or the Uniform Rules on
Administrative Cases in the Civil Service, empowering its Regional Offices to take cognizance of cases
involving CSC examination anomalies:
SECTION 6. Jurisdiction of Civil Service Regional Offices. - The Civil Service Commission
Regional Offices shall have jurisdiction over the following cases:
A. Disciplinary
1. Complaints initiated by, or brought before, the Civil Service Commission Regional
Offices provided that the alleged acts or omissions were committed within the
jurisdiction of the Regional Office, including Civil Service examination anomalies or
irregularities and the persons complained of are employees of agencies, local or
national, within said geographical areas;
xxxx
Based on the foregoing, it is clear that the CSC acted within its jurisdiction when it initiated the conduct of a
preliminary investigation on the alleged civil service examination irregularity committed by the petitioner.
However, petitioner contends that a citizen who has complaints against a police officer should bring his
complaint before the following, citing Section 41 of RA 6975,[29] to wit:
(a) x x x x
(1) Chiefs of police, where the offense is punishable by withholding of privileges, restriction
to specified limits, suspension or forfeiture of salary, or any combination thereof for a period
not exceeding fifteen (15) days;
(2) Mayors of cities or municipalities, where the offense is punishable by withholding of

privileges, restriction to specified limits, suspension or forfeiture of salary, or any
combination thereof, for a period of not less than sixteen (16) days but not exceeding thirty
(30) days;
(3) People's Law Enforcement Board, as created under Section 43 hereof, where the offense
is punishable by withholding of privileges, restriction to specified limits, suspension or
forfeiture of salary, or any combination thereof, for a period exceeding thirty (30) days; or
by dismissal.
xxxx
(c) Exclusive Jurisdiction. - A complaint or a charge filed against a PNP member shall be
heard and decided exclusively by the disciplining authority who has acquired original
jurisdiction over the case and notwithstanding the existence of concurrent jurisdiction as
regards the offense: Provided, That offenses which carry higher penalties referred to a
disciplining authority shall be referred to the appropriate authority which has jurisdiction
over the offense.
Based on the foregoing, petitioner avers that the CSC does not have the authority to conduct an
initiatory investigation of the case, but it only has appellate jurisdiction to review the decision of any of the
disciplining authorities above mentioned. Petitioner anchors his argument on the following provisions of EO
292 stating that the heads of departments, agencies, offices or bureaus should first commence disciplinary
proceedings against their subordinates before their decisions can be reviewed by the CSC:
Section 47, Book V of EO 292:
Disciplinary Jurisdiction. - (1) The Commission shall decide upon appeal all administrative
disciplinary cases involving the imposition of a penalty of suspension for more than thirty
days, or fine in an amount exceeding thirty days' salary, demotion in rank or salary or
transfer, removal or dismissal from office x x x
(2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and
municipalities shall have jurisdiction to investigate and decide matters involving disciplinary
action against officers and employees under their jurisdiction. Their decisions shall be final
in case the penalty imposed is suspension for not more than thirty days or fine in an amount
not exceeding thirty days' salary. In case the decision rendered by a bureau or office head
is appealable to the Commission, the same may be initially appealed to the department and
finally to the Commission and pending appeal, the same shall be executory except when
the penalty is removal, in which case the same shall be executory only after confirmation
by the Secretary concerned.
Section 48, Book V of EO 292:
Procedure in Administrative Cases Against Non-Presidential Appointees. - (1) Administrative

proceedings may be commenced against a subordinate officer or employee by the Secretary
or head of office of equivalent rank, or head of local government, or chiefs of agencies, or
regional directors, or upon sworn, written complaint of any other person.
We are not persuaded. It has already been settled in Cruz v. Civil Service Commission[30] that the appellate
power of the CSC will only apply when the subject of the administrative cases filed against erring
employees is in connection with the duties and functions of their office, and not in cases where the acts
of complainant arose from cheating in the civil service examinations.Thus:
Petitioners invocation of the law is misplaced. The provision is applicable to instances where
administrative cases are filed against erring employees in connection with their duties and
functions of the office. This is, however, not the scenario contemplated in the case at bar. It
must be noted that the acts complained of arose from a cheating caused by the petitioners
in the Civil Service (Subprofessional) examination. The examinations were under the direct
control and supervision of the Civil Service Commission. The culprits are government
employees over whom the Civil Service Commission undeniably has jurisdiction. x x x
Moreover, in Civil Service Commission v. Albao,[31] we rejected the contention that the CSC, under the
aforestated Sections 47 and 48 of Book V of EO 292, only has appellate disciplinary jurisdiction on charges
of dishonesty and falsification of documents in connection with an appointment to a permanent position in
the government service. We enunciated, thus:
Pursuant to Section 47 (1), (2) and Section 48 above, it is the Vice President of
the Philippines, as head of office, who is vested with jurisdiction to
commence disciplinary action against respondent Albao.
Nevertheless, this Court does not agree that petitioner is helpless to act directly and motu
proprio, on the alleged acts of dishonesty and falsification of official document committed
by respondent in connection with his appointment to a permanent position in the Office of
the Vice President.
It is true that Section 47 (2), Title I (A), Book V of EO No. 292 gives the heads of government
offices original disciplinary jurisdiction over their own subordinates. Their decisions shall be
final in case the penalty imposed is suspension for not more than thirty days or fine in an
amount not exceeding thirty days salary. It is only when the penalty imposed exceeds the
aforementioned penalties that an appeal may be brought before the Civil Service
Commission which has appellate jurisdiction over the same in accordance with Section 47
(1) Title I(A), Book V of EO No. 292, thus:
SEC. 47. Disciplinary Jurisdiction. (1) The Commission shall decide upon
appeal all administrative disciplinary cases involving the imposition of a
penalty of suspension for more than thirty days, or fine in an amount
exceeding thirty days salary, demotion in rank or salary or transfer, removal
or dismissal from office. x x x
The present case, however, partakes of an act by petitioner to protect the

integrity of the civil service system, and does not fall under the provision on disciplinary
actions under Sec. 47. It falls under the provisions of Sec. 12, par. 11, on
administrative cases instituted by it directly. This is an integral part of its duty,
authority and power to administer the civil service system and protect its
integrity, as provided in Article IX-B, Sec. 3 of the Constitution, by removing
from its list of eligibles those who falsified their qualifications. This is to be
distinguished from ordinary proceedings intended to discipline a bona fide
member of the system, for acts or omissions that constitute violations of the
law or the rules of the service. (Emphasis Ours)
Incidentally, it must be mentioned at this juncture that citizens complaints before the PLEB under RA 6975
pertain to complaints lodged by private citizens against erring PNP members for the redress of an injury,
damage or disturbance caused by the latter's illegal or irregular acts, an example being that of a policeman
who takes fish from the market without paying for it.[32] Clearly, the PLEB has no jurisdiction concerning
matters involving the integrity of the civil service system.
Finally, petitioners reliance on Civil Service Commission v. Court of Appeals,[33] is misplaced. In said
case, the NAPOLCOM assailed Item 3 of CSC Resolution No. 96-5487, which provides:
3. Appointees to Police Officer and Senior Police Officer positions in the Philippine
National Police must have passed any of the following examinations:
a) PNP Entrance Examination;

b) Police Officer 3rd Class Examination; and
c) CSC Police Officer Entrance Examination.
The NAPOLCOM took exception to this provision, particularly letter (c), arguing that the requirement of taking
a CSC Police Officer Entrance Examination is only applicable to entrance in the first-level position in the
PNP, i.e., the rank of PO1.[34] NAPOLCOM stressed that what would entitle a police officer to the appropriate
eligibility for his promotion in the PNP are the promotional examinations conducted by the NAPOLCOM, and
not the CSC Police Officer Entrance Examination.
The Court of Appeals found in favor of the NAPOLCOM and held that the CSC, by issuing Item 3 of CSC
Resolution No. 96-5487 encroached on the exclusive power of NAPOLCOM under RA 6975[35] to administer
promotional examinations for policemen and to impose qualification standards for promotion of PNP
personnel to the ranks of PO2 up to Senior Police Officers 1-4.Thus:
Admittedly, the CSC is mandated to conduct the qualifying entrance examination (CSC
Police Officer Entrance Examination) for Police Officer 1. However, when the CSC prescribes
the same examination for appointment of Senior Police Officer (SPO) under the questioned
Item 3, it in effect imposes an examination for promotion (appointment) of a policeman to
PO2 up to other higher ranks up to SP04. Thus Item 3 encompasses examinations for the
positions of Police Officer as well as that of Senior Police Officer, meaning examination not
only for appointment to PO1 but promotion to PO2 and PO3 up to the four SPO ranks.[36]
The Court of Appeals thus ordered the CSC to desist from conducting any promotional examination for Police
Officers and Senior Police Officers.
In a Minute Resolution dated September 25, 2001 in G.R. No. 141732, we affirmed the Court of Appeals
thereby sustaining the authority of the NAPOLCOM to administer promotional examinations for policemen.
It must be stressed however that the subject matter in the above cited case was the conduct of promotional
examination for policemen. On the contrary, the issue in the instant case is the jurisdiction of the CSC with
regard to anomalies or irregularities in the CSP-CAT, which is a totally different matter.
In fine, we find that CSC Caraga acted within its powers when it instituted the conduct of a
preliminary investigation against herein petitioner. In view of the foregoing, we need not anymore attend to
the issue of the doctrine of exhaustion of administrative remedies.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
(On official leave)

CONCHITA CARPIO MORALES MINITA V. CHICO-NAZARIO

(On official leave)
PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA

(On official leave)

DIOSDADO M. PERALTA LUCAS P. BERSAMIN
ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion of the
Court.
REYNATO S. PUNO
Chief Justice
*
The Court of Appeals is deleted as co-respondent pursuant to Section 4, Rule 45 of the Rules of Court.
[1]
Republic Act No. 6975 (1990), Secs. 36 and 91.
[2]
Civil Service Commission v. Albao, G.R. No. 155784, October 13, 2005, 472 SCRA 548, 555.
[3]
Rollo, p. 70.
[4]
Id. at 71.
[5]
Id. at 107.
[6]
Id. at 106.
[7]
Id. at 74.
[8]
Id.
[9]
G.R. No. 141732, promulgated on September 25, 2001 in the form of a Minute Resolution, wherein we
affirmed in toto the decision of the Court of Appeals in CA-G.R. SP No. 46503.
[10]
See CSC Order dated November 16, 2001, rollo, p. 75.
[11]
Id. at 75-76.
[12]
Id. at 76.
[13]
Id. at 77-82. Docketed as S.P. Civil Case No. 1059 and raffled to Branch 32.
[14]
Id. at 87-88.
[15]
Id. at 89-105.
[16]
Supra note 9.
[17]
Rollo, pp. 114-122; penned by Judge Victor A. Tomaneng.
[18]
Id. at 122.
[19]
Id. at 123-124.
[20]
Id. at 140.
[21]
Id. at 141-160.
[22]
Id. at 161-176
[23]
Id. at 47-57; penned by Associate Justice Romulo V. Borja and concurred in by Associate Justices Myrna
Dimaranan-Vidal and Ricardo R. Rosario.
[24]
Id. at 30-31.
[25]
Supra note 9.
[26]
Rollo, pp. 199-221.
[27]
CONSTITUTION, Art. IX-B, Sec. 3. See Sec. 1, Book V of Executive Order (E.O.) No. 292 or the
Administrative Code of 1987.
[28]
CONSTITUTION, Art. IX-B, Sec. 2(1). See Sec. 6, id.
[29]
Section 52 of Republic Act No. 8551 amended Section 41 of Republic Act No. 6975, referring to citizens
complaints as those complaints filed by either a natural or juridical person.
[30]
G.R. No. 144464, November 27, 2001, 370 SCRA 650, 655-656.
[31]
[32]
Fianza v. Peoples Law Enforcement Board (PLEB), G.R. No. 109638, March 31, 1995, 243 SCRA 165, 178
and Cordoviz v. Peoples Law Enforcement Board (PLEB), G.R. No. 109639, March 31, 1995, 243 SCRA
165.
[33]
Supra note 2.
[34]
Under Section 32 of RA 6975, the CSC administered the qualifying entrance examination for policemen
on the basis of the standards set by the NAPOLCOM. RA 8551 amended this and now mandates the
NAPOLCOM to administer both the entrance and promotional examinations for policemen on the basis
of the standards it has set.
[35]
Specifically Section 38 of the law which states:
Promotions. (a) A member of the PNP shall not be eligible for promotion to a higher position or rank unless
he has successfully passed the corresponding promotional examination given by the Commission, or the
Bar or corresponding board examinations for technical services and other professions x x x
[36]
Rollo, pp. 181-182.
Supreme Court
Manila
SECOND DIVISION
ENGR. APOLINARIO DUEAS, G.R. No. 165679

Petitioner,
Present:
CORONA,* J.,
CARPIO MORALES,
-versus - Acting Chairperson,
BRION,
DEL CASTILLO, and
ABAD, JJ.
ALICE GUCE-AFRICA, Promulgated:

Respondent. October 5, 2009
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Time and again, we have held that in a petition for review on certiorari filed under Rule 45 of the
Rules of Court, we cannot review or pass upon factual matters, save under exceptional
circumstances, none of which obtains in the present case. Petitioner endeavors in vain to convince
us that the trial court and the Court of Appeals erred in finding him negligent in the construction
of respondents house and holding him liable for breach of contract.
This is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court seeking
to reverse and set aside the April 29, 2004 Decision[2] of the Court Appeals in CA-G.R. CV No.
70757, which affirmed the December 21, 2000 Decision[3] of the Regional Trial Court, Branch 157,
Pasig City, in an action for breach of contract with damages[4] filed by respondent against
petitioner.
THE FACTS
For respondent and her family, April 18, 1998 was supposed to be a special occasion and
a time for family reunion. It was the wedding date of her sister Sally Guce, and respondents other
siblings from the United States of America, as well as her mother, were expected to return to the
country. The wedding ceremony was set to be held at the familys ancestral house at San Vicente,
Banay-banay, Lipa City, where respondents relatives planned to stay while in the Philippines.
Respondent found the occasion an opportune time to renovate their ancestral

house. Thus, in January 1998 she entered into a Construction Contract[5] with petitioner for the
demolition of the ancestral house and the construction of a new four-bedroom residential
house. The parties agreed that respondent would pay P500,000.00 to the petitioner, who obliged
himself to furnish all the necessary materials and labor for the completion of the project. Petitioner
likewise undertook to finish all interior portions of the house on or before March 31, 1998, or
more than two weeks before Sallys wedding.
On April 18, 1998, however, the house remained unfinished. The wedding ceremony was thus
held at the Club Victorina and respondents relatives were forced to stay in a hotel.Her mother
lived with her children, transferring from one place to another.
On July 27, 1998, respondent filed a Complaint[6] for breach of contract and damages
against petitioner before the Regional Trial Court of Pasig City. She alleged, among others, that
petitioner started the project without securing the necessary permit from the City Engineers Office
of Lipa City. Respondent likewise alleged that, all in all, she gave petitioner P550,000.00 (which
is P50,000.00 more than the contract price). However, and despite knowledge that the
construction of the house was intended for the forthcoming marriage of respondents sister,
petitioner unjustly and fraudulently abandoned the project leaving it substantially unfinished and
incomplete. Several demands were made, but petitioner obstinately refused to make good his
contractual obligations. Worse, petitioners workmanship on the incomplete residential house was
substandard.
Respondent prayed for the return of the P50,000.00 overpayment. She also prayed for an award
of P100,000.00 for the purpose of repairing what had been poorly constructed and at
least P200,000.00 to complete the project.
In his Answer with Counterclaim,[7] petitioner asserted that it was respondent who undertook to
secure the necessary government permits.[8] With regard to the alleged overpayment, petitioner
claimed that the amount of P50,000.00 was in payment for the additional works which respondent
requested while the construction was still on going. In fact, the estimated cost for the additional
works amounted to P133,960.00, over and above the P500,000.00 contract price.
Petitioner likewise alleged that the delay in the construction of the house was due to
circumstances beyond his control, namely: heavy rains, observance of Holy Week, and celebration
of barangay fiesta. Ultimately, he was not able to complete the project because on May 27, 1998,
respondent went to his house and told him to stop the work.
He maintained that he cannot be held liable for the amounts claimed by the
respondent in her complaint considering that he had faithfully complied with the
terms and conditions of the Construction Contract.
On February 19, 1999, pre-trial conference was conducted. Thereafter, trial ensued.
Respondent testified on the material points alleged in her complaint. She also presented the
testimony of her brother Romeo Guce, who declared on the witness stand that petitioner confided
to him that he had to stop the construction because he could no longer pay his workers. He also
testified that petitioner asked for additional amount of about P20,000.00 to finish the house. He
relayed this to the respondent who refused to release any additional amount because of
petitioners unsatisfactory and substandard work. But later on, respondent acceded and gave
petitioner P20,000.00.
To establish the status of the project and determine the amount necessary for the repair and
completion of the house, respondent presented Romeo Dela Cruz, a licensed realtor and a
graduate of an engineering course at the Technological Institute of the Philippines. Dela Cruz
testified that he conducted an ocular inspection on the construction site in November 1998 and
found that only about 60% of the project had been accomplished. Some parts of the project,
according to the witness, were even poorly done. He likewise testified that in order to repair the
poorly constructed portion of the house, respondent would need to spend about P100,000.00 and
another P200,000.00 to complete it.
Petitioner also took the witness stand and testified on matters relative to the defenses he raised
in his answer.
On December 21, 2000, the RTC rendered a Decision[9] in favor of the

respondent and against the petitioner. The RTC gave more credence to respondents version of
the facts, finding that-
Clearly, Dueas [herein petitioner] failed to tender performance in
accordance with the terms and conditions of the construction contract he executed
with Africa [herein respondent]. He failed to construct a four-bedroom residential
house suitable and ready for occupancy on a stipulated date. Dueas was fully
aware that Africa needed the new house for a long scheduled family event
precisely a completion date was included and specified in the transaction. Despite
knowledge and receipt of payment from Africa, Dueas failed to deliver what was
incumbent upon him under the undertaking. He unjustifiably incurred delay in the
construction of the new building and wrongfully deprived Africa and her family of
the use and enjoyment of the subject property.Bad weather, observance of the
Holy Week and barangay fiesta are insufficient excuses. As a building contractor
Dueas should have provided for such contingencies. Mere inconvenience or
unexpected impediments will not relieve a party of his obligation. Granting that he
was not yet fully paid for the additional work by Africa, provisions or arrangements
should have been made to ensure completion of the project within the agreed
period.
Moreover, Dueas negligently abandoned the unfinished structure shortly after a

confrontation with Africa and family. Rain water sipped[sic] into the house
because Dueas failed to secure the roofing and wall flushing. The house remained
[un]habitable because fixtures and devises were yet to be installed. Dueas failed
to exercise the required diligence as a contractor and is guilty of negligence and
delay. He must be made responsible for the foreseen effect of the exposure of the
new structure to the elements.
Significantly, the poor construction performance manifested in the structure after

Dueas in bad faith abandoned it. Indeed, the newly constructed edifice needs
significant repairs if only to make it habitable for its occupants.[10]
Consequently, the fallo of the RTC decision reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff Alice G. Africa and

against defendant Apolinario Dueas who is hereby directed to pay plaintiff:
- P100,000.00 for the necessary repair of the structure;

- 200,000.00 for the completion of the construction;
- 50,000.00 as and for attorneys fees;
- and costs of suit.
Plaintiffs claim for moral, nominal and exemplary damages are hereby denied for
lack of sufficient basis.
SO ORDERED.[11]
Both parties were unsatisfied. They thus brought the matter to the Court of Appeals assailing the
Decision of the RTC. The appellate court, however, found no cogent reason to depart from the
trial courts conclusion. Thus, on April 29, 2004, it rendered the herein assailed
Decision[12] affirming with modification the RTCs ruling, viz:
WHEREFORE, in view of the foregoing, the Decision of

the Regional Trial Court of Pasig City, Branch 157, dated 21 December 2000, is
hereby AFFIRMED WITH MODIFICATION that the award of attorneys fees is
hereby DELETED.
SO ORDERED.[13]
ISSUES
Feeling aggrieved but still undeterred, petitioner interposes the present recourse anchored on the
following grounds:
I.
THE COSTS OF ACTUAL DAMAGES AWARDED ARE BASED ON MERE

SPECULATIONS AND CONJECTURES.[14]
II.
THE RULINGS THAT DUEAS ABANDONED THE WORK AND INCURRED DELAY ARE
CONTRARY TO THE EVIDENCE.[15]
III.
THE DAMAGES CAUSED BY RAIN WATER WERE NOT DUE TO APOLINARIO DUEAS
FAULT OR NEGLIGENCE.[16]
OUR RULING
For purposes of clarity, we shall tackle simultaneously the second and third arguments raised by
the petitioner.
Instant petition not available to determine

whether petitioner violated the contract or
abandoned the construction of the house
Petitioner contends that he neither abandoned the project nor violated the contract. He maintains
that continuous rains caused the delay in the construction of the house and that he was not able
to finish the project because respondent ordered him to stop the work. In fact, there was no
reason for him to stop the project because he still had available workers and materials at that
time, as well as collectibles from the respondent. Petitioner likewise contends that the Court of
Appeals erred in upholding the trial courts finding that he was guilty of negligence.
The contentions lack merit.
Petitioner endeavors to convince us to determine, yet again, the weight, credence, and
probative value of the evidence presented. This cannot be done in this petition for review
on certiorari under Rule 45 of the Rules of Court where only questions of law may be raised by
the parties and passed upon by us. In Fong v. Velayo,[17] we defined a question of law as
distinguished from a question of fact, viz:
A question of law arises when there is doubt as to what the law is on a certain
state of facts, while there is a question of fact when the doubt arises as to the
truth or falsity of the alleged facts.For a question to be one of law, the same must
not involve an examination of the probative value of the evidence presented by
the litigants or any of them. The resolution of the issue must rest solely on what
the law provides on the given set of circumstances. Once it is clear that the issue
invites a review of the evidence presented, the questioned posed is one of
fact. Thus, the test of whether a question is one of law or of fact is not the
appellation given to such question by the party raising the same; rather, it is
whether the appellate court can determine the issue raised without reviewing or
evaluating the evidence, in which case, it is a question of law; otherwise, it is a
question of fact.
It has already been held that the determination of the existence of a breach of contract
is a factual matter not usually reviewable in a petition filed under Rule 45.[18] We will not review,
much less reverse, the factual findings of the Court of Appeals especially where, as in this case,
such findings coincide with those of the trial court, since we are not a trier of facts.[19] The
established rule is that the factual findings of the Court of Appeals affirming those of the RTC are
conclusive and binding on us. We are not wont to review them, save under exceptional
circumstances as: (1) when the inference made is manifestly mistaken, absurd or impossible; (2)
when there is grave abuse of discretion; (3) when the findings are grounded entirely on
speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is based
on misapprehension of facts; (5) when the Court of Appeals, in making its findings, went beyond
the issues of the case and the same is contrary to the admissions of both appellant and appellee;
(6) when the findings of fact are conclusions without citation of specific evidence on which they
are based; (7) when the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would justify a different conclusion;
and (8) when the findings of fact of the Court of Appeals are premised on the absence of evidence
and are contradicted by the evidence on record.[20]
Except with respect to the first ground advanced by the petitioner which will be discussed
later, none of the above exceptions obtain in this case. Hence, we find no cogent reason to disturb
the findings of the RTC and affirmed by the Court of Appeals that petitioner was negligent in the
construction of respondents house and thus liable for breach of contract.
Respondent not entitled to actual damages for want

of evidentiary proof
Petitioner further argues that the appellate court erred in affirming the RTCs award of
actual damages for want of evidentiary foundation. He maintains that actual damages must be
proved with reasonable degree of certainty. In the case at bench, petitioner argues that the trial
and the appellate courts awarded the amounts of P100,000.00 and P200,000.00 as actual
damages based merely on the testimonies of respondent and her witness.
We agree. Article 2199 of the Civil Code provides that one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. In Ong v. Court
of Appeals,[21] we held that (a)ctual damages are such compensation or damages for an injury
that will put the injured party in the position in which he had been before he was injured. They
pertain to such injuries or losses that are actually sustained and susceptible of measurement. To
be recoverable, actual damages must not only be capable of proof, but must actually be proved
with reasonable degree of certainty. We cannot simply rely on speculation, conjecture or
guesswork in determining the amount of damages. Thus, it was held that before actual damages
can be awarded, there must be competent proof of the actual amount of loss, and credence can
be given only to claims which are duly supported by receipts.[22]
Here, as correctly pointed out by petitioner, respondent did not present documentary
proof to support the claimed necessary expenses for the repair and completion of the house. In
awarding the amounts of P100,000.00 and P200,000.00, the RTC and the Court of Appeals merely
relied on the testimonies of the respondent and her witness. Thus:
As to the award of P100,000.00 as cost of repair and P200,000.00 as the

amount necessary to complete the house, the Court finds the same to be in the
nature of actual damages. It is settled that actual damages must be supported by
best evidence available x x x. In the case at bar, the Court finds that the testimony
of the plaintiff-appellant in this regard is supported by the testimony of Romeo
dela Cruz, a realtor, who inspected the structure after it remained unfinished. Said
testimonies are sufficient to establish the claim. x x x
Respondent entitled to temperate damages in lieu of

actual damages
Nonetheless, in the absence of competent proof on the amount of actual damages

suffered, a party is entitled to temperate damages. Articles 2216, 2224 and 2225 of the Civil Code
provide:
Art. 2216. No proof of pecuniary loss is necessary in order that moral,

nominal, temperate, liquidated or exemplary damages may be adjudicated. The
assessment of such damages, except liquidated ones, is left to the discretion of
the court, according to the circumstances of each case.
Art. 2224. Temperate or moderate damages, which are more than nominal
but less than compensatory damages, may be recovered when the court finds that
some pecuniary loss has been suffered but its amount can not, from the nature of
the case, be proved with certainty.
Art. 2225. Temperate damages must be reasonable under the

circumstances.
Temperate or moderate damages may be recovered when some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be proved with certainty.[23] The
amount thereof is usually left to the discretion of the courts but the same should be reasonable,
bearing in mind that temperate damages should be more than nominal but less than
compensatory. [24]
There is no doubt that respondent sustained damages due to the breach committed by
the petitioner. The transfer of the venue of the wedding, the repair of the substandard work, and
the completion of the house necessarily entailed expenses. However, as earlier discussed,
respondent failed to present competent proof of the exact amount of such pecuniary loss. To our
mind, and in view of the circumstances obtaining in this case, an award of temperate damages
equivalent to 20% of the original contract price of P500,000.00, or P100,000.00 (which,
incidentally, is equivalent to 1/3 of the total amount claimed as actual damages), is just and
reasonable.
WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision of the Court of
Appeals dated April 29, 2004 in CA-G.R. CV No. 70757 is AFFIRMED withMODIFICATION that
the award of actual damages is deleted and, in lieu thereof, petitioner is ordered to pay
respondent temperate damages in the amount of P100,000.00.
SO ORDERED.

Associate Justice
WE CONCUR:
RENATO C. CORONA
Associate Justice
CONCHITA CARPIO MORALES ARTURO D. BRION

ROBERTO A. ABAD
Associate Justice
ATTESTATION
CONCHITA CARPIO MORALES

Associate Justice
Acting Chairperson, Second Division
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
Additional member per Special Order No. 718 dated October 2, 2009.
[1]
Rollo, pp. 3-15.
[2]
CA rollo, pp. 96-103; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by
Associate Justices Danilo B. Pine and Edgardo F. Sundiam.
[3]
Records, pp. 171-179; penned by Judge Esperanza Fabon-Victorino.
[4]
Docketed as Civil Case No. 66930.
[5]
Records, p. 6.
[6]
Id. at 1-5.
[7]
Id. at 19-24.
[8]
During trial, however, petitioner declared on the witness stand that the parties agreed that he
will secure the necessary permit only if the concerned government agency requires it.
TSN, January 25, 2000, p. 7.
[9]
[10]
Supra note 3.
[11]
Id. at 178-179.
[12]
Supra note 2.
[13]
Id. at 103.
[14]
Rollo, p. 6
[15]
Id. at 10.
[16]
Id. at 12.
[17]
G.R. No. 155488, December 6, 2006, 510 SCRA 320, 329-330.
[18]
Omengan v. Philippine National Bank, G.R. No. 161319, January 23, 2007, 512 SCRA 305,
309.
[19]
Ledonio v. Capitol Development Corporation, G.R. No. 149040, July 4, 2007, 526 SCRA 379,
392.
[20]
College Assurance Plan v. Belfranlt Development, Inc., G.R. No. 155604, November 22, 2007, 538
SCRA 27, 37-38.
[21]
G.R. No. 117103, January 21, 1999, 301 SCRA 387, 400.
[22]
Viron Transportation Co., Inc. v. Alberto Delos Santos, G.R. No. 138296, November 22, 2000,
345 SCRA 509, 519.
[23]
Art. 2224, CIVIL CODE OF THE PHILIPPINES.
[24]
Supra note 20, at 40.
Supreme Court
Manila
EN BANC
LEAH M. NAZARENO, CARLO M. CUAL, G.R. No. 181559

ROGELIO B. CLAMONTE, FLORECITA M.
LLOSA, ROGELIO S. VILLARUBIA,
RICARDO M. GONZALES, JR., ROSSEL
MARIE
G. GUTIERREZ, NICANOR F. VILLAROSA,
JR., MARIE SUE F. CUAL, MIRAMICHI
MAJELLA B. MARIOT, ALMA F. RAMIREZ,
ANTOLIN D. ZAMAR, JR., MARIO S.
ALILING, TEODULO SALVORO, JR.,
PHILIP JANSON ALTAMARINO,
ANTONIETTA PADURA, ADOLFO R.
CORNELIA, IAN RYAN PATULA,
WILLIAM TANOY, VICTOR ARBAS, Present:
JEANITH CUAL, BRAULIO SAYSON,
DAWN M. VILLAROSA, AGUSTIN A. PUNO, C.J.,
RENDOQUE, ENRIQUETA TUMONGHA, QUISUMBING,*
LIONEL P. BANOGON, ROSALITO YNARES-SANTIAGO,
VERGANTINOS, MARIO T. CUAL, JR., CARPIO,
ELAINE MAY TUMONGHA, NORMAN F. CORONA,
VILLAROSA, RICARDO C. PATULA, CARPIO MORALES,
RACHEL BANAGUA, RODOLFO A. CHICO-NAZARIO,**
CALUGCUGAN, PERGENTINO CUAL, VELASCO, JR.,
BERNARD J. OZOA, ROGER JOHN NACHURA,
AROMIN, CHERYL E. NOCETE, MARIVIC LEONARDO-DE CASTRO,
SANCHEZ, CRISPIN DURAN, REBECO BRION,
LINGCONG, ANNA LEE ESTRABELA, PERALTA,
MELCHOR B. MAQUILING, RAUL MOLAS, BERSAMIN,
OSCAR KINIKITO, DARWIN B. DEL CASTILLO, and
CONEJOS, ROMEL CUAL, ROQUETA ABAD, JJ.
AMOR, DISODADO LAJATO, PAUL PINO,
LITO PINERO, RODULFO ZOSA, JR. and
JORGE ARBOLADO,
Petitioners,
- versus -
CITY OF DUMAGUETE, represented by

CITY MAYOR AGUSTIN PERDICES,
DOMINADOR DUMALAG, JR., ERLINDA
TUMONGHA, JOSEPHINE MAE FLORES
AND ARACELI CAMPOS,
Respondents.
Promulgated:
October 2, 2009
x--------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The integrity and reliability of our civil service is, perhaps, never more sorely tested than in the
impassioned demagoguery of elections. Amidst the struggle of personalities, ideologies, and
platforms, the vigor and resilience of a professional civil service can only be preserved where our
laws ensure that partisanship plays no part in the appointing process. Consequently, we affirm
the validity of a regulation issued by the Civil Service Commission (CSC or the Commission)
intended to ensure that appointments and promotions in the civil service are made solely on the
basis of qualifications, instead of political loyalties or patronage.
This Petition for Review on Certiorari filed under Rule 45 of the Rules of Court seeks to reverse
the Decision[1] of the Court of Appeals dated August 28, 2007 and its Resolution[2] dated January
11, 2008 in CA-G.R. CEB-SP No. 00665. The case stemmed from CSC Field Offices invalidation of
petitioners appointments as employees of the City of Dumaguete, which was affirmed by the CSC
Regional Office, by the Commission en banc and by the Court of Appeals.
LEGAL AND FACTUAL BACKGROUNDS
Accreditation of Dumaguete City by the

Civil Service Commission
On October 25, 1999, pursuant to the Commissions Accreditation Program, the CSC issued
Resolution No. 992411,[3] which granted the City Government of Dumaguete the authority to take
final action on all its appointments, subject to, inter alia, the following conditions:
1. That the exercise of said authority shall be subject to Civil Service Law, rules
and regulations and within the limits and restrictions of the implementing
guidelines of the CSC Accreditation Program as amended (MC No. 27, s. 1994);
xxxx
5. That appointments issued under this authority shall be subject to monthly

monitoring by the [Civil Service Field Office] CSFO concerned;
xxxx
9. That appointments found in the course of monthly monitoring to have been

issued and acted upon in violation of pertinent rules, standards, and
regulations shall immediately be invalidated by the Civil Service Regional Office
(CSRO), upon recommendation by the CSFO.
Appointments made by outgoing

Mayor Remollo
Then Dumaguete City Mayor Felipe Antonio B. Remollo sought re-election in the May 14, 2001
elections, but lost to respondent Mayor Agustin R. Perdices. Thereafter, on June 5, 7, and 11,
2001, outgoing Mayor Remollo promoted 15 city hall employees, and regularized another 74 city
hall employees, including the herein 52 petitioners.
On July 2, 2001, Mayor Perdices publicly announced at the flag raising ceremony at the
Dumaguete City Hall grounds that he would not honor the appointments made by former Mayor
Remollo. On the same day, he instructed the City Administrator, respondent Dominador Dumalag,
Jr., to direct respondent City Assistant Treasurer Erlinda C. Tumongha (now deceased), to refrain
from making any cash disbursements for payments of petitioners' salary differentials based on
their new positions.
The Petition for Mandamus before the

Regional Trial Court of Dumaguete City
Thus, on August 1, 2001, petitioners filed a Petition for Mandamus with Injunction and Damages
with Prayer for a Temporary Restraining Order against the City of Dumaguete, represented by
respondent city mayor Perdices and city officers Dumalag, Tumongha, Josephine Mae Flores, and
Araceli Campos. The petition was docketed as Civil Case No. 13013, and raffled to Branch 41 of
the Regional Trial Court of Dumaguete City. Petitioners sought the issuance of a writ of
preliminary injunction to enjoin respondents from taking any action or issuing any orders nullifying
their appointments.
In a Decision[4] dated March 27, 2007, the Regional Trial Court dismissed the petition; petitioners
Motion for Reconsideration was also denied in an Order[5] dated April 26, 2007. The issues
involved in Civil Case No. 13013 have twice been elevated to and eventually resolved by the Court
in G.R. Nos. 177795[6] and 168484.[7]
Revocation of Appointments by the

Civil Service Commission Field Office
Relative to this main case, on August 1, 2001, the CSC Field Office in Dumaguete City, through
Director II Fabio R. Abucejo, revoked and invalidated the appointments of the petitioners (the
August 1, 2001 Order) based of the following findings:
1. There were a total of 15 promotional appointments and 74 original

appointments issued as reflected in the submitted [Report of Personnel
Actions] ROPA for the month of June 2001.
2. There was only one (1) en banc meeting of the City Personnel Selection Board
(PSB) held on 5 June 2001 to consider the number of appointments thus issued
and there was no other call for a PSB meeting certified to by the City [Human
Resource Management Officer] HRMO.
3. There were no minutes available to show the deliberations of the PSB of the 89
appointments listed in the ROPA as certified by the City HRMO.
4. There were no PSB statements certifying that there was actual screening and
evaluation done on all candidates for each position.
5. The appointing officer of the 89 appointments was an outgoing local official who
lost during the 14 May 2001 elections for City Mayor of Dumaguete City.
6. The 89 appointments were all issued after the elections and when the new city
mayor was about to assume office.[8]
Director Abucejo invalidated the appointments as the same were done in violation of CSC
Resolution No. 010988 dated June 4, 2001, the pertinent portions of which provide:
WHEREAS, the May 14, 2001 national and local elections have just concluded and
the Commission anticipates controversies that would arise involving appointments
issued by outgoing local chief executives immediately before or after the elections;
WHEREAS, the Commission observed the tendency of some outgoing local chief
executives to issue appointments even after the elections, especially when their
successors have already been proclaimed.
WHEREAS, the practice of some outgoing local chief executives causes animosities
between the outgoing and incoming officials and the people who are immediately
affected and are made to suffer the consequences thereof are the ordinary civil
servants, and eventually, to a large extent, their constituents themselves;
WHEREAS, one of the reasons behind the prohibition in issuing appointments or

hiring new employees during the prohibited period as provided for in CSC
Memorandum Circular No. 7, series of 2001, is to prevent the occurrence of the
foregoing, among others;[9]
WHEREAS, local elective officials whose terms of office are about to expire, are
deemed as caretaker administrators who are duty bound to prepare for the smooth
and orderly transfer of power and authority to the incoming local chief executives;
WHEREAS, under Section 15, Article VII of the Constitution, the President or Acting
President is prohibited from making appointments two (2) months immediately
before the next presidential elections and up to the end of his term, except
temporary appointments to executive positions when continued vacancies therein
will prejudice public service or endanger public safety;
WHEREAS, while there is no equivalent provision in the Local Government Code of

1991 (Republic Act 7160) or in the Civil Service Law (Book V of Executive Order
No. 292) of the abovestated prohibition, the rationale against the prohibition on
the issuance of midnight appointments by the President is applicable to
appointments extended by outgoing local chief executives immediately before
and/or after the elections;
xxxx
NOW THEREFORE, the Commission, pursuant to its constitutional mandate as the

control personnel agency of the government, hereby issues and adopts the
following guidelines:
xxxx
3. All appointments, whether original, transfer, reemployment, reappointment,

promotion or demotion, except in cases of renewal and reinstatement, regardless
of status, which are issued AFTER the elections, regardless of their dates of
effectivity and/or date of receipt by the Commission, including its Regional or Field
Offices, of said appointments or the Report of Personnel Actions (ROPA) as the
case may be, shall be disapproved unless the following requisites concur relative
to their issuance:
a) The appointment has gone through the regular screening by the Personnel
Selection Board (PSB) before the prohibited period on the issuance of
appointments as shown by the PSB report or minutes of its meeting;
b) That the appointee is qualified;
c) There is a need to fill up the vacancy immediately in order not to prejudice

public service and/or endanger public safety;
d) That the appointment is not one of those mass appointments issued after
the elections.
4. The term mass appointments refers to those issued in bulk or in large number
after the elections by an outgoing local chief executive and there is no apparent
need for their immediate issuance.
On September 4, 2001, petitioners filed a Motion for Reconsideration of the August 1, 2001 Order
before the CSC Region VII Office in Cebu. The motion was, however, denied on the ground that
it should have been filed before the office of Director Abucejo in Dumaguete City. Thereafter, on
October 31, 2001, petitioners asked the CSC Region VII Office in Cebu to treat their previous
Motion for Reconsideration as their appeal.
On February 14, 2002, the CSC Region VII Office affirmed the August 1, 2001
Order. Subsequently, an Appeal to the Commission en banc was filed through registered mail by
52 of the original 89 appointees, the petitioners herein, namely:
Date of
Name Former Position New Position Appointment
1. Leah M. Nazareno Legal Researcher Asst. Dept. Head I 7-Jun-01
2. Carlo M. Cual Legislative Staff Legislative Staff 5-Jun-01
Officer I Officer III
3. Rogelio B. Clamonte Public Services Supply Officer IV 5-Jun-01
4. Florecita Llosa Supply Officer I Records Officer II 11-Jun-01
5. Rogelio S. Villarubia Agriculturist II Agriculturist III 5-Jun-01
6. Rossel Marie G. Gutierrez Casual/Plantilla Supervising 5-Jun-01
Environmental
Management
Specialist
7. Nicanor F. Villarosa, Jr. Casual/Plantilla Dentist II 5-Jun-01
8. Marie Sue Cual Casual/Plantilla Social Welfare 7-Jun-01
Officer I
9. Miramichi Majella B. Mariot Casual/Plantilla Records Officer II 7-Jun-01
10. Alma F. Ramirez Casual/Plantilla Clerk IV 7-Jun-01
11. Antolin D. Zamar, Jr. Casual/Plantilla Metro Aide II 11-Jun-01
12. Mario S. Aliling Casual/Plantilla Driver II 5-Jun-01
13. Teodulo Salvoro, Jr. Casual/Plantilla Metro Aide II 5-Jun-01
14. Philip Janson Altamarino Casual/Plantilla Clerk I 5-Jun-01
15. Antonieta Padura Casual/Plantilla Metro Aide II 11-Jun-01
Date of
16. Adolfo Cornelia Casual/Plantilla Metro Aide II 11-Jun-01
17. Ian Ryan Patula Casual/Plantilla Metro Aide II 7-Jun-01
18. William Tanoy Casual/Plantilla Metro Aide II 5-Jun-01
19. Victor Arbas Casual/Plantilla Public Services 7-Jun-01
Foreman
20. Jeanith Cual Casual/Plantilla Utility Worker II 5-Jun-01
21. Braulio Sayson Casual/Plantilla Mechanical Plant 7-Jun-01
Supervisor
22. Dawn Villarosa Casual/Plantilla Clerk I 7-Jun-01
23. Agustin Rendoque Casual/Plantilla Utility Worker I 7-Jun-01
24. Enriqueta Tumongha Casual/Plantilla Utility Worker II 5-Jun-01
25. Lionel Banogon Casual/Plantilla Clerk II 5-Jun-01
26. Rosalito Vergantinos Casual/Plantilla Pest Control 5-Jun-01
Worker II
27. Mario Cual, Jr. Casual/Plantilla Utility Foreman 7-Jun-01
28. Elaine Tumongha Casual/Plantilla Registration 11-Jun-01
Officer I
29. Norman Villarosa Casual/Plantilla Utility Worker I 5-Jun-01
30. Ricardo C. Patula Casual/Plantilla Revenue Collection 5-Jun-01
Clerk I
31. Rachel Banagua Casual/Plantilla Utility Worker I 5-Jun-01
32. Rodolfo Calugcugan Job Order Driver I 7-Jun-01
33. Pergentino Cual Job Order Metro Aide II 11-Jun-01
34. Bernard Ozoa Job Order Utility Worker I 7-Jun-01
35. Roger J. Aromin Job Order Utility Worker I 7-Jun-01
36. Cheryl Nocete Job Order Utility Worker I 11-Jun-01
37. Marivic Sanchez Job Order Utility Worker I 11-Jun-01
38. Crispin Duran Job Order Metro Aide II 11-Jun-01
39. Rebeco Lingcong Job Order Metro Aide II 5-Jun-01
40. Anna Lee Estrabela Job Order Cash Clerk III 5-Jun-01
41. Melchor Maquiling Job Order Engineer I 7-Jun-01
42. Raul Molas Job Order Construction and 7-Jun-01
Maintenance
Foreman
43. Oscar Kinikito Job Order Electrician II 7-Jun-01
44. Darwin Conejos Job Order Engineering Aide 7-Jun-01
45. Romel Cual Job Order Metro Aide II 11-Jun-01
46. Roqueta Amor Job Order Dental Aide 5-Jun-01
47. Diosdado Lajato Job Order Pest Control 5-Jun-01
Worker II
48. Paul Pino Job Order Utility Worker II 5-Jun-01
49. Lito Piero Job Order Metro Aide II 11-Jun-01
Date of
50. Rodulfo Zosa, Jr. Job Order Metro Aide II 11-Jun-01
51. Jorge Arbolado Job Order Traffic Aide I 5-Jun-01
52. Ricardo M. Gonzales, Jr. OIC-General Asst. Dept. Head I 5-Jun-01
Services Officer
Ruling of the CSC en banc and the Court

of Appeals
On August 23, 2004, the CSC en banc issued Resolution No. 040932 denying petitioners' appeal,
and affirming the invalidation of their appointments on the ground that these were mass
appointments made by an outgoing local chief executive.[10] The Commission explained:
The rationale behind the prohibition in CSC Resolution No. 01-0988 is not hard to
comprehend. The prohibition is designed to discourage losing candidates from
extending appointments to their protgs or from giving their constituents promised
positions (CSC Resolution No. 97-0317 dated January 17, 1997, Re: Roldan B.
Casinillo). Moreover, the same is intended to prevent the outgoing local chief
executive from hurriedly issuing appointments which would subvert the policies of
the incoming leadership. Thus, any means that would directly or indirectly
circumvent the purposes for which said Resolution was promulgated should not be
allowed, particularly when the appointments were issued by the appointing
authority who lost in said election.
Petitioners filed a Motion for Reconsideration which was denied by the Commission on April 11,
2005, through CSC Resolution No. 050473.
Petitioners then filed a petition for review before the Court of Appeals, which was docketed as
CA-G.R. CEB-SP No. 00665. On August 28, 2007, the Court of Appeals denied the appeal and
affirmed CSC Resolution No. 040932 dated August 23, 2004 and CSC Resolution No. 050473
dated April 11, 2005, ratiocinating that:
The spirit behind CSC Resolution No. 010988 is evident from its preamble. It was
issued to thwart the nefarious practice by outgoing local chief executives in making
appointments before, during, and/or after the regular local elections for ulterior
partisan motives. Said practice being analogous to midnight appointments by the
President or Acting President, the CSC then promulgated Resolution No. 010988,
to suppress the mischief and evils attributed to mass appointments made by local
chief executives.
Petitioners Motion for Reconsideration was denied by the Court of Appeals in a Resolution dated
January 11, 2008.
THE PARTIES ARGUMENTS
Before us, petitioners maintain that CSC Resolution No. 010988 is invalid because the Commission
is without authority to issue regulations prohibiting mass appointments at the local government
level. Petitioners cite De Rama v. Court of Appeals[11] which held that Section 15, Article VII of
the Constitution is only applicable to the President or Acting President. They claim that outgoing
or defeated local appointing authorities are authorized to make appointments of qualified
individuals until their last day in office, and that not all mass appointments are invalid. Finally,
petitioners claim that because Dumaguete City had been granted authority to take final action on
all appointments, the Commission did not have any authority to disapprove the appointments
made by outgoing mayor Remollo.
In their Comment dated May 15, 2008,[12] respondents argue that petitioners appointments
violated civil service rules and regulations other than CSC Resolution No. 010988. Respondents
also assert that the Commission is authorized to invalidate the petitioners appointments, because
the CSC accreditation program carried with it the caveat that said exercise of authority shall be
subject to Civil Service law, rules and regulations. Finally, respondents claim that petitioners were
guilty of forum shopping because the issues in this case and in G.R. No. 177795 are the same.
OUR RULING
We find that the Civil Service Commission has the authority to issue CSC Resolution No. 010988
and that the invalidation of petitioners appointments was warranted. Consequently, we affirm the
Decision of the Court of Appeals dated August 28, 2007 and its Resolution dated January 11,
2008 in CA-G.R. CEB-SP No. 00665.
The CSC has the authority to establish

rules to promote efficiency in the civil
service
The Commission, as the central personnel agency of the government,[13] has statutory authority
to establish rules and regulations to promote efficiency and professionalism in the civil
service. Presidential Decree No. 807,[14] or the Civil Service Decree of the Philippines, provides for
the powers of the Commission, including the power to issue rules and regulations and to review
appointments:
Section 9: Powers and functions of the Commission The Commission shall
administer the Civil Service and shall have the following powers and functions:
xxxx
(b) Prescribe, amend, and enforce suitable rules and regulations for
carrying into effect the provisions of this Decree x x x
(c) Promulgate policies, standards, and guidelines for the Civil

Service and adopt plans and programs to promote economical,
efficient, and effective personnel administration in the
government;
xxxx
(h) Approve all appointments, whether original or promotional, to positions

in the civil service, except those of presidential appointees, members of the
armed forces of the Philippines, police forces, firemen, and jailguards, and
disapprove those where the appointees do not possess the appropriate
eligibility or required qualifications; (Emphasis supplied)
Executive Order No. 292, or the Administrative Code of 1987, also provides:
Section 12: Powers and Functions The Commission shall have the following powers
and functions:
xxxx
(2) prescribe, amend, and enforce rules and regulations for carrying
into effect the provisions of the Civil Service Law and other pertinent laws;
(3) promulgate policies, standards, and guidelines for the Civil Service
and adopt plans and programs to promote economical, efficient, and
effective personnel administration in the government;
(4) take appropriate action on all appointments and other personnel matters
in the Civil Service including extension of Service beyond retirement age;
(5) inspect and audit the personnel actions and programs of the
departments, agencies, bureaus, offices, local government units, and other
instrumentalities of the government, including government owned and
controlled corporations. (emphasis supplied)
Clearly, the above-cited statutory provisions authorize the Commission to prescribe, amend, and
enforce rules to cover the civil service. The legislative standards to be observed and respected in
the exercise of such delegated authority are set out in the statutes, to wit: to promote economical,
efficient, and effective personnel administration.
The Reasons behind CSC Resolution No.
010988
We also find that there was substantial reason behind the issuance of CSC Resolution No. 010988.
It is true that there is no constitutional prohibition against the issuance of mass appointments by
defeated local government officials prior to the expiration of their terms. Clearly, this is not the
same as a midnight appointment, proscribed by the Constitution, which refers to those
appointments made within two months immediately prior to the next presidential election.[15] As
we ruled in De Rama v. Court of Appeals:[16]
The records reveal that when the petitioner brought the matter of recalling the
appointments of the fourteen (14) private respondents before the CSC, the only
reason he cited to justify his action was that these were midnight
appointments that are forbidden under Article VII, Section 15 of the Constitution.
However, the CSC ruled, and correctly so, that the said prohibition applies only to
presidential appointments. In truth and in fact, there is no law that prohibits local
elective officials from making appointments during the last days of his or her
tenure.
However, even while affirming De Rama, we explained in Quirog v. Aumentado,[17] that:
We, however, hasten to add that the aforementioned ruling does not mean that
the raison d' etre behind the prohibition against midnight appointments may not
be applied to those made by chief executives of local government units, as
here. Indeed, the prohibition is precisely designed to discourage, nay,
even preclude, losing candidates from issuing appointments merely for
partisan purposes thereby depriving the incoming administration of the
opportunity to make the corresponding appointments in line with its
new policies. (Emphasis supplied)
Quirog also involved the disapproval of an appointment for non-compliance with CSC Resolution
No. 010988. However, we found that Quirogs appointment was made on June 1, 2001, or three
days prior to the issuance of CSC Resolution No. 010988. As such, we ruled that the retroactive
application of the law was not warranted.
In Sales v. Carreon, Jr.,[18] we had occasion to discuss the reasons behind the prohibition by the
Commission of mass appointments after the elections. Sales involved the issuance of 83
appointments made by then Dapitan City Mayor Joseph Cedrick O. Ruiz in his last month of office
(on June 1, 18, and 27, 2001), which the newly elected Mayor, Rodolfo H. Carreon, subsequently
revoked, on the ground that these violated CSC Resolution No. 010988 in relation to CSC
Memorandum Circular No. 7, Series of 2001, imposing a ban on issuing appointments in the civil
service during the election period. In Sales, we declared:
This case is a typical example of the practice of outgoing local chief executives to
issue "midnight" appointments, especially after their successors have been
proclaimed. It does not only cause animosities between the outgoing and the
incoming officials, but also affects efficiency in local governance. Those appointed
tend to devote their time and energy in defending their appointments instead of
attending to their functions.[19]
It is not difficult to see the reasons behind the prohibition on appointments before and after the
elections. Appointments are banned prior to the elections to ensure that partisan loyalties will not
be a factor in the appointment process, and to prevent incumbents from gaining any undue
advantage during the elections. To this end, appointments within a certain period of time are
proscribed by the Omnibus Election Code and related issuances.[20] After the elections,
appointments by defeated candidates are prohibited, except under the circumstances mentioned
in CSC Resolution No. 010988, to avoid animosities between outgoing and incoming officials, to
allow the incoming administration a free hand in implementing its policies, and to ensure that
appointments and promotions are not used as a tool for political patronage or as a reward for
services rendered to the outgoing local officials.
Not all Mass Appointments are

Prohibited
Indeed, not all appointments issued after the elections by defeated officials are invalid. CSC
Resolution No. 010988 does not purport to nullify all mass appointments. However, it must be
shown that the appointments have undergone the regular screening process, that the appointee
is qualified, that there is a need to fill up the vacancy immediately, and that the appointments
are not in bulk. In Nazareno v. Dumaguete,[21] we explained:
CSC Resolution No. 010988 does not totally proscribe the local chief executive from
making any appointments immediately before and after elections. The same
Resolution provides that the validity of an appointment issued immediately before
and after elections by an outgoing local chief executive is to be determined on
the basis of the nature, character, and merit of the individual
appointment and the particular circumstances surrounding the same.
Corollarily, we held in Sales,[22] that:
x x x [e]ach appointment must be judged on the basis of the nature, character,

and merits of the individual appointment and the circumstances surrounding the
same. It is only when the appointments were made en masse by the outgoing
administration and shown to have been made through hurried maneuvers and
under circumstances departing from good faith, morality, and propriety that this
Court has struck down "midnight" appointments.
In the instant case, Mayor Remollo issued the 89 original and promotional appointments on three
separate dates, but within a ten-day period, in the same month that he left office.[23] Further, the
Commissions audit found violations of CSC rules and regulations that justified the disapproval of
the appointments. In this regard, CSC Memorandum Circular No. 40, otherwise known as the
Revised Rules on Appointments and Other Personnel Actions, provides:
Section 1 Appointments submitted to the CSC office concerned should meet the
requirements listed hereunder. Non-compliance with such requirements shall be
grounds for disapproval of said appointments:
xxxx
(h) Personnel Selection Board (PSB) Evaluation/Screening. Appointees should be
screened and evaluated by the PSB, if applicable. As proof thereof, a certification
signed by the Chairman of the Board at the back of the appointment or
alternatively, a copy of the proceedings/ minutes of the Boards deliberation shall
be submitted together with the appointment. The issuance of the appointment
shall not be earlier than the date of the final screening/deliberation of the PSB.
Here, there was only one en banc meeting of the city PSB to consider the appointments, without
any evidence that there were any deliberations on the qualifications of the petitioners, or any
indication that there was an urgent need for the immediate issuance of such appointments. The
absence of evidence showing careful consideration of the merits of each appointment, and the
timing and the number of appointments, militate against petitioners cause. On the contrary, the
prevailing circumstances in this case indicate that the appointments were hurriedly issued by the
outgoing administration.
The Accreditation of Dumaguete City
did not remove the CSCs authority to
review appointments
We find that the authority granted by CSC Resolution No. 992411 to the City Government of
Dumaguete to take final action on all its appointments did not deprive the Commission of its
authority and duty to review appointments. Indeed, Resolution No. 992411 states that such
exercise of authority shall be subject to civil service law, rules and regulations and that
appointments in violation of pertinent rules shall immediately be invalidated.
Moreover, Section 20, Rule VI of the Omnibus Rules Implementing Book V of Executive Order No.
292 provides that notwithstanding the initial approval of an appointment, the same may be
recalled for [v]iolation of other existing Civil Service laws, rules and regulations. The CSC is
empowered to take appropriate action on all appointments and other personnel actions and that
such power includes the authority to recall an appointment initially approved in disregard of
applicable provisions of Civil Service law and regulations.[24]
Petitioners have not engaged in forum
shopping
The essence of forum-shopping is the filing of multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the purpose of obtaining a
favorable judgment.[25] Forum-shopping has been defined as the act of a party against whom an
adverse judgment has been rendered in one forum, seeking and possibly getting a favorable
opinion in another forum, other than by appeal or the special civil action of certiorari, or the
institution of two or more actions or proceedings grounded on the same cause on the supposition
that one or the other court would make a favorable disposition.[26]
Although the factual antecedents of the cases brought before this Court are the same, they
involve different issues. The petition for Mandamus with Injunction and Damages, docketed
as Civil Case No. 13013, and raised before this Court as G.R. No. 177795, challenged respondents
refusal to recognize petitioners appointments and to pay petitioners salaries, salary adjustments,
and other emoluments. The petition only entailed the applications for the issuance of a writ
of mandamus and for the award of damages. The present case docketed as G.R. No. 181559, on
the other hand, involves the merits of petitioners appeal from the invalidation and revocation of
their appointments by the CSC-Field Office, which was affirmed by the CSC-Regional Office,
CSC en banc, and the Court of Appeals.
In any event, this issue had already been settled in our Decision of June 19, 2009 in G.R. No.
177795, which found petitioners not guilty of forum shopping, to wit:
True, that the [Petition in G.R. No. 177795] and the one in G.R. No. 181559 are
interrelated, but they are not necessarily the same for this Court to adjudge that
the filing of both by petitioners constitutes forum shopping. In G.R. No. 181559,
the Court will resolve whether or not the petitioners appointments are valid. [In
G.R. No. 177795], petitioners are claiming a right to the salaries, salary
adjustments and other emoluments during the pendency of the administrative
cases, regardless of how the CSC decided the validity of their appointments.
WHEREFORE, the petition is DENIED for lack of merit. The Court of Appeals Decision in CA-
G.R. CEB-SP No. 00665 dated August 28, 2007 affirming CSC Resolution No. 040932 dated August
23, 2004 and CSC Resolution No. 050473 dated April 11, 2005, and its Resolution dated January
11, 2008 denying the Motion for Reconsideration are AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
(On official leave)

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO





ROBERTO A. ABAD
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions
in the above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Court.
REYNATO S. PUNO
Chief Justice
*
On official leave.
**
On leave.
[1]
Rollo, pp. 40-55; penned by Associate Justice Pampio A. Abarintos, and concurred in by
Associate Justices Priscilla Baltazar-Padilla and Stephen C. Cruz.
[2]
Id. at 57-59.
[3]
Id. at 212-214.
[4]
See Nazareno v. City of Dumaguete, G.R. No. 177795, June 19, 2009.
[5]
Id.
[6]
Id. In this case, we affirmed the Decision dated March 27, 2007 and Order dated April 26, 2007
of the Regional Trial Court. We ruled that petitioners were not entitled to the issuance of a
writ of mandamus ordering respondents to pay petitioners salaries, salary adjustments, and
other emoluments, from September 28, 2001 until final resolution of the case since there was
no ministerial duty compellable by a writ of mandamus. We also ruled that petitioners were
not, as yet, entitled to an award for damages resulting from the invalidation of their
appointments.
[7]
Nazareno v. City of Dumaguete, July 12, 2007, 527 SCRA 508. Involved in this case is a Petition
for Review on Certiorari of the Decision of the Court of Appeals dated January 30, 2004 in CA-
G.R. SP No. 70254, and its Resolution dated May 6, 2005. The assailed Decision affirmed with
modification the Orders issued by the Regional Trial Court of Dumaguete City, Branch 41, dated
September 26, 2001 and January 17, 2001, in Civil Case No. 13013. We held that both the
appointing authority and the appointee may question the disapproval of an appointment. In
this case, the appointing authority who had the right to assail the invalidation of the
appointment is the mayor occupying the position at the time of the institution of the appeal
and not the former mayor who made the assailed appointment. Aggrieved parties, including
the Civil Service Commission and the appointee, also have the right to file motions for
reconsideration or to appeal.
[8]
Rollo, pp. 146-147.
[9]
Memorandum Circular No. 7, Series of 2001, prescribes specific guidelines relating to the
transfer, detail, and issuance of appointments to civil personnel during elections, namely: (1)
a prohibition on the transfer or detail of personnel within the period from January 2, 2001 until
June 13, 2001; and (2) a prohibition of new appointments, promotions, or increases in salary
from March 30, 2001 to May 14, 2001.
[10]
Rollo, pp. 148-157; penned by Commissioner Waldemar Valmores, and concurred in by
Chairman Karina Constantino-David and Commissioner Cesar D. Buenaflor.
[11]
G.R. No. 131136, February 28, 2001, 353 SCRA 94, 102.
[12]
Rollo, pp. 124-173.
[13]
Article IX(B), Section 3 of the Constitution provides:
SECTION 3. The Civil Service Commission, as the central personnel agency of the Government,
shall establish a career service and adopt measures to promote morale, efficiency, integrity,
responsiveness, progressiveness, and courtesy in the civil service. It shall strengthen the merit
and rewards system, integrate all human resources development programs for all levels and
ranks, and institutionalize a management climate conducive to public accountability. It shall
submit to the President and the Congress an annual report on its personnel programs.
[14]
Providing For The Organization Of The Civil Service Commission In Accordance With Provisions
Of The Constitution, Prescribing Its Powers And Functions And For Other Purposes (October 6,
1975).
[15]
Article VII, Section 15 of the 1987 Philippine Constitution provides:
Two months immediately before the next presidential elections and up to the end of his term, a
President or Acting President shall not make appointments, except temporary appointments to
executive positions when continued vacancies therein will prejudice public service or endanger
public safety.
[16]
Supra note 11.
[17]
G.R. No. 163443, November 11, 2008.
[18]
G.R. No. 160791, February 13, 2007, 515 SCRA 597, 601.
[19]
In Sales, we found that there had not been proper publication of the vacancies, and there was
no first level representative to the Personnel Selection Board, as required by existing laws and
regulations.
[20]
Section 261 of the Omnibus Election Code of the Philippines provides:
"x x x The following shall be guilty of an election offense:
xxxx
(g) Appointment of new employees, creation of new position, promotion, or giving salary
increases During the period of forty five (45) days before regular election and thirty days before
a special election (1) any head, official or appointing officer of a government office, agency or
instrumentality, whether national or local, including government-owned or controlled
corporations, who appoints or hires any new employee, whether provisional, temporary or
casual, or creates and fills any new position, except upon prior authority of the Commission.
The Commission shall not grant the authority sought unless, it is satisfied that the position to
be filled is essential to the proper functioning of the office or agency concerned, and that the
position shall not be filled in a manner that may influence the election.
As an exception to the foregoing provisions, a new employee may be appointed in case of urgent
need; Provided, however, That notice of the appointment shall be given to the Commission
within three days from the date of the appointment. Any appointment or hiring in violation of
this provision shall be null and void.
COMELEC Resolution No. 3401, entitled Enforcement Of The Prohibition Against Appointment Or
Hiring Of New Employees; Creation Or Filling Up Of New Positions, Giving Salary Increases;
Transferring/Detailing Civil Service Employees; And Suspension Of Elective Local Officials In
Connection With The May 14, 2001 Elections (15 December 2000), also prohibited
appointments prior to the elections:
SECTION 1. Prohibited Acts
xxxx
(b) Beginning March 30, 2001 until May 14, 2001, no head, official or appointing officer of any
national or local government office, agency or instrumentally, including government owned or
controlled corporation shall: (1) appoint or hire any new employee, whether permanent,
provisional, temporary or casual; or (2) create and fill any new positions, except upon prior
authority of the Commission.
[21]
Supra note 4.
[22]
Supra note 18, at 603-604.
[23]
The assumption date of the winning mayoralty candidate Mayor Perdices was on June 30,
2001.
[24]
Sales, supra note 18; Mathay v. Civil Service Commission, G.R. No. 130214, August 9, 1999, 312
SCRA 91,102; Debulgado v. Civil Service Commission, G.R. No. 111471, September 26, 1994, 237
SCRA 184, 200.
[25]
Mondragon Leisure and Resorts Corporation v. United Coconut Planters Bank, G.R. No.
154187, April 14, 2004, 427 SCRA 585, 590.
[26]
Transfield Philippines, Inc. v. Luzon Hydro Corporation, G.R. No. 146717, May 19, 2006, 490
SCRA 14, 18; Roxas v. Court of Appeals, G.R. No. 139337, August 15, 2001, 363 SCRA 207,
217.
SECOND DIVISION

Appellee,
Present:
YNARES-SANTIAGO,* J.,
CARPIO MORALES,
- versus - Acting Chairperson,
PERALTA,**
DEL CASTILLO, and
ABAD, JJ.
ANTON MADEO, Promulgated:

Appellant. October 2, 2009
x-----------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Rape is nothing more or less than a conscious process of intimidation by which a

man keeps a woman in a state of fear and humiliation. Thus, it is not even
impossible for a victim of rape not to make an outcry against an unarmed
assailant.[1] Physical resistance is immaterial in a rape case when the victim is
sufficiently intimidated by her assailant and she submits against her will because
of fear for her personal safety.[2]
Assailed before us is the 16 October 2006 Decision[3] of the Court of Appeals in CA-G.R. CR-H.C.
No. 01551 which affirmed the Decision[4] of the Regional Trial Court ofUrdaneta City, Branch 46
in Criminal Case No. U-10600 finding appellant Anton Madeo guilty beyond reasonable doubt of
the crime of rape and sentencing him to suffer the penalty of reclusion perpetua and to pay the
victim the sum of P50,000.00 as moral damages and P20,000.00 as exemplary damages, with
modification that appellant is further ordered to pay the sum of P50,000.00 as civil indemnity.
On 4 April 2000, an Amended Information was filed charging appellant Anton Madeo with the
crime of Rape committed as follows:
That on or about December 7, 1999, in the afternoon, at Labit West, Urdaneta City
and within the jurisdiction of this Honorable Court, the above-named accused,
knowing fully well of the mental disability, emotional disorder and/or physical
handicap of the offended party, AAA[5] at the time of the commission of the rape,
and by means of force and intimidation, did then and there willfully, unlawfully
and feloniously have sexual intercourse with said AAA, against her will and without
her consent, to her damage and prejudice.
Contrary to Art. 266-A, par. 1(a), Revised Penal Code, as amended by Rep. Acts
7659 and 8353.[6]
During arraignment, appellant entered a plea of not guilty.[7] Trial on the merits thereafter
ensued.
The prosecution presented Dr. Noel U. Obedoza who testified that he examined AAA on 5 January
2000. According to Dr. Obedoza, the victim was conscious and coherent during the
interview.[8] However, the physical examination results indicated that she had a ruptured hymen
and healed hymenal lacerations[9] about three weeks old.[10] On the other hand, Dr. Bernadette
M. Quitoriano testified that she conducted psychological and mental examinations on the person
of AAA whom she found to have a mental age of a 5 year old.[11]
AAA's mother also testified that on 5 January 2000, she noticed that her daughter was pale and
trembling; that when asked if she has any problem, AAA answered none;[12] that when further
asked if somebody touched her private parts, AAA cried and told her that appellant touched her
private parts and warned her not to tell anyone or he would kill her family;[13] that she and her
husband immediately brought AAA to a hospital for examination and to the NBI to report the
crime.[14]
Complaining witness, AAA, also took the witness stand. She testified that on 7 December 1999 at
about 3 o'clock in the afternoon, she was on her way to her grandmother's house when her
classmate, Jovelyn Fortuna (Jovelyn), invited her to the house of her uncle, herein appellant
Madeo;[15] that soon thereafter Jovelyn left AAA alone with appellant[16] who summoned AAA to
his room; that when she did not comply, appellant forcibly pulled her inside the
room,[17] undressed her and thereafter touched her private parts;[18] that appellant likewise
undressed, ordered AAA to lie down, went on top of her and proceeded to have carnal knowledge
of her;[19] that she felt pain in her private parts;[20] that thereafter, appellant warned AAA not to
reveal to anyone what happened or he would kill her and her family; that after the sexual assault,
appellant put on his pants; that AAA also put on her shorts and was told to go home;[21] that after
some time she narrated the incident to her mother who brought her to the hospital for medical
examination and to the NBI to report the incident.[22]
The defense presented Jovelyn as its first witness. She testified that she was staying at her
grandmother's house at Labit West, Urdaneta City, Pangasinan;[23] that her uncle, appellant
herein, also stays in the said house;[24] that on 7 December 1999 she was sick[25] and did not see
her uncle or AAA.[26]
Melanie Andrada also testified for the defense. She claimed that Jovelyn is her niece while
appellant is her cousin;[27] that on 7 December 1999, she visited Jovelyn who was sick;[28] and
that during her visit, she did not see AAA or appellant.[29]
The defense also presented Olimpia Yesa who testified that on 7 December 1999, from 3 to 7
p.m., she was at the house of Epifania Madeo, appellant's mother, as she was treating Jovelyn
who was sick.[30]
To establish the whereabouts of appellant, the defense presented Virgilio Jacob who testified that
on 7 December 1999, he and appellant were working in a mobile rice mill owned by Roger Madolid
at Labit West, Urdaneta City.[31]
Finally, the defense presented appellant who denied the charges against him. He claimed that on
7 December 1999, he was working at the rolling rice mill together with Berting Jacob, Etong,
Rommel, Roger Madolid who owned the rice mill and another person whose name he
forgot;[32] that from 6 o'clock in the morning up to 6 o'clock in the afternoon, they traveled to
several barangays in Urdaneta City to mill rice; and that he did not see the victim on said
date.[33] On cross-examination, appellant averred that he did not have any quarrel with the victim
and that he could not understand why the latter would file the charges against him.[34]
On rebuttal, the prosecution presented Roger Madolid who denied hiring Virgilio Jacob and
appellant as workers in his rolling rice mill. He testified that on 7 December 1999, his rolling rice
mill was under repair at the Andrada Repair Shop in Nancamaliran, Urdaneta City.[35]
On 24 August 2000, the Regional Trial Court of Urdaneta City, Branch 46, rendered its Decision,
WHEREFORE, JUDGMENT is hereby rendered, CONVICTING ANTON MADEO

beyond reasonable doubt of the crime of SIMPLE RAPE and the Court sentences
him to suffer the penalty of Reclusion Perpetua; Anton Madeo is hereby ordered
to indemnify AAA the sum of P50,000.00 as moral damages and P20,000.00 as
exemplary damages.
The Branch Clerk of Court of this Court is hereby ordered to prepare the mitimus
immediately.
The Jail Warden, Bureau of Jail Management and Penology (BJMP) Urdaneta
District Jail, Urdaneta City, is hereby ordered to deliver the living person of Anton
Madeo to the National Bilibid Prisons, Muntinlupa City, immediately upon receipt
of this Decision.
SO ORDERED.[36]
The trial court held that although Dr. Quitoriano testified that AAA has a mental age of 5 years
old, the latter is only simple-minded as she was able to finish grade school and has a mental age
of more than seven years old. The court below found the testimony of the victim credible and
straightforward and corroborated by the medical findings. Likewise, the age of the healed
hymenal lacerations coincided with the date of the commission of the crime. On the other hand,
the court below disregarded appellant's alibi for being self-serving.
Appellant filed an appeal before the Court of Appeals. In his Brief,[37] he alleged that the trial
court erred in finding that he employed force and intimidation in consummating the rape.[38] He
also argued that the victim's actuations did not show the kind of resistance expected of a woman
defending her virtue. In particular, appellant asserted that AAA voluntarily accepted the invitation
to enter appellant's room; that she did not make any outcry or sought the help of the neighbors
despite the lack of danger to her life; that she was not rendered unconscious during the
intercourse; that she only used her hands but not her feet in warding off appellant's advances;
and that the medical report did not indicate that AAA suffered any physical injury.[39]
Appellant likewise argued that the trial court erred in finding that the victim was mentally
deficient.[40] He alleged that when AAA was presented on the witness stand, she was 22 years
old and was in 2nd year high school.[41] Finally, appellant alleged that the victim may have been
coerced by her mother to testify falsely against him in order to have the sole management of the
land which she jointly tills with the appellant.[42]
In the Appellee's Brief,[43] the Office of the Solicitor General countered that appellant's argument
of consensual congress should be dismissed because it was clearly established that appellant
employed force, threats and intimidation. It was also shown that AAA was deceived to join Jovelyn
inside the house of appellant; that the victim's failure to shout could not yield the inference that
no rape was committed; and that the mental retardation of AAA was proven beyond reasonable
doubt.
On 16 October 2006, the Court of Appeals rendered its Decision affirming with modification the
Decision of the Regional Trial Court, the dispositive portion of which reads:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED,

and the Decision appealed from rendered by
the Regional Trial Court of Urdaneta City, Branch 46, dated August 24, 2000, in
Criminal Case No. U-10600 is hereby AFFIRMED with the
MODIFICATION that accused-appellant is hereby ORDERED to pay private
complainant an additional Fifty Thousand Pesos (P50,000.00) as and by way of
civil indemnity.
SO ORDERED.[44]
The appellate court noted that the issues raised by appellant deal with the victim's credibility and
appreciation of facts, both of which lie in the province of the trial court. At any rate, the Court of
Appeals found that the trial court did not overlook or mis-appreciate any material fact that
warrants a reversal of its findings.[45]
The appellate court likewise found that the victim testified in a spontaneous and straightforward
manner; that there was nothing in her testimony that detracts from her claim that she was indeed
raped; that her failure to make an outcry did not mean that she was not raped; that the fact that
she did not shout could be attributed to the warning she received from the appellant; that it is
not true that the victim did not resist the advances of the appellant; and that AAA's failure to
offer tenacious resistance does not make her submission to the criminal acts of the appellant
voluntary.[46]
Anent the award of damages, the Court of Appeals held that AAA is entitled to an additional
amount of P50,000.00 by way of indemnity ex delicto.[47]
On 7 March 2007, the Court resolved to notify the parties to file, if they so desire, their respective
supplemental briefs.[48] Both parties manifested that they were no longer submitting their
supplemental briefs since they have already extensively discussed their arguments in their
respective briefs.[49]
Article 266-A of the Revised Penal Code provides:
ART. 266-A. Rape, When and How Committed. - Rape is committed -

1. By a man who shall have carnal knowledge of a woman under any of the
following circumstances:
a. Through force, threat or intimidation;
b. When the offended party is deprived of reason or is otherwise unconscious;
c. By means of fraudulent machination or grave abuse of authority;
d. When the offended party is under twelve (12) years of age or is demented, even
though none of the circumstances mentioned above is present;
x x x x.
Thus, in the instant case, the prosecution must prove beyond reasonable doubt that appellant
had carnal knowledge of AAA through the use of force, threats or intimidation.
We have carefully examined the records of the case and we find that both the trial court and the
Court of Appeals correctly held that appellant is guilty of the crime of simple rape. The testimony
of the victim clearly established that appellant had sexual intercourse with her without her consent
and against her will by employing force, threats and intimidation. Her narration of her harrowing
experience is enlightening, thus:
Q On December 7, 1999 at 3:00 0clock in the afternoon, do you remember where

you were?
A Yes, sir.
Q Where were you?
A I was walking going to the house of my grandmother, sir.
Q Were you able to reach the house of your grandmother on that date and time?
A No, sir.
Q Why were you not able to reach the house of your grandmother?
A That was the time when Anton Madeo raped me, sir.
Q Will you kindly tell this Honorable Court how this incident happened and started?
A I was walking going to the house of my grandmother, Jovelyn called me, sir.
Q What is the family name of this Jovelyn?
A I only know her to be Jovelyn, sir.
COURT Is he a man or a woman?
A A woman, sir.
ATTY. BONGOLAN Do you know if this Jovelyn who called you has any relationship
with Anton Madeo?
A Yes, sir.
Q How are they related?
A Jovelyn is the niece of Anton Madeo, sir.
Q Where was Jovelyn when she called you?

A She was in the yard of Madeo, sir.
COURT So, you were walking and called by Jovelyn in the yard of Madeo?
A Yes, sir.
ATTY. BONGOLAN What did she say when she called you?
A Jovelyn told me, come AAA I have something to tell you.
COURT Is that your nickname AAA?
A Yes, sir.
ATTY BOLONGAN What did you do?
A I responded to the call of Jovelyn, sir.
Q What happened when you got near Jovelyn?
A We greeted each other, sir.
Q What else?
A She invited me to get inside the house, sir.
Q Do you know where Anton Madeo was at the time?
A Yes, sir.
Q Where was he?
A Inside their house, sir.
Q Did you go inside the house as invited by Jovelyn?
A Yes, sir.
Q When you got inside the house did you notice any other person aside from the
three of you?
A No more, sir.
COURT
By the way, the place where you were walking is it a pathway, barrio road or
municipal road?
A It is a road, sir.
Q The place where Jovelyn was at the time, was it divided by a wall or barb wire
or nothing was placed in between the road?
A None, sir.
Q When you were already inside the house of Anton Madeo and Jovelyn, what did
Jovelyn do?
A She went out laughing, sir.
Q After she left what happened?
A (No answer yet, a question was raised by the Court).
COURT Did you find out why she was laughing?
A Yes, sir.
Q What was the reason why she went out laughing?
A Because she told, come AAA inside the house.
Q Do you know the reason why she went out x x x and why she went out laughing?
A Because Anton Madeo pulled me inside his room, sir.
Q Did you comply?
A No, sir, I did not?
Q What is your understanding when Jovelyn went out laughing?
A She was laughing, sir.
Q Is it because you were left alone with Anton Madeo and she went out laughing?
A Yes, sir.
ATTY BOLONGAN Before Anton Madeo pulled you to his room, what did he do
then?
A He warned me and he said: if you shout I will kill you.
COURT Where did he pull you?
A In his room, sir.
Q Otherwise what?
A He will kill me, sir.
ATTY BOLONGAN After he pulled you to his room and warned if you will scream
or shout what did he do next if any?
A He suddenly undressed me, sir.
Q Will you tell us how he undressed you?

A He held my two hands and then he undressed me, sir.
Q What part of your dress was removed first?
A My shorts, sir.
Q While he was removing your shorts what did you do if you did anything?
A I was pushing him but he was heavy I cannot push him away, sir.
Q After that what did he do if any?
A And then he removed my panty, sir.
Q What did he do to you when your panty was being removed?
A He touched my vagina, sir.
COURT The touching of your vagina, is it actual touching or inserting his penis or
some other way?
A After touching my vagina he undressed himself, sir.
ATTY. BOLONGAN After undressing himself what did he do next if any?
A I was made to lie down and then he went on top of me, sir.
Q When he went on top of you what did you do?
A I was struggling but I cannot push him because he was heavy, sir.
Q When he was on top of you and you were trying to free yourself struggling what
happened next?
A He forced his organ to insert in my vagina, sir.
COURT When you said, he forced his organ in my vagina what do you mean by
his organ?
A His penis, sir.

COURT She is not a retarded.
ATTY BOLONGAN That is according to the findings of the Doctor, Your Honor.
Q When he forcibly inserted his penis into your private parts what did you feel?
A My vagina is painful, sir.
Q How long was he on top of you after inserting his penis in your vagina?
A A little bit long, sir.
Q Can you estimate how long he was on top of you?
COURT If I were you I will not ask that question that is dangerous.
ATTY BOLONGAN I will withdraw the question, Your Honor.
ATTY BOLONGAN After that what happened?
A He said, if you will not give what I want, I will kill you together with your father
and mother.
Q I am asking what he did if any after he was already on top of you and after he
inserted his penis into your organ?
A The penis was inserted in my vagina, sir.
Q After that what did he do?
A After that he warned me and he said, if you shout I will kill you and your parents.
Q Did he finally get off from you?
A Yes, sir.
Q What did he do after he got off from you?
A He put on his pants, sir.
Q How about you?
A I also put on my shorts and stood up, sir.
Q When you stood up, did you notice something in your person?
A Yes, sir.
Q What was that?
A My vagina was bleeding, sir.
Q Before that incident were you already touched by a man?
A None except him, sir.
Q Did he tell you anything as you put on your dress?
A Yes, sir.
Q What did he tell you?
A I was sent home, sir.
Q Did he not tell you anything more?
A If you report I will kill you and your father and mother.
Q But inspite of that threat did you report this matter to anyone?
A Yes, sir.
Q To whom did you report?
A My mother, sir.
Q What did your mother do when you reported to her?
A My mother reported the same to my father, sir.
Q What did your parents do if they did anything?
A I was examined at the Center, sir.
Q You are referring to the Rural Health Unit of Urdaneta City?
A Yes, sir.
Q Were you brought to any hospital for further examination?
A Yes, sir.
Q Where were you brought, what hospital?

A At the Center, sir.
Q Aside from the Center where were you brought?
A Emergency hospital, sir.
Q Are you referring to Don Amadeo Perez Memorial General Hospital?
A Yes, sir.
Q Who was with you when you were brought there?
A My mother, sir.
Q What happened first in the hospital?
A We were asked questions, sir.
Q When you said we who were your companions?

A My mother, sir.
Q Do you know who interviewed you at the hospital?
A I forgot the name, sir.
Q After you were interviewed what happened next?
A I was submitted for examination to determine pregnancy test, sir.
Q Do you remember having been examined by a Doctor?
A Yes, sir.
Q Do you know the Doctor who examined you in the hospital?
A I forgot the name, sir.
Q After you were examined in the hospital do you know if this matter was brought
to the authorities?
A Yes, sir.
Q Where, what Police station or authorities?
A At the NBI, sir.
Q Where is that office of the NBI where you were brought?

A Urdaneta City, sir.
Q What happened at the NBI Office?
A We were asked questions, sir.[50]
We find no merit in appellants contention that the victims actuations did not show the
kind of resistance expected of a woman defending her virtue. Time and again, we have held that
the behavior and reaction of every person cannot be predicted with accuracy. It is a time-honored
precept that different people react differently to a given situation or type of situation and there
is no standard form of behavioral response when one is confronted with a strange or startling or
frightful experience. Not every rape victim can be expected to act conformably to the usual
expectations of everyone. Some may shout; some may faint; and some may be shocked into
insensibility; while other may openly welcome the intrusion.[51]
Besides, AAAs failure to cry for help during the incident in question, did not make her
testimony improbable inasmuch as it is not uncommon for a woman to be easily intimidated into
silence and conceal for sometime the violation of her honor, even by the mildest threat to her
life.[52] In her testimony, AAA explained that she did not shout because she was intimidated by
the appellant, who repeatedly warned that she and her family would be killed if she would refuse
to give in to his demands, thus:
Q Why did you not tell your mother immediately on that date, December 7, 1999,
when you arrived home from the place where you were allegedly raped?
A I did not report immediately because I was afraid because Anton threatened
me.[53]
xxxx
Q Since you did not like to be alone with Madeo, why did you allow Jovelyn to
leave without you?
A She just left.
Q Why did you not follow her since you were alone in a house with another man?
A Because Madeo threatened me if I shout he will kill my father and mother.
Q That is correct when Jovelyn left, but before Jovelyn left, why did you not follow
her immediately?
A I was scared that is why I was not able to follow.

xxxx
Q Since you were already scared and afraid, why did you not leave the house when
Jovelyn was still there?
A I was threatened, sir.[54]
xxxx
Q On questions of this Honorable Court, you testified that your mouth was not
covered, you were conscious all through out that process did you shout or
scream for help?
A No, sir.
Q Why not?
A Because I was threatened.[55]
Our ruling in People v. Silvano[56] is instructive, to wit:
For his defense, appellant claims among others, that the victim offered only
a token resistance when the alleged sexual acts were being done. Be that as it
may, the failure to shout or offer tenacious resistance cannot be construed as a
voluntary submission to appellants desires. It is enough if the prosecution had
proven that force or intimidation concurred in the commission of the crime, as in
this case. The law does not impose upon a rape victim the burden of proving
resistance. Moreover, physical resistance need not be established in rape when
intimidation is exercised upon the victim and she submits herself against her will
to the rapists lust because of fear for her life or personal safety. The force,
violence, or intimidation in rape is a relative term, depending not only on the age,
size, and strength of the parties but also on their relationship with each other.
The imputation that AAA was coerced by her mother to file the charges against appellant
in order to have exclusive rights to the land they presently jointly cultivate, is unbelievable. It is
outrageous even to suggest that a mother would subject her daughter to a public trial, ridicule
and embarrassment and to all the rigors that go with it, just for the purpose of increasing ones
harvest. Besides, this imputation is totally lacking in any factual basis. From AAAs and her mothers
testimony, we could only discern an honest and sincere desire to solely seek justice and obtain
redress for the unforgivable and wicked acts committed upon her.
Anent AAAs state of mind, we find that we cannot subscribe to the findings that AAAs
mental age is that of a 5 years old, or even a seven year-old. The basic postulate in criminal
prosecution anchored on the constitution is that the prosecution is burdened to prove the guilt of
the accused for the crime charged beyond cavil of doubt. The prosecution is burdened to prove
conclusively and indubitably not only that appellant had carnal knowledge of AAA but also that
she was a mental retardate.[57] The conviction of an accused of rape based on the mental
retardation of AAA must be anchored on proof beyond reasonable doubt of her mental
retardation.[58] We examined closely the testimony of AAA and we find the same to be coherent
and categorical. In assessing her level of intelligence and capacity to comprehend, the trial court
propounded several questions which were all satisfactorily answered by AAA, thus:
Q Do you recognize the people around the bench, do you know them?
A Not yet, sir.
Q You dont know their names, can you tell us their occupation or calling are they
Doctors, Police or what?
A Lawyers, sir.
Q Who are your parents?
A BBB and CCC, sir.
Q What does your father do for a living?
A He is a farmer, sir.
Q About your mother?
A Housekeeper, sir
Q Do you wear bra?
A No, sir.
Q Do you understand bra?

A Yes, sir.
Q You dont have any bra?
A I have, sir.
Q Do you have panty?

A Yes, sir.
Q Do you go to school?
A Yes, sir.
Q What grade?
A Second year high school, sir.
Q What school?
A Catablan, sir.
Q What municipality is Catablan?
A Urdaneta, sir.
Q What are your subjects in second year high school?
A English, Pilipino, Hekasi, sir.
Q What is your favorite subject aside from recess?
A Pilipino, sir.
Q Do you know who is your teacher in Pilipino?
A Mercedita, sir.
Q You comb your hair personally or with the assistance of your mother?
A Me, sir.
Q Do you take a bath alone?
A Yes, sir.
Q Without the assistance of your mother?
A Yes, sir.
Q Do you dress up alone?
A Yes, sir.
Q Do you put your bra alone?
A Yes, sir.
Q Do you put your panty alone?

A Yes, sir.
Q About your shoes?
A Yes, sir.
Q Do you use shampoo in your hair?
A Yes, sir.
Q Do you use soap?
A Yes, sir.
Q What kind of soap?
A Safeguard, sir.[59]
Based on the testimony of AAA, we are convinced that she is not a mental retardate.[60]
In addition, we find that although it was specifically alleged in the Information that
appellant knew of AAAs mental disability, emotional disorder and/or physical handicap, still, no
proof was presented that appellant indeed knew AAAs alleged mental deficiency. In People v.
Limio,[61] we held that:
By itself, the fact that the offended party in a rape case is a mental retardate does
not call for an imposition of the death penalty, unless knowledge by the offender
of such mental disability is specifically alleged and adequately proved by the
prosecution.
For the Anti-Rape Law of 1997, now embodied in Article 266-B of the Revised
Penal Code (RPC), expressly provides that the death penalty shall also be imposed
if the crime of rape is committed with the qualifying circumstance of (10) when
the offender knew of the mental disability, emotional disorder and/or physical
handicap of the offended party at the time of the commission of the crime. Said
knowledge, in our view, qualifies rape as a heinous offense. Absent said
circumstance, which must be proved by the prosecution beyond reasonable doubt,
the conviction of appellant for qualified rape under Art. 266-B (10), RPC, could not
be sustained, although the offender may be held liable for simple rape and
sentenced to reclusion perpetua.
Both the trial court and the Court of Appeals correctly disregarded appellants denial and
alibi. These two defenses are inherently the weakest as they are negative defenses.Mere denials
of involvement in a crime cannot take precedence over the positive testimony of the offended
party. For alibi to prosper, it is not enough for the defendant to prove that he was somewhere
else when the crime was committed; he must likewise demonstrate that it is physically impossible
for him to be at the scene of the crime at the time.[62]
In the instant case, AAA positively identified appellant as the author of the crime. It should
be noted that affirmative testimony, like that of the victims, is stronger than appellants bare
denial, which is a negative assertion. As regards appellants alibi, we find that he failed to prove
that it was physically impossible for him to be at the scene of the crime at the time it was
committed.
In view of the foregoing, we find that appellant was correctly found guilty of the crime of
simple rape; i.e., by having carnal knowledge of a woman committed through the use of force,
threats or intimidation. Under Article 266-B of the Revised Penal Code, the penalty therefor
is reclusion perpetua.
Anent the award of damages, we find that the award of P50,000.00 as civil indemnity and
another P50,000.00 as moral damages is proper and in line with prevailing jurisprudence.[63] Civil
indemnity is mandatory upon a finding of the fact of rape. As to moral damages, the same is
automatically granted without need of further proof, it being assumed that a rape victim has
actually suffered moral damages entitling her to such award. However, the award of exemplary
damages must be deleted. Article 2230 of the Civil Code provides that in criminal offenses,
exemplary damages as a part of civil liability may be imposed when the crime was committed
with one or more aggravating circumstances. There being no aggravating circumstance in the
instant case, the award of exemplary damages therefore has no basis. In People v. Marcos,[64] we
held that the award of exemplary damages is in order when the crime was committed with an
aggravating circumstance pursuant to Article 2230 of the Civil Code.
WHEREFORE, the 16 October 2006 Decision of the Court of Appeals in CA-G.R. CR-H.C.
No. 01551 finding appellant Anton Madeo guilty beyond reasonable doubt of the crime of rape
and sentencing him to suffer the penalty of reclusion perpetua and to pay the victim the sum
of P50,000.00 as moral damages, and P50,000.00 as civil indemnity, is AFFIRMED with
MODIFICATION that the award of P20,000.00 as exemplary damages is DELETED.
SO ORDERED.
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
CONCHITA CARPIO MORALES DIOSDADO M. PERALTA

ROBERTO A. ABAD
Associate Justice
ATTESTATION

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting Chairpersons
attestation, it is hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
*
Additional member per Special Order No. 691 dated September 4, 2009.
**
In lieu of Justice Arturo D. Brion who is on sick leave, per Special Order No. 711
dated September 28, 2009.
[1]
People v. Silvano, G.R. No. 127356, June 29, 1999, 309 SCRA 362, 384.
[2]
People v. Domingo, G.R. Nos. 153295-99, June 30, 2008, 556 SCRA 788, 803.
[3]
Rollo, pp. 3-17; penned by Associate Justice Jose C. Reyes, Jr. and concurred in by Associate
Justices Edgardo P. Cruz and Enrico A. Lanzanas.
[4]
Records, pp. 111-118; penned by Judge Modesto C. Juanson.
[5]
The names and personal circumstances of the victim, as well as those of their immediate family
or household members, or any other information tending to establish or compromise their
identities, shall not be disclosed pursuant to People v. Cabalquinto, G.R. No. 167693,
September 19, 2006, 502 SCRA 419, 425-426.
[6]
Records, p. 40.
[7]
Id. at 45.
[8]
TSN, May 8, 2000, p. 5.
[9]
Id.
[10]
Id. at 8.
[11]
TSN, May 9, 2000, p. 6.
[12]
TSN, May 16, 2000, p. 7.
[13]
Id. at pp. 8-9.
[14]
Id. at 11-15.
[15]
TSN, May 23, 2000, pp. 5-6.
[16]
Id. at 7.
[17]
Id.
[18]
Id. at 8.
[19]
Id. at 9.
[20]
Id.
[21]
Id. at 9-10.
[22]
Id. at 11-14.
[23]
TSN, June 7, 2000, pp. 4-5.
[24]
Id. at 6.
[25]
Id. at 5.
[26]
Id. at 6.
[27]
TSN, June 20, 2000, pp. 2-3.
[28]
Id. at 4.
[29]
Id. at 6.
[30]
TSN, June 21, 2000, pp. 5-6.
[31]
TSN, June 27, 2000, p. 3.
[32]
TSN, June 28, 2000, p. 6.
[33]
Id. at 7-8.
[34]
Id. at 12-13.
[35]
TSN, July 11, 2000, p. 3.
[36]
Records, p. 118.
[37]
[38]
Id. at 49.
[39]
Id. at 49-50.
[40]
Id. at 51.
[41]
Id. at 52.
[42]
Id. at 115.
[43]
Id. at 65-80.
[44]
Rollo, p. 16.
[45]
Id. at 11-12.
[46]
Id. at 12-14.
[47]
Id. at 16.
[48]
Id. at 18.
[49]
Id. at 19-20 & 22-23.
[50]
TSN, May 23, 2000, pp. 4-13.
[51]
People v. Silvano, supra note 1, at 392.
[52]
See People v. Orande, G.R. Nos. 141724-27, November 12, 2003, 415 SCRA 699, 707.
[53]
TSN, May 24, 2000, p. 2.
[54]
Id. at pp. 8-9.
[55]
Id. at pp.15-16.
[56]
Supra note 1, at 383-384.
[57]
People v. Dalandas, G.R. No. 140209, December 27, 2002, 394 SCRA 433, 438.
[58]
Id. at 441.
[59]
TSN, May 9, 2000, pp. 13-15.
[60]
See People v. Dalandas, supra note 57, at 442.
[61]
G.R. Nos. 148804-06, May 27, 2004, 429 SCRA 597, 602.
[62]
People v. Bon, G.R. No. 166401, October 30, 2006, 168 SCRA 185-186.
[63]
See People v. Arcosiba, G.R. No. 181081, September 4, 2009; People v. Ganoy, G.R. No.
174370, July 23, 2009.
[64]
G.R. No. 185380, June 18, 2009.
SECOND DIVISION
REPUBLIC OF THE PHILIPPINES, G.R. No. 165332
Petitioner,
Present:
YNARES-SANTIAGO,* J.,
- versus - CARPIO MORALES,
Acting Chairperson
BRION,
DEL CASTILLO, and
ABAD, JJ.
YANG CHI HAO, Promulgated:
Respondent. October 2, 2009
x--------------------------------------------------x
DECISION
DEL CASTILLO, J.:
As early as 1913, we held in Herrera v. Barretto[1] that:
The office of the writ of certiorari has been reduced to the correction of defects
of jurisdiction solely and cannot legally be used for any other purpose. It is truly
an extraordinary remedy and, in this jurisdiction, its use is restricted to truly
extraordinary cases cases in which the action of the inferior court is wholly void;
where any further steps in the case would result in a waste of time and money
and would produce no result whatever; where the parties, or their privies, would
be utterly deceived; where a final judgment or decree would be nought but a snare
and a delusion, deciding nothing, protecting nobody, a judicial pretension, a
recorded falsehood, a standing menace. It is only to avoid such results as these
that a writ of certiorari is issuable; and even here an appeal will lie if the aggrieved
party prefers to prosecute it.
We reiterate these well-established principles: that only errors of jurisdiction, not errors of
judgment, may be entertained in a petition for certiorari; that certiorari will not lie where an
appeal may be taken or is lost through petitioner's own doing; and that questions of fact are not
decided by this Court.
Assailed in this Petition for Review on Certiorari is the Resolution[2] of the Court of Appeals (CA)
in CA-G.R. SP No. 83787, dated 11 August 2004 dismissing outright petitioners Petition
for Certiorari for being the wrong legal remedy to impugn the final order of the Regional Trial
Court of Manila, Branch 24. Also assailed is the CA Resolution[3] dated 20 September
2004 denying the motion for reconsideration.
On 6 August 2002, Yang Chi Hao, private respondent herein, filed a Petition for
Naturalization[4] before the Regional Trial Court of Manila, Branch 24, which was docketed as Case
No. 02104240. The Republic of the Philippines, through the Office of the Solicitor General (OSG),
opposed the petition, cross-examined private respondent and his witnesses, but did not present
any of its own evidence.
On 4 September 2003, the trial court issued a Decision[5] denying the Petition for
Naturalization. Private respondent filed a Motion for Reconsideration which the trial court granted
in its Order[6] dated 25 November 2003. The dispositive portion of the Order reads:
Accordingly, in view of all the foregoing, the motion for reconsideration is hereby
granted.
The decision of the Court dated September 4, 2003 is hereby set aside.
Petitioner is hereby admitted as citizen of the Republic of the Philippines subject

to the provisions of Republic Act No. 530. After the period of two (2) years and
upon compliance with all the legal requirements the appropriate Certification of
Naturalization shall be issued, to be registered in the Civil Registry.
SO ORDERED.[7]
Thereafter, the OSG filed a Motion for Reconsideration which was denied by the trial court in an
Order[8] dated 24 February 2004.
Instead of filing an ordinary appeal before the Court of Appeals, the OSG filed a Petition
for Certiorari under Rule 65 of the Rules of Court, claiming that by reversing its original decision,
the trial court acted with grave abuse of discretion amounting to lack of jurisdiction. In the herein
assailed Resolution of 11 August 2004, the appellate court dismissed the petition, declaring that:
This petition for certiorari faces outright dismissal.
xxxx
The present recourse is an incorrect, improper, or a wrong legal remedy for the
simple reason that the order in question is a final order which disposed of the case.
Hence, the proper recourse therefrom is an ordinary appeal to be filed within
fifteen (15)[9] days from March 8, 2004, when the OSG received notice of the denial
of its motion for reconsideration. In other words, the OSG had until March 23,
2004 to interpose an appeal therefrom. There is no showing why an appeal was
not taken. Indeed, there is even an allegation that there is no appeal, nor any
plain, speedy and adequate remedy in the ordinary course of law other than the
instant petition, which is patently false and misleading. For, to repeat, the OSG
had the obvious remedy of appeal open to it, but failed to take it for some unknown
reason of its own.
In view of such failure, the instant petition for certiorari cannot be given due
course, as it is settled law, that certiorari is not a substitute for a lost appeal.[10]
The OSG filed a Motion for Reconsideration but it was denied by the Court of Appeals in its Resolution
dated 20 September 2004.[11]
Hence, this Petition for Review on Certiorari. The OSG claims that there was no need to file a regular appeal
before the Court of Appeals because: (1) the Rules of Court apply only in a suppletory manner in
naturalization cases; (2) there was no final decision to appeal, since a judgment in a naturalization case only
becomes final two years after the promulgation of the decision, when the Certificate of Naturalization is
issued; (3) the trial court never acquired jurisdiction over the petition because the National Bureau of
Investigation (NBI) reported that respondent did not reside at the address he provided in the petition; and
(4) the Order of the trial court granting the petition for naturalization was issued with grave abuse of
discretion amounting to lack of jurisdiction, there being no compliance by private respondent with the legal
requirements for naturalization, namely, good moral conduct, possession of lucrative income, and absence
of mental alienation or incurable contagious disease.[12]
In his Comment,[13] private respondent claims that the Court of Appeals correctly dismissed the petition for
being the wrong mode of remedy. He also argues that as held by the trial court, he satisfactorily complied
with the requirements of good moral conduct based on the testimonies of witnesses and
clearances issued by the NBI and police, prosecutor, and courts of Paraaque City. He insists that the trial
court correctly found him free of any medical impediment based on the medical certificate issued by the Ann
Francis Maternity and Medical Clinic. As regards the income requirement, respondent explains that his
income from 2000 to 2002 was only P60,000.00 per year because during that period, he was still a
student. Upon graduation, however, he worked full-time as Marketing Manager of Food Mart, Inc. with a
monthly income of P60,000.00, evidence of which had been presented before and assessed by the trial
court. Private respondent disputes the findings of the NBI that he was not known to his neighbors at No.
743 Gandara Street, Room 402 Evershine Bldg., Binondo, Manila. He claims that the NBI conducted the
background investigation on 26 January 2004 or long after his petition for naturalization was granted by the
trial court on 25 November 2003. He alleges that after the trial court rendered its decision, he transferred to
his parents residence in Paraaque City. A new tenant moved in to his former residence who obviously was
not acquainted to him. Finally, private respondent insists that it is not proper for the OSG to present evidence
long after the RTC decision had become final.
The OSG filed its Reply on 5 May 2005, insisting that its recourse to the remedy of certiorari was proper
considering that the trial court, in reconsidering and reversing its own decision sans the submission of any
new evidence, acted with grave abuse of discretion amounting to lack of jurisdiction. The OSG also argues
that the NBI report, even if belatedly submitted, clearly showed that respondent did not live in his stated
address, thus ousting the trial court of its jurisdiction.[14]
The trial court did not abuse its discretion

when it reconsidered its earlier decision
and granted private respondents petition
for naturalization.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment which is equivalent
to an excess or lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an
evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act at all in contemplation
of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or
hostility.[15] It also bears stressing that the true function of the writ of certiorari is to keep an inferior court
within the bounds of its jurisdiction, or to relieve parties from the arbitrary acts of courts.[16]
Viewed against these standards, we find the trial courts reversal of its decision after the filing of a Motion for
Reconsideration not tainted with grave abuse of discretion. The reasons for granting the Petition for
Naturalization were enunciated in the Order dated 25 November 2003, as well as in the Order[17] dated 24
February 2004, where the trial court held thus:
In opposing the motion, petitioner alleged that his documentary and testimonial evidence
undisputably and overwhelmingly satisfied the requirement for good conduct; that his
annual income from year 2000 to year 2002 was P60,000.00 because during that period he
was still studying and worked as a part-time employee only, but after graduation in October,
2002, and working full time as marketing manager of Food Mart, his income rose
to P60,000.00 a month, including his commission; and that the medical certificate he
presented proved that after a thorough medical check up he was found to be essentially
normal.
Considering the allegations in the opposition, the court gave the Office of the Solicitor
General an opportunity to file its reply. However, as of this writing, no reply was
forthcoming. Hence, this Order.
The Court is not convinced.
Petitioner was able to successfully overcome all the grounds raised in the Motion for
Reconsideration. Indeed, it is doubtful if the University of Sto. Tomas, a reputable catholic
school, would allow petitioner to be enrolled in its high school and graduate from its college
if his conduct is questionable or if he has any mental alienation and incurable contagious
disease. Besides, what better proof of good conduct can petitioner show other than the
clearances issued by our courts, the National Bureau of Investigation and the police, the
government agencies tasked to issue clearances. And unless proof is shown that the medical
examiner of Ann Francis Maternity & Medical Clinic falsified the results of petitioners medical
check up, its issuance is considered regular.
Petitioner was likewise able to explain that for the years 2000 to 2002, his income was
only P60,000.00 annually because at that time he was still studying and worked only as a
part-time employee but after graduating in October, 2002, when he worked already as full-
time marketing manager of Food Mart, his income rose to P60,000.00 a month, including
his commissions.[18]
We found no whimsicality or patent abuse of discretion as would amount to an evasion of positive duty or
virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law.
Shorn of embellishment, the OSG simply argues that the trial court erred in granting the petition for
naturalization because it failed to consider material evidence that would warrant the denial of said petition. If,
indeed, there was error, this is simply an error of judgment in appreciation of facts and the law. Besides, the
trial court has the discretion to reverse itself upon the filing of a motion for reconsideration. Indeed, Section
3, Rule 37 of the Rules of Court is explicit in that a trial court may amend its judgment or order if it finds that
the judgment or final order is contrary to the evidence or law. If a mistake was committed by the trial court,
it was in the exercise of its jurisdiction. Thus, the error is one of judgment, not of jurisdiction; consequently,
petitioner's remedy is appeal, not certiorari.
Petitioner had readily

available remedies.
A basic requisite of the special civil action of certiorari, which is governed by Rule 65 of the Rules of Court,
is that there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. Where
appeal is available, certiorari generally does not lie. Certiorari cannot be used as a substitute for a lost or
lapsed remedy of appeal.[19]
In this case, an appeal was not only available, but also mandated by Sections 11[20] and 12[21] of
Commonwealth Act No. 473 (1939), or the Revised Naturalization Law, as amended. Notably, in Keswani v.
Republic,[22] we declared that the remedy from a decision by the trial court admitting an individual as a
Filipino citizen is through an appeal to the Court of Appeals.[23]
Moreover, a decision granting a petition for naturalization becomes executory only two years after its
promulgation. On this matter, Section 1 of Republic Act No. 530 (1950)[24] provides:
Section 1. The provisions of existing laws notwithstanding, no petition for Philippine
citizenship shall be heard by the courts until after six months from the publication of the
application required by law, nor shall any decision granting the application become
executory until after two years from its promulgation and after the court, on proper hearing,
with the attendance of the Solicitor General or his representative, is satisfied, and so finds,
that during the intervening time the applicant has (1) not left the Philippines, (2) has
dedicated himself continuously to a lawful calling or profession, (3) has not been convicted
of any offense or violation of Government promulgated rules, (4) or committed any act
prejudicial to the interest of the nation or contrary to any Government announced policies.
As such, petitioner is not without a remedy to assail the grant of citizenship. In addition, it may also move
to have the naturalization certificate cancelled in the
proper proceedings, if it can be shown that the certificate was obtained fraudulently.[25]
The Supreme Court will not try
questions of fact.
Questions of fact are not proper in a Petition brought under Rule 45 of the Rules of Court. Time and time
again, we have stated that the Supreme Court is not a trier of facts,[26] and this Court will decline to sift
through the evidence submitted by the parties, particularly here, where such evidence was not presented
before the trial court. It would be ludicrous indeed if we were to determine, in the first instance, where
respondent actually resides, his true income, or his current mental state. Such issues are best threshed out
before the trial court; we have neither the inclination or interest to resolve these factual matters here.
We end with an admonition. It appears that the OSG requested the NBI to conduct a confidential
investigation in connection with private respondent's petition for naturalization as early as 30 January
2003. However, the NBI only prepared the report on 26 January 2004, and referred it to the OSG only on 10
March 2004. Questions regarding the responsible party and cause of such protracted delay be it inadvertence
or negligence need not be belaboured here. Suffice it to state that it was highly irregular for the OSG to
present new evidence before the courts only during certiorari proceedings, thereby denying the private
respondent his right to contest the NBI's prejudical findings. The OSG is thus cautioned to avoid such
actuations in the future, particularly where the Rules of Court expressly provide for the appropriate venue
for the presentation of allegedly
newly discovered evidence.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The Resolution of the Court of
Appeals dated 11 August 2004 in CA-G.R. SP No. 83787 dismissing outright the Petition
for Certiorari, and its Resolution dated 20 September 2004 denying the Motion for
Reconsideration, are AFFIRMED.
SO ORDERED.
Associate Justice
WE CONCUR:
Associate Justice

ROBERTO A. ABAD
Associate Justice
ATTESTATION
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
Additional member per Special Order No. 691 dated September 4, 2009, in lieu of Justice
Leonardo A. Quisumbing, who is on official leave.
[1]
25 Phil. 245, 271 (1913).
[2]
Rollo, pp. 10-11; penned by Associate Justice Renato C. Dacudao and concurred in by Associate
Justices Lucas P. Bersamin (now a Member of this Court) and Celia C. Librea-Leagogo.
[3]
Id. at 18.
[4]
Annex D, id at. 50-58.
[5]
Id. at 60-65; penned by Judge Antonio M. Eugenio, Jr.
[6]
Annex F, id. at 66-68.
[7]
Id. at 67.
[8]
Id. at 70-72.
[9]
Should be 30 days pursuant to Sec. 12 of Commonwealth Act No. 43 (1939) or the Revised
Naturalization Law, as amended vis a vis Section 39 of B.P. Blg. 129 which reads:
Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards, judgments, or
decisions of any court in all cases shall be fifteen (15) days counted from the notice of the
final order, resolution, award, judgment, or decision appealed from: Provided, however, That
in habeas corpus cases, the period for appeal shall be forty-eight (48) hours from the notice
of the judgment appealed from.
No record on appeal shall be required to take an appeal. In lieu thereof, the entire original record
shall be transmitted with all the pages prominently numbered consecutively, together with an
index of the contents thereof.
This section shall not apply in appeals in special proceedings and in other cases wherein multiple
appeals are allowed under applicable provisions of the Rules of Court.
[10]
Id. at 10.
[11]
Id. at 44.
[12]
Id. 21-38.
[13]
Id. at 123-126.
[14]
Id. at 132-135.
[15]
Estrada v. Desierto, G.R. No. 156160, December 9, 2004, 445 SCRA 655, 668; First Women's
Credit Corporation and Katayama v. Perez, G.R. No. 169026, June 15, 2006, 490 SCRA 774,
777-778.
[16]
Espinoza v. Provincial Adjudicator of the Provincial Agrarian Reform Adjudication Office of
Pampanga, G.R. No. 147525, February 26, 2007, 516 SCRA 635, 639-640.
[17]
[18]
Ibid.
[19]
Tolentino v. People, G.R. No. 170396, August 31, 2006, 500 SCRA 721, 724.
[20]
Section 11 provides that "[T]he final sentence may, at the instance of either of the parties, be
appealed to the Supreme Court."
[21]
Section 12 reads in part: If, after the lapse of thirty days from and after the date on which
the parties were notified x x x, no appeal has been filed, or if, upon appeal, the decision has
been confirmed by the Supreme Court x x x.
[22]
G.R. No. 153986, June 8, 2007, 524 SCRA 145.
[23]
Sec Section 9 of Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 1980 which
provides for the exclusive appellate jurisdiction of the Court of Appeals over all final judgments,
resolutions, orders or awards of the Regional Trial Courts.
[24]
An Act Making Additional Provisions for Naturalization.
[25]
Commonwealth Act No. 473 (1939), Sec. 18.
[26]
Andrada v. National Labor Relations Commission, G.R. No. 173231, December 28, 2007, 541 SCRA
538.
SECOND DIVISION
ARNEL SAGANA, G.R. No.161952

Petitioner,
Present:
YNARES-SANTIAGO,* J.
CARPIO MORALES,
- versus - Acting Chairperson,
BRION,
DEL CASTILLO, and
ABAD, JJ.
RICHARD A. FRANCISCO, Promulgated:

Respondent, ** October 2, 2009
x-----------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
It is, at times, difficult to reconcile the letter of the law with its spirit. Thus, it is not altogether
surprising that two competing values are usually discernable in every controversy the principle
of dura lex sed lex versus the notion that technicalities should yield to broader interests of
justice. In our rules of procedure, for instance, judges often struggle to find a balance between
due process considerations and a liberal construction to secure a just disposition of every
action. In such cases, where a measure of discretion is permitted, courts must tread carefully,
with due consideration of the factual milieu and legal principles involved. In so doing, we take
steps - sometimes tentative, sometimes bold - to apply prior experience and precedent towards
an eventual just resolution. It is these principles that animate our decision in the instant case.
Assailed in this Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court is the 13
August 2003 Decision[2] of the Court of Appeals in CA-G.R. CV No. 66412 which reversed and set
aside the 20 September 1999 Decision[3] of the Regional Trial Court of Quezon City, Branch 99 in
Civil Case No. Q-94-22445 and held that there was no valid service of summons to respondent
Richard A. Francisco.
On 13 December 1994, petitioner Arnel Sagana filed a Complaint[4] for Damages before the
Regional Trial Court of Quezon City docketed as Civil Case No. Q-94-22445 and raffled to Branch
99. Petitioner alleged that on 20 November 1992, respondent Richard A. Francisco, with intent to
kill and without justifiable reason, shot him with a gun hitting him on the right thigh. As a result,
petitioner incurred medical expenses and suffered wounded feelings, and was compelled to
engage the services of a lawyer, due to respondents refusal to pay said expenses. Petitioner thus
demanded payment of P300,000.00 as actual damages, P150,000.00 as moral
damages, P50,000.00, exemplary damages, and P50,000.00 as attorneys fees.
On 31 January 1995, process server Manuel S. Panlasigui attempted to serve summons at
respondents address at No. 36 Sampaguita St., Baesa, Quezon City but was unsuccessful. In his
Servers Return,[5] Panlasigui stated that he tried to personally serve the summons to respondent
at his given address at No. 36 Sampaguita St., Baesa, Quezon City. However, the occupant of
that house, who refused to give his identity, told him that respondent is unknown at said
address. Panlasigui also declared that diligent efforts were exerted to serve the summons but
these proved to be futile.[6] Subsequently, the trial court attempted to serve summons to
respondents office through registered mail on 9 February 1995. However, despite three notices,
respondent failed to pick up the summons.
On 30 June 1995, the trial court dismissed the case on account of petitioners lack of interest to
prosecute.[7] It noted that since the filing of the Servers Return on 8 February 1995, petitioner
did not take any action thus indicating lack of interest to prosecute the case.
Petitioner filed a Motion for Reconsideration[8] stating that after the Servers Return was filed, he
exerted efforts to locate the respondent, and it was confirmed that respondent indeed lived at No.
36 Sampaguita St., Baesa, Quezon City. On 4 August 1995, the trial court granted petitioners
motion for reconsideration, conditioned upon the service of summons on the respondent within
10 days from receipt of the Order.[9]
Thus, on 25 August 1995, Process Server Jarvis Iconar again tried to serve the summons at the
address of the respondent but no avail. According to Iconars handwritten notation on the
summons,[10] he was informed by Michael Francisco, respondents brother, that respondent no
longer lived at said address. However, he left a copy of the summons to Michael Francisco.[11]
On 10 November 1995, petitioner filed a Motion to Declare Defendant in Default,[12] alleging that
despite service of summons, respondent still failed to file an Answer. On 16 February 1996, the
trial court issued an Order[13] finding that the summons was validly served to respondent through
his brother, Michael. It thus declared respondent in default and allowed petitioner to present his
evidence ex parte. Nonetheless, copies of all pleadings and court documents were furnished to
respondent at No. 36 Sampaguita St.
In the meantime, on 1 March 1996, Michael Francisco, through his counsel, Atty. Bernardo Q.
Cuaresma, filed a Manifestation and Motion[14] denying that he received the summons or that he
was authorized to receive summons on behalf of his brother, respondent Richard Francisco. He
alleged that the substituted service did not comply with Section 8, Rule 14 of the Rules of Court,
since summons was not served at defendants residence or left with any person who was
authorized to receive it on behalf of the defendant. Michael Francisco also prayed that his name
be stricken off the records as having received a copy of the summons.
In the Affidavit of Merit[15] submitted together with the Manifestation and Motion, Michael
Francisco asserted that he was 19 years of age; that his brother, herein respondent Richard
Francisco, had left their residence in March 1993; and that respondent would just write his family
without informing them of his address, or would just call by phone.
Thereafter, petitioner and movant Michael Francisco submitted their respective Opposition, Reply,
and Rejoinder. In his Rejoinder, petitioner attached a copy of an Affidavit[16]prepared by
respondent Richard A. Francisco dated 23 December 1992, where he declared himself a resident
of No. 36 Sampaguita St. Interestingly, the lawyer who notarized the affidavit for the respondent,
Atty. Bernardo Q. Cuaresma, was the same lawyer who represented respondents brother before
the trial court.
On 4 October 1996, the trial court issued an Order[17] denying Michael Franciscos Manifestation
and Motion for lack of merit, holding thus:
It should be considered that earlier, plaintiff had already sent numerous pleadings
to defendant at his last known address. As also pointed out by [petitioner] in his
Opposition, movant has not adduced evidence, except his affidavit of merit, to
impugn the service of summons thru him. Movant herein also admits that
defendant communicates with him through telephone. Movant, therefore, being a
person of sufficient age and discretion, would be able, more likely than not, to
inform defendant of the fact that summons was sent to him by the court.[18]
Having failed to file an answer or any responsive pleading, respondent was declared in default
and petitioner was allowed to present evidence ex parte. On 20 September 1999, the trial court
rendered its Decision,[19] the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of

plaintiff and hereby orders defendant to pay plaintiff the amount of THIRTY FIVE
THOUSAND PESOS (PhP35,000.00) as and for actual damages, the amount of
FIFTEEN THOUSAND PESOS (PhP15,000.00) as and for moral damages, the
amount of TEN THOUSAND PESOS (PhP10,000.00) for exemplary damages and
the amount of TWENTY THOUSAND PESOS (PhP20,000.00) as attorneys fees.
No further costs.
SO ORDERED.[20]
On 23 November 1999, respondent Richard A. Francisco filed a Notice of Appeal, claiming that
he received a copy of the trial courts Decision on 9 November 1999; that the same was contrary
to the law, facts, and evidence, and praying that his appeal be given due course.[21]
On 5 June 2000, the Court of Appeals directed the parties to file their respective briefs, a copy of
which was sent to respondent by registered mail at No. 36 Sampaguita St., Baesa, Quezon
City.[22] In his Appellants brief, respondent argued that:
I
THE COURT A QUO ERRED IN ASSUMING JURISDICTION OVER THE PERSON OF
THE DEFENDANT-APPELLANT DESPITE THE IRREGULARITY OF THE
SUBSTITUTED SERVICE OF SUMMONS BY THE COURT PROCESS SERVER.
II
THE COURT A QUO ERRED IN AWARDING ACTUAL DAMAGES IN THE AMOUNT
OF THIRTY FIVE-THOUSAND PESOS (P35,000.00) TO THE PLAINTIFF-APPELLEE
ALTHOUGH ONLY SEVENTEEN THOUSAND PESOS (P17,000.00) WAS DULY
SUPPORTED BY RECEIPTS.
III
THE COURT A QUO LIKEWISE ERRED IN AWARDING UNREASONABLE MORAL
DAMAGES IN THE AMOUNT OF FIFTEEN THOUSAND PESOS (P15,000.00);
EXEMPLARY DAMAGES IN THE AMOUNT OF TEN THOUSAND PESOS (P10,000.00);
AND ATTORNEYS FEES IN THE AMOUNT OF TWENTY THOUSAND PESOS
(P20,000.00) DESPITE THE FACT THAT THERE IS NO FACTUAL AND
SUBSTANTIVE BASIS FOR ALL THESE.[23]
On 15 August 2002, the Court of Appeals issued a Resolution[24] ordering the parties to personally
appear for the conduct of preliminary conference to consider amicably settling the appeal,
pursuant to Sec. 1(a), Rule 7 of the Revised Internal Rules of the Court of Appeals and the Courts
Resolution A.M. No. 02-2-17-SC dated 16 April 2002 regarding the Pilot Testing of Mediation in
the Court of Appeals. Respondent was furnished[25] a copy of this Resolution at his address at No.
36 Sampaguita Street, Baesa, Quezon City. Per Delivery Receipt of the Court of Appeals, the same
was personally received by respondent on 23 August 2002.[26]
On 3 September 2002, respondent attended the preliminary conference; however the parties
failed to reach an amicable settlement.[27] Thus, on 13 August 2003, the Court of Appeals
rendered the herein assailed Decision granting the appeal and setting aside the Decision of the
trial court. The appellate court held that the service of summons was irregular and such
irregularity nullified the proceedings before the trial court. Since it did not acquire jurisdiction
over the person of the respondent, the trial courts decision was void.
In brief, the Court of Appeals found that there was no valid service of summons for the following
reasons:
1. Except for the notation made by the process server on the summons, no proof of service by
way of a Process Servers Return was prepared;
2. The process server failed to state the specific facts and circumstances that would justify valid
substituted service of summons, to wit: (a) the impossibility of service of summons within
a reasonable time, (b) the efforts exerted to locate the respondent, and (c) it was served
on a person of sufficient age and discretion residing therein.
3. Petitioner failed to prove that, at the time summons was served, respondent actually lived
in No. 36 Sampaguita St.
Petitioner filed a Motion for Reconsideration[28] where he alleged that respondent did, in fact,
reside at No. 36 Sampaguita St. To prove this assertion, petitioner submitted the original copy of
the envelope containing respondents Notice of Appeal, which indicated respondents return
address to be No. 36 Sampaguita St.[29] Nonetheless, on 29 January 2004, the Court of Appeals
denied the Motion for Reconsideration.
Hence, petitioner filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court,
raising the sole issue of whether there was valid service of summons upon the respondent.
The petition is meritorious. Under the circumstances obtaining in this case, we find there was
proper substituted service of summons upon the respondent.
Section 8 of Rule 14 of the old Revised Rules of Court, the rules of procedure then in force at the
time summons was served, provided:
Section 8. Substituted service. If the defendant cannot be served within a

reasonable time as provided in the preceding section [personal service on
defendant], service may be effected (a) by leaving copies of the summons at the
defendants residence with some person of suitable age and discretion then residing
therein, or (b) by leaving the copies at defendants office or regular place of business
with some competent person in charge thereof.
Jurisprudence has long established that for substituted service of summons to be valid, the
following must be demonstrated: (a) that personal service of summons within a reasonable time
was impossible; (b) that efforts were exerted to locate the party; and (c) that the summons was
served upon a person of sufficient age and discretion residing at the party's residence or upon a
competent person in charge of the party's office or regular place of business.[30] It is likewise
required that the pertinent facts proving these circumstances be stated in the proof of service or
in the officer's return.[31]
In this case, personal service of summons was twice attempted by the trial court, although
unsuccessfully. In the first attempt, the resident of the house refused to receive the summons;
worse, he would not even give his name. In the second attempt, respondents own brother refused
to sign for receipt of the summons, and then later claimed that he never received a copy, despite
his participation in the proceedings. The trial court also thrice attempted to contact the
respondent through his place of work, but to no avail. These diligent efforts to locate the
respondent were noted in the first sheriff's return, the process server's notation, as well as the
records of the case.
Clearly, personal service of summons was made impossible by the acts of the respondent in
refusing to reveal his whereabouts, and by the act of his brother in claiming that respondent no
longer lived at No. 36 Sampaguita St., yet failing to disclose his brother's location. We also note
that it was the trial court which directed that the second service of summons be made within
seven days; thus, the reasonable time was prescribed by the trial court itself.
Undeniably, no Sheriffs Return was prepared by process server Jarvis Iconar; the only record of
the second service of summons was Mr. Iconars handwritten notation in the summons
itself. However, the information required by law and prevailing jurisprudence, that is, that
personal service was impossible because of the claim that respondent no longer lived at the stated
address, that efforts were exerted to locate the respondent through the multiple attempts to
serve summons, and that summons was served upon a person of sufficient age and discretion,
were already in the records of the trial court.
Moreover, we find the claim that respondent moved out of their residence in March 1993 without
informing his brother or parents his whereabouts, despite regular calls and letters, simply
incredulous. What makes this version of events even more implausible is respondents admission
that he received a copy of the trial court's Decision of 20 September 1999 that was sent to No.
36 Sampaguita Street. Respondent even filed a Notice of Appeal coincidentally indicating that his
address was No. 36 Sampaguita St., Baesa, Quezon City. He also received a copy of the appellate
courts order for preliminary conference that was sent to said address. These were never denied
by respondent, despite being given every opportunity to do so.
Respondent also wishes us to believe that it was pure chance that he and his brother were
assisted by the same lawyer, Atty. Bernardo Q. Cuaresma, and yet it never occurred to
respondents own brother or lawyer to inform him about the receipt of summons. All these militate
against respondents self-serving declaration that he did not reside at No. 36 Sampaguita
St. Indeed, there was no proof presented as to when respondent left and then returned to his
original home, if he actually did leave his home.
In view of the foregoing, we find that substituted service of summons was validly made upon
respondent through his brother.
We do not intend this ruling to overturn jurisprudence to the effect that statutory requirements
of substituted service must be followed strictly, faithfully, and fully, and that any substituted
service other than that authorized by the Rules is considered ineffective.[32] However, an overly
strict application of the Rules is not warranted in this case, as it would clearly frustrate the spirit
of the law as well as do injustice to the parties, who have been waiting for almost 15 years for a
resolution of this case. We are not heedless of the widespread and flagrant practice whereby
defendants actively attempt to frustrate the proper service of summons by refusing to give their
names, rebuffing requests to sign for or receive documents, or eluding officers of the court. Of
course it is to be expected that defendants try to avoid service of summons, prompting this Court
to declare that, the sheriff must be resourceful, persevering, canny, and diligent in serving the
process on the defendant.[33] However, sheriffs are not expected to be sleuths, and cannot be
faulted where the defendants themselves engage in deception to thwart the orderly
administration of justice.
The purpose of summons is two-fold: to acquire jurisdiction over the person of the defendant and
to notify the defendant that an action has been commenced so that he may be given an
opportunity to be heard on the claim against him. Under the circumstances of this case, we find
that respondent was duly apprised of the action against him and had every opportunity to answer
the charges made by the petitioner. However, since respondent refused to disclose his true
address, it was impossible to personally serve summons upon him. Considering that respondent
could not have received summons because of his own pretenses, and has failed to provide an
explanation of his purported new residence, he must now bear the consequences.[34]
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The 13 August 2003 Decision
of the Court of Appeals in CA-G.R. CV No. 66412 and its 29 January 2004 Resolution
are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Quezon City,
Branch 99, dated 20 September 1999 in Civil Case No. Q-94-22445 holding that there was valid
service of summons, and ordering respondent to pay petitioner the amounts of P35,000.00 as
actual damages, P15,000.00 as moral damages, P10,000.00 as exemplary damages,
and P20,000.00 as attorneys fees, is REINSTATED and AFFIRMED.
SO ORDERED.

Associate Justice
WE CONCUR:
Associate Justice

ROBERTO A. ABAD
Associate Justice
ATTESTATION
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
Additional member per Special Order No. 691 dated September 4, 2009, in lieu of Justice
Leonardo A. Quisumbing who is on official leave.
**
The Court of Appeals and the Presiding Judge of the Regional Trial Court, Branch 99, Quezon
City as co-respondents are deleted from the title pursuant to Section 4, Rule 45 of the Rules
of Court.
[1]
Rollo, pp. 10-22.
[2]
Id. at 23-35; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate
Justices Eubolo G. Verzola and Regalado E. Maambong.
[3]
Records, pp. 113-116; penned by Judge Ma. Theresa Dela Torre-Yadao.
[4]
Id. at 1-4.
[5]
Id. at 7.
[6]
Ibid
[7]
Id. at 8.
[8]
Id. at 9-10.
[9]
Id. at 13; penned by Judge Felix M. De Guzman.
[10]
Id. at 14.
[11]
Ibid.
[12]
Id. at 15-16.
[13]
Id. at 22.
[14]
Id. at 23-24.
[15]
Id. at 26.
[16]
Id. at 37-38.
[17]
Id. at 45-46; penned by Judge Felix M. De Guzman.
[18]
Id. at 45.
[19]
Id. at 113-116; penned by Judge Ma. Theresa Dela Torre-Yadao.
[20]
Id. at 116.
[21]
Id. at 119.
[22]
CA rollo, p. 10.
[23]
Id. at 15-32.
[24]
Id. at 75.
[25]
Id. at 71.
[26]
Id., dorsal page.
[27]
Id. at 45.
[28]
Id. at 60-69.
[29]
Id. at 68; Annex A of the Motion for Reconsideration.
[30]
Umandap v. Sabio Jr., G.R. No. 140244, August 29, 2000, 339 SCRA 243, 249.
[31]
Jose v. Boyon, G.R. No. 147369, October 23, 2003, 414 SCRA 216, 222.
[32]
Pioneer International, Ltd. v. Guadiz, Jr., G.R. No. 156848, October 11, 2007, 535 SCRA 584,
601.
[33]
Manotoc v. Court of Appeals, G.R. No. 130974, August 16, 2006, 499 SCRA 21, 35.
[34]
Robinson v. Miralles, G.R. No. 163584, December 12, 2006, 510 SCRA 678, 684.

Supreme Court
Manila
EN BANC
RONNIE H. LUMAYNA, G.R. No. 185001

ROMEO O. CHULANA,
HELEN A. BONHAON, Present:
PETER G. LAHINA, JR.,
JUANITO O. LICHNACHAN, JR., PUNO,* C. J.,
SAMMY C. CHANG-AGAN, QUISUMBING,*
BONIFACIO L. BAICHON, YNARES-SANTIAGO,**
REYNALDO B. UCHAYAN, CARPIO,*
JOHN L. MARTIN, CORONA,
AUGUSTA C. PANITO, CARPIO MORALES,
ROSENDO P. BONGYO, JR., CHICO-NAZARIO,
KLARISA MAE C. CHAWANA, VELASCO, JR.,
Petitioners, NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
- versus - BERSAMIN,
DEL CASTILLO, and
ABAD, JJ.
COMMISSION ON AUDIT, Promulgated:

Respondent. September 25, 2009
x--------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Certiorari under Rule 64 in relation to Rule 65 of the Rules of
Court is the Decision No. 2005-071[1] dated 29 December 2005 of the Commission on Audit (COA)
affirming the Notice of Disallowance[2] of the 5% salary increase of the municipal personnel of
the Municipality of Mayoyao, Ifugao covering the period 15 February to 30 September 2002, in
the amount of P895,891.50, and requiring petitioners to refund the same. Also assailed is the
COA Decision No. 2007-040[3] dated 25 October 2007 denying the Motion for Reconsideration.
On 15 June 2001, the Department of Budget and Management (DBM) issued Local Budget
Circular No. 74[4] (LBC No. 74), authorizing the grant of a maximum of 5% salary adjustment to
personnel in the Local Government Units (LGUs) effective 1 July 2001, pursuant to Republic Act
No. 9137[5] dated 8 June 2001.
On 13 May 2002, the Sangguniang Bayan of Mayoyao, Ifugao, (Sangguniang Bayan)

enacted Resolution No. 41, s. 2002,[6] approving the 2002 Annual Municipal Budget, and
appropriating the amount of P1,590,376.00 thereof for the salaries and benefits of 17 newly
created positions in the municipality.[7] Upon review by the Sangguniang Panlalawigan of the
Province of Ifugao (Sangguniang Panlalawigan), the 2002 Annual Municipal Budget of Mayoyao,
Ifugao was declared operative subject to the conditions that the creation of 17 new positions
shall in no case be made retroactive and that the filling up of such positions be made strictly in
accordance with the Civil Service rules and regulations.[8]
On 8 July 2002, the Sangguniang Bayan approved Resolution No. 66, s. 2002, adopting a
first class salary scheme for the municipality and implementing a 5% salary increase for its
personnel in accordance with LBC No. 74.[9] For this purpose, it enacted Resolution No. 94, s.
2002, re-aligning the amount of P1,936,524.96[10] from the 2002 municipal budget originally
appropriated for the salaries and benefits of the 17 new positions.[11]
On 12 July 2002, DBM issued Local Budget Circular No. 75[12] (LBC No. 75) providing
guidelines on personal services limitation, pursuant to Section 325(a) of the Local Government
Code of 1991 (LGC).
On 16 December 2002, the Sangguniang Bayan through Resolution No. 144, s. 2002,
approved the 2003 Annual Municipal Budget stated in Appropriation Ordinance No. 03.[13] This
was reviewed by the Sangguniang Panlalawigan and approved on 10 February
2003 via Resolution No. 2003-808.[14] The Sangguniang Panlalawigan, however, disallowed the
5% salary increase and the re-alignment of funds pursuant to Resolution No. 94, s. 2002, of
the Sangguniang Bayan on the ground that the re-alignment is not sufficient in form to implement
a salary increase.
On 9 June 2003, the Sangguniang Bayan enacted Resolution No. 73, s. 2003,[15] earnestly
requesting the Sangguniang Panlalawigan to reconsider its Resolution.[16]Finding good faith on
the part of the officials of the municipality, the Sangguniang Panlalawigan in its Resolution No.
2004-1185 reconsidered its earlier position. Thus, the Sangguniang Panlalawigan allowed the
adoption of a first class salary schedule and the 5% salary increase of
the Municipality of Mayoyao, Ifugao.
Meanwhile, the Regional Legal and Adjudication Office (RLAO) of the COA-Cordillera
Administrative Region (COA-CAR) issued a Notice of Disallowance dated 16 May 2003 of the
amount of P895,891.50, representing payments for salary increases of municipal personnel, for
the period 15 February - 30 September 2002. According to COA-CAR, the grant of the increase
was not in accordance with Sections 325 and 326 of the LGC; that the limitation on personal
services had been exceeded; and that the Sangguniang Bayan resolution was not the appropriate
manner of granting the increase. Pursuant thereto, the following persons, petitioners herein, were
ordered to refund the said amount:
Helen A. Bonhain Budget Officer

Peter G. Lahina, Jr. Municipal Accountant
Ronnie H. Lumayna Municipal Mayor
Romeo O. Chulana
Juanito O. Lichnachan, Jr.
Sammy C. Chang-agan
SB Members who approved Resolution No.
94, s. 2002
Bonifacio L. Baichon
Reynaldo B. Uchayan
John L. Martin
Augusta C. Panitio
Rosendo P. Bongyo, Jr.
Klarisa Mae C. Chawana
Petitioners requested a reconsideration, which was denied on 5 August 2003 by the RLAO-
COA-CAR.[17] Thus, petitioners filed a Notice of Appeal before the Director, LAO-Local of COA but
it was denied on 10 November 2003 in Decision No. 2003-104.
Hence, petitioners filed a Petition for Review before respondent COA assailing LAO-Local
Decision No. 2003-104.
On 29 December 2005, the COA rendered the herein assailed Decision No. 2005-
071[18]
denying the petition for lack of merit, and affirming the disallowance in the amount
of P895,891.50. The COA held thus:
After a careful evaluation, this Commission answers in the negative subject to the
extended discussions hereunder.
Anent the first assignment of error, the same has been judiciously passed upon in
LAO-Local Decision No. 2003-104. While the Municipality of Mayoyao may grant
salary increases pursuant to LBC No. 74, such grant should comply with the
limitations provided by law, specifically Section 325 (a) of R.A. No. 7160. There is
no doubt that in the grant of the 5% salary increase to the officials and employees
of the Municipality of Mayoyao, the limitation for PS in the annual budget of said
Municipality had been exceeded. In fact, in a recomputation made Ms. Virginia B.
Farro, Provincial Budget Officer of Ifugao, as embodied in her letter dated July 04,
2003, it was revealed that the Annual Budget of the Municipality exceeded the PS
limit by P3,944,568.05.Furthermore, Mr. Julian L. Pacificador, Jr., Regional
Director, DBM-CAR, in his letter dated December 3, 3003 asserted that the grant
of the increase through the adoption of higher salary class schedule is not included
in the list of items and activities whereby PS limitation may be waived under LBC
No. 75. It must also be noted that the Municipalitys budget adopted the salary
rates under LBC No. 69 and not the salary rates under LBC No. 74.
Anent the second assignment of error, the same will not suffice to over-turn the
other grounds for the audit disallowance. The fact remains that the grant of the
5% salary increase contravened the limitation of the law as explicitly provided
under item (a) of section 325 of R.A. No. 7160.
Anent the third assignment of error, while the Sanggguniang Panlalawigan of

Ifugao, in its resolution No. 2002-556, has declared operative the 2002 Annual
Budget of Mayoyao, the review of said Sanggunian was only limited to the
provisions stated in the said budget which contained, among others, provisions for
the funding of the 17 newly created positions and not the salary increases. Thus,
the declaration of the Sangguniang Panlalawigan of Ifugao that the 2002 annual
budget was operative did not include the grant of the 5% salary increase because
the same was not actually contained in the said budget but in SB Resolution No.
66, series of 2002.
Anent the 4th assignment of error, the disallowance is not based solely on the
results of the favorable review of the Sangguniang Panlalawigan of Ifugao since
there are other grounds which would justify and uphold the disallowance. [19]
Petitioners filed a Motion for Reconsideration but it was denied by respondent COA on 25
October 2007 in its Decision No. 2007-040.[20]
Hence, this petition[21] under Rule 64 of the Rules of Court raising the
following issues:
1. RESOLUTION NO. 66, S. 2002 ADOPTING A 5% INCREASE IN THE SALARY

OF THE PERSONNEL OF LGU MAYOYAO PURSUANT TO DBM LBC 74, AND
RESOLUTION NO. 94, S. 2002 PROVIDING THE FUND TO IMPLEMENT THE
FORMER ARE VALID EXERCISES OF LOCAL LEGISLATIVE PREROGATIVE BY
THE SANGGUNIANG BAYAN OF MAYOYAO, IFUGAO. THERE IS SUFFICIENT
PROOF THAT THE BUDGET OF THE MUNICIPALITY OF MAYOYAO FOR 2002
DID NOT EXCEED THE PS LIMITATIONS FOR THAT PARTICULAR YEAR. IN
THE SAME MANNER, THE REALIGNMENT OF FUNDS PURSUANT TO
RESOLUTION NO. 94, S. 2002 DID NOT CREATE ANY INCREASE IN THE
PERSONAL SERVICES ALLOCATION OF THE AFORESAID MUNICIPALITY FOR
THAT PARTICULAR YEAR BECAUSE THE REALIGNMENT PERTAINS TO A
REALIGNMENT OF AN EXISTING PERSONAL SERVICES FUND PARTICULARLY
THE AMOUNT ORIGINALLY INTENDED FOR THE SEVENTEEN POSITIONS
WHICH WERE VACATED AND/OR ABOLISHED, TO FUND THE SALARY
INCREASE WHICH IN ITSELF IS A PERSONAL SERVICE EXPENDITURE. THE
HONORABLE COMMISSION ON AUDIT, THEREFORE, GRAVELY ABUSED ITS
DISCRETION WHEN IT HELD THAT THE REALIGNMENT PURSUANT TO
RESOLUTION NO. 94, S. 2002 CAUSED THE LGU OF MAYOYAO TO EXCEED
THE PS LIMITATIONS FOR 2002 AS PRESCRIBED BY LAW AND
CONSEQUENTLY DECLARING AS INVALID RESOLUTION NO. 66 S. 2002 OF
THE SANGGUNIANG BAYAN OF MAYOYAO, IFUGAO.
2. THE PERSONAL SERVICES ALLOCATION FOR THE MUNICIPALITY OF

MAYOYAO, IFUGAO FOR FY 2002 WAS COMPUTED IN ACCORDANCE WITH
DBM LBC 74 IN RELATION TO DBM LBC 69 WHICH WERE THE CIRCULARS IN
EFFECT AT THE TIME THE BUDGET OF THE LGU FOR FY 2002 WAS
REVIEWED, APPROVED AND DECLARED OPERATIVE BY THE SANGGUNIANG
PANLALAWIGAN OF THE PROVINCE OF IFUGAO THROUGH RESOLUTION NO.
2002-556. SOON THEREAFTER DBM LBC 75 WAS ISSUED WITH A CLEAR
EFFECTIVITY CLAUSE EXEMPTING FROM ITS OPERATION BUDGETS WHICH
HAVE ALREADY BEEN REVIEWED PRIOR TO ITS ISSUANCE. NOTICE OF
DISALLOWANCE (ND) NO. 03-006 DATED MAY 16, 2003 IS PREMISED ON A
RECOMPUTATION OF THE ALLOWABLE PS LIMITATION OF THE LGU BASED
ON RATES STATED IN DBM LBC 75 CONTRARY TO THE CLEAR LANGUAGE OF
ITS EFFECTIVITY CLAUSE. THE HONORABLE COMMISSION, THEREFORE,
GRAVELY ABUSED ITS DISCRETION WHEN IT UPHELD THE NOTICE OF
DISALLOWANCE (ND) NO. 03-007 WHICH DIRECTED THE HEREIN
PETITIONERS TO REFUND THE AMOUNT DISALLOWED THEREIN.
3. PUBLIC OFFICERS ENJOY THE PRESUMPTION OF REGULARITY OF

PERFORMANCE OF OFFICIAL FUNCTIONS AND DUTIES. FOR THIS REASON
AND MORE, THE HONORABLE SUPREME COURT UPHELD CERTAIN NOTICES
OF DISALLOWANCE ISSUED BY THE HONORABLE COMMISSION TO CERTAIN
GOVERNMENT AGENCIES BUT DECLINED TO LET THE PERSONS LIABLE
THEREFORE TO REFUND THE AMOUNT DISALLOWED ON THE GROUND OF
GOOD FAITH. IN RESOLUTION NO. 2004-1185 OF THE SANGGUNIANG
PANLALAWIGAN OF IFUGAO RECOGNIZED THE GOOD FAITH OF LGU
MAYOYAO AND THE NOBLE INTENTIONS OF THE OFFICERS THEREOF TO
GIVE THE EMPLOYEES A DECENT PAY. THE HONORABLE COMMISSION ON
AUDIT, THEREFORE GRAVELY ABUSED ITS DISCRETION, WHEN IT FAILED
TO CONSIDER THE GOOD FAITH OF THE OFFICERS WHO APPROVED THE
QUESTIONED RESOLUTIONS AND DEMANDED THE REFUND BY HEREIN
PETITIONERS OF THE WHOLE AMOUNT DISALLOWED THEREIN EVEN IF THE
SAID AMOUNTS WERE ALREADY RECEIVED BY THE EMPLOYEES.[22]
The foregoing boils down to the core issue of whether the COA committed grave abuse
of discretion in affirming the disallowance of the amount of P895,891.50, representing the 5%
salary increase of the personnel of the municipality of Mayoyao for the period 15 February to 30
September 2002, and in ordering petitioners to refund the same.
We first dispense with the procedural issue of whether the petition was timely filed.
Respondent, through the Office of the Solicitor General, argues that the petition should
be dismissed outright for being filed beyond the reglementary period to appeal.[23]Respondent
maintains that since petitioners received a copy of Decision No. 2005-071 on 29 August 2006,
they only had 30 days or until 28 September 2006 within which to file a Motion for
Reconsideration or a Petition for Review on Certiorari with the Supreme Court. As the Motion for
Reconsideration was filed only on 2 October 2006, the COA Decision No. 2005-71 already attained
finality.[24]
On the other hand, petitioners allege that this argument on belated filing is misplaced
considering that respondent COA already gave due course to their Motion for Reconsideration,
the resolution of which was embodied in its Decision No. 2007-040. At any rate, petitioners argue
that their failure to file the Motion for Reconsideration with respondent COA on 28 September
2006 was justified because the government offices in Metro Manila were closed due to typhoon
Feria.[25]
Petitioners contention has merit. Records show that COA gave due course to the Motion
for Reconsideration without stating in its Decision No. 2007-040[26] that it was filed out of
time. For this reason, we find that the issue of whether the petitioners timely filed the Motion for
Reconsideration has become moot.
Going now to the merits of the case, petitioners contend that Resolution Nos. 66 and 94, s. 2002,
are valid exercise of legislative prerogative in accordance with DBM LBC No. 74, which gave them
the authority to grant a maximum of 5% salary adjustment to personnel in the LGU effective 1
July 2001. Petitioners cite as basis Resolution No. 2002-556 of the Sangguniang
Panlalawigan which declared as operative the 2002 Annual Budget of
the Municipality of Mayoyao, Ifugao on 10 June 2002.
Petitioners also claim that the amount allocated in the 2002 municipal budget for personal services
is within the allowable limits prescribed by law. In declaring that the municipality exceeded the
personal services limitation set by law, respondent COA based its finding on a computation using
the rates prescribed in LBC No. 75, and not LBC No. 74, in relation to LBC No. 69, on which the
municipality based its computation. Petitioners further explain that when the municipality enacted
Resolution No. 94, s. 2002, re-aligning the amount appropriated for the 17 newly created positions
to the 5% salary increase of the municipal personnel, it did so with the understanding that the
17 newly created positions were vacated and/or abolished. Thus, the re-alignment of the
aforesaid amount was done without decreasing the whole amount originally earmarked for
personal services.
Claiming good faith, petitioners insist that Resolution No. 66, s. 2002 was enacted on 2 July 2002,
while LBC No. 75 was issued by DBM on 12 July 2002 and was received by them at a much later
date; that Notice of Disallowance No. 03-006 was issued only on 16 May 2003, after the
municipality had already implemented the 5% salary increase pursuant to Resolution Nos. 66 and
94, s. 2002; and that the Sangguniang Panlalawigan recognized the good faith of the municipality
when it enacted Resolution No. 2004-1185 where it reconsidered its earlier Resolution No. 2003-
808.
We PARTIALLY GRANT the petition.
The COA disallowed the amount of P895,891.50 on the ground that the 5% salary increase
exceeded the total allowable appropriations of the municipality for personal services provided by
law, specifically Section 325(a)[27] of the LGC. It based its finding on the recomputation made by
Ms. Virginia B. Farro, Provincial Budget Officer of Ifugao, which showed that the Annual Budget
of the municipality exceeded the personal services limit by P3,944,568.05.[28] According to the
COA, the municipalitys budget adopted the salary rates under LBC No. 69 instead of the salary
rates prescribed under LBC No. 74 which is the applicable circular in this case.[29]
As regards petitioners reliance on Resolution No. 2002-556 of

the Sangguniang Panlalawigan, the COA in its Decision No. 2005-071 made it clear that the review
of the 2002 municipal budget by the Sangguniang Panlalawigan was only limited to the provisions
stated in the said budget which contained, among others, provisions for the funding of the 17
newly created positions, and not its re-alignment to the 5% salary increase. Consequently, the
declaration by the Sangguniang Panlalawigan in the said Resolution that the 2002 municipal
budget was operative did not include the grant of the 5% salary increase, as the same was not
contained in the said budget but in Resolution No. 66, s. 2002.[30]
We find that the COA correctly affirmed the disallowance of the amount of P895,891.50.
At the outset, it must be stressed that factual findings of administrative bodies charged
with their specific field of expertise, are afforded great weight by the courts, and in the absence
of substantial showing that such findings were made from an erroneous estimation of the
evidence presented, they are conclusive, and in the interest of stability of the governmental
structure, should not be disturbed.[31]
In this case, the assailed Decisions of the COA clearly presented the factual findings and
adequately explained the legal basis for disallowing the said amount. Indeed, as computed by
Ms. Virginia Farro, the Provincial Budget Officer of Ifugao, the annual budget of Mayoyao for 2002
exceeded the limit for personal services as prescribed in Section 325(a) of the LGC
by P3,944,568.05. Further, it was established that the grant of the increase through the adoption
of higher salary class schedule is not among the list of items and activities whereby the limitation
for personal services may be waived pursuant to LBC No. 75. Finally, the municipality adopted
the salary rates under LBC No. 69 and not the salary rates under LBC No. 74. No grave abuse of
discretion amounting to lack or excess of jurisdiction can thus be attributed to respondent
COA. Grave abuse of discretion exists where an act of a court or tribunal is performed with a
capricious or whimsical exercise of judgment equivalent to lack of jurisdiction, or where the power
is exercised in an arbitrary or despotic manner by reason of passion or personal hostility which
must be so patent and gross as to amount to an invasion of positive duty or to a virtual refusal
to perform the duty enjoined or to act at all in contemplation of law mere abuse of discretion is
not enough.[32]
However, we find that petitioners should not be ordered to refund the disallowed amount
because they acted in good faith.
In Abanilla v. Commission on Audit,[33] the Board of Directors of the Metropolitan Cebu

Water District (MCWD) issued several resolutions giving benefits and privileges to its personnel
which included hospitalization privileges, monetization of leave credits, Christmas bonus, and
longevity allowance. MCWD likewise entered into a collective bargaining agreement (CBA) with
the employees union providing for benefits, such as cash advances, 13th month pay, mid-year
bonus, Christmas bonus, vacation and leave credits, hospitalization, medicare, uniform privileges
and water allowance.
However, the COA disallowed the amount of P12,221,120.86 representing hospitalization

benefits, mid-year bonus, 13th month pay, Christmas bonus and longevity pay on the ground that
the compensation package of MCWD personnel may no longer be subject of a CBA, as its officers
and employees were covered by the Civil Service laws, and not by the Labor Code.
On petition for certiorari before this Court, the disallowance by COA was sustained;
however, the MCWD personnel who received those benefits were no longer required to refund
the same. The Court held, thus:
While we sustain the disallowance of the above benefits by respondent

COA, however, we find that the MCWD affected personnel who received the above
mentioned benefits and privileges acted in good faith under the honest belief that
the CBA authorized such payment. Consequently, they need not refund them.
In Querubin vs. Regional Cluster Director, Legal and Adjudication Office,

COA Regional Office VI, Pavia, Iloilo City, citing, De Jesus vs. Commission on
Audit, this Court held.:
Considering, however, that all the parties here acted in good

faith, we cannot countenance the refund of subject incentive
benefits for the year 1992, which amounts the petitioners have
already received. Indeed, no indicia of bad faith can be detected
under the attendant facts and circumstances. The officials and
chiefs of offices concerned disbursed such incentive benefits in the
honest belief that the amounts given were due to the recipients and
the latter accept the same with gratitude, confident that they richly
deserve such benefits.
x x x. Petitioners here received the additional allowances

and bonuses in good faith under the honest belief that the LWUA
Board Resolution No. 313 authorized such payment. At the time
petitioners received the additional allowances and bonuses, the
Court had not yet decided Baybay Water District. Petitioners had no
knowledge that such payment was without legal basis.Thus, being
in good faith, petitioners need not refund the allowances
and bonuses they received but disallowed by the COA.[34]
In Blaquera v. Alcala,[35] petitioners who were officials and employees of several
government agencies were paid productivity incentive benefits for the year 1992 pursuant to
Executive Order No. 292, otherwise known as the Administrative Code of 1987. On 19 January
1993, then President Fidel V. Ramos issued Administrative Order No. 29 limiting the grant of
productivity incentive benefits for the year 1992 in the maximum amount of P1,000.00 and
enjoining the grant of said benefit without prior approval of the President.
Consequently, all agencies that authorized the payment of productivity incentive benefits
for the year 1992 in excess of P1,000.00 were directed to immediately cause the return/refund
of the excess amount. Thus, respondents therein caused the deduction, from petitioners salaries
or allowances, of the amounts needed to cover the alleged overpayments.
On petition before the Court, it was held that Administrative Order No. 29 limiting the
amount of incentive benefits and enjoining heads of government agencies from granting incentive
benefits without prior approval of the President, was a valid exercise of the Presidents power of
control and authority over executive departments. As regards petitioners contention that
respondents should be held personally liable for the refund in question, the Court held, thus:
Untenable is petitioners contention that the herein respondents be held

personally responsible for the refund in question. Absent a showing of bad faith or
malice, public officers are not personally liable for damages resulting from the
performance of official duties.
Every public official is entitled to the presumption of good faith in the

discharge of official duties. Absent any showing of bad faith and malice, there is
likewise a presumption of regularity in the performance of official duties.
In upholding the constitutionality of AO 268 and AO 29, the Court reiterates

the well-entrenched doctrine that in interpreting statutes, that which will avoid a
finding of unconstitutionality is to be preferred.
Considering, however, that all the parties here acted in good faith, we
cannot countenance the refund of subject incentive benefits for the year 1992,
which amounts the petitioners have already received. Indeed, no indicia of bad
faith can be detected under the attendant facts and circumstances. The officials
and chiefs of offices concerned disbursed such incentive benefits in the honest
belief that the amounts given were due to the recipients and the latter accepted
the same with gratitude, confident that they richly deserve such benefits.[36]
This ruling has been consistently applied in several cases.[37]
In the instant case, although the 5% salary increase exceeded the limitation for
appropriations for personal services in the Municipality of Mayoyao, this alone is insufficient to
overthrow the presumption of good faith in favor of petitioners as municipal officials. It must be
mentioned that the disbursement of the 5% salary increase of municipal personnel was done
under the color and by virtue of resolutions enacted pursuant to LBC No. 74, and was made only
after the Sangguniang Panlalawigan declared operative the 2002 municipal budget. In fact, the
Notice of Disallowance was issued only on 16 May 2003, after the municipality had already
implemented the salary increase.Moreover, in its Resolution No. 2004-1185,[38] the Sangguniang
Panlalawigan reconsidered its prior disallowance of the adoption of a first class salary schedule
and 5% salary increase of the Municipality of Mayoyao based on its finding that the municipal
officials concerned acted in good faith, thus:
WHEREAS, the Sangguniang Bayan of Mayoyao however justified that their
realignment of the amount of Php 1,936,524.96 and the adoption of a first class
salary was done in good faith and with the purpose of giving decent pay to officials
and employees of the said Municipality considering the high cost of living;
WHEREAS, this Body finding merit on the justification of the said

Municipality hereby reconsiders its earlier stand on the disallowed adoption of a
first class salary schedule and the 5% salary increase of the Municipality of
Mayoyao, Ifugao;
x x x x.[39]
Furthermore, granting arguendo that the municipalitys budget adopted the incorrect
salary rates, this error or mistake was not in any way indicative of bad faith. Under prevailing
jurisprudence, mistakes committed by a public officer are not actionable, absent a clear showing
that he was motivated by malice or gross negligence amounting to bad faith. It does not simply
connote bad moral judgment or negligence. Rather, there must be some dishonest purpose or
some moral obliquity and conscious doing of a wrong, a breach of a sworn duty through some
motive or intent, or ill will. It partakes of the nature of fraud and contemplates a state of mind
affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior
purposes.[40] As we see it, the disbursement of the 5% salary increase was done in good faith.
Accordingly, petitioners need not refund the disallowed disbursement in the amount
of P895,891.50.
WHEREFORE, the instant Petition is PARTIALLY GRANTED. The Decision of the

Commission on Audit No. 2005-071 dated 29 December 2005 and its Decision No. 2007-040 dated
25 October 2007 affirming the disallowance of the 5% salary increase of the municipal personnel
of Mayoyao, Ifugao, covering the period 15 February to 30 September 2002 in the amount
of P895,891.50, are AFFIRMED with MODIFICATION that petitioners need not refund the said
disallowed amount of P895,891.50.
SO ORDERED.

Associate Justice
WE CONCUR:
(On official leave)
REYNATO S. PUNO
Chief Justice
(On official leave)

(On official leave)





ROBERTO A. ABAD
Associate Justice
CERTIFICATION
*
On official leave.
**
Acting Chief Justice per Special Order No. 706 dated September 17, 2009.
[1]
Rollo, pp. 24-27.
[2]
Annex K, id. at 54.
[3]
Id. at 28-32.
[4]
Id. at 33-34.
[5]
An Act Appropriating The Sum of Ten Billion Nine Hundred Million Pesos (P10,900,000,000.00)
As Supplemental Appropriation For FY 2001 And For Other Purposes.
[6]
Rollo, pp. 38-39.
[7]
Id. at 38-39.
[8]
See Resolution No. 2002-556; id. at 40.
[9]
Id. at 41.
[10]
This includes the P1,590,376.00 appropriated for the 17 newly created positions and 5%
salary increase of all officials and employees of the Municipality of Mayoyao, Ifugao.
[11]
Rollo, p. 42.
[12]
Id. at 43-48.
[13]
Id. at 49-50.
[14]
Id. at 51-53.
[15]
Id. at 62-63.
[16]
Id. at 55-61.
[17]
Id. at 25.
[18]
Id. at 24-27.
[19]
Id. at 26-27.
[20]
Id. at 28-32.
[21]
Id. at 3-63, with Annexes.
Id. at 13-14.
[22]
Section 3, Rule 64 of the Rules of Court provides:

[23]
Time to file petition. The petition shall be filed within thirty (30) days from notice of the judgment
or final order or resolution sought to be reviewed. The filing of a motion for new trial or
reconsideration of said judgment or final order or resolution, if allowed under the procedural
rules of the Commission concerned, shall interrupt the period herein fixed. If the motion is
denied, the aggrieved party may file the petition within the remaining period, but which shall
not be less than five (5) days in any event, reckoned from notice of denial.
[24]
Rollo, pp. 78-81.
[25]
Id. at 91-93.
[26]
Id. at 28-32.
[27]
Section 325(a) of the Local Government Code, provides:
General Limitations. The use of the provincial, city, and municipal funds shall be subject to the following limitations:
(a) The total appropriations, whether annual or supplemental, for personal services of a local government unit for
one (1) fiscal year shall not exceed forty-five percent (45%) in the case of the first to third class provinces, cities,
and municipalities, and fifty-five percent (55%) in the case of fourth class or lower, of the total annual income
from regular sources realized in the next preceding fiscal year. The appropriations for salaries, wages,
representation and transportation allowances of officials and employees of the public utilities and economic
enterprises owned, operated, and maintained by the local government unit concerned shall not be included in
the annual budget or in the computation of the maximum amount of personal services. The appropriations for
the personal services of such economic enterprises shall be charged to their respective budgets.
[28]
Rollo, p. 26.
[29]
Id. at 31.
[30]
Id. at 27.
[31]
Ocampo v. Commission on Elections, G.R. Nos. 136282 &137470, February 15, 2000, 325
SCRA 636, 645.
[32]
VMC Rural Electric Service Cooperative, Inc. v. Court of Appeals, G.R. No. 153144, October
16, 2006, 504 SCRA 336, 350.
[33]
G.R. No. 142347, August 25, 2005, 468 SCRA 87.
[34]
Id. at 93-94.
[35]
G.R. Nos. 109406, 110642, 111494, 112056 & 119597, September 11, 1998, 295 SCRA 366.
[36]
Id. at 447-448.
[37]
De Jesus v. Commission on Audit, G.R. No. 149154, 40, June 10, 2003, 403 SCRA
666; Querubin v. Regional Cluster Director, Legal and Adjudication Office, COA Regional Office
VI, Pavia, Iloilo City, G.R. No. 159299, July 7, 2004, 433 SCRA 769; Kapisanan ng mga
Manggagawa sa Government Service Insurance System (KMG) v. Commission on Audit, G.R.
No. 150769, August 31, 2004, 437 SCRA 371; Home Development Mutual Fund v. Commission
on Audit, G.R. No. 157001, October 19, 2004, 440 SCRA 643; Philippine Ports Authority v.
Commission on Audit, G.R. No. 159200, February 16, 2006, 482 SCRA 490; and Barbo v
Commission on Audit, G.R. No. 157542, October 10, 2008.
[38]
Id. at 62-63.
[39]
Id. at 63.
[40]
Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, G.R. No. 145184,
March 14, 2008, 548 SCRA 295.
EN BANC
GLORIA G. HALLASGO, G.R. No. 171340*

Municipal Treasurer of Damulog,
Bukidnon, Present:
Petitioner,
PUNO, C. J.,
QUISUMBING,**
- versus - YNARES-SANTIAGO,
CARPIO,
CORONA,
COMMISSION ON AUDIT CARPIO MORALES,
(COA) Regional Office No. X, CHICO-NAZARIO,
ELIEZER ASOMBRADO, the VELASCO, JR.,
former vice-mayor of the NACHURA,
Municipality of Damulog, LEONARDO-DE CASTRO,
Bukidnon, ALEJANDRO S. BRION,
BERDERA, a former member of PERALTA,
Sangguniang Bayan and ULYSES BERSAMIN,
TIRADO and ARMANDO AYCO, DEL CASTILLO, and
members of the Sangguniang Bayan ABAD, JJ.
of the Municipality of Damulog,
Bukidnon,*** Promulgated:
Respondents. September 11, 2009
x-----------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The oft-repeated phrase, public office is a public trust[1] is not and should not be mere hortatory
clich. A public servant is expected to exhibit, at all times, the highest degree of honesty and
integrity, and is accountable to all those he or she serves. Public officers particularly those in
custody of public funds are held to the highest standards of ethical behavior in both their public
and private conduct, and are expected to uphold the public interest over personal interest at all
times. It is in this spirit that we convey our deep disdain for all those whose actions betray the
trust and confidence reposed in public officers, and those who attempt to conceal wrongdoing
through misdirection and blatantly belated explanations.
This is a Petition for Review on Certiorari filed by petitioner Gloria Hallasgo, Municipal Treasurer
of Damulog, Bukidnon, assailing the Decision[2] dated 9 September 2004 of the Court of Appeals
(CA) in CA-GR SP No. 77522, affirming the 22 October 2002 Decision[3] of the Deputy Ombudsman
for Mindanao. Said Decision of the Ombudsman found petitioner guilty of grave misconduct and
ordered her dismissal from the service. Also assailed in this petition is the Resolution[4] dated 19
January 2006 of the CA denying petitioners Motion for Reconsideration.
Petitioner was the Municipal Treasurer of the Municipality of Damulog, Bukidnon. On 15 June
2001, she was accused before the Office of the Deputy Ombudsman for Mindanao of unauthorized
withdrawal of monies of the public treasury amounting to malversation of public funds by outgoing
and incumbent officials of the municipality, namely, Messrs. Eliezer N. Asombrado, Alejandro S.
Berdera, Ulyses T. Tirado, and Armando L. Ayco.[5] Also named in the Affidavit-Complaint were
Emma T. Badic and Emiterio D. Luis, the municipalitys disbursing officer and municipal mayor
from 1980 to 1998, respectively. The case was docketed as Eliezer N. Asombrado, et al. v. Gloria
Hallasgo, Emma Badic, and Emiterio Luis, for malversation (OMB-MIN-01-0329) and gross
misconduct (OMB-MIN-ADM-01-192).
In brief, the Affidavit-Complaint claimed that petitioner, Badic and Luis were liable for the
following acts: (1) making unrecorded withdrawals from the municipalitys bank account
totaling P360,000.00 without the required supporting documents; and (2) failing to liquidate cash
advances despite the lapse of over a year, in the amount of P171,256.00.
On 9 August 2001, petitioner, Badic and Luis filed their Joint Counter-Affidavit[6] alleging that: (1)
all disbursements were supported by vouchers and recorded in the Treasurers Cash Book and
Journal of Checks; and (2) all the required documentation to liquidate the cash advances were
received by the Municipal Accountant on 26 December 2000. In addition, Luis declared that he
had since retired from the service, and that all his accounts were cleared prior to his retirement.
After a preliminary review of the documents, the Office of the Ombudsman for Mindanao
determined that it could not make a complete evaluation of the issues without conducting an
extensive audit. Thus, it requested the Commission on Audit (COA), Region X, Cagayan de Oro
City, to audit the records of the alleged anomalous transactions. On 16 October 2001, in
accordance with COA Regional Office Order No. 2001-X-297L, the COA created a Special Audit
Team (the audit team) to verify the transactions referred to in the Affidavit-Complaint. The audit
team submitted its report to the COA Regional Office on 12 December 2001; said results were
then referred to the Office of the Ombudsman for Mindanao on 11 February 2002.
The salient points of the audit teams findings[7] are summarized as follows:
A. Alleged Unrecorded Withdrawals of P360,000.00 through three (3) checks made

without supporting vouchers.
1. Land Bank of the Philippines (LBP) Check No. 15106143 for P100,000.00 dated 2
August 1996 in favor of Emma T. Badic, Disbursing Officer.
The audit team found that this transaction was officially recorded.
2. LBP Check No. 15627928 for P250,000.00 dated 15 August 1997 in favor of petitioner.
LBP Check No. 15627928 amounting to P250,000.00 was withdrawn and encashed by the
petitioner on 15 August 1997 without the required disbursement voucher. No evidence
existed to show that the amount withdrawn was deposited in any of the municipalitys
depositary banks.
Petitioner first claimed that she deposited this amount in the municipalitys Philippine
National Bank (PNB) account. However, no evidence of a cash deposit in the amount
of P250,000.00 could be found. Instead, it appeared that what was actually deposited
by the petitioner were checks that were intended to fund separate transactions.
Petitioner later claimed that, after going over her records, the P250,000.00 was kept in
her safe as reserve fund, so this amount was included in her accountabilities. The
audit team however noted that no evidence was presented to show that
the P250,000.00 was really accounted for, aside from petitioners statement that this
was included in the funds under her accountability. Further, a verification of the
general ledger account as of 31 December 1997 revealed that the cash in treasury
amounted to only P239,741.65.
The audit team recommended that petitioner be made to account for the withdrawal;
otherwise, the appropriate action should be instituted against her for failure to account
for the amount withdrawn.
3. LBP Check No. 26719253 for P10,000.00 dated 27 February 1998 issued to Emiterio D.
Luis.
There was no disbursement voucher found on file from the Office of the Provincial Auditor
of Bukidnon, nor was there any record of this transaction taken up either in the
Treasurers Journal of Checks, the General Ledger Book, or the Treasurers
Cashbook. Petitioner explained that the check was actually issued as the municipalitys
contribution to the Department of Education Culture and Sports (DECS) regional
competition, but a mistake was made in effecting payment. However, the audit team
found that this check was deposited on 17 July 1998 in the LBP-Maramag branch,
returned, and then re-deposited in the trust fund account of the
municipality. Evidently, it took four months and 16 days for the former Mayor, Luis, to
return the check. The audit team also noted that if the check was really intended as
contribution to the DECS, then the DECS, not the mayor, would have been the
designated signatory.
The audit team recommended that petitioner and Luis should be made to account for the
withdrawal of the fund without the appropriate documentation; otherwise, the
appropriate action should be instituted against them for failure to account for the
amount withdrawn. In addition, they recommended that the municipality should stop
the practice of disbursing money of the local treasury without complete
documentation.
B. Alleged Unliquidated Cash Advances of P171,256.00.
1. The COA audit revealed that of the P171,256.00 cash advances listed, the amount
of P30,161.90 had already been previously liquidated.
2. As for the remaining P141,094.10, these constituted cash advances granted to

petitioner which remained unliquidated for over one year. Indeed, a review of the
dates showed that the cash advances remained unliquidated for a period ranging from
one year and six months to two years and five months.
The audit team recommended that all officials be required to process the liquidation of
vouchers of cash advances submitted by the former Municipal Treasurer in accordance
with Section 5 of COA Circular No. 97-02 so that unliquidated cash advances could be
settled. Otherwise, appropriate administrative actions should be instituted against
those who fail to settle their cash advances accordingly.
3. Additional cash advances had been granted to petitioner, even if previous cash
advances remained unsettled, thus exposing the funds to possible misuse and
misappropriation. Consequently, the audit team recommended that the municipality
should stop the practice of granting additional cash advances to officials who have not
yet liquidated their previous cash advances.
4. Cash advances totaling P171,256.00 were granted to the former Municipal Treasurer
under her own accountability, in violation of COA-MOF Joint Memorandum Circular No.
02-81 dated 15 November 1981. As such, the audit team recommended that the
municipality stop the practice of granting cash advances to the Municipal Treasurer
under her own accountability except upon prior approval from the Department of
Finance.
C. Alleged Unrecorded Withdrawals of P700,000.00 encashed by petitioner on 16

June 1997 under PNB Check No. 586577-W for P350,000.00 and LBP Check No.
15627907 for P350,000.00.
The audit team found that these transactions totaling the amount of P700,000.00 were
all recorded in the books of accounts as of June 1997.
Nonetheless, in the course of the audit, the audit team noted that on two separate
occasions, the Disbursing Officer failed to timely record the cash advances in her cashbook
at the time the transactions were incurred, in violation of Section 19(a) of COA
Memorandum 84-373, thus precluding early detection of errors and discrepancies. The
delays in recording ranged from 26 30 days. The audit team recommended that the
municipality direct the Disbursing Officer to record promptly all cash advances received in
the cashbook at the time the transaction is incurred, to avoid mishandling of cash and to
detect errors and discrepancies without delay.
D. Petitioner failed to remit intact and promptly the amounts she received in cash
totaling P980,000.00, thus exposing government funds to probable
misuse/misapplication.
It was shown that on separate occasions in 1997, petitioner withdrew a total of P980,000.00 from
the Municipal Treasury, allegedly for fund transfer to the PNB, as follows:
Date of Payee Check No. Amount Date encashed

Chec
k
15 August G. Hallasgo LBP15627928[8 PhP250,000.0 15 August 1997

1997 ]
0
16 June 1997 G. Hallasgo LBP15627907 PhP350,000.0 16 June 1997
0
29 July 1997 G. Hallasgo LBP15627921 PhP380,000.0 29 June 1997
0
Petitioner explained that she had the checks issued in her name, instead of depositing them in
the municipalitys account, in order to avoid the three or four day clearing period. However,
in the course of the audit, it was shown that even the cash was never deposited to the
municipalitys PNB account. Rather, petitioner deposited different checks to fund the PNB
account; stated otherwise, checks were used to cover up cash withdrawals for the same
purpose. It was thus unclear what the funds under LBP Check Nos. 15627907 and
15627921 were utilized for.
The audit team recommended that (1) petitioner be required to explain the final status of cash
withdrawn totaling P980,000.00; (2) the municipality end the practice of encashing checks
for the purpose of withdrawal by the depositary for fund transfer to another bank; (3)
responsible officers deposit intact and promptly the full amount so received and collected
to the treasury and credit it to particular accounts to which said money belongs to avoid
misuse/misapplication of the same.
On 12 April 2002, the audit team, composed of State Auditors Concepcion Guanzon and Leonido
Pajo, executed a Joint Affidavit summarizing their findings against petitioner and Luis.[9] The case
was re-docketed as Commission on Audit (COA) Regional Office No. X v. Gloria Hallasgo &
Emiterio D. Luis, but the same docket numbers were retained. Petitioner filed her Counter-
Affidavit dated 17 June 2002, essentially reiterating the defenses made before the COA Audit
Team.[10] After the parties filed their respective position papers, the case was submitted for
resolution.[11]
On 22 October 2002, the Deputy Ombudsman for Mindanao issued a Decision[12] finding petitioner
guilty of GRAVE MISCONDUCT. The charge against Luis was dismissed.Pertinent portions thereof
read as follows:
This Office finds that there is sufficient evidence to support a finding of grave
misconduct against respondent [Hallasgo]. Misconduct in office implies a wrongful
intention and not a mere error of judgment. In the instant case, the respondent
appears to have used her expertise in financial management to obfuscate the
subject transactions for the purposes of concealing financial anomalies. Her acts
cannot be considered as done in good faith or constituting only errors of
judgment. It is to be emphasized that the tasks and functions of a treasurer is
highly fiduciary in nature. Public office is a public trust. In the case of the
respondent, a higher degree of standard is expected from her and this Office finds
that she has abjectly failed to live up to that standard. In grave misconduct, as
distinguished from simple misconduct, the elements of corruption, clear intent to
violate the law, or flagrant disregard of established rule must be manifest. All of
these are evident in the instant case.
xxxx
WHEREFORE, PREMISES CONSIDERED, this Office finds respondent GLORIA

HALLASGO, GUILTY OF GRAVE MISCONDUCT. Pursuant to Resolution No. 991936,
otherwise known as the Uniform Rules on Administrative Cases in the Civil Service,
the respondent is hereby meted the corresponding penalty of DISMISSAL FROM
THE SERVICE, together with all the accessory penalties appurtenant thereto,
effective upon the finality hereof. The charge against co-respondent Emeterio D.
Luis is hereby DISMISSED.[13]
Petitioner filed a Motion for Reconsideration,[14] which was denied by the Office of the
Ombudsman in an Order[15] dated 8 April 2003. Petitioner then appealed the Decision to the CA
under Rule 43 of the Rules of Court.
In the herein assailed Decision[16] dated 9 September 2004, the CA dismissed petitioners appeal
for lack of merit. Petitioners Motion for Reconsideration[17] dated 27 September 2004 was likewise
dismissed in a Resolution[18] dated 19 January 2006.
Before this Court, petitioner now claims that:
1. The CA did not decide the case in accordance with applicable law and jurisprudence.
2. The CA failed to appreciate the conclusions of the COA as found in the audit report, and thus
departed from the accepted and usual course of judicial proceedings, that justifies the
exercise of supervision by the Supreme Court.
3. The CA failed to appreciate that there was no substantial evidence to warrant the meting out
of the extreme penalty of dismissal from service.
4. The penalty of DISMISSAL from the service imposed by the Ombudsman and affirmed by the
CA is not commensurate to their findings since no substantial evidence exists.
In its Comment[19] dated 28 June 2006, the Office of the Solicitor General (OSG), representing
the COA, argued that:
1. All indispensable parties should have been impleaded in the proceedings before the
Ombudsman and made parties to the Petition filed before the CA.
2. A Petition for Review under Rule 45 of the 1997 Rules of Civil Procedure must raise only
questions of law.
3. The totality of the evidence must be considered in determining petitioners liability for grave
misconduct, as what was correctly done by the Ombudsman.
4. Petitioners dismissal from service is warranted by law and the evidence on record.
We affirm the ruling of the CA and DENY the petition for lack of merit.
Procedural Matters
There is no merit in the OSGs claim that private complainants - Eliezer Asombrado, Alejandro
Berdera, Ulyses Tirado, and Armando Ayco - were denied due process when petitioner failed to
implead them as indispensable parties before the CA.[20]
A review of the records indicates that even during the proceedings before the Office of the
Ombudsman, the case was re-docketed as Commission on Audit Regional Office No. X v. Gloria
Hallasgo and Emiterio D. Luis, after the COA audit team executed a Complaint-Affidavit against
petitioner for gross misconduct. Furthermore, the private complainants cannot be considered
indispensable parties,[21] such that the case cannot be resolved without their participation. In
administrative cases, the complainant is a mere witness; no private interests are involved as any
offense is committed against the government.[22] In any event, the private complainants were not
denied due process. Although not named in the petition, the private complainants were furnished
copies of the pleadings and did, in fact, participate in the proceedings before the CA, arguing
vigorously against the petitioner.[23]
On the other hand, the OSG correctly argues that questions of fact are not proper in a petition
brought under Rule 45 of the Rules of Court.[24] Put simply, the Supreme Court is not a trier of
facts,[25] and cannot be tasked to analyze, assess, and weigh the facts presented by the parties
before the Ombudsman and the CA in order to ascertain if their appreciation of the evidence is
correct.[26] Although there are recognized exceptions to this rule,[27] none of them apply to the
present case. Nonetheless, in the interest of justice, we have carefully examined all the evidence
in this case, but still find that there is no sufficient reason to overturn the findings of the CA and
the Office of the Ombudsman.
Our Finding of Gross Misconduct
Misconduct generally means wrongful, improper or unlawful conduct motivated by a

premeditated, obstinate or intentional purpose. It is a transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty. Qualified by the term gross, it means
conduct that is "out of all measure beyond allowance; flagrant; shameful; such conduct as is not
to be excused."[28]
We find that the evidence on record demonstrates a pattern of negligence and gross misconduct
on the part of the petitioner that fully satisfies the standard of substantial evidence. Substantial
evidence is such amount of relevant evidence that a reasonable mind might accept as adequate
to support a conclusion.[29]
Petitioners failure to keep current and accurate records, repeated withdrawal of funds without
the appropriate disbursement vouchers, failure to ensure the timely liquidation of her cash
advances even after the lapse of over a year, and failure to account for funds in her custody not
only constitute violations of applicable laws,[30] but also reflect poorly on the government and
provide ripe opportunity for fraud and corruption.
Petitioner presented these arguments to exonerate herself from liability: first, any anomalous
transactions are merely the product of human error, and do not constitute misconduct so grave
as to warrant dismissal from the service; second, as regards the failure to liquidate cash advances,
it is the accountant that failed to obligate all cash advances; thus, petitioner should not be held
liable; third, unless a thorough audit is done, she should not have been adjudged to have
committed gross misconduct. In particular, she claims that since the audit team could not
determine the final status of the cash withdrawn for the purpose of fund transfer to PNB, her
dismissal is not warranted until a full-blown audit is conducted.
As treasurer of the municipality, it is petitioners duty to perform her responsibilities diligently,

faithfully, and efficiently. It behooves her to exercise the highest degree of care over the custody,
management, and disbursement of municipal funds.[31] Even if petitioner may have justified some
of the transactions, these explanations were belatedly done, effected only after being directed to
do so by the audit team. This purported atonement, undertaken as an afterthought accompanied
by neither shame nor remorse, cannot exonerate her from liability.[32]
We are not convinced that the anomalies complained of are the result of mere inadvertence, or
that responsibility can so easily be shifted by petitioner to her subordinates. On the contrary, her
actions demonstrate her wanton and deliberate disregard for the demands of public service.
Petitioners failure to ensure that disbursements are properly documented or that cash advances
granted to her are properly and timely liquidated certainly deserves administrative sanction. In
particular, we wish to denounce petitioners practice of having the municipality issue checks in her
name, ostensibly to get cash immediately and avoid a three day clearing period, only to discover
that petitioner never actually deposited the cash in the municipalitys bank account. This is a highly
pernicious practice that this Court condemns in the strongest possible terms.
It bears stressing that petitioner never bothered to explain what took place with respect to the
funds subject of LBP Check Nos. 15627907 (for P350,000.00) and 15627921
(for P380,000.00). In stark contrast with the staunch defense she launched for other matters,
she never thought to account for these checks, whether before the Office of the Ombudsman,
the CA, or this Court. She cannot abdicate responsibility for the checks by claiming that it was
the audit teams duty to undertake forensic analysis to uncover how these funds were
spent. Rather, as treasurer, she should have deposited the funds as she was tasked to do, and
subsequently accounted for the use of said funds.
All these collectively constitute gross misconduct. Pursuant to Section 52, Rule IV of the Civil
Service Rules, gross misconduct is a grave offense punishable with dismissal for the first
offense,[33] without prejudice to the Ombudsmans right to file the appropriate criminal case
against the petitioner or other responsible individuals. We are, of course, aware that in several
administrative cases, this Court has refrained from strictly imposing the penalties provided by the
law, in light of mitigating factors such as the offending employees length of service,
acknowledgment of his or her infractions and feeling of remorse, family circumstances, advanced
age, and other equitable considerations.[34]However, we find that petitioners recalcitrant refusal
to explain the use (or misuse) of the more than P700,000.00 in cash placed in her possession
makes her unworthy of such humanitarian consideration, and merits the most serious penalty
provided by law.
WHEREFORE, the Petition is hereby DENIED for LACK OF MERIT. The Court of Appeals
Decision in CA-GR SP No. 77522 dated 9 September 2004 and Resolution dated 19 January 2006
are AFFIRMED. Petitioner is hereby found GUILTY of GRAVE MISCONDUCT and is
ordered DISMISSED from service with forfeiture of all retirement benefits except accrued leave
credits, with prejudice to reemployment in any branch or instrumentality of the government,
including government-owned and controlled corporations. The Office of the Ombudsman
is DIRECTED to take appropriate action against herein petitioner.
SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
(On official leave)





ROBERTO A. ABAD
Associate Justice
CERTIFICATION
REYNATO S. PUNO
Chief Justice
*
This case was inherited by the ponente from his immediate predecessor, now retired Associate
Justice Ma. Alicia Austria-Martinez on 6 August 2009.
**
On official leave.
***
The names of respondents in italics are included in the Petition for Review on Certiorari filed
before this Court although they are not indispensable parties to this case.
[1]
CONSTITUTION, Art. 11, Sec. 1.
[2]
Rollo, pp. 8-18; penned by Associate Justice Edgardo A. Camello and concurred in by Associate
Justices Estela M. Perlas-Bernabe and Arturo G. Tayag.
[3]
Id. at 48-57.
[4]
Id. at 19-20; penned by Associate Justice Edgardo A. Camello and concurred in by Associate
Justices Normandie B. Pizarro and Ricardo R. Rosario.
[5]
Id. at 71-89.
[6]
Id. at 90-105.
[7]
Id. at 106-147.
[8]
As indicated in A2, above, Petitioner alleged that the first check (LBP15627928) was not
actually deposited in the municipalitys PNB account, but rather, was kept in Petitioners safe as
reserve fund.
[9]
Rollo, pp. 150-152.
[10]
Id. at 153-156.
[11]
Id. at 158-192.
[12]
Id. at 48-57.
[13]
Id. at 55-56.
[14]
Id. at 59-61.
[15]
Id. at 68-69.
[16]
Supra note 2.
[17]
Rollo, pp. 203-205.
[18]
Supra note 4.
[19]
Rollo, pp. 219-238.
[20]
Rule 43 of the Rules of Court provides that a Petition for Review before the Court of Appeals
shall state the full names of the parties to the case, without impleading the courts or agencies
either as petitioners or respondents.
[21]
Rule 3, Section 7 of the Rules of Court provides:
Section 7. Compulsory joinder of indispensable parties. Parties in interest without whom
no final determination can be had of an action shall be joined either as plaintiffs or defendants.
[22]
Navarro v. Civil Service Commission, G.R. Nos. 107370-71, September 16, 1993, 226 SCRA
522, 526, citing Paredes v. Civil Service Commission, G.R. Nos. 88177 & 89530, December 4,
1990, 192 SCRA 84.
[23]
Rollo, pp. 256 266.
[24]
Section 1 of Rule 45 is quite clear in that the petition shall raise only questions of law which
must be distinctly set forth.
[25]
Andrada v. National Labor Relations Commission, G.R. No. 173231, December 28, 2007, 541
SCRA 538.
There is a "question of fact" when the doubt or controversy arises as to the truth or falsity of the
alleged facts. This is distinguished from a question of law when the doubt or difference arises
as to what the law is on a certain state of facts, and does not call for an examination of the
probative value of the evidence presented by the parties-litigants. See Cucueco v. Court of
Appeals, G.R. No. 139278, October 25, 2004, 441 SCRA 290, 298.
[26]
La Union Cement Workers Union & Almonte v. National Labor Relations Commission, G.R. No.
174621, January 30, 2009; JMM Promotions and Management, Inc. v. Court of Appeals, 439
Phil. 1, 10 (2002).
[27]
In Sampayan v. Court of Appeals, G.R. No. 156360, January 14, 2005, 448 SCRA 220, 229,
this Court held:
"[I]t is a settled rule that in the exercise of the Supreme Court's power of review, the Court is not a trier of
facts and does not normally undertake the re-examination of the evidence presented by the contending
parties during the trial of the case considering that the findings of facts of the CA are conclusive and
binding on the Court. However, the Court had recognized several exceptions to this rule, to wit: (1) when
the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made
is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of facts 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 the appellant and the appellee; (7) when the findings are contrary to the 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 petitioner's main and reply briefs are not
disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify
a different conclusion.
[28]
Rodriguez v. Eugenio, A.M. No. RTJ-06-2216, April 20, 2007, 521 SCRA 489, 505-
506; Malabanan v. Metrillo, A.M. No. P-04-1875, February 6, 2008, 544 SCRA 1.
[29]
RULES OF COURT, Rule 133, Section 5; Mendoza v. Buo-Rivera, A.M. No. P-04-1784, April 28, 2004,
428 SCRA 72, 76. Administrative proceedings are governed by the substantial evidence rule. Stated
otherwise, a finding of guilt in an administrative case may be sustained if it is supported by substantial
evidence that the respondent has committed acts stated in the complaint. See Dadulo v. Court of
Appeals, G.R. No. 175451, April 13, 2007, 521 SCRA 357; Menor v. Guillermo, A.M. No. P-08-2587,
December 18, 2008. The standard of substantial evidence is satisfied when there is a reasonable ground
to believe that respondent is responsible for the conduct complained of, even if such evidence is not
overwhelming. See Liguid v. Camano, Jr., A.M. No. RTJ-99-1509, August 8, 2002, 387 SCRA 1, 11.
[30]
Such laws include:
Section 344 of Republic Act No. 7160, which provides that no money shall be disbursed unless
the local budget officer certifies to the existence of the appropriation that has been
legally made for the purpose, the local accountant has obligated said appropriation,
and the local treasurer certifies to the availability of the funds for the purpose.
Section 69 of Presidential Decree No. 1445, which provides that public officers authorized to
receive and collect money arising from taxes, revenues, or receipts of any kind shall remit
intact the full amounts so received and collected by them to the treasurer of the
agency concerned and credited to the particular accounts to which the said money
belong.
Section 89 of Presidential Decree No. 1445, which provides that no cash advance shall be given
unless for a legally authorized public purpose. A cash advance shall be reported on and
liquidated as soon as the purpose for which it was given has been served. No
additional cash advance shall be allowed to any official or employee unless the
previous cash advance given to him is first settled or a proper accounting thereof
is made.
COA-MOF Joint Memorandum Circular No. 2-81 dated 15 October 1981 provides that cash
advances shall be granted only to duly designated paymaster, property officers, and supply
officers of the local government unit concerned, for the payment of salaries and wages and
other petty operating expenses, except when the grant of the cash advance is authorized by
special law or competent authority, or is extremely necessary as determined by the chief
executive and/or the heads of offices of the local government unit, as hereinafter provided. In
no case shall the Treasurer or his cashier be granted a cash advance under his own
accountability except for his foreign travel or such other official purpose as the
ministry of finance may authorize.
[31]
LOCAL GOVERNMENT CODE OF THE PHILIPPINES, Section 470.
[32]
Judiciary Planning Devt. and Implementation Office v. Calaguas, A.M. No. P-95-1155, May 15,
1996, 256 SCRA 690, 694.
[33]
Under CSC Resolution No. 99-1936 dated 31 August 1999 (the "Uniform Rules in
Administrative Cases in the Civil Service"), which took effect on 27 September 1999, the
penalty of dismissal shall carry with it the cancellation of eligibility, forfeiture of retirement
benefits, and perpetual disqualification from reemployment in the government service.
Similarly, Section 10, Rule III of the Rules of Procedure of the Office of the Ombudsman, as
amended by Administrative Order No. 17, provides that "the penalty of dismissal from the
service shall carry with it that of cancellation of eligibility, forfeiture of retirement benefits, and
perpetual disqualification from reemployment in the government service, unless otherwise
provided in the decision."
[34]
Tan v. Sermonia, A.M. No. P-08-2436, August 4, 2009, citing In Re: Administrative Case for
Dishonesty Against Elizabeth Ting, Court Secretary I, and Angelita C. Esmerio, Clerk III, Office
of the Division Clerk of Court, Third Division, A.M. No. 2001-7-SC & 2001-8-SC, 22, July 22,
2005, 464 SCRA 1; Concerned Taxpayer v. Doblada, Jr., A.M. No. P-99-1342, September 20,
2005, 470 SCRA 218; Civil Service Commission v. Belagan, G.R. No. 132164, October 19, 2004,
440 SCRA 578; Buntag v. Pana, G.R. No. 145564, March 24, 2006, 485 SCRA 302.

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Republic of the Philippines

SELWYN F. LAO AND G.R. No. 164791

CORONA, C.J., Chairperson,

SPECIAL PLANS, INC., Promulgated:

DEL CASTILLO, J.:

Antonio San Mateo, vice-president for legal affairs of plaintiff-corporation, averred

In their defense, Jim and petitioners proffered the following:

Roofing repair - P 45,000.00 (Exhibit 2-A)

On cross, he averred that he sought the expertise of Gregorio Tamayo to repair

On cross, he declared that he was the subcontractor of defendant Lao.[7]

Ruling of the Metropolitan Trial Court

Wherefore, in view of the foregoing considerations, let this case be, as it

Ruling of the Regional Trial Court

Ruling of the Court of Appeals

The petition is without merit.

3. The two debts are due:

4. The debts are liquidated and demandable;

Petitioners failed to properly discharge their burden to

Respecting these issues, petitioner Lao testified as follows:[29]

Q: What else if any were you able to discover?

Q: According to this document you submitted a quotation?

Q: And whose signature appears above the name Gregorio Tamayo?

Q: And what happened to the repairs?

Q: All in all how much did it cost you in Exh. 2?

Q: And, what happened next after informing the lessor.

Q: What happened when you were able to talk to Mr. Cruz?

Q: In this room, what is the structural defect?

Q: It has something to do with the foundation?

For failure to timely appeal the RTC Decision before the

MARIANO C. DEL CASTILLO

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

JOSE PORTUGAL PEREZ

Republic of the Philippines

DEL CASTILLO, J.:

1) sidecar of the tricycle which costs P16,000.00;

CAUSE OF DEATH: Severe hemorrhage due to Multiple Stabbed wounds,

P 50, 000.00 - as indemnity for the death of the victim.

Ruling of the Regional Trial Court

The accused is further ordered to be immediately committed to the National

Cost against accused Rene Baron.

Ruling of the Court of Appeals

Costs against accused-appellant.

The appeal is unmeritorious.

Q. Where is this Julies Bakeshop located x x x?

Q. Can you tell us what was that?

Q. Why do you know him?

Q. And who were they if you know?

(TSN-Tan, January 18, 1996, pp. 6-10)

MARIANO C. DEL CASTILLO

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

JOSE PORTUGAL PEREZ

Republic of the Philippines

SOUTHEASTERN SHIPPING, G.R. No. 167678

CORONA, C.J., Chairperson,

FEDERICO U. NAVARRA, JR., Promulgated:

DEL CASTILLO, J.:

Ruling of the Labor Arbiter

Evelyn appealed the Decision to the NLRC.

Ruling of the NLRC

Death compensation - US$ 50,000.00

Petitioners raise the following issues:

The petition is partly meritorious.

SECTION 28. JURISDICTION

The Philippine Overseas Employment Administration (POEA) or the National Labor