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THIRD DIVISION

[G.R. No. 119053. January 23, 1997.]

FLORENTINO ATILLO III, petitioner, LHUILLIER, respondents.


FRANCISCO, J.:

vs. COURT

OF

APPEALS,

AMANCOR,

INC.,

and

MICHELL

RESOLUTION
This is a petition for review on certiorari of the decision of the respondent Court of Appeals in CA-G.R. No. 3677 promulgated on August 4, 1994 affirming in toto the decision of Branch 7 of the Regional Trial Court of Cebu City in Civil Case No. CEB-9801 entitled "Florentino L. Atillo III versus Amancor, Inc. and Michell Lhuillier". The material antecedents are as follows:

On August 15, 1985, respondent Amancor, Inc. (hereinafter referred to as AMANCOR for brevity), a corporation then owned and controlled by petitioner Florentino L. Atillo III, contracted a loan in the amount of P1,000,000.00 with Metropolitan Bank and Trust Company, secured by real estate properties owned by the petitioner. Before the said loan could be paid, petitioner entered into a Memorandum of Agreement dated June 14, 1988 (Annex "A" of the Complaint) with respondent Michell Lhuillier (hereinafter referred to as LHUILLIER for brevity) whereby the latter bought shares of stock in AMANCOR. As a consequence of the foregoing transaction, petitioner and LHUILLIER each became owner of 47% of the outstanding shares of stock of AMANCOR while the officers of the corporation owned the remaining 6%. In view of the urgent and immediate need for fresh capital to support the business operations of AMANCOR, petitioner and LHUILLIER executed another Memorandum of Agreement on February 13, 1989 (Annex "B" of the Complaint) by virtue of which LHUILLIER undertook to invest additional capital in AMANCOR. As an addendum to the foregoing, a Supplemental Memorandum of Agreement was entered into by the petitioner and LHUILLIER on March 11, 1989. Relevant to the case at bar is a stipulation in the said Supplemental Memorandum of Agreement which provides as follows: "4. F.L. Atillo III may dispose off (sic) his properties at P. del Rosario St., Cebu City which may involve pre-payment of AMANCOR'S mortgage loan to the bank estimated at 300,000.00 and while AMANCOR may not yet be in the position to re-pay said amount to him, it shall pay the interests to him equivalent to prevailing bank rate."
[1] [2] [3] [4] [5]

Pursuant to this stipulation, petitioner assumed AMANCOR' s outstanding loan balance of P300,000.00 with Metropolitan Bank and Trust Company. After offsetting the amount of P300,000.00 with some of the accounts that petitioner had with AMANCOR, the amount which remained due to the petitioner was P199,888.89. Because of the failure of AMANCOR to satisfy its obligation to repay petitioner, the latter filed a complaint for collection of a sum of money docketed as Civil Case No. Ceb-9801 against AMANCOR and LHUILLIER before Branch 7 of the Regional Trial Court of Cebu City. At the pre-trial conference, petitioner, AMANCOR and LHUILLIER, assisted by their respective counsels, stipulated on the following:

"1. That the parties admit the due execution and genuineness of the Memorandum of Agreement dated 14 June 1988 (Annex A), the Memorandum of Agreement dated 13 February 1989 (Annex B) and Supplemental Agreement dated 11 March 1989 (Annex C); 2. That the defendants admit that the claim of the plaintiff amounted to P199,888.89 as of October 1, 1990;"
[6]

and submitted the following issues to be resolved by the trial court:

"a. From the aforesaid Annexes A, B and C, is Michell J. Lhuillier personally liable to the plaintiff? b. What rate of interests shall the defendant corporation and Michell J. Lhuillier, if the latter is liable, pay the plaintiff?" (Underscoring supplied.)
[7]

On the basis of the stipulation of facts and the written arguments of the parties, the trial court rendered a decision in favor of the petitioner, ordering AMANCOR to pay petitioner the amount of P199,888.89 with interest equivalent to the bank rate prevailing as of March 11, 1989. LHUILLIER was, however, absolved of any personal liability therefor.[8] It is from the trial court's conclusion of non-liability that petitioner appealed to respondent court, arguing therein that as LHUILLIER signed the Memorandum of Agreement without the official participation nor ratification of AMANCOR, LHUILLIER should have been declared jointly and severally liable with AMANCOR.[9] The respondent court found petitioner's contention bereft of merit and held in part that:

"Contrary to plaintiffs-appellants (sic) allegation, the indebtedness of P199,888.89 was incurred by defendant AMANCOR, INC., alone. A thorough study of the records shows that plaintiff's cause of action for collection of a sum of money arose from "his payment of the defendant corporation's outstanding loan balance of P300,000.00 with Metropolitan Bank & Trust Company" x x x. Considering the allegations in the complaint and those contained in the Memorandum of Agreement, the respondent court properly ruled that the liability was incurred by defendant AMANCOR, INC., singly. We grant that if plaintiff really believes that the indebtedness was incurred by defendant Lhuillier in his personal capacity, he should not have offsetted (sic) some of his accounts with the defendant corporation, x x x. As it is, plaintiff could have ofted (sic) to sue defendant Lhuillier in his personal capacity the whole amount of indebtedness and not implead the defendant corporation as co-defendant.
xxx xxx
[10]

xxx

x x x [T]he indebtedness was incurred by the defendant corporation as a legal entity to pay the mortgage loan. Defendant Lhuillier acted only as an officer/agent of the corporation by signing the said Memorandum of Agreement."
Aggrieved by the decision of respondent court, petitioner brought this instant petition submitting the following issue for the resolution of this Court:

"When a party, by his judicial admissions, has affirmed that he has personal liability in a certain transaction, may a court rule against such an admission despite clear indications that it was not affected by mistakes palpable or otherwise?"
[11]

Petitioner claims that LHUILLIER made a judicial admission of his personal liability in his Answer wherein he stated that:

"3.11.

In all the subject dealings, it was between plaintiff and Lhuillier personally without the official participation of Amancor, Inc.
xxx xxx xxx

3.14 . Since the board of Amancor, Inc. did not formally ratify nor acceded (sic) to the personal agreement between plaintiff and Lhuillier through no fault of the latter, the corporation is not bound and the actionable documents are, at most, unenforceable insofar as the subject claim of plaintiff is concerned."
[12]

And on the basis of such admission, petitioner contends that the decision of the respondent court absolving LHUILLIER of personal liability is manifest error for being contrary to law, particularly Section 4 of Rule 129 of the Rules of Court which provides that:

"An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made."
Petitioner would want to further strengthen his contention by adverting to the consistent pronouncement of this Court that: "x x x an admission made in the pleadings cannot be controverted by the party making such admission and are conclusive as to him, and that all proofs submitted by him contrary thereto or inconsistent therewith, should be ignored, whether objection is interposed by the party or not x x x." [13] We find petitioner's contention to be without merit and the reliance on the general rule regarding judicial admissions enunciated by the abovementioned provision of law and jurisprudence misplaced. As provided for in Section 4 of Rule 129 of the Rules of Court, the general rule that a judicial admission is conclusive upon the party making it and does not require proof admits of two exceptions: 1) when it is shown that the admission was made through palpable mistake, and 2) when it is

shown that no such admission was in fact made.[14] The latter exception allows one to contradict an admission by denying that he made such an admission.

"For instance, if a party invokes an 'admission' by an adverse party, but cites the admission 'out of context', then the one making the admission may show that he made no 'such' admission, or that his admission was taken out of context. This may be interpreted as to mean 'not in the sense in which the admission is made to appear.' That is the reason for the modifier 'such'." [Underscoring supplied.]
[15]

Here, petitioner appears to have taken the admissions made by LHUILLIER in paragraph 3.11 of his Answer "out of context". Petitioner is seemingly misleading this Court by isolating paragraph 3.11 of the said Answer from the preceding paragraphs. A careful scrutiny of the Answer in its entirety will show that paragraph 3.11 is part of the affirmative allegations recounting how LHUILLIER was persuaded to invest in AMANCOR which was previously owned and managed by petitioner.[16] Paragraph 3.11 has reference to the fact that in all investments made with AMANCOR through stock purchases, only petitioner and LHUILLIER dealt with each other. [17] It is more than obvious that paragraph 3.11 has nothing to do with the obligation of AMANCOR to petitioner which is the subject of the present case. Contrary to petitioner's allegations, LHUILLIER had categorically denied personal liability for AMANCOR's corporate debts, and in the succeeding paragraphs of the said Answer asserted the following:

"3.12. As evident in the wordings of par. 12 of the Actionable Memorandum of Agreement dated 13 February 1989 (Annex B) and par. 4 of the actionable Supplemental Memorandum of Agreement dated 11 March 1989 (Annex C), Lhuillier did not engage to personally pay the corporate loans secured by plaintiff's property as to release the property to plaintiff. On the contrary, as explicitly stated in the aforesaid par. 4 of Annex C, ". . . while Amancor may not yet be in the position to repay said amount to him, IT shall pay the interests to him equivalent to prevailing bank rate." "3.13. At most, therefore, Lhuillier x x x only agreed, for the corporation to repay plaintiff the amount of the pre- terminated corporate loans with the bank and, pending improvement of Amancor's finances, for said corporation to pay interest at prevailing bank rate. x x x." (Underscoring supplied.)
[18]

Furthermore, petitioner was well aware that LHUILLIER had never admitted personal liability for the said obligation. In fact, in delineating the issues to be resolved by the trial court, both parties submitted for the determination of the court, the question of whether or not LHUILLIER is personally liable for the obligation of AMANCOR to petitioner.[19]Moreover, as correctly observed by respondent court, if petitioner really believed that the liability was incurred by LHUILLIER in his personal capacity, then he should not have offset his accounts with those of AMANCOR's. The foregoing act of petitioner is a clear indication that he recognized AMANCOR and not LHUILLIER as the obligor. Granting arguendo that LHUILLIER had in fact made the alleged admission of personal liability in his Answer, We hold that such admission is not conclusive upon him. Applicable by analogy is our ruling in the case of Gardner vs. Court of Appeals which allowed a party's testimony in open court to override admissions he made in his answer. Thus:

"The fact, however, that the allegations made by Ariosto Santos in his pleadings and in his declarations in open court differed will not militate against the findings herein made nor support the reversal by respondent court. As a general rule, facts alleged in a party's pleading are deemed admissions of that party and are binding upon it, but this is not an absolute and inflexible rule. An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence. As ARIOSTO SANTOS himself, in open court, had repudiated the defenses he had raised in his ANSWER and against his own interest, his testimony is deserving of weight and credence. Both the Trial Court and the Appellate Court believed in his credibility and we find no reason to overturn their factual findings thereon." (Underscoring supplied.)
[20]

Prescinding from the foregoing, it is clear that in spite of the presence of judicial admissions in a party's pleading, the trial court is still given leeway to consider other evidence presented. This rule should apply with more reason when the parties had agreed to submit an issue for resolution of the trial court on the basis of the evidence presented. As distinctly stated in the stipulation of facts entered into during the pre-trial conference, the parties agreed that the determination of LHUILLIER's liability shall be based on the Memoranda of Agreement designated as ANNEXES "A", "B"

and "C" of the Complaint. Thus, the trial court correctly relied on the provisions contained in the said Memoranda of Agreement when it absolved LHUILLIER of personal liability for the obligation of AMANCOR to petitioner. Furthermore, on the basis of the same evidence abovementioned, respondent court did not err when it refused to pierce the veil of corporate fiction, thereby absolving LHUILLIER of liability for corporate obligations and deciding the question in this wise:

"The separate personality of the corporation may be disregarded, or the veil of corporation fiction may be pierced and the individual shareholder may be personally liable (sic) to the obligations of the corporation only when the corporation is used as a cloak or cover for fraud or illegality, or to work an injustice, or where necessary to achieve equity or when necessary for the protection of the creditors. This situation does not obtain in this case. In the case at bar, plaintiff-appellant failed to show that defendant Lhuillier acted otherwise than what is required of him as an agent of a corporation. It does not appear either that defendant-appellee Michel (sic) Lhuillier is jointly and severally liable with AMANCOR INC. absent an express stipulation to that effect and sans clear and convincing evidence as to his personal liability."
[21]

The foregoing pronouncement is based on factual findings of the lower court which were upheld by the respondent court, and which are thus, conclusive upon us pursuant to the well established rule that factual findings of the Court of Appeals, supported by substantial evidence on the record, are final and conclusive and may not be reviewed on appeal.[22] ACCORDINGLY, finding no reversible error, the decision appealed from is hereby AFFIRMED and this petition is DENIED. SO ORDERED. Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Panganiban, JJ., concur.

OFELIA HERRERA-FELIX, Represented by JOVITA HERRERA-SEA, petitioner, vs. COURT OF APPEALS, and ST. JOSEPH RESOURCES DEVELOPMENT, INC., respondents. RESOLUTION
CALLEJO, SR., J.:

This is a petition for review on certiorari assailing the Decision[1]of the Court of Appeals which dismissed the petition to annul the Decision[2] of the Regional Trial Court of Malabon, Metro Manila, Branch 73, in Civil Case No. 1967, on the ground of lack of jurisdiction over the person of herein petitioner Ofelia Herrera-Felix. The Antecedents On March 11, 1993, respondent St. Joseph Resource Development, Inc. filed a complaint for sum of money against the Spouses Restituto and Ofelia Felix with a prayer for a writ of preliminary attachment. It was alleged therein that, during the period from November 16, 1992 to December 14, 1992, the Felix Spouses purchased from the respondent tubs of assorted fish, as follows: Date of Purchase Amount of Fish Purchased November 16, 1992 November 17, 1992 November 19, 1992 November 20, 1992 December 2, 1992 December 3, 1992 December 5, 1992 December 8, 1992 P 183,360.00 114,380.00 56,014.00 183,400.00 70,000.00 159,100.00 73,500.00 79,025.50

275,190.00 102,840.00 78,300.00 108,692.00 32,379.50 ----------------Total . . . . . P 1,516,181.00 It was also alleged that the Felix Spouses still had an outstanding obligation amounting to P1,132,065.50, after deducting their total payment of P438,615.50 from their aggregate purchases. The respondent prayed that, after due proceedings, judgment be rendered in its favor, thus: WHEREFORE, it is respectfully prayed that judgment be rendered in favor of plaintiff and against defendants, ordering the latter to pay the former the following: 1. P1,132,065.50, representing their unpaid obligation, including unpaid tubs, plus legal interest from the date of filing of the complaint; 2. Attorneys fees equivalent to 25% of the foregoing amount; and 3. Costs of suit. Plaintiff likewise prays that a writ of preliminary attachment be issued ex parte against the properties of defendants as security for the satisfaction of any judgment that may be recovered. Other just and equitable relief is also prayed for.[3] The case was docketed as Civil Case No. 1967. The trial court granted the respondents prayer for a writ of preliminary attachment on a bond of P1,132,065.50 which was posted on March 26, 1993. The Sheriff levied and took custody of some of the personal properties of the Felix Spouses. On March 26, 1993, a copy of the writ of preliminary attachment, summons and complaint were served on them at their residence, through the sister of Ofelia Herrera-Felix, Ma. Luisa Herrera.[4] According to the Sheriffs Return, Ofelia Herrera-Felix was out of the country, as per the information relayed to him by Ma. Luisa Herrera. On April 5, 1993, the Felix Spouses, through Atty. Celestino C. Juan, filed a motion praying for an extension of time to file their answer to the complaint.[5] On April 6, 1993, the trial court issued an Order granting the motion. However, the Felix Spouses failed to file their answer to the complaint. The respondent then filed a Motion dated April 23, 1993 to declare the said spouses in default,[6] which motion was granted by the court in its Resolution[7] dated May 13, 1993. A copy of the said resolution was sent to and received by the counsel of the Felix Spouses through registered mail. On August 11, 1993, the court a quo rendered a decision in favor of the respondent, the decretal portion of which reads: WHEREFORE, judgment is hereby rendered ordering: 1. The defendants to pay, jointly and severally, the plaintiffs the amount of ONE MILLION SEVENTY-SEVEN THOUSAND FIVE HUNDRED SIXTY-FIVE PESOS AND FIFTY CENTAVOS (P1,077,565.50) plus legal rate of interest from the date of the filing of the complaint; 2. The defendants to pay, jointly and severally, the amount of TWENTY-FIVE THOUSAND PESOS (P25,000.00) as/for reasonable Attorneys fees; 3. The defendants to pay the costs of this suit.

December 9, 1992 December 11, 1992 December 12, 1992 December 13, 1992 December 14, 1992

SO ORDERED.[8] Copies of the said decision were mailed to the Felix Spouses and their counsel, Atty. Celestino C. Juan, by registered mail. The copy of the decision addressed to the spouses was returned to the court after two notices for having been Unclaimed. However, then counsel for the Felix Spouses received his copy of the decision. The decision of the trial court became final and executory after the Felix Spouses failed to appeal the same. The respondent filed a motion for a writ of execution. A copy thereof was served on the said spouses by registered mail, but they failed to oppose the motion. The court thereafter issued an order granting the motion and directing the issuance of a writ of execution. The counsel for the Felix Spouses received a copy of the said order. Thereafter, the following personal properties of the latter were levied upon and sold by the sheriff at public auction for P83,200.00 to the respondent as the winning bidder: (1) unit Jeep-semi stainless (1) unit Jeep-stainless (1) Victor-Radio/TV/Cassette Recorder (1) Sony 17 TV w/ remote control (1) Kawai Electric Organ (3) Hitachi Stand Fan (1) Standard Desk Fan (1) 6 pieces Sala Set.[9] On August 14, 1995, the Sheriff executed a Certificate of Sale of personal properties.[10] On September 13, 1996, petitioner Ofelia Herrera-Felix, represented by another sister, Jovita Herrera-Sea, filed a petition with the Court of Appeals under Rule 47 of the Rules of Court for the nullification of the trial courts judgment by default, the writ of execution issued by the said court, and the sale of her properties at public auction. The petitioner alleged, inter alia, that the complaint and summons were handed over to her sister, Ma. Luisa Herrera, who was merely a visitor in her house and, as such, was not a valid substituted service under Rule 14, Section 7 of the Rules of Court. She also alleged that her husband Restituto Felix had died as early as April 23, 1988, as evidenced by his Certificate of Death. [11] In its comment on the petition, the respondent alleged that the substituted service of the complaint and summons on the petitioner, who was then temporarily outside thePhilippines, through her sister Ma. Luisa Herrera, was valid and effective. The respondent, likewise, averred that even if such substituted service on the petitioner was defective, the defect was cured when the latter, through her counsel, Atty. Celestino C. Juan, appeared in court and moved for an extension of time to file her responsive pleading. The respondent also maintained that the petitioner and her counsel were served with copies of the decision of the court a quo, but that the petitioner failed to appeal the decision. In her reply to the comment of the respondent, the petitioner alleged that since she failed to file a responsive pleading to the complaint, the appearance of Atty. Celestino C. Juan, as her counsel, did not constitute as a voluntary submission to the jurisdiction of the court. On June 7, 2000, the CA rendered a decision, the dispositive portion of which reads: WHEREFORE, premises considered, finding that the court a quo validly acquired jurisdiction over the action and absent any ground warranting the annulment of its judgment, this petition is herebyDISMISSED for lack of merit SO ORDERED.[12]

The petitioner, through her sister, Jovita Herrera-Sea, now comes to this Court via a petition for review on certiorari praying for the reversal of the decision of the Court of Appeals. She alleges that the trial court did not acquire jurisdiction over her person through the service of the complaint and summons on her sister, Ma. Luisa Herrera. She maintains that the latter was a mere visitor in her house, not a resident therein; hence, the decision of the trial court is null and void. She further alleges that even assuming the validity of the trial courts decision, such decision never became final and executory since she was not served a copy of the same. As such, the writ of execution issued by the trial court, the sale of her personal properties at public auction, as well as the issuance of the Certificate of Sale, are null and void. She asserts that the actuations of both the trial court and the Sheriff deprived her of her right to due process. The contentions of the petitioner have no merit. The court acquires jurisdiction over the person of the defendant by service of the complaint and summons on him, either by personal service or by substituted service or by extra-territorial service thereof or by his voluntary personal appearance before the court or through counsel. In this case, the petitioner appeared before the court, through counsel, and filed a motion for extension of time to file her answer to the complaint which the trial court granted. She even admitted in the said motion that she was served with a copy of the complaint as well as the summons. The admissions made in a motion are judicial admissions which are binding on the party who made them. Such party is precluded from denying the same unless there is proof of palpable mistake or that no such admission was made.[13] By filing the said motion, through counsel, the petitioner thereby submitted herself to the jurisdiction of the trial court. Indeed, in Busuego vs. Court of Appeals,[14] we ruled that: A voluntary appearance is a waiver of the necessity of a formal notice. An appearance in whatever form, without explicitly objecting to the jurisdiction of the court over the person, is a submission to the jurisdiction of the court over the person. While the formal method of entering an appearance in a cause pending in the courts is to deliver to the clerk a written direction ordering him to enter the appearance of the person who subscribes it, an appearance may be made by simply filing a formal motion, or plea or answer. This formal method of appearance is not necessary. He may appear without such formal appearance and thus submit himself to the jurisdiction of the court. He may appear by presenting a motion, for example, and unless by such appearance he specifically objects to the jurisdiction of the court, he thereby gives his assent to the jurisdiction of the court over his person. When the appearance is by motion objecting to the jurisdiction of the court over his person, it must be for the sole and separate purpose of objecting to the jurisdiction of the court. If his motion is for any other purpose than to object to the jurisdiction of the court over his person, he thereby submits himself to the jurisdiction of the court.[15] Equally barren of factual basis is the claim of the petitioner that she was not served with a copy of the decision of the trial court. The records show that aside from the copy of the decision sent to her by the Branch Clerk of Court by registered mail, another copy of the decision was served on her through her counsel, Atty. Celestino C. Juan, who received the same. The service of the decision on the petitioner, through counsel, is binding on her, conformably to Rule 13, Section 2 of the Rules of Court.[16] We reject the petitioners plaint of having been deprived of her right to due process. The essence of due process is a reasonable opportunity to be heard and submit evidence in support of ones defense. What the law proscribes, therefore, is the lack of opportunity to be heard. [17] A party who opts not to avail of the opportunity to answer cannot complain of procedural due process. There can be no denial of due process where a party had the opportunity to participate in the proceedings but failed to do so through his own fault.

WHEREFORE, the petition is DENIED DUE COURSE. The assailed decision of the Court of Appeals dated June 7, 2000 is hereby AFFIRMED. Costs against the petitioner. SO ORDERED. Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

SECOND DIVISION HEIRS OF PEDRO CLEMEA Y ZURBANO, Petitioners, G.R. No. 155508 Present: PUNO, J., Chairperson, SANDOVAL-GUTIERREZ, CORONA, AZCUNA and GARCIA, JJ.

- versus -

HEIRS OF IRENE B. BIEN, Respondents.

Promulgated: September 11, 2006

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

DECISION CORONA, J.:

The only question presented in this petition for review on certiorari[1] is whether petitioners, the heirs of Pedro Clemea y Zurbano, should be made to pay respondents, the heirs of Irene B. Bien, compensatory damages for depriving them of the owners share of the harvest from a tract of riceland in Bolo, Municipality of Tiwi, Albay.

This piece of land, described in Tax Declaration No. 5299 (TD 5299) as having a surface area of more or less 20,644 square meters, was one of three lots[2]involved in two consolidated cases[3] for recovery of possession and ownership filed in the 1940s by respondents predecessor Irene Bien (through her attorney-in-fact Gregorio Clemea) against petitioners

predecessor Pedro Clemea y Zurbano. The pertinent averments in Irene Biens complaint read:
[T]he plaintiff is x x x the absolute owner of a parcel of land situated in the province of Albay described and limited as follows: Una parcela de terreno arrozal en el sitio de Bolo, Municipio de Tiwi, Provincia de Albay, con una extension superficial de 20,644 metros cuadrados poco mas o menos, lindante al Norte - Eulalio Copino y Esteban Bobis; al Este Pedro Clemea y Conde; al Sur Canal de Ragadio y Valentina Conde; y al Oeste Marcial Copino, Pedro Clemea y Valentina Conde. Declared as Tax No. 5299 and assessed at P310.00 [T]he plaintiff acquired the above parcel of land by purchase from Victoriano Napa as per deed of sale in her favor x x x; and the said Victoriano Napa in turn acquired the same by purchase from Francisco Barrameda who also bought the said land from the administrator of the estate of Pedro Clemea y Conde which sale had been duly authorized and approved by this Honorable Court in Civil Case No. 3410-In re The Estate of Pedro Clemea y Conde x x x; [T]he defendant ever since he was removed as administrator of the Estate of Pedro Clemea y Conde in the year 1939 deliberately continued to occupy and usurp the possession and use of the above described parcel of land x x x, and has ever since refused to relinquish the possession of the same to the lawful owner thereof notwithstanding the fact that he has no right or any color of title over the said land; [B]y reason of this unlawful occupation and usurpation by the defendant, the plaintiff will suffer damages and in fact has suffered damages beginning this October 1943 harvest at the rate of 25 cavans of palay per harvest or 50 cavans yearly x x x[4]

In his answer, Pedro Clemea y Zurbano alleged that the land was his and that it was in his exclusive possession.[5] His claim of ownership was similarly based on a sale by the estate of the late Pedro Clemea y Conde to his predecessor-in-interest.

Neither one of the

original

parties

lived

to

see

the

end

of

the

trial. The plaintiff,

Irene Bien, passed away in 1953 and was substituted by

respondents.[6] Not long after that, petitioners succeeded the defendant Pedro Clemea y Zurbano who died in 1955.[7] The trial lasted decades. Eventually, the cases were re-raffled to Branch 2[8] of the Regional Trial Court (RTC) of Legaspi City in November of 1994.

On August 10, 1995, the RTC rendered a decision[9] declaring petitioners to be the absolute owners of the land described in TD 5299 and directing respondents to respect petitioners possession thereof.[10] Subsequently, however, the RTC reconsidered its findings with respect to ownership. This time, it ruled that the contending parties had failed to prove their respective claims of ownership and therefore the land in question still belonged to its original owner, the estate of the late Pedro Clemea y Conde. Thus, in an order dated November 13, 1995,[11] the RTC modified the dispositive portion of its decision to read:
1. Considering that the parcel covered by [TD] No. 5299, the other parcel subject matter of Civil Case No. 115, is not included among those parcels sold by the estate of the late Pedro Clemea y Conde to Francisco Barameda, the predecessor of the original plaintiff Irene Bien and neither was it included in the sale executed by Special Administrator Salustiano Zubeldia in favor of Jesus Salazar, the predecessor-ininterest of the defendants [petitioners], the same still forms part of the estate of the late Pedro Clemea y Conde. Neither the plaintiffs [respondents] nor the defendants [petitioners] own the same. 2. Considering that the defendants [petitioners,] in their opposition to the motion for reconsideration, no longer disputes (sic) the ownership of the plaintiffs [respondents] as regards the parcel covered by [TD] No. 5681, subject matter of Civil Case No.

74, plaintiffs [respondents] are declared the owners thereof, as stated in the decision. As regards the claim for damages by the plaintiffs [respondents], since it was not duly established that the defendants [petitioners] entered and occupied a portion of said property, no damage is just the same awarded. 3. Considering that the parcel of land covered by [TD] No. 5685 is included in the sale executed by Special Administrator Salustiano Zubeldia to Jesus Salazar, and further considering that said deed of sale is earlier than the sale executed in favor of Mr. Francisco Barameda, the defendants [petitioners] are declared the owners thereof and therefore entitled to its possession. No damages having been proved, no award concerning is awarded (sic). SO ORDERED.[12]

From that order, respondents appealed to the Court of Appeals (CA). It was docketed as CA-G.R. CV No. 50912. In a decision dated April 4, 2002,[13] the CA affirmed the RTCs resolution of the issues relating to the other two parcels of land but reversed the ruling on the ownership of the land covered by TD 5299. It proceeded to award respondents P118,000 in damages as compensation for their having been deprived of possession and the owners share in the harvest. The findings on which this award was based were stated in the appellate courts decision:
[T]he recovered exhibits of the appellants [respondents] clearly indicate that ownership thereof belongs to [them] by virtue of the following documents of sale x x x. Hence, the appellants [respondents] are the owners of the property covered by Tax Declaration No. 5299. The remaining issue to be determined is the amount of damages sustained by appellants [respondents] from appellees [petitioners] retention of possession thereof.

Gregorio Clemea testified on the damages incurred from the appellees occupation of the property in the form of deprivation of the owners share of the harvest, to wit: Q A Q This second parcel of land described in the SECOND cause of action which is Tax No. 5299, what kind of land is this? Riceland. How big is this parcel of land?

A Q A

More or less, two (2) hectares. What is the average owners share of the harvest? About fifty cavans of palay. xxx xxx xxx

Q A

From the time you filed this case in the year 1943, who had been receiving the owners share from this property, known as Tax No. 5299? The late Pedro Clemea y Zurbano when he was still alive and then his children after his death.

He likewise testified on the changes in the price of a cavan of palay over the years, thus: Q A Q A Q A What was the current average price of palay after liberation, starting from the year 1945 up to 1950? About Fifteen (P15.00) Pesos a sack. How about after 1950 to 1960? The same. How about from 1960 to 1970? At present, it is Twenty Five (P25.00) Pesos per cavan. xxx xxx xxx

We believe, in the exercise of discretion, that the [respondents] are entitled to an award of damages in the amount of P118,000 computed in the following manner: P1,500.00 (50cavans multiplied by two [the number of harvests in a year] multiplied by P15.00) multiplied by 27 years (1943 to 1970) and P2,700.00 (50 cavans multiplied by two [the number of harvests in a year] multiplied by P25.00) multiplied by 31 years (1971-2001). WHEREFORE, the appeal is partly granted in that the Order, dated November 13, 1995, of the Regional Trial Court of Legazpi City, Branch II, in two consolidated cases, docketed as Civil Case Nos. 74 and 155, is affirmed with the modification that paragraph 1 is deleted and replaced with the following: 1. Appellants [respondents] are hereby DECLARED entitled to the ownership of the property covered by Tax

Declaration No. 5299. The appellees [petitioners] and all persons claiming under them are hereby ORDERED to vacate this tract of land immediately and to turn over the possession of such land together with all improvements thereon to appellants. Appellees [petitioners] are further directed to pay to appellants [respondents] the amount of one hundred and eighteen thousand pesos (P118,000.00), by way of actual and compensatory damages, with legal interest thereon from the date of finality of this decision until actual payment thereof. [14]

Petitioners motion for reconsideration was denied in a resolution dated October 1, 2002.[15] Hence, this petition.

Petitioners no longer dispute respondents ownership of the property covered by TD 5299. They insist, however, that they cannot be held liable to respondents for the harvest because (1) they never took possession of the property declared in TD 5299 and (2) the evidence the CA relied on to determine the amount of damages, proceeding as it did from one of the plaintiffs, was self-serving and therefore could not have been a proper basis for such an award.

The petition is devoid of merit.

Petitioners contention that the land was never in their possession should be dismissed outright for two re asons, both of them simple and rather obvious.

First, petitioners predecessor Pedro Clemea y Zurbano alleged in his answer that the land declared in TD 5299 was in his exclusive possession.[16] That statement, insofar as it confirmed the allegation in the complaint that petitioners predecessor had retained possession of the land in question,[17] took on the character of a judicial admission contemplated in Section 4, Rule 129 of the Rules of Court:

An admission, verbal or written, made by a party in the course of 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.[18]

A judicial admission conclusively binds the party making it. He cannot thereafter contradict it. The exception is found only in those rare instances when the trial court, in the exercise of its discretion and because of strong reasons to support its stand, may relieve a party from the consequences of his admission.[19]

The rule on judicial admissions found its way into black-letter law only in 1964[20] but its content is supplied by case law much older and in many instances more explicit than the present codal expression. In the early case of Irlanda v. Pitargue,[21] this Court laid down the doctrine that acts or facts admitted do not require proof and cannot be contradicted unless it can be shown that the admission was made through palpable mistake. The rule was more forcibly stated by Mr. Justice Street in the 1918 decision Ramirez v. Orientalist Co.:[22]
An admission made in a pleading can not be controverted by the party making such admission; and all proof submitted by him contrary thereto or inconsistent therewith should simply be ignored by the court, whether objection is interposed by the opposite party or not.[23]

And in Cunanan v. Amparo,[24] the Court declared that:


the allegations, statements, or admissions contained in a pleading are conclusive as against the pleader. A party cannot subsequently take a position contrary to, or inconsistent with, his pleadings.[25]

Petitioners newly-contrived assertion that they were never in possession of the land cannot hold up against these pronouncements. As substituting defendants, they were bound by the admission of Pedro Clemea y Zurbano, their predecessor in the litigation.[26] Without any showing that the admission was made through palpable mistake or that no such admission was made, petitioners cannot now contradict it.

Second, the issue of whether petitioners ever had possession of the land is undeniably a question of fact. Questions of this nature cannot be raised in a petition for review on certiorari as the remedy is confined to pure questions of law.[27]

The Court is well aware, of course, that this rule has been watered down by a slew of exceptions. Hoping to convince the Court to reverse the CAs findings, petitioners invoke a number of these exceptions, namely: (1) the factual findings of the trial court and the CA are contradictory; (2) the decision sought to be reviewed is against the law and in complete disregard of the rules on evidence; (3) there was grave abuse of discretion in the appreciation of facts; and (4) the CA failed to notice relevant facts and evidence which if properly considered would justify a different conclusion.[28] But this case does not fall within any of these. For one, petitioners have shown no contradiction between the findings of the CA and the RTC on the matter. And for obvious reasons, our preceding disquisition on the conclusiveness of Pedro Clemea y Zurbanos admission of the fact of possession makes the rest of the grounds invoked by petitioners undeserving of even passing consideration.

Petitioners next proposition, i.e., that Gregorio Clemeas testimony was self-serving and therefore an improper basis for the damages awarded to respondents, is just as unworthy of this Courts favorable consideration.

Self-serving evidence, perhaps owing to its descriptive formulation, is a concept much misunderstood. Not infrequently, the term is employed as a weapon to devalue and discredit a partys testimony favorable to his cause. That, it seems, is the sense in which petitioners are using it now. This is a grave error. Self-serving evidence is not to be taken literally to mean any evidence that serves its proponents interest.[29] The term, if used with any legal sense, refers only to acts or declarations made by a party in his own interest at some place and time out of court, and it does not include testimony that he gives as a witness in court.[30] Evidence of this sort is excluded on the same ground as any hearsay evidence, that is, lack of opportunity for cross-examination by the adverse party and on the consideration that its admission would open the door to fraud and fabrication.[31] In contrast, a partys testimony in court is sworn and subject to cross-examination by the other party,[32] and therefore, not susceptible to an objection on the ground that it is self-serving.

At any rate, for all their protestations against the use of Gregorio Clemeas testimony, petitioners never once alleged, much less tried to show, that his testimony was inaccurate or untrue. As already observed, petitioners objection is founded solely on the mere fact that he, being a plaintiff, was a witness interested in the outcome of the case. Now, it is true that a partys interest may to some extent affect his credibility as a witness.[33] To insist otherwise would be the height of naivet. Nonetheless, the Court cannot subscribe to the view, implicit in petitioners argument, that a partys

testimony favorable to himself must be disregarded on account solely of his interest in the case. Our justice system will not survive such a rule for obdurate cynicism on the part of a court is just as odious to the administration of justice as utter gullibility.

Moreover, this Court held in National Development Company v. Workmens Compensation Commission[34] that interest alone is not a ground for disregarding a partys testimony.[35] Elsewhere it has been said that the interest of a witness does not ipso facto deprive his testimony of probative force or require it to be disregarded, and the trier of facts is entitled to accept as much of the witness testimony as he finds credible and to reject the rest.[36] To these dicta we give our complete assent. Petitioners arguments to the contrary must be rejected.

In view of the foregoing, we hold that the appellate court committed no reversible error in relying on Gregorio Clemeas testimony. The award of damages must stand.

WHEREFORE, the petition is hereby DENIED. The April 4, 2002 decision and October 1, 2002 resolution of the Court of Appeals in CA-G.R. CV No. 50912 are AFFIRMED.

SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 168071 December 18, 2006 LUCIANO TAN, petitioner, vs. RODIL ENTERPRISES, respondent. DECISION CHICO-NAZARIO, J.:

The instant Petition for Review on Certiorari assails the Decision1 dated 21 October 2002 and the Resolution2dated 12 May 2005 of the Court of Appeals in CA-G.R. SP No. 67201, which set aside the 18 June 2001 Decision3 of the Regional Trial Court (RTC) of Manila, Branch 26 in Civil Case No. 01-99797. The RTC reversed the 6 October 2000 Decision4 of the Metropolitan Trial Court (MeTC) of Manila, Branch 13 in Civil Case No. 166584, and dismissed the Complaint filed by respondent Rodil Enterprises against petitioner Luciano Tan for utter lack of merit. This case has its origin from the Complaint5 for Unlawful Detainer filed on 13 March 2000 by Rodil Enterprises against Luciano Tan with the MeTC of Manila, Branch 13, docketed as Civil Case No. 166584. The factual antecedents to the filing of the Complaint show that Rodil Enterprises is a lessee of the subject premises, the Ides ORacca Building since 1959. The Ides ORacca Building, located at the corner of M. de Santos and Folgueras Streets in Binondo, Manila, is owned by the Republic of the Philippines. On 18 May 1992, Rodil Enterprises and the Republic, through the Department of Environment and Natural Resources (DENR), entered into a Renewal of a Contract of Lease over the Ides ORacca Building. A subsequent Supplementary Contract dated 25 May 1992 was similarly entered into, thus, extending the lease agreement until 1 September 1997. The validity of the 18 May 1992 and the 25 May 1992 contracts was placed in question in several actions involving Rodil Enterprises, the Ides ORacca Building Tenants Association, Inc., and other tenants. This Court upheld the validity of the aforesaid contracts in a Decision rendered on 29 November 2001, in the consolidated cases of Rodil Enterprises, Inc. v. Court of Appeals, Carmen Bondoc, Teresita Bondoc-Esto, Divisoria Footwear and Chua Huay Soon (G.R. No. 129609) and Rodil Enterprises, Inc. v. Ides ORacca Building Tenants Association, Inc. (G.R. No. 135537).6 Prior thereto, the Office of the President in OP Case No. 4968 entitled, Spouses Saturnino B. Alvarez and Epifania Binay Alvarez v. Rodil Enterprises Company, Inc. rendered a Decision7 dated 8 February 1994, declaring the Renewal of Contract of Lease and the Supplementary Contract, dated 18 May 1992 and 25 May 1992, respectively, of no force and effect. It appears that Rodil Enterprises appealed the 8 February 1994 Decision to the Court of Appeals, docketed as CA-G.R. SP No. 34586 which was dismissed by the appellate court for non-compliance with procedural requirements. The dismissal was appealed by Rodil Enterprises to the Supreme Court, docketed as G.R. No. 119711 which was also dismissed. Subsequently, the Office of the President issued an Order of Execution of its 8 February 1994 Decision in OP Case No. 4968. Thereafter, Rodil Enterprises filed a Petition for Review onCertiorari with the Court of Appeals on the Order of Execution, docketed as CA-G.R. SP No 79157. The Court of Appeals rendered a Decision therein dated 28 March 2005 which annulled the Order of Execution, and enjoined the Office of the President from enforcing its 8 February 1994 Decision in OP Case No. 4968. Likewise, the Court of Appeals ordered the Office of the President to abide by the 29 November 2001 Decision of the Supreme Court in the consolidated cases of G.R. No. 129609 and G.R. No. 135537, upholding the validity of the Renewal of Contract of Lease and the Supplemental Contract, dated 18 May 1992 and the 25 May 1992, respectively. Finally, the Decision of the Court of Appeals in CA-G.R. SP No. 79157 was brought on certiorari by the Ides ORacca Building Tenants Association, Inc. to the Supreme Court, and docketed as G.R. No. 169892. On 25 January 2006, the Court, in G.R. No. 169892, issued a Resolution denying the Petition. On 20 March 2006, a Resolution was rendered in the same case denying with finality the amended Motion for Reconsideration.

Meanwhile, during the pendency of the preceding cases, on 18 October 1999, a subsequent Contract of Lease was drawn between Rodil Enterprises and the Republic, the same to be effective retroactively from 1 September 1997 to 21 August 2012 at a monthly rental of P65,206.67, subject to adjustment upon the approval of a new appraisal covering the Ides ORacca Building. Rodil Enterprises subleased various units of the property to members of the Ides ORacca Building Tenants Association, Inc. A space thereof, known as Botica Divisoria was subleased to herein petitioner, Luciano Tan. In Rodil Enterprises Complaint for Unlawful Detainer filed against Luciano Tan, the former alleged that Luciano Tan bound himself to pay under a Contract of Sublease, the amount of P13,750.00 as monthly rentals, representing the reasonable use and occupancy of the said premises. However, Luciano Tan unjustifiably and unreasonably refused to pay the rentals from September 1997 up to the time of the filing of the Complaint, and despite repeated oral and written demands, refused to vacate the premises and to pay the rents due. Rodil Enterprises prayed that Luciano Tan and those claiming rights under him be ordered to vacate the leased premises. A payment of rentals in arrears, amounting to P385,000.00 was similarly sought, including attorneys fees and litigation costs, as well as, subsequent monthly rentals in the amount of P13,750.00 until Luciano Tan vacates Botica Divisoria. In his Answer, Luciano Tan insists that he is a legitimate tenant of the government who owns the Ides ORacca Building and not of Rodil Enterprises. As such, he has the right to lease the said premises pending the disposition and sale of the building. He based his claim on the fact that on 8 February 1994, the Office of the President in OP Case No. 4968, had declared the Renewal of Contract of Lease dated 18 May 1992 and the Supplemental Contract dated 25 May 1992 between Rodil Enterprises and the Republic to be without force and effect. Accordingly, the DENR was directed to award the lease contract in favor of the Ides ORacca Building Tenants Association, Inc. of which Luciano Tan is a member. He, thus, prayed for the dismissal of the Complaint, and for the return of whatever amount Rodil Enterprises had collected from 1987 to 1997, or during such time when he was still paying rentals to the latter. On 27 June 2000, the MeTC issued an Order, recognizing an agreement entered into in open court by Luciano Tan and Rodil Enterprises. The Order, inter alia, declared, thus: On second call, the parties and counsel agreed in principle in open court to the following terms to put an end to this civil case for ejectment between them: 1.) that [Luciano Tan] will pay P440,000.00 representing rentals from September, 1997 up to the present, which is the outstanding obligation of [Luciano Tan] as of June, 2000, on or before June 30, 2000; and 2.) [Luciano Tan] will pay the monthly rentals computed at P13,750.00 on or before the 5th day of each month after June 30, 2000.8 On 14 August 2000, Luciano Tan filed a Motion to Allow Defendant to Deposit Rentals,9 averring therein that he had agreed to pay all the rentals due on the subject premises and to pay the subsequent monthly rentals as they fall due; that the rentals in arrears from September 1997 amounted to P467,500.00; and in line with his good faith in dealing with Rodil Enterprises, he would like to deposit the aforesaid amount, and the subsequent monthly rentals as they fall due. He prayed that he be allowed to deposit the Managers Check for the amount ofP467,500.00, made payable to the City Treasurer of Manila. However, on 15 August 2000, the MeTC denied the Motion on the rationalization that Luciano Tans prayer to deposit the specified sum with the City Treasurer of Manila contravenes Section 19,10 Rule 70 of the 1997 Rules of Civil Procedure.

Subsequently, the issues for the resolution of the MeTC were synthesized by the court in its Order, dated 25 July 2000, to wit: [T]he issue insofar as [Rodil Enterprises], revolved on: "Whether [Rodil Enterprises] is legally entitled to collect from [Luciano Tan] the amount of rentals and interest thereon as prayed for in the complaint and to ask for the ejectment of the defendant from the leased premises." On the other hand, [Luciano Tan]s counsel formulated the issues of the case in the following manner[,] to wit: 1) Whether or not under the circumstances[,][Luciano Tan] could be ejected from the premises in question; 2) Whether or not under the circumstances[,] [Rodil Enterprises] should be made to return the amounts collected from [Luciano Tan] from 1987 to 1997 amounting to P988,650.00.11 On 6 October 2000, the MeTC rendered a Decision in favor of Rodil Enterprises. The court said that Luciano Tan did not contest the sublease on a monthly basis, and in fact admitted in judicio, viz: 1.) That [Luciano Tan] will pay P440,000.00 representing rentals from September 1997 up to the present, which is the outstanding obligation of the defendant as of June, 2000, on or before June 30, 2000; and 2) [[Luciano Tan] will pay the monthly rentals computed at P13,750.00, on or before the 5th day of each month after June 30, 2000. (Order dated June 27, 2000)12 According to the MeTC, notwithstanding the evidentiary norm in civil cases that an offer of compromise is not an admission of any liability, and is not admissible in evidence against the offeror, the court cannot overlook the frank representations by Luciano Tans counsel of the formers liability in the form of rentals, coupled with a proposal to liquidate.13 The foregoing gestures, as appreciated by the MeTC, were akin to an admission of a fact, like the existence of a debt which can serve as proof of the loan, and was thus, admissible.14 The court pronounced that Luciano Tan had explicitly acknowledged his liability for the periodic consideration for the use of the subleased property. Estoppel, thus, precludes him from disavowing the fact of lease implied from the tender of payment for the rentals in arrears.15 The MeTC, explained further: Prescinding from the foregoing discourse, it ineluctably follows that [Luciano Tan]s indifference to heed the two demand letters, the cognition of which were recognized (paragraphs VII and IX, Complaint; paragraph 2, Answer), rendered him a deforciant (1 Regalado, Remedial Law Compendium, 6th Revised Edition, 1997, page 770, citing Dikit vs. Ycasiano, 89 Phil. 44), and was thus vulnerable to the special civil action under Section 1, Rule 70 of the 1997 Rules of Civil Procedure, especially so when non-payment of rentals is an accepted prelude to, and a secondary matrix for, a tenants eviction (Article 1673 (2), New Civil Code). From a different plane, [Luciano Tan]s quest at this juncture for recovery of the rentals he paid to the plaintiff from 1987 to 1997 will not merit the desired result since, in a manner of speaking, it will place the cart ahead of the horse, when juxtaposed with another pending controversy between the parties before the Supreme Court (Annex "1," Position Paper for the Defendant; Annex "B," Answer to Counterclaim). The decretal portion of the Decision, states, viz: WHEREFORE, in view of the foregoing premises, judgment is hereby rendered in favor of [Rodil Enterprises], ordering:

1. Defendant Luciano Tan, and all persons claiming rights under him, to vacate the subject realty, and to peacefully deliver possession to the plaintiffs representative; 2. Defendant [Luciano Tan] to pay the sum of FOUR HUNDRED FORTY THOUSAND PESOS (P440,000.00) as recognized unpaid rentals from September, 1997 up to June 30, 2000; 3. Defendant [Luciano Tan] to pay the sum of THIRTEEN THOUSAND SEVEN HUNDRED FIFTY PESOS (P13,750.00) as agreed rental per month, starting July, 2000, and every month thereafter, until possession is delivered to the plaintiffs representative; 4. Defendant [Luciano Tan] to pay the sum of FIVE THOUSAND PESOS (P5,000.00) as reasonable attorneys fees; and 5. Defendant [Luciano Tan] to pay the cost of suit. For want of merit, defendants counterclaim is hereby DISMISSED. IT IS SO ORDERED.16 Aggrieved thereby, Luciano Tan appealed the Decision to the RTC. Meanwhile, Rodil Enterprises filed a Motion for Issuance of Writ of Execution,17 which was subsequently denied by the MeTC in the Order18 of 15 December 2000. On 18 June 2001, the RTC rendered a Decision reversing the judgment appealed from and dismissing the Complaint. It found that the MeTC erred in holding that the offer to compromise by Luciano Tans counsel was akin to an admission of fact, the same being contrary to Section 27,19 Rule 130 of the 1997 Rules of Civil Procedure. As reasoned by the RTC: During the pre-trial conference held in the lower court, proposals and counter-proposals emanated from the parties counsels, which was normally inspired by the desire to "buy peace", nay, to put an end to the troubles of litigation, and to promote settlement of disputes as a matter of public policy. The act of defendant/appellants (sic) in the midst of pretrial is not an admission of any liability and therefore, should not be considered admissible evidence against him. 20 Proceeding to the issue of the right of Rodil Enterprises to collect rentals and eject Luciano Tan based on the contracts, dated 18 May 1992 and 25 May 1992, the RTC ruled that the controversy is still pending before the Supreme Court. It, thus, held that the prayer for recovery of rentals from 1987 to 1997 is premature. The RTC, disposed, as follows: IN VIEW OF THE FOREGOING, the judgment appealed from is hereby REVERSED, and a new judgment is hereby entered DISMISSING the complaint in Civil Case No. 166584 for utter lack of merit.21 Subsequently, Rodil Enterprises filed a Petition for Review with the appellate court, which, in a Decision dated 21 October 2002 set aside the judgment of the RTC, and affirmed and reinstated the 6 October 2000 Decision of the MeTC. According to the appellate court, there is, between Rodil Enterprises and the Republic of the Philippines, a valid and subsisting Contract of Lease executed on 18 October 1999, the same for a period of fifteen (15) years. 22 The period of the lease, under the 18 October 1999 contract is from 1 September 1997 to 31 August 2012. The Court of Appeals gave credence to the fact that the existence of the aforesaid contract was not denied nor controverted by Luciano Tan. What Luciano Tan, instead, impugned was the validity of the contracts dated 18 and 25 May 1992, which was upheld by this Court in the consolidated cases of Rodil Enterprises, Inc. v. Court of Appeals, Carmen Bondoc, Teresita Bondoc-Esto, Divisoria

Footwear and Chua Huay Soon (G.R. No. 129609) and Rodil Enterprises, Inc. v. Ides ORacca Building Tenants Association, Inc. (G.R. No. 135537).23 Ruling on the more important question of whether Luciano Tan made a judicial admission anent his liability as a sublessee of Rodil Enterprises, the Court of Appeals held that the former made an implied admission of the existence of a contract of sublease between him and Rodil Enterprises on the subject premises; and that he had reneged in the payment of rentals since 1 September 1997. Moreover, it deemed Luciano Tans Motion to Allow Defendant to Deposit Rentals as another admission in favor of Rodil Enterprises. The appellate court elucidated, thus: The evidence on record indubitably shows that respondent [Luciano Tan] is a sublessee of petitioner [Rodil Enterprises] who failed to pay rentals from 01 September 1997 and even until the case was filed before the [M]etropolitan [T]rial [C]ourt, when respondent [Luciano Tan] "agreed in principle in open court" to the following terms: 1) that the defendant [Luciano Tan] will pay P440,000.00 representing rentals from September, 1997 up to the present, which is the outstanding obligation of the defendant as of June, 2000, on or before June 30, 2000; and 2) defendant [Luciano Tan] will pay the monthly rentals computed at P13,750.00 on or before the 5thday of each month after June 30, 2000. at the hearing on 27 June 2000 though no settlement was eventually reached between the parties, respondent [Luciano Tan] in effect made an implied judicial admission that there was a subsisting contract of sublease between him and petitioner, and that he was remiss in the payment of rentals from 01 September 1997 up to that day (Rollo, Annex "9" of petition). Respondent [Luciano Tan]s admission was further bolstered by the fact that he filed a "Motion to Allow Defendant to Deposit Rentals" (Rollo, p. 3 of Annex "15" of petition). By such acts, respondent [Luciano Tan] accepted the truth of petitioner [Rodil Enterprises] allegation of the existence of a contract of sublease between them and of his non-payment of the rentals from 01 September 1997. A judicial admission is an admission made in the course of the proceedings in the same case, verbal or written, by a party accepting for the purposes of the suit the truth of some alleged fact, which said party cannot thereafter disprove (Remedial Law by Herrera, Oscar M. citing Section 4, Rule 129 of the Revised Rules on Evidence and Evidence by Salonga).24 The decretal portion of the 21 October 2002 Court of Appeals Decision, states, thus: WHEREFORE, in the light of the foregoing, the petition for review is GIVEN DUE COURSE. The Decision dated 18 June 2001 of the Regional Trial Court of Manila, Branch 26 is hereby SET ASIDE. The Decision dated 06 October 2000 of the Metropolitan Trial Court of Manila, Branch 13 is AFFIRMED and REINSTATED.25 The appellate court denied Luciano Tans Motion for Reconsideration thereon, in a Resolution,26 dated 12 May 2005. Thus, petitioner comes before us, raising the following grounds, to wit: I THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR WHEN IT ISSUED ITS RESOLUTION DENYING PETITIONERS MOTION FOR RECONSIDERATION OF ITS DECISION BY RELYING SOLELY AND EXCLUSIVELY ON THE MARCH 28, 2005 DECISION OF THE COURT OF APPEALS AND DESPITE THE FACT THAT THE SAID DECISION HAS NOT YET BECOME FINAL AND EXECUTORY. II

RESPONDENT RODIL ENTERPRISES IS GUILTY OF FORUM SHOPPING WHEN IT FILED THE PETITION FOR CERTIORARI WITH THE COURT OF APPEALS DOCKETED AS CA-G.R. SP. NO. 79517 SEEKING TO NULLIFY THE ORDER OF EXECUTION BY THE OFFICE OF THE PRESIDENT OF ITS 8 FEBRUARY 1994 DECISION IN OP CASE NO. 4968, DESPITE THE FACT THAT ITS PREVIOUS PETITION FOR REVIEW FILED WITH THE COURT OF APPEALS OF THE SAME DECISION OF THE OFFICE OF THE PRESIDENT DATED 8 FEBRUARY 1994 HAD BEEN DISMISSED BY THE COURT OF APPEALS IN ITS RESOLUTION DATED NOVEMBER 17, 1994 DUE TO NON-COMPLIANCE WITH PROCEDURAL RULES. III THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR AND A GRAVE MISAPPREHENSION OF THE FACTS AND MISAPPRECIATION OF THE EVIDENCE WHEN IT RULED THAT PETITIONER IS A SUBLESSEE OF RESPONDENT AND THAT PETITIONER WAS REMISS IN THE PAYMENT OF HIS RENTALS OVER THE PREMISES.27 The Petition is without merit. We shall address the first ground raised by petitioner with regard to the alleged reliance of the Court of Appeals on the Decision of the Tenth Division of the same court, dated 28 March 2005 in CA-G.R. SP No. 79157, entitled,Rodil Enterprises, Inc. v. The Office of the President and Ides ORacca Building Tenants Association, Inc.28 Contrary to petitioners contention, we do not find that the Court of Appeals was in error when it took notice of the ruling in CA-G.R. SP No. 79157 in resolving petitioners Motion for Reconsideration. As respondent Rodil Enterprises asseverated, for the appellate court to ignore a decision rendered by a division thereof would be to turn a blind eye on a valid judgment rendered by the same appellate body. Neither can we give merit to petitioners submission that the reliance by the Court of Appeals on its Decision in CA-G.R. SP No. 79517 is premature and misplaced. More significantly, the contention of the petitioner that the Decision in CA-G.R. SP No. 79517 has not attained finality has become mute when viewed within recent factual developments. The ruling in CA-G.R. SP No. 79517 has long reached finality. This Court in a Resolution29 dated 25 January 2006 denied the Petition for Review on Certiorari filed by the Ides ORacca Building Tenants Association, Inc. thereon. On 20 March 2006, this Court denied with finality the Motion for Reconsideration of the 25 January 2006 Resolution for lack of compelling reason or substantial argument.30 Moreover, on 12 April 2004, the appellate court issued a Resolution,31 granting petitioner a hearing on its Motion for Reconsideration as the grounds cited therein needed further clarification. This belies petitioners claim that the resolution on the Motion for Reconsideration was based solely on the ruling of the Court of Appeals in CA-G.R. SP No. 79517. We come to the second ground raised by the petitioner. Petitioner argues that Rodil Enterprises is guilty of forum shopping when it filed the Petition for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 79157,32after it filed an Appeal with the appellate court in CA-G.R. SP No. 34586.33 Forum shopping is the act of a party against whom an adverse judgment has been rendered in one forum, seeking another and possibly favorable opinion in another forum other than by appeal or special civil action of certiorari.34 The question of forum shopping is not even material to the instant petition.

It must be emphasized that neither CA-G.R. SP No. 79157 nor CA-G.R. SP No. 34586 is before this Court for consideration. These cases are separate and distinct from CA-G.R. SP No. 67201 now before us. What are assailed in the instant Petition are the Decision of the Court of Appeals, dated 21 October 2002 and the Resolution, dated 12 May 2005 in CA G.R. SP No. 67201, which reversed the ruling of the RTC, and affirmed the MeTC, ordering Luciano Tan to vacate the premises and peacefully deliver possession to Rodil Enterprises. The matter in controversy is the refusal of Luciano Tan to pay the monthly rentals over Botica Divisoria under the contract of sublease between the parties. On the other hand, CA-G.R. SP No. 79157 was a Petition for Review on Certiorari seeking to nullify the Order of Execution of the Office of the President of its 8 February 1994 Decision in OP Case No. 4968 finding the Renewal of Contract of Lease, and the Supplemental Contract of no force and effect. CA-G.R. SP No. 34586 was an appeal on the Decision in O.P. Case No. 4968, which was the basis of the Order of Execution. If there has indeed been forum shopping when CA-G.R. SP No. 79517 was instituted during the pendency of CA-G.R. SP No. 34586, such question should have been raised by petitioner, at first instance, before the Court of Appeals in CA-G.R. SP No. 79517. It should be noted that the petition in CA-G.R. SP No. 79517 was already given due course by the Court of Appeals and its ruling therein has long attained finality when, on appeal to this Court, docketed as G.R. No. 169892, we denied the said appeal with finality in our Resolutions dated 25 January 2000 and dated 20 March 2006. Whatever matters concerning the said case is now beyond the jurisdiction of this Court to resolve. We proceed to the final ground raised by the petitioner for the allowance of the instant Petition. Petitioner assails the factual findings of the Court of Appeals when it ruled that there was a judicial admission as to petitioners liability under a contract of sublease between him and Rodil Enterprises. To resolve this issue, a reading of the significant orders of the MeTC and the pleadings filed by petitioner is warranted. The MeTC issued an Order, dated 27 June 2000 of the following import, to wit: On second call, the parties and counsel agreed in principle in open court to the following terms to put an end to this civil case for ejectment between them: 1.) that the defendant [Luciano Tan] will pay P440,000.00 representing rentals from September, 1997 up to the present, which is the outstanding obligation of the defendant as of June, 2000 on or before June 30, 2000; and 2.) the defendant [Luciano Tan] will pay the monthly rentals computed at P13,750.00 on or before the 5th day of each month after June 30, 2000.35 On 14 August 2000, petitioner filed a Motion to Allow Defendant to Deposit Rentals with the MeTC, praying that he be allowed to deposit the rentals due as of August 2000, in the amount of P467,500.00, and the subsequent monthly rentals as it falls due. Petitioner posits that the aforesaid admission, made in open court, and then, reiterated in his Motion to Allow Defendant to Deposit Rentals, cannot be taken as an admission of his liability, citing Section 27, Rule 130 of the Rules of Court,36 which states, inter alia, that an offer of compromise in a civil case is not a tacit admission of liability. The general rule is an offer of compromise in a civil case is not an admission of liability. It is not admissible in evidence against the offeror. The rule, however, is not iron-clad. This much was elucidated by this Court in Trans-Pacific Industrial Supplies, Inc. v. Court of Appeals,37 to wit:

To determine the admissibility or non-admissibility of an offer to compromise, the circumstances of the case and the intent of the party making the offer should be considered. Thus, if a party denies the existence of a debt but offers to pay the same for the purpose of buying peace and avoiding litigation, the offer of settlement is inadmissible. If in the course thereof, the party making the offer admits the existence of an indebtedness combined with a proposal to settle the claim amicably, then, the admission is admissible to prove such indebtedness (Moran, Comments on the Rules of Court, Vol. 5, p. 233 [1980 ed.]); Francisco, Rules of Court, Vol. VII, p. 325 [1973 ed.] citing McNiel v. Holbrook, 12 Pac. (US) 84, 9 L. ed., 1009). Indeed, an offer of settlement is an effective admission of a borrowers loan balance (L.M. Handicraft Manufacturing Corp. v. Court of Appeals, 186 SCRA 640 [1990]. x x x.38 Similarly, in the case of Varadero de Manila v. Insular Lumber Co.39 the Court applied the exception to the general rule. In Varadero there was neither an expressed nor implied denial of liability, but during the course of the abortive negotiations therein, the defendant expressed a willingness to pay the plaintiff. Finding that there was no denial of liability, and considering that the only question discussed was the amount to be paid, the Court did not apply the rule of exclusion of compromise negotiations. In the case at bar, the MeTC and the Court of Appeals properly appreciated petitioners admission as an exception to the general rule of inadmissibility. The MeTC found that petitioner did not contest the existence of the sublease, and his counsel made frank representations anent the formers liability in the form of rentals. This expressed admission was coupled with a proposal to liquidate. The Motion to Allow Defendant to Deposit Rentals was deemed by the MeTC as an explicit acknowledgment of petitioners liability on the subleased premises. The Court of Appeals agreed with the MeTC. Indeed, the existence of the Contract of Lease, dated 18 October 1999 was not denied by petitioner. The contracts that were assailed by petitioner are the contracts dated 18 and 25 May 1992, the validity of which has been upheld by this Court in the consolidated cases of G.R. No. 129609 and G.R. No. 135537. Finally, we find a categorical admission on the part of petitioner, not only as to his liability, but also, as to the amount of indebtedness in the form of rentals due. The Order of the MeTC dated 27 June 2000 was clear that the petitioner agreed in open court to pay the amount of P440,000.00, representing petitioners unpaid rentals from September 1997 to June 2000; and that petitioner will pay the monthly rentals computed at P13,750.00 on or before the 5th day of each month after 30 June 2000. The petitioners judicial admission in open court, as found by the MeTC, and affirmed by the Court of Appeals finds particular significance when viewed together with his Motion to Allow Defendant to Deposit Rentals, wherein petitioner stated that the rentals due on the premises in question from September 1997 up to the present amounted to P467,500.00, as of the date of filing the Motion. Petitioner cannot now be allowed to reject the same. An admission made in the pleading cannot be controverted by the party making such admission and are conclusive as to him, and that all proofs submitted by him contrary thereto or inconsistent therewith should be ignored whether objection is interposed by a party or not.40 A judicial admission is an admission made by a party in the course of the proceedings in the same case, for purposes of the truth of some alleged fact, which said party cannot thereafter disprove.41 WHEREFORE, the Petition is DENIED. The Decision dated 21 October 2002 and the Resolution dated 12 May 2005 in CAG.R. SP No. 67201, affirming and reinstating the 6 October 2000 Decision of the MeTC in Civil Case No. 166584 are AFFIRMED. Costs against petitioners.

SO ORDERED. Ynares-Santiago, (Working Chairman), Austria-Martinez, Callejo, Sr., and, Chico-Nazario, JJ., concur. Panganiban, C.J., Retired as of 7 December 2006. EN BANC [G.R. No. 149453. April 1, 2003] PEOPLE OF THE PHILIPPINES, THE SECRETARY OF JUSTICE, DIRECTOR GENERAL OF THE PHILIPPINE NATIONAL POLICE, CHIEF STATE PROSECUTOR JOVENCITO ZUO, STATE PROSECUTORS PETER L. ONG and RUBEN A. ZACARIAS; 2ND ASSISTANT CITY PROSECUTOR CONRADO M. JAMOLIN and CITY PROSECUTOR OF QUEZON CITY CLARO ARELLANO, petitioners, vs. PANFILO M. LACSON, respondent. RESOLUTION
CALLEJO, SR., J.:

Before the Court is the petitioners Motion for Reconsideration of the Resolution dated May 28, 2002, remanding this case to the Regional Trial Court (RTC) of Quezon City, Branch 81, for the determination of several factual issues relative to the application of Section 8 of Rule 117 of the Revised Rules of Criminal Procedure on the dismissal of Criminal Cases Nos. Q-99-81679 to Q99-81689 filed against the respondent and his co-accused with the said court. In the aforesaid criminal cases, the respondent and his co-accused were charged with multiple murder for the shooting and killing of eleven male persons identified as Manuel Montero, a former Corporal of the Philippine Army, Rolando Siplon, Sherwin Abalora, who was 16 years old, Ray Abalora, who was 19 years old, Joel Amora, Jevy Redillas, Meleubren Sorronda, who was 14 years old, Pacifico Montero, Jr., of the 44th Infantry Batallion of the Philippine Army, Welbor Elcamel, SPO1 Carlito Alap-ap of the Zamboanga PNP, and Alex Neri, former Corporal of the 44th Infantry Batallion of the Philippine Army, bandied as members of the Kuratong Baleleng Gang. The respondent opposed petitioners motion for reconsideration. The Court ruled in the Resolution sought to be reconsidered that the provisional dismissal of Criminal Cases Nos. Q-99-81679 to Q-99-81689 were with the express consent of the respondent as he himself moved for said provisional dismissal when he filed his motion for judicial determination of probable cause and for examination of witnesses. The Court also held therein that although Section 8, Rule 117 of the Revised Rules of Criminal Procedure could be given retroactive effect, there is still a need to determine whether the requirements for its application are attendant. The trial court was thus directed to resolve the following: ... (1) whether the provisional dismissal of the cases had the express consent of the accused; (2) whether it was ordered by the court after notice to the offended party; (3) whether the 2-year period to revive it has already lapsed; (4) whether there is any justification for the filing of the cases beyond the 2-year period; (5) whether notices to the offended parties were given before the cases of respondent Lacson were dismissed by then Judge Agnir; (6) whether there were affidavits of desistance executed by the relatives of the three (3) other victims; (7) whether the multiple murder cases against respondent Lacson are being revived within or beyond the 2-year bar. The Court further held that the reckoning date of the two-year bar had to be first determined whether it shall be from the date of the order of then Judge Agnir, Jr. dismissing the cases, or from the dates of receipt thereof by the various offended parties, or from the date of effectivity of the new rule. According to the Court, if the cases were revived only after the two-year bar, the State must be given the opportunity to justify its failure to comply with the said time-bar. It emphasized that the new rule fixes a time-bar
[1] [2] [3] [4]

to penalize the State for its inexcusable delay in prosecuting cases already filed in court. However, the State is not precluded from presenting compelling reasons to justify the revival of cases beyond the two-year bar. In support of their Motion for Reconsideration, the petitioners contend that (a) Section 8, Rule 117 of the Revised Rules of Criminal Procedure is not applicable to Criminal Cases Nos. Q-99-81679 to Q-99-81689; and (b) the time-bar in said rule should not be applied retroactively. The Court shall resolve the issues seriatim. I. SECTION 8, RULE 117 OF THE REVISED RULES OF CRIMINAL PROCEDURE IS NOT APPLICABLE TO CRIMINAL CASES NOS. Q-99-81679 TO Q-99-81689. The petitioners aver that Section 8, Rule 117 of the Revised Rules of Criminal Procedure is not applicable to Criminal Cases Nos. Q-99-81679 to Q-99-81689 because the essential requirements for its application were not present when Judge Agnir, Jr., issued his resolution of March 29, 1999. Disagreeing with the ruling of the Court, the petitioners maintain that the respondent did not give his express consent to the dismissal by Judge Agnir, Jr., of Criminal Cases Nos. Q-99-81679 to Q-99-81689. The respondent allegedly admitted in his pleadings filed with the Court of Appeals and during the hearing thereat that he did not file any motion to dismiss said cases, or even agree to a provisional dismissal thereof. Moreover, the heirs of the victims were allegedly not given prior notices of the dismissal of the said cases by Judge Agnir, Jr. According to the petitioners, the respondents express consent to the provisional dismissal of the cases and the notice to all the heirs of the victims of the respondents motion and the hearing thereon are conditions sine qua non to the application of the time-bar in the second paragraph of the new rule. The petitioners further submit that it is not necessary that the case be remanded to the RTC to determine whether private complainants were notified of the March 22, 1999 hearing on the respondents motion for judicial determination of the existen ce of probable cause. The records allegedly indicate clearly that only the handling city prosecutor was furnished a copy of the notice of hearing on said motion. There is allegedly no evidence that private prosecutor Atty. Godwin Valdez was properly retained and authorized by all the private complainants to represent them at said hearing. It is their contention that Atty. Valdez merely identified the purported affidavits of desistance and that he did not confirm the truth of the allegations therein. The respondent, on the other hand, insists that, as found by the Court in its Resolution and Judge Agnir, Jr. in his resolution, the respondent himself moved for the provisional dismissal of the criminal cases. He cites the resolution of Judge Agnir, Jr. stating that the respondent and the other accused filed separate but identical motions for the dismissal of the criminal cases should the trial court find no probable cause for the issuance of warrants of arrest against them. The respondent further asserts that the heirs of the victims, through the public and private prosecutors, were duly notified of said motion and the hearing thereof. He contends that it was sufficient that the public prosecutor was present during the March 22, 1999 hearing on the motion for judicial determination of the existence of probable cause because criminal actions are always prosecuted in the name of the People, and the private complainants merely prosecute the civil aspect thereof. The Court has reviewed the records and has found the contention of the petitioners meritorious. Section 8, Rule 117 of the Revised Rules of Criminal Procedure reads: Sec. 8. Provisional dismissal. A case shall not be provisionally dismissed except with the express consent of the accused and with notice to the offended party.

The provisional dismissal of offenses punishable by imprisonment not exceeding six (6) years or a fine of any amount, or both, shall become permanent one (1) year after issuance of the order without the case having been revived. With respect to offenses punishable by imprisonment of more than six (6) years, their provisional dismissal shall become permanent two (2) years after issuance of the order without the case having been revived. Having invoked said rule before the petitioners-panel of prosecutors and before the Court of Appeals, the respondent is burdened to establish the essential requisites of the first paragraph thereof, namely: 1. the prosecution with the express conformity of the accused or the accused moves for a provisional (sin perjuicio) dismissal of the case; or both the prosecution and the accused move for a provisional dismissal of the case; 2. the offended party is notified of the motion for a provisional dismissal of the case; 3. the court issues an order granting the motion and dismissing the case provisionally; 4. the public prosecutor is served with a copy of the order of provisional dismissal of the case. The foregoing requirements are conditions sine qua non to the application of the time-bar in the second paragraph of the new rule. The raison d etre for the requirement of the express consent of the accused to a provisional dismissal of a criminal case is to bar him from subsequently asserting that the revival of the criminal case will place him in double jeopardy for the same offense or for an offense necessarily included therein. Although the second paragraph of the new rule states that the order of dismissal shall become permanent one year after the issuance thereof without the case having been revived, the provision should be construed to mean that the order of dismissal shall become permanent one year after service of the order of dismissal on the public prosecutor who has control of the prosecution without the criminal case having been revived. The public prosecutor cannot be expected to comply with the timeline unless he is served with a copy of the order of dismissal. Express consent to a provisional dismissal is given either viva voce or in writing. It is a positive, direct, unequivocal consent requiring no inference or implication to supply its meaning. Where the accused writes on the motion of a prosecutor for a provisional dismissal of the case No objection or With my conformity, the writing amounts to express consent of the accused to a provisional dismissal of the case. The mere inaction or silence of the accused to a motion for a provisional dismissal of the case or his failure to object to a provisional dismissal does not amount to express consent. A motion of the accused for a provisional dismissal of a case is an express consent to such provisional dismissal. If a criminal case is provisionally dismissed with the express consent of the accused, the case may be revived only within the periods provided in the new rule. On the other hand, if a criminal case is provisionally dismissed without the express consent of the accused or over his objection, the new rule would not apply. The case may be revived or refiled even beyond the prescribed periods subject to the right of the accused to oppose the same on the ground of double jeopardy or that such revival or refiling is barred by the statute of limitations. The case may be revived by the State within the time-bar either by the refiling of the Information or by the filing of a new Information for the same offense or an offense necessarily included therein. There would be no need of a new preliminary investigation. However, in a case wherein after the provisional dismissal of a criminal case, the original witnesses of the prosecution or some of them may have recanted their testimonies or may have died or may no longer be available and new witnesses for the State have emerged, a new preliminary investigation must be conducted before an Information is refiled or a new Information is filed. A new preliminary investigation is also required if aside from the original accused, other persons are
[5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15]

charged under a new criminal complaint for the same offense or necessarily included therein; or if under a new criminal complaint, the original charge has been upgraded; or if under a new criminal complaint, the criminal liability of the accused is upgraded from that as an accessory to that as a principal. The accused must be accorded the right to submit counter-affidavits and evidence. After all, the fiscal is not called by the Rules of Court to wait in ambush; the role of a fiscal is not mainly to prosecute but essentially to do justice to every man and to assist the court in dispensing that justice. In this case, the respondent has failed to prove that the first and second requisites of the first paragraph of the new rule were present when Judge Agnir, Jr. dismissed Criminal Cases Nos. Q-99-81679 to Q-99-81689. Irrefragably, the prosecution did not file any motion for the provisional dismissal of the said criminal cases. For his part, the respondent merely filed a motion for judicial determination of probable cause and for examination of prosecution witnesses alleging that under Article III, Section 2 of the Constitution and the decision of this Court in Allado v. Diokno, among other cases, there was a need for the trial court to conduct a personal determination of probable cause for the issuance of a warrant of arrest against respondent and to have the prosecutions witnesses summoned before the court for its examin ation. The respondent contended therein that until after the trial court shall have personally determined the presence of probable cause, no warrant of arrest should be issued against the respondent and if one had already been issued, the warrant should be recalled by the trial court. He then prayed therein that: 1) a judicial determination of probable cause pursuant to Section 2, Article III of the Constitution be conducted by this Honorable Court, and for this purpose, an order be issued directing the prosecution to present the private complainants and their witnesses at a hearing scheduled therefor; and 2) warrants for the arrest of the accused-movants be withheld, or, if issued, recalled in the meantime until the resolution of this incident. Other equitable reliefs are also prayed for. The respondent did not pray for the dismissal, provisional or otherwise, of Criminal Cases Nos. Q-99-81679 to Q-9981689. Neither did he ever agree, impliedly or expressly, to a mere provisional dismissal of the cases. In fact, in his reply filed with the Court of Appeals, respondent emphasized that: ... An examination of the Motion for Judicial Determination of Probable Cause and for Examination of Prosecution Witnesses filed by the petitioner and his other co-accused in the said criminal cases would show that the petitioner did not pray for the dismissal of the case. On the contrary, the reliefs prayed for therein by the petitioner are: (1) a judicial determination of probable cause pursuant to Section 2, Article III of the Constitution; and (2) that warrants for the arrest of the accused be withheld, or if issued, recalled in the meantime until the resolution of the motion. It cannot be said, therefore, that the dismissal of the case was made with the consent of the petitioner. A copy of the aforesaid motion is hereto attached and made integral part hereof as Annex A. During the hearing in the Court of Appeals on July 31, 2001, the respondent, through counsel, categorically, unequivocally, and definitely declared that he did not file any motion to dismiss the criminal cases nor did he agree to a provisional dismissal thereof, thus:
[16] [17] [18] [19]

JUSTICE SALONGA: And it is your stand that the dismissal made by the Court was provisional in nature? ATTY. FORTUN: It was in (sic) that the accused did not ask for it. What they wanted at the onset was simply a judicial determination of probable cause for warrants of arrest issued. Then Judge Agnir, upon the presentation by the parties of their witnesses, particularly those who had withdrawn their affidavits, made one further conclusion that not only was this case lacking in probable cause for purposes of the issuance of an arrest warrant but also it did not justify proceeding to trial. JUSTICE SALONGA:

And it is expressly provided under Section 8 that a case shall not be provisionally dismissed except when it is with the express conformity of the accused. ATTY. FORTUN: That is correct, Your Honor. JUSTICE SALONGA: And with notice to the offended party. ATTY. FORTUN: That is correct, Your Honor. JUSTICE SALONGA: Was there an express conformity on the part of the accused? ATTY. FORTUN: There was none, Your Honor. We were not asked to sign any order, or any statement, which would normally be required by the Court on pretrial or on other matters, including other provisional dismissal. My very limited practice in criminal courts, Your Honor, had taught me that a judge must be very careful on this matter of provisional dismissal. In fact they ask the accused to come forward, and the judge himself or herself explains the implications of a provisional dismissal. Pumapayag ka ba dito. Puwede bang pumirma ka? JUSTICE ROSARIO: You were present during the proceedings? ATTY. FORTUN: Yes, Your Honor. JUSTICE ROSARIO: You represented the petitioner in this case? ATTY. FORTUN: That is correct, Your Honor. And there was nothing of that sort which the good Judge Agnir, who is most knowledgeable in criminal law, had done in respect of provisional dismissal or the matter of Mr. Lacson agreeing to the provisional dismissal of the case. JUSTICE GUERRERO: Now, you filed a motion, the other accused then filed a motion for a judicial determination of probable cause? ATTY. FORTUN: Yes, Your Honor. JUSTICE GUERRERO: Did you make any alternative prayer in your motion that if there is no probable cause what should the Court do? ATTY. FORTUN: That the arrest warrants only be withheld. That was the only prayer that we asked. In fact, I have a copy of that particular motion, and if I may read my prayer before the Court, it said: Wherefore, it is respectfully prayed that (1) a judicial determination of probable cause pursuant to Section 2, Article III of the Constitution be conducted, and for this purpose, an order be issued directing the prosecution to present the private complainants and their witnesses at the scheduled hearing for that purpose; and (2) the warrants for the arrest of the accused be withheld, or, if issued, recalled in the meantime until resolution of this incident. JUSTICE GUERRERO: There is no general prayer for any further relief? ATTY. FORTUN: There is but it simply says other equitable reliefs are prayed for. JUSTICE GUERRERO: Dont you surmise Judge Agnir, now a member of this Court, precisely addressed your prayer for just and equitable relief to d ismiss the case because what would be the net effect of a situation where there is no warrant of arrest being issued without dismissing the case? ATTY. FORTUN: Yes, Your Honor. I will not second say (sic) yes the Good Justice, but what is plain is we did not agree to the provisional dismissal, neither were we asked to sign any assent to the provisional dismissal.

JUSTICE GUERRERO: If you did not agree to the provisional dismissal did you not file any motion for reconsideration of the order of Judge Agnir that the case should be dismissed? ATTY. FORTUN: I did not, Your Honor, because I knew fully well at that time that my client had already been arraigned, and the arraignment was valid as far as I was concerned. So, the dismissal, Your Honor, by Judge Agnir operated to benefit me, and therefore I did not take any further step in addition to rocking the boat or clarifying the matter further because it probably could prejudice the interest of my client. JUSTICE GUERRERO: Continue.[20]

In his memorandum in lieu of the oral argument filed with the Court of Appeals, the respondent declared in no uncertain terms that: Soon thereafter, the SC in early 1999 rendered a decision declaring the Sandiganbayan without jurisdiction over the cases. The records were remanded to the QC RTC: Upon raffle, the case was assigned to Branch 81. Petitioner and the others promptly filed a motion for judicial determination of probable cause (Annex B). He asked that warrants for his arrest not be issued. He did not move for the dismissal of the Informations, contrary to respondent OSGs claim. The respondents admissions made in the course of the proceedings in the Court of Appeals are binding and c onclusive on him. The respondent is barred from repudiating his admissions absent evidence of palpable mistake in making such admissions. To apply the new rule in Criminal Cases Nos. Q-99-81679 to Q-99-81689 would be to add to or make exceptions from the new rule which are not expressly or impliedly included therein. This the Court cannot and should not do. The Court also agrees with the petitioners contention that no notice of any motion for the provisional dismissal of Criminal Cases Nos. Q-99-81679 to Q-99-81689 or of the hearing thereon was served on the heirs of the victims at least three days before said hearing as mandated by Rule 15, Section 4 of the Rules of Court. It must be borne in mind that in crimes involving private interests, the new rule requires that the offended party or parties or the heirs of the victims must be given adequate a priori notice of any motion for the provisional dismissal of the criminal case. Such notice may be served on the offended party or the heirs of the victim through the private prosecutor, if there is one, or through the public prosecutor who in turn must relay the notice to the offended party or the heirs of the victim to enable them to confer with him before the hearing or appear in court during the hearing. The proof of such service must be shown during the hearing on the motion, otherwise, the requirement of the new rule will become illusory. Such notice will enable the offended party or the heirs of the victim the opportunity to seasonably and effectively comment on or object to the motion on valid grounds, including: (a) the collusion between the prosecution and the accused for the provisional dismissal of a criminal case thereby depriving the State of its right to due process; (b) attempts to make witnesses unavailable; or (c) the provisional dismissal of the case with the consequent release of the accused from detention would enable him to threaten and kill the offended party or the other prosecution witnesses or flee from Philippine jurisdiction, provide opportunity for the destruction or loss of the prosecutions physical and other evidence and prejudice the rights of the offended party to recover on the civil liability of the accused by his concealment or furtive disposition of his property or the consequent lifting of the writ of preliminary attachment against his property. In the case at bar, even if the respondents motion for a determination of probable cause and examination of witnesses may be considered for the nonce as his motion for a provisional dismissal of Criminal Cases Nos. Q-99-81679 to Q-99-81689, however, the heirs of the victims were not notified thereof prior to the hearing on said motion on March 22, 1999. It must be stressed that the respondent filed his motion only on March 17, 1999 and set it for hearing on March 22, 1999 or barely five days
[21] [22] [23]

from the filing thereof. Although the public prosecutor was served with a copy of the motion, the records do not show that notices thereof were separately given to the heirs of the victims or that subpoenae were issued to and received by them, including those who executed their affidavits of desistance who were residents of Dipolog City or Pian, Zamboanga del Norte or Palompon, Leyte. There is as well no proof in the records that the public prosecutor notified the heirs of the victims of said motion or of the hearing thereof on March 22, 1999. Although Atty. Valdez entered his appearance as private prosecutor, he did so only for some but not all the close kins of the victims, namely, Nenita Alap-ap, Imelda Montero, Margarita Redillas, Rufino Siplon, Carmelita Elcamel, Myrna Abalora, and Leonora Amora who (except for Rufino Siplon) executed their respective affidavits of desistance. There was no appearance for the heirs of Alex Neri, Pacifico Montero, Jr., and Meleubren Sorronda. There is no proof on record that all the heirs of the victims were served with copies of the resolution of Judge Agnir, Jr. dismissing the said cases. In fine, there never was any attempt on the part of the trial court, the public prosecutor and/or the private prosecutor to notify all the heirs of the victims of the respondents motion and the hearing thereon and of the resolution of Judge Agnir, Jr. dismissing said cases. The said heirs were thus deprived of their right to be heard on the respondents motion and to protect their interests either in the trial court or in the appellate court. Since the conditions sine qua non for the application of the new rule were not present when Judge Agnir, Jr. issued his resolution, the State is not barred by the time limit set forth in the second paragraph of Section 8 of Rule 117 of the Revised Rules of Criminal Procedure. The State can thus revive or refile Criminal Cases Nos. Q-99-81679 to Q-99-81689 or file new Informations for multiple murder against the respondent. II. THE TIME-BAR IN SECTION 8, RULE 117 OF THE REVISED RULES OF CRIMINAL PROCEDURE SHOULD NOT BE APPLIED RETROACTIVELY. The petitioners contend that even on the assumption that the respondent expressly consented to a provisional dismissal of Criminal Cases Nos. Q-99-81679 to Q-99-81689 and all the heirs of the victims were notified of the respondents motion before the hearing thereon and were served with copies of the resolution of Judge Agnir, Jr. dismissing the eleven cases, the two-year bar in Section 8 of Rule 117 of the Revised Rules of Criminal Procedure should be applied prospectively and not retroactively against the State. To apply the time limit retroactively to the criminal cases against the respondent and his co-accused would violate the right of the People to due process, and unduly impair, reduce, and diminish the States substantive right to pros ecute the accused for multiple murder. They posit that under Article 90 of the Revised Penal Code, the State had twenty years within which to file the criminal complaints against the accused. However, under the new rule, the State only had two years from notice of the public prosecutor of the order of dismissal of Criminal Cases Nos. Q-99-81679 to Q-99-81689 within which to revive the said cases. When the new rule took effect on December 1, 2000, the State only had one year and three months within which to revive the cases or refile the Informations. The period for the State to charge respondent for multiple murder under Article 90 of the Revised Penal Code was considerably and arbitrarily reduced. They submit that in case of conflict between the Revised Penal Code and the new rule, the former should prevail. They also insist that the State had consistently relied on the prescriptive periods under Article 90 of the Revised Penal Code. It was not accorded a fair warning that it would forever be barred beyond the two-year period by a retroactive application of the new rule. Petitioners thus pray to the Court to set aside its Resolution of May 28, 2002. For his part, the respondent asserts that the new rule under Section 8 of Rule 117 of the Revised Rules of Criminal Procedure may be applied retroactively since there is no substantive right of the State that may be impaired by its application to the criminal
[24] [25] [26] [27] [28]

cases in question since [t]he States witnesses were ready, willing and able to provide their testimony but the prosecution failed to act on these cases until it became politically expedient in April 2001 for them to do so. According to the respondent, penal laws, either procedural or substantive, may be retroactively applied so long as they favor the accused. He asserts that the two-year period commenced to run on March 29, 1999 and lapsed two years thereafter was more than reasonable opportunity for the State to fairly indict him. In any event, the State is given the right under the Courts assailed Resolution to justify the filing of the Information in Criminal Cases Nos. 01-101102 to 01-101112 beyond the time-bar under the new rule. The respondent insists that Section 8 of Rule 117 of the Revised Rules of Criminal Procedure does not broaden the substantive right of double jeopardy to the prejudice of the State because the prohibition against the revival of the cases within the one-year or two-year periods provided therein is a legal concept distinct from the prohibition against the revival of a provisionally dismissed case within the periods stated in Section 8 of Rule 117. Moreover, he claims that the effects of a provisional dismissal under said rule do not modify or negate the operation of the prescriptive period under Article 90 of the Revised Penal Code. Prescription under the Revised Penal Code simply becomes irrelevant upon the application of Section 8, Rule 117 because a complaint or information has already been filed against the accused, which filing tolls the running of the prescriptive period under Article 90. The Court agrees with the respondent that the new rule is not a statute of limitations. Statutes of limitations are construed as acts of grace, and a surrender by the sovereign of its right to prosecute or of its right to prosecute at its discretion. Such statutes are considered as equivalent to acts of amnesty founded on the liberal theory that prosecutions should not be allowed to ferment endlessly in the files of the government to explode only after witnesses and proofs necessary for the protection of the accused have by sheer lapse of time passed beyond availability. The periods fixed under such statutes are jurisdictional and are essential elements of the offenses covered. On the other hand, the time-bar under Section 8 of Rule 117 is akin to a special procedural limitation qualifying the right of the State to prosecute making the time-bar an essence of the given right or as an inherent part thereof, so that the lapse of the timebar operates to extinguish the right of the State to prosecute the accused. The time-bar under the new rule does not reduce the periods under Article 90 of the Revised Penal Code, a substantive law. It is but a limitation of the right of the State to revive a criminal case against the accused after the Information had been filed but subsequently provisionally dismissed with the express consent of the accused. Upon the lapse of the timeline under the new rule, the State is presumed, albeit disputably, to have abandoned or waived its right to revive the case and prosecute the accused. The dismissal becomes ipso facto permanent. He can no longer be charged anew for the same crime or another crime necessarily included therein. He is spared from the anguish and anxiety as well as the expenses in any new indictments. The State may revive a criminal case beyond the one-year or two-year periods provided that there is a justifiable necessity for the delay. By the same token, if a criminal case is dismissed on motion of the accused because the trial is not concluded within the period therefor, the prescriptive periods under the Revised Penal Code are not thereby diminished. But whether or not the prosecution of the accused is barred by the statute of limitations or by the lapse of the time-line under the new rule, the effect is basically the same. As the State Supreme Court of Illinois held: This, in effect, enacts that when the specified period shall have arrived, the right of the state to prosecute shall be gone, and the liability of the offender to be punishedto be deprived of his libertyshall cease. Its terms not only strike down the right of action which the state had acquired by the offense, but also remove the flaw which the crime had created in the offenders title to liberty. In this respect, its language goes
[29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40]

deeper than statutes barring civil remedies usually do. They expressly take away only the remedy by suit, and that inferentially is held to abate the right which such remedy would enforce, and perfect the title which such remedy would invade; but this statute is aimed directly at the very right which the state has against the offenderthe right to punish, as the only liability which the offender has incurred, and declares that this right and this liability are at an end. The Court agrees with the respondent that procedural laws may be applied retroactively. As applied to criminal law, procedural law provides or regulates the steps by which one who has committed a crime is to be punished. In Tan, Jr. v. Court of Appeals, this Court held that: Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that extent. The fact that procedural statutes may somehow affect the litigants rights may not preclude their retroactive application to pending actions. The retroactive application of procedural laws is not violative of any right of a person who may feel that he is adversely affected. Nor is the retroactive application of procedural statutes constitutionally objectionable. The reason is that as a general rule no vested right may attach to, nor arise from, procedural laws. It has been held that a person has no vested right in any particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of any other than the existing rules of procedure. It further ruled therein that a procedural law may not be applied retroactively if to do so would work injustice or would involve intricate problems of due process or impair the independence of the Court. In a per curiam decision in Cipriano v. City of Houma, the United States Supreme Court ruled that where a decision of the court would produce substantial inequitable results if applied retroactively, there is ample basis for avoiding the injustice of hardship by a holding of nonretroactivity. A construction of which a statute is fairly susceptible is favored, which will avoid all objectionable, mischievous, indefensible, wrongful, and injurious consequences. This Court should not adopt an interpretation of a statute which produces absurd, unreasonable, unjust, or oppressive results if such interpretation could be avoided. Time and again, this Court has decreed that statutes are to be construed in light of the purposes to be achieved and the evils sought to be remedied. In construing a statute, the reason for the enactment should be kept in mind and the statute should be construed with reference to the intended scope and purpose. Remedial legislation, or procedural rule, or doctrine of the Court designed to enhance and implement the constitutional rights of parties in criminal proceedings may be applied retroactively or prospectively depending upon several factors, such as the history of the new rule, its purpose and effect, and whether the retrospective application will further its operation, the particular conduct sought to be remedied and the effect thereon in the administration of justice and of criminal laws in particular. In a per curiam decision inStefano v. Woods, the United States Supreme Court catalogued the factors in determining whether a new rule or doctrine enunciated by the High Court should be given retrospective or prospective effect: (a) the purpose to be served by the new standards, (b) the extent of the reliance by law enforcement authorities on th e old standards, and (c) the effect on the administration of justice of a retroactive application of the new standards. In this case, the Court agrees with the petitioners that the time-bar of two years under the new rule should not be applied retroactively against the State. In the new rule in question, as now construed by the Court, it has fixed a time-bar of one year or two years for the revival of criminal cases provisionally dismissed with the express consent of the accused and with a priori notice to the offended party. The time-bar may appear, on first impression, unreasonable compared to the periods under Article 90 of the Revised Penal Code. However, in fixing the time-bar, the Court balanced the societal interests and those of the accused for the orderly and
[41] [42] [43] [44] [45] [46] [47] [48] [49]

speedy disposition of criminal cases with minimum prejudice to the State and the accused. It took into account the substantial rights of both the State and of the accused to due process. The Court believed that the time limit is a reasonable period for the State to revive provisionally dismissed cases with the consent of the accused and notice to the offended parties. The time-bar fixed by the Court must be respected unless it is shown that the period is manifestly short or insufficient that the rule becomes a denial of justice. The petitioners failed to show a manifest shortness or insufficiency of the time-bar. The new rule was conceptualized by the Committee on the Revision of the Rules and approved by the Court en banc primarily to enhance the administration of the criminal justice system and the rights to due process of the State and the accused by eliminating the deleterious practice of trial courts of provisionally dismissing criminal cases on motion of either the prosecution or the accused or jointly, either with no time-bar for the revival thereof or with a specific or definite period for such revival by the public prosecutor. There were times when such criminal cases were no longer revived or refiled due to causes beyond the control of the public prosecutor or because of the indolence, apathy or the lackadaisical attitude of public prosecutors to the prejudice of the State and the accused despite the mandate to public prosecutors and trial judges to expedite criminal proceedings. It is almost a universal experience that the accused welcomes delay as it usually operates in his favor, especially if he greatly fears the consequences of his trial and conviction. He is hesitant to disturb the hushed inaction by which dominant cases have been known to expire. The inordinate delay in the revival or refiling of criminal cases may impair or reduce the capacity of the State to prove its case with the disappearance or nonavailability of its witnesses. Physical evidence may have been lost. Memories of witnesses may have grown dim or have faded. Passage of time makes proof of any fact more difficult. The accused may become a fugitive from justice or commit another crime. The longer the lapse of time from the dismissal of the case to the revival thereof, the more difficult it is to prove the crime. On the other side of the fulcrum, a mere provisional dismissal of a criminal case does not terminate a criminal case. The possibility that the case may be revived at any time may disrupt or reduce, if not derail, the chances of the accused for employment, curtail his association, subject him to public obloquy and create anxiety in him and his family. He is unable to lead a normal life because of community suspicion and his own anxiety. He continues to suffer those penalties and disabilities incompatible with the presumption of innocence. He may also lose his witnesses or their memories may fade with the passage of time. In the long run, it may diminish his capacity to defend himself and thus eschew the fairness of the entire criminal justice system. The time-bar under the new rule was fixed by the Court to excise the malaise that plagued the administration of the criminal justice system for the benefit of the State and the accused; not for the accused only. The Court agrees with the petitioners that to apply the time-bar retroactively so that the two-year period commenced to run on March 31, 1999 when the public prosecutor received his copy of the resolution of Judge Agnir, Jr. dismissing the criminal cases is inconsistent with the intendment of the new rule. Instead of giving the State two years to revive provisionally dismissed cases, the State had considerably less than two years to do so. Thus, Judge Agnir, Jr. dismissed Criminal Cases Nos. Q-99-81679 to Q-9981689 on March 29, 1999. The new rule took effect on December 1, 2000. If the Court applied the new time-bar retroactively, the State would have only one year and three months or until March 31, 2001 within which to revive these criminal cases. The period is short of the two-year period fixed under the new rule. On the other hand, if the time limit is applied prospectively, the State would have two years from December 1, 2000 or until December 1, 2002 within which to revive the cases. This is in consonance
[50] [51] [52] [53] [54] [55] [56]

with the intendment of the new rule in fixing the time-bar and thus prevent injustice to the State and avoid absurd, unreasonable, oppressive, injurious, and wrongful results in the administration of justice. The period from April 1, 1999 to November 30, 1999 should be excluded in the computation of the two-year period because the rule prescribing it was not yet in effect at the time and the State could not be expected to comply with the time-bar. It cannot even be argued that the State waived its right to revive the criminal cases against respondent or that it was negligent for not reviving them within the two-year period under the new rule. As the United States Supreme Court said, per Justice Felix Frankfurter, in Griffin v. People: We should not indulge in the fiction that the law now announced has always been the law and, therefore, that those who did not avail themselves of it waived their rights . The two-year period fixed in the new rule is for the benefit of both the State and the accused. It should not be emasculated and reduced by an inordinate retroactive application of the time-bar therein provided merely to benefit the accused. For to do so would cause an injustice of hardship to the State and adversely affect the administration of justice in general and of crim inal laws in particular. To require the State to give a valid justification as a condition sine qua non to the revival of a case provisionally dismissed with the express consent of the accused before the effective date of the new rule is to assume that the State is obliged to comply with the time-bar under the new rule before it took effect. This would be a rank denial of justice. The State must be given a period of one year or two years as the case may be from December 1, 2000 to revive the criminal case without requiring the State to make a valid justification for not reviving the case before the effective date of the new rule. Although in criminal cases, the accused is entitled to justice and fairness, so is the State. As the United States Supreme Court said, per Mr. Justice Benjamin Cardozo, in Snyder v. State of Massachussetts, the concept of fairness must not be strained till it is narrowed to a filament. We are to keep the balance true. In Dimatulac v. Villon, this Court emphasized that the judges action must not impair the substantial rights of the accused nor the right of the State and offended party to due process of law. This Court further said: Indeed, for justice to prevail, the scales must balance; justice is not to be dispensed for the accused alone. The interests of society and the offended parties which have been wronged must be equally considered. Verily, a verdict of conviction is not necessarily a denial of justice; and an acquittal is not necessarily a triumph of justice, for, to the society offended and the party wronged, it could also mean injustice. Justice then must be rendered even-handedly to both the accused, on one hand, and the State and offended party, on the other. In this case, the eleven Informations in Criminal Cases Nos. 01-101102 to 01-101112 were filed with the Regional Trial Court on June 6, 2001 well within the two-year period. In sum, this Court finds the motion for reconsideration of petitioners meritorious. IN THE LIGHT OF ALL THE FOREGOING, the petitioners Motion for Reconsideration is GRANTED. The Resolution of this Court, dated May 28, 2002, is SET ASIDE. The Decision of the Court of Appeals, dated August 24, 2001, in CA-G.R. SP No. 65034 is REVERSED. The Petition of the Respondent with the Regional Trial Court in Civil Case No. 01-100933 is DISMISSED for being moot and academic. The Regional Trial Court of Quezon City, Branch 81, is DIRECTED to forthwith proceed with Criminal Cases Nos. 01-101102 to 01-101112 with deliberate dispatch. No pronouncements as to costs. SO ORDERED.
[57] [58] [59]

Republic of the Philippines

Supreme Court
Manila
EN BANC IRENE K. NACU, substituted by BENJAMIN M. NACU, ERVIN K. NACU, and NEJIE N. DE SAGUN, Petitioners, G.R. No. 187752 Present: CORONA, C.J., CARPIO, CARPIO MORALES, JR., NACHURA, DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO,* ABAD, VILLARAMA, JR., PEREZ, MENDOZA, and SERENO, JJ. Promulgated: CIVIL SERVICE COMMISSION and PHILIPPINE ECONOMIC ZONE AUTHORITY, November 23, 2010

VELASCO, LEONARDO-

- versus -

Respondents. x------------------------------------------------------------------------------------x DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari, seeking the reversal of the Court of Appeals (CA) Decision[1] dated December 24, 2008 and Resolution[2] dated May 6, 2009. The assailed Decision held that Irene K. Nacu (Nacu), Enterprise Service Officer III at the Philippine Economic Zone Authority (PEZA), assigned at the Bataan Economic Zone (BEZ), was guilty of dishonesty, grave misconduct, and conduct prejudicial to the best interest of the service, and imposed upon her the penalty of dismissal from the service and its accessory penalties.

The case arose from the following facts:

On December 17, 1999, PEZA issued Memorandum Order No. 99-003, prohibiting its employees from charging and collecting overtime fees from PEZA-registered enterprises. The pertinent portions of the said regulation read:
Effective immediately, PEZA shall provide processing/documentation services required by economic zone exportproducers for incoming and outgoing shipments x x x FREE OF OVERTIME FEES/CHARGES x x x. xxxx

Economic zone export producers, customs brokers, freight forwarders, truckers and other service providers and enterprises are strictly prohibited from offering financial and/or non-financial tokens, compensation, etc. to any PEZA official and/or personnel, in connection with PEZA overtime services rendered and/or other transactions. In addition, economic zone export-producers, customs brokers, freight forwarders, truckers and other service providers and enterprises are enjoined to notify ranking PEZA officials (Administrator, Manager, Officer-in-Charge, Deputy Director Generals and the Director General) on any difficulties or problems they encounter, particularly those pertaining to lack of service-orientation or improper behavior of any PEZA officer and/or personnel.[3]

Sometime in September 2001, Edison (Bataan) Cogeneration Corporation (EBCC) filed a complaint against Nacu for allegedly charging it overtime fees, despite Memorandum Order No. 99-003.

Acting on the complaint, PEZA immediately conducted a preliminary investigation, during which Atty. Norma B. Cajulis, PEZAs lawyer, interviewed Rey Ligan (Ligan), a document processor at EBCC. Ligan attested, among others, that the overtime fees went to Nacus group, and that, during the time Nacu was confined in the hospital, she pre-signed documents and gave them to him.

On November 21, 2001, Atty. Procolo Olaivar (Atty. Olaivar) of PEZA Legal Services Group requested the National Bureau of Investigation (NBI) to verify the genuineness of Nacus signatures appearing on the Statements of Overtime Services (SOS).[4] Original copies of 32 SOS and a specimen of Nacus signature were then sent to the NBI for comparison.

On January 25, 2002, the NBI informed Atty. Olaivar that no definite opinion can be rendered on the matter since the standards/sample signatures of the subject submitted [we]re not sufficient and appropriate to serve as basis for a specific comparative examination. The NBI then requested that, should PEZA still want it to conduct further examination, it be furnished with add itional standard/sample signatures, in the same style and pattern as that of the questioned document, appearing in official/legal documents on file, executed before, during, and after the date of the questioned document.[5]

PEZA referred the 32 SOS, together with the same standard specimen of Nacus signatures/initials, to the Philippine National Police Crime Laboratory (PNP Crime Lab) for determination of the genuineness of Nacus signature appearing therein.

In Questioned Document Report No. 052-02 dated May 3, 2002, Rosario C. Perez, Document Examiner II of the PNP Crime Lab, stated her findings, thus
1. Scientific comparative examination and analysis of the questioned initials/signatures IRENE NACU/I. NACU marked Q-1 to Q-6, Q-11, Q-12, Q-13, Q-15, Q-19, Q-20, Q-21, Q-23, Q-24, Q-25, Q-27 to Q-32 and the submitted standard initials/signatures of Irene K. Nacu marked S-1 to S-19 inclusive reveal significant divergences in the matter of execution, line quality and stroke structure. 2. Scientific comparative examination and analysis of the questioned initials/signatures IRENE NACU/I. NACU marked Q -7 to Q-10, Q-14, Q-16 to Q-18; Q-22, Q-26 and the submitted standard signatures/initials of Irene K. Nacu marked S-1 to S19 inclusive reveal significant similarities in the manner of execution, line quality and stroke structure. xxxx CONCLUSION 1. The questioned initials/signatures IRENE NACU/I. NACU marked Q-1 to Q-6, Q-11, Q-12, Q-13, Q-15, Q-19 to Q-21, Q23 to Q-25, Q-27 to Q-32 appearing in the twenty-two (22) pieces [of] Statement of Overtime Services and the submitted standard initials/signatures of Irene K. Nacu marked S-1 to S-19 inclusive WERE NOT WRITTEN BY ONE AND THE SAME PERSON. 2. The questioned initials/signatures IRENE NACU/I. NACU marked Q-7 to Q-10, Q-14, Q-16 to Q-18; Q-22, Q-26 appearing in the ten (10) pieces of Statement of Overtime Service and the submitted standard initials/signatures [of] Irene K. Nacu marked S-1 to S-19 inclusive WERE WRITTEN BY ONE AND THE SAME PERSON.[6]

Finding a prima facie case against Nacu, PEZA Director General Lilia B. de Lima (Director General De Lima) filed a Formal Charge against her for Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service. It was alleged that Nacu unlawfully charged P3,500.00 overtime fee from EBCC on ten occasions (covered by the ten SOS which the PNP Crime Lab found to have been written by Nacu), for a total amount of P35,000.00.

Nacu denied that the signatures appearing on the ten overtime billing statements were hers. She averred that it was impossible for her to charge EBCC overtime fees as the latter was well aware that PEZA employees may no longer charge for overtime services; that she had no actual notice of Memorandum Order No. 99-003; and that she caused no damage and prejudice to PEZA and EBCC.

During the hearing, PEZA presented the following witnesses: Rosario Perez, the document examiner who examined the SOS; Atty. Dante Quindoza, Zone Administrator of BEZ, who testified that Nacu was one of the officials authorized to sign the documents; Romy Zaragosa, Corporate Relations Manager of Covanta Energy, who attested that meetings were held on November 17, 2001 and January 25, 2002, wherein Ligan testified that he gave the payment for overtime fees to Nacu; Roberto Margallo (Margallo), Enterprise Service Officer III of PEZA, who testified that he knows Nacus signature and that he was certain that the signatures appearing on th e SOS were hers; Omar Dana, EBCC plant chemist, who testified that EBCC paid, through Ligan, overtime fees to Nacu and some other persons; Elma Bugho, PEZA Records Officer, who testified on the issuance of PEZA Memorandum Order No. 99-003;[7] and Miguel Herrera, then Division Chief of PEZA at the BEZ, who testified that he was responsible for the implementation of PEZA rules and regulations and for assigning examiners upon the request of zone enterprises and brokers.[8]

On February 8, 2005, the PEZA Central Board of Inquiry, Investigation, and Discipline (CBIID), with the approval of Director General De Lima, found Nacu guilty of the acts charged, thus:

Wherefore, in view of the foregoing, the Central Board of Inquiry, Investigation and Discipline (CBIID) 1. resolves that Irene K. Nacu committed an act which constitutes a ground for disciplinary action and finds her guilty of dishonesty, grave misconduct[, and conduct] prejudicial to the best interest of service pursuant to Section 46(b)(1), (4) and (27), Book V of Executive Order No. 292 and hereby 2. recommends that respondent be dismissed from service pursuant to Section 52, Rule IV, Revised Uniform Rules in Administrative Cases in Philippine Civil Service with accessory penalties of: a) b) c) cancellation of eligibility; forfeiture of retirement benefits; and perpetual disqualification from re-employment in the government service.[9]

Nacu moved for a reconsideration of the CBIIDs findings, but the motion was denied. By way of appeal, Nacu elevated the case to the Civil Service Commission (CSC).

On February 19, 2007, the CSC promulgated Resolution No. 070327, affirming the CBIIDs resolution, viz.:

WHEREFORE, the appeal of Irene K. Nacu, former Enterprise Service Officer III, Philippine Economic Zone Authority (PEZA), is hereby DISMISSED. Accordingly, the Decision dated February 08, 2005 issued by Director General Lilia B. de Lima finding Nacu guilty of Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service and imposing upon her the penalty of dismissal from the service with the accessory penalties of cancellation of eligibility, forfeiture of retirement benefits, and disqualification from being re-employed in the government service is AFFIRMED.[10]

Nacu filed a motion for reconsideration of CSC Resolution No. 070327, but the motion was denied in Resolution No. 071489 dated August 1, 2007.[11]

Nacu forthwith filed a petition for review with the CA, assailing the CSC resolutions. On September 17, 2007, while the case was pending resolution, Nacu died and was substituted by her heirs, Benjamin Nacu (husband), Nejie N. de Sagun (daughter), and Ervin K. Nacu (son), herein petitioners.

The CA, in the assailed Decision dated December 24, 2008, affirmed the CSC resolutions. The CA could not believe Nacus claim that she was not aware of Memorandum Order No. 99-003, considering that the order was issued almost two years earlier. According to the CA, as a PEZA employee, Nacu had the obligation to keep herself abreast of everything that transpires in her office and of developments that concern her position. It stressed that even if Nacu had not actually received a copy of the memorandum order, such circumstance will not foreclose the orders effectivity; and that it is merely an internal regulation which does not require publication for its effectivity.[12]

The CA brushed aside Nacus objections to (a) Ligans written statement because it was not made under oath and Ligan was not presented as witness during the hearing; (b) the PNP Crime Labs findings for being unreliable in light of the NBIs own finding that the samples were not sufficient; and (c) Margallos testimony identifying Nacus signatures on the SOS, on the ground that he was not presented as an expert witness. The CA pointed out that proceedings in administrative cases are not strictly governed by technical rules of procedure and evidence, as they are required to be disposed of summarily.

In particular, the CA found pointless Nacus criticism of the PNP Crime Labs findings based on the NBIs opinion on the samples given. To counter the same, the CA highlighted the fact that the NBIs opinion did not conclusively state that the signatures were not that of Nacu. It stressed that Nacu failed to adduce clear and convincing evidence to contradict the PNP Crime La bs findings, relying merely on the NBIs opinion which, to the mind of the CA, did not actually absolve petitioner.

According to the CA, Memorandum Order No. 99-003, the PNPs findings, and the witnesses testimonies, taken together, were sufficient to hold Nacu administratively liable for the acts complained of. Nacu was not denied due process, considering that she was given the opportunity to explain her side and present evidence, and that she had, in fact, participated in the hearing.

The dispositive portion of the assailed CA Decision reads:


WHEREFORE, premises considered, the Petition for Review is hereby DISMISSED for lack of merit. SO ORDERED.[13]

A motion for reconsideration was filed by petitioners, but the CA denied the motion in its Resolution [14] dated May 6, 2009. They then elevated the case to this Court through this petition for review on certiorari.

Petitioners submit to this Court the issue of whether the finding that Nacu is guilty of dishonesty, grave misconduct, and conduct prejudicial to the best interest of the service is supported by substantial evidence.

Petitioners arguments focus largely on the weight given by the CA to the PNP Crime Labs report, which, they insist, should not be given credence as it is unreliable. Firstly, it was not shown that the questioned document examiner who examined the SOS was a handwriting expert. Secondly, the signature samples were, according to the NBI, insufficient references for a comparative examination. Thirdly, the sample signatures used were obtained in violation of Nacus right against self -incrimination. And lastly, the report merely states that there were similarities in the manner of execution, line quality, and stroke structures of the signatures, and that such conclusion does not translate to a finding that the signatures appearing on the SOS are genuine.

Petitioners also object to the CAs reliance on the statements made by Ligan d uring the preliminary investigation, which were not given under oath. They contend that Nacu was denied due process when Ligan was not presented as witness during the trial, and that there were inconsistencies in Ligans statements.

And finally, as an affirmative defense, they reiterate that Nacu was not aware of the issuance and implementation of Memorandum Order No. 99-003. They point out that there was, in fact, no showing that the said order had been published in a newspaper, posted at the BEZ, or a copy thereof furnished to Nacu.

We find no merit in this petition.

Substantial evidence, the quantum of evidence required in administrative proceedings, means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[15] The standard of substantial evidence is satisfied when there is reasonable ground to believe that a person is responsible for the misconduct complained of, even if such evidence might not be overwhelming or even preponderant.[16]

Overall, the testimonies of the witnesses, the statements made by Ligan during the preliminary investigation, and the findings of the PNP Crime Lab on its examination of the signatures on the SOS, amounted to substantial evidence that adequately supported the conclusion that Nacu was guilty of the acts complained of. Petitioners allegations of unreliability, irregularities, and inconsistencies of the evidence neither discredited nor weakened the case against Nacu.

For one, petitioners cite the PNPs findings as unreliable in light of the NBIs opinion that the samples utilized by the PNP Crime Labthe same samples submitted to the NBIwere not sufficient to make a comparative examination.

We do not agree. The PNP and the NBI are separate agencies, and the findings of one are not binding or conclusive upon the other. Moreover, as pointed out by the Office of the Solicitor General in its Comment, the NBIs finding referred only to the insuff iciency of the samples given; the NBI did not actually make a determination of the genuineness of the signatures. While the NBI may have found the samples to be insufficient, such finding should not have any bearing on the PNP Crime Labs own findings that the samples wer e sufficient and that some of the signatures found on the overtime billings matched the sample signatures. The difference of opinion with respect to the sufficiency of the samples could only mean that the PNP Crime Lab observes a standard different from that used by the NBI in the examination of handwriting.

Instead of just discrediting the PNP Crime Labs findings, Nacu should have channeled her efforts into providing her own proo f that the signatures appearing on the questioned SOS were forgeries. After all, whoever alleges forgery has the burden of proving the same by clear and convincing evidence.[17] Nacu could not simply depend on the alleged weakness of the complainants evidence without offering stronger evidence to contradict the former.

In any case, the CA did not rely solely on the PNP Crime Lab report in concluding that the signatures appearing on the ten SOS were Nacus. Margallo, a co-employee who holds the same position as Nacu, also identified the latters signatures on the SOS. Such testimony deserves credence. It has been held that an ordinary witness may testify on a signature he is familiar with. [18] Anyone who is familiar with a persons writing from having seen him write, from carrying on a correspondence with him, or from having becom e familiar with his writing through handling documents and papers known to have been signed by him may give his opinion as to the genuineness of that persons purported signature when it becomes material in the case.[19]

Petitioners also posit that Nacu was denied her right against self-incrimination when she was made to give samples of her signature. We do not agree. The right against self-incrimination is not self-executing or automatically operational. It must be claimed; otherwise, the protection does not come into play. Moreover, the right must be claimed at the appropriate time, or else, it may be deemed waived. [20] In the present case, it does not appear that Nacu invoked her right against self-incrimination at the appropriate time, that is, at the time she was asked to provide samples of her signature. She is therefore deemed to have waived her right against self-incrimination.

Next, petitioners assail the credibility of Ligans statement because it was not made under oath and Ligan was not presented as witness during the hearing. Nacu was allegedly denied due process when she was deprived of the opportunity to cross-examine Ligan.

It is settled that, in administrative proceedings, technical rules of procedure and evidence are not strictly applied. Administrative due process cannot be fully equated with due process in its strict judicial sense.[21] In a recent case, a party likewise protested against the non-presentation of a witness during trial and the lack of opportunity to cross-examine the said witness. Addressing the issue, the Court held that the contention was unavailing, stating that In another case, the Court addressed a similar contention by stating that the petitioner therein could not argue that she had been deprived of due process merely because no cross-examination took place. [Citing Casimiro v. Tandog, 459 SCRA 624, 633 (2005)]. Indeed, in administrative proceedings, due process is satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy or given opportunity to move for a reconsideration of the action or ruling complained of.[22]

The measure of due process to be observed by administrative tribunals allows a certain degree of latitude as long as fairness is not compromised. It is, therefore, not legally objectionable or violative of due process for an administrative agency to resolve a case based solely on position papers, affidavits, or documentary evidence submitted by the parties, as affidavits of witnesses may take the place of their direct testimonies.[23]

In addition, petitioners claim that there were inconsistencies in Ligans statement. While Ligan allegedly stated that Nacu gave him pre-signed documents during the time that she was in the hospital, and that these pre-signed documents referred to the ten overtime billings referred to in the formal charge, the record does not show that Nacu was confined in the hospital on the dates indicated in the said billings.

To set the record straight, Ligan did not specifically mention that the dates indicated in the pre-signed documents were also the days when Nacu was confined in the hospital. He merely said that Nacu pre-signed some documents during the time that she was in the hospital, and that she gave these documents to him. Neither did he state that these pre-signed SOS were the same ten SOS cited in the formal charge against Nacu. It was petitioners own assumption that led to this baseless conclusion.

In Nacus defense, petitioners contend that she (Nacu) was not aware of the existence of Memorandum Order No. 99 -003. They aver that there was no evidence showing that Memorandum Order No. 99-003 was posted, published, and promulgated; hence, it cannot be said that the order had already taken effect and was being implemented in the BEZ. Petitioners claim that Nacu had, in fact, no actual knowledge of the said order as she was not furnished with a copy thereof.

Nacu cannot feign ignorance of the existence of the said order. As correctly opined by the CA, it is difficult to believe that Nacu, one of the employees of PEZA affected by the memorandum order, was not in any way informedby posting or personal noticeof the implementation of the said order, considering that over a year had lapsed since it had been issued. From the testimonies of the other witnesses, who were employees of PEZA and PEZA-registered enterprises, it was evident that the prohibition against charging and collecting overtime fees was common knowledge to them.

At any rate, no publication is required for such a regulation to take effect. Memorandum Order No. 99-003 is an internal regulation that clearly falls within theadministrative rules and regulations exempted from the publication requirement, as set forth in the prevailing case of Taada v. Hon. Tuvera:[24]

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors [25] concerning the rules on guidelines to be followed by their subordinates in the performance of their duties.

At the very least, Nacu should have been aware that collecting payments directly from PEZA-registered enterprises was strictly prohibited. Months before Memorandum Order No. 99-003 was promulgated, PEZA had already put a stop to the practice of collecting direct payments for overtime fees from PEZA-registered enterprises under Office Order No. 99-0002 dated March 8, 1999. The latter specifically provides that overtime shall be paid only through the regular payroll system, and that overtime claims shall be supported by the required documents.[26] This was followed by PEZA General Circular No. 99-0001 (Prescribing New Rates of Overtime Pay Payable by Zone Enterprises, Customs Brokers And Other Entities Concerned) dated August 10, 1999, providing that
4.5. All payments to be made by requesting parties shall be covered by official receipts. IN NO CASE SHALL PAYMENT BE MADE DIRECTLY TO ZONE/PCDU PERSONNEL. 4.6 No additional charges or fees shall be paid by requesting parties, nor shall they offer gifts, tips and other financial/material favors to PEZA employees rendering overtime services. At the end of the month, all claims of personnel for payment of overtime services shall be supported by the following documents: 4.7.1. Copies of written requests by enterprises and other parties; 4.7.2. Certificate of service or DTR; 4.7.3. Authority to render overtime services; and 4.7.4. Certificate of accomplishment.[27]

4.7

Petitioners desperately argue that Nacu could not have charged and collected overtime fees from EBCC as it was well aware of Memorandum Order No. 99-003. The contention is puerile. Petitioners are, in effect, saying that knowledge of the existence of a rule prohibiting a certain act would absolutely prevent one from doing the prohibited act. This premise is undeniably false, and, as a matter of fact, judicial institutions have been founded based on the reality that not everyone abides by the law.

All told, Nacu was rightfully found guilty of grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service, and penalized with dismissal from the service and its accessory penalties. The general rule is that where the findings of the administrative body are amply supported by substantial evidence, such findings are accorded not only respect but also finality, and are binding on this Court. It is not for the reviewing court to weigh the conflicting evidence, determine the credibility of witnesses, or otherwise substitute its own judgment for that of the administrative agency on the sufficiency of evidence.[28]

Nacus length of service or the fact that this was her first offense has not been clearly established. We cannot reasonably ta ke them into consideration in reviewing the case. At any rate, these circumstances cannot serve to mitigate the violation, considering the gravity of the offense and the fact that Nacus act irreparably tarnished the integrity of PEZA.

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated December 24, 2008 and its Resolution dated May 6, 2009 are AFFIRMED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. Nos. 108280-83 November 16, 1995

ROMEO SISON, NILO PACADAR, JOEL TAN, RICHARD DE LOS SANTOS, and JOSELITO TAMAYO,petitioners, vs. PEOPLE OF THE PHILIPPINES and COURT OF APPEALS, respondents. G.R. Nos. 114931-33 November 16, 1995 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ANNIE FERRER, accused, ROMEO SISON, NILO PACADAR, JOEL TAN, RICHARD DE LOS SANTOS, and JOSELITO TAMAYO, accused-appellants. PUNO, J.: The case before us occurred at a time of great political polarization in the aftermath of the 1986 EDSA Revolution. This was the time when the newly-installed government of President Corazon C. Aquino was being openly challenged in rallies, demonstrations and other public fora by "Marcos loyalists," supporters of deposed President Ferdinand E. Marcos. Tension and animosity between the two (2) groups sometimes broke into violence. On July 27, 1986, it resulted in the murder of Stephen Salcedo, a known "Coryista." From August to October 1986, several informations were filed in court against eleven persons identified as Marcos loyalists charging them with the murder of Salcedo. Criminal Case No. 86-47322 was filed against Raul Billosos y de Leon and Gerry Nery y Babazon; Criminal Case No. 86-47617 against Romeo Sison y Mejia, Nilo Pacadar y Abe and Joel Tan y Mostero; Criminal Case No. 86-47790 against Richard de los Santos y Arambulo; Criminal Case No. 86-48538 against Joselito Tamayo y Ortia; and Criminal Case No. 86-48931 against Rolando Fernandez y Mandapat. Also filed were Criminal Cases Nos. 86-49007 and 86-49008 against Oliver Lozano and Benjamin Nuega as well as Annie Ferrer charging them as accomplices to the murder of Salcedo. The cases were consolidated and raffled to the Regional Trial Court, Branch XLIX, Manila. All of the accused pleaded not guilty to the charge and trial ensued accordingly. The prosecution presented twelve witnesses, including two eyewitnesses, Ranulfo Sumilang and Renato Banculo, and the police officers who were at the Luneta at the time of the incident. In support of their testimonies, the prosecution likewise presented documentary evidence consisting of newspaper accounts of the incident and various photographs taken during the mauling. The prosecution established that on July 27, 1986, a rally was scheduled to be held at the Luneta by the Marcos loyalists. Earlier, they applied for a permit to hold the rally but their application was denied by the authorities. Despite this setback, three thousand of them gathered at the Rizal Monument of the Luneta at 2:30 in the afternoon of the scheduled day. Led by Oliver Lozano and Benjamin Nuega, both members of the Integrated Bar of the Philippines, the loyalists started an impromptu singing contest, recited prayers and delivered speeches in between. Colonel Edgar Dula Torres, then Deputy Superintendent of the Western Police District, arrived and asked the leaders for their permit. No permit could be produced. Colonel Dula Torres thereupon gave them ten minutes to disperse. The loyalist leaders asked for thirty minutes but this was refused. Atty. Lozano turned towards his group and said "Gulpihin ninyo ang lahat ng mga Cory infiltrators." Atty. Nuega added "Sige, sige gulpihin ninyo!" The police then pushed the crowd, and used tear gas and truncheons to disperse them.

The loyalists scampered away but some of them fought back and threw stones at the police. Eventually, the crowd fled towards Maria Orosa Street and the situation later stabilized. 1 At about 4:00 p.m., a small group of loyalists converged at the Chinese Garden, Phase III of the Luneta. There, they saw Annie Ferrer, a popular movie starlet and supporter of President Marcos, jogging around the fountain. They approached her and informed her of their dispersal and Annie Ferrer angrily ordered them "Gulpihin ninyo and mga Cory hecklers !" Then she continued jogging around the fountain chanting "Marcos pa rin, Marcos pa rin, Pabalikin si Marcos, Pabalikin si Marcos, Bugbugin ang mga nakadilaw!" The loyalists replied "Bugbugin!" A few minutes later, Annie Ferrer was arrested by the police. Somebody then shouted "Kailangang gumanti, tayo ngayon!" A commotion ensued and Renato Banculo, a cigarette vendor, saw the loyalists attacking persons in yellow, the color of the "Coryistas." Renato took off his yellow shirt. 2 He then saw a man wearing a yellow t-shirt being chased by a group of persons shouting "Iyan, habulin iyan. Cory iyan!" The man in the yellow t-shirt was Salcedo and his pursuers appeared to be Marcos loyalists. They caught Salcedo and boxed and kicked and mauled him. Salcedo tried to extricate himself from the group but they again pounced on him and pummelled him with fist blows and kicks hitting him on various parts of his body. Banculo saw Ranulfo Sumilang, an electrician at the Luneta, rush to Salcedo's aid. Sumilang tried to pacify the maulers so he could extricate Salcedo from them. But the maulers pursued Salcedo unrelentingly, boxing him with stones in their fists. Somebody gave Sumilang a loyalist tag which Sumilang showed to Salcedo's attackers. They backed off for a while and Sumilang was able to tow Salcedo away from them. But accused Raul Billosos emerged from behind Sumilang as another man boxed Salcedo on the head. Accused Richard de los Santos also boxed Salcedo twice on the head and kicked him even as he was already fallen. 3 Salcedo tried to stand but accused Joel Tan boxed him on the left side of his head and ear. 4 Accused Nilo Pacadar punched Salcedo on his nape, shouting: "Iyan, Cory Iyan. Patayin!" 5 Sumilang tried to pacify Pacadar but the latter lunged at the victim again. Accused Joselito Tamayo boxed Salcedo on the left jaw and kicked him as he once more fell. Banculo saw accused Romeo Sison trip Salcedo and kick him on the head, and when he tried to stand, Sison repeatedly boxed him. 6 Sumilang saw accused Gerry Neri approach the victim but did not notice what he did. 7 Salcedo somehow managed to get away from his attackers and wipe off the blood from his face. He sat on some cement steps 8 and then tried to flee towards Roxas boulevard to the sanctuary of the Rizal Monument but accused Joel Tan and Nilo Pacadar pursued him, mauling Sumilang in the process. Salcedo pleaded for his life exclaiming "Maawa na kayo sa akin. Tulungan ninyo ako." He cried: "Pulis, pulis. Wala bang pulis?" 9 The mauling resumed at the Rizal Monument and continued along Roxas Boulevard until Salcedo collapsed and lost consciousness. Sumilang flagged down a van and with the help of a traffic officer, brought Salcedo to the Medical Center Manila but he was refused admission. So they took him to the Philippine General Hospital where he died upon arrival. Salcedo died of "hemorrhage, intracranial traumatic." He sustained various contusions, abrasions, lacerated wounds and skull fractures as revealed in the following post-mortem findings: Cyanosis, lips, and nailbeds. Contused-abrasions: 6.0 x 2.5 cm., and 3.0 x 2.4 cm., frontal region, right side; 6.8 x 4.2 cm., frontal region, left side; 5.0 x 4.0 cm., right cheek; 5.0 x 3.5 cm., face, left side; 3.5 x 2.0 cm., nose; 4.0 x 2.1 cm., left ear, pinna; 5.0 x 4.0 cm. left suprascapular region; 6.0 x 2.8 cm., right elbow.

Abrasions: 4.0 x 2.0 cm., left elbow; 2.0 x 1.5 cm., right knee. Lacerated wounds: 2.2 cm., over the left eyebrow; 1.0 cm., upper lip. Hematoma, scalp; frontal region, both sides; left parietal region; right temporal region; occipital region, right side. Fractures, skull; occipital bone, right side; right posterior cranial fossa; right anterior cranial fossa. Hemorrhage, subdural, extensive. Other visceral organs, congested.
Stomach, about 1/2 filled with grayish brown food materials and fluid.

10

The mauling of Salcedo was witnessed by bystanders and several press people, both local and foreign. The press took pictures and a video of the event which became front-page news the following day, capturing national and international attention. This prompted President Aquino to order the Capital Regional Command and the Western Police District to investigate the incident. A reward of ten thousand pesos (P10,000.00) was put up by Brigadier General Alfredo Lim, then Police Chief, for persons who could give information leading to the arrest of the killers.11 Several persons, including Ranulfo Sumilang and Renato Banculo, cooperated with the police, and on the basis of their identification, several persons, including the accused, were apprehended and investigated. For their defense, the principal accused denied their participation in the mauling of the victim and offered their respective alibis. Accused Joselito Tamayo testified that he was not in any of the photographs presented by the prosecution 12 because on July 27, 1986, he was in his house in Quezon City. 13 Gerry Neri claimed that he was at the Luneta Theater at the time of the incident. 14 Romeo Sison, a commercial photographer, was allegedly at his office near the Luneta waiting for some pictures to be developed at that time. 15 He claimed to be afflicted with hernia impairing his mobility; he cannot run normally nor do things forcefully. 16 Richard de los Santos admits he was at the Luneta at the time of the mauling but denies hitting Salcedo. 17 He said that he merely watched the mauling which explains why his face appeared in some of the photographs. 18 Unlike the other accused, Nilo Pacadar admits that he is a Marcos loyalist and a member of the Ako'y Pilipino Movement and that he attended the rally on that fateful day. According to him, he saw Salcedo being mauled and like Richard de los Santos, merely viewed the incident. 19 His face was in the pictures because he shouted to the maulers to stop hitting Salcedo. 20 Joel Tan also testified that he tried to pacify the maulers because he pitied Salcedo. The maulers however ignored him. 21 The other accused, specifically Attys. Lozano and Nuega and Annie Ferrer opted not to testify in their defense. On December 16, 1988, the trial court rendered a decision finding Romeo Sison, Nilo Pacadar, Joel Tan, Richard de los Santos and Joselito Tamayo guilty as principals in the crime of murder qualified by treachery and sentenced them to 14 years 10 months and 20 days of reclusion temporal as minimum to 20 years of reclusion temporal as maximum. Annie Ferrer was likewise convicted as an accomplice. The court, however, found that the prosecution failed to prove the guilt of the other accused and thus acquitted Raul Billosos, Gerry Nery, Rolando Fernandez, Oliver Lozano and Benjamin Nuega. The dispositive portion of the decision reads as follows: WHEREFORE, judgement is hereby rendered in the aforementioned cases as follows:

1. In "People versus Raul Billosos and Gerry Nery," Criminal Case No. 86-47322, the Court finds that the Prosecution failed to prove the guilt of the two (2) Accused beyond reasonable doubt for the crime charged and hereby acquits them of said charge; 2. In "People versus Romeo Sison, et al.," Criminal Case No. 86-47617, the Court finds the Accused Romeo Sison, Nilo Pacadar and Joel Tan, guilty beyond reasonable doubt, as principals for the crime of Murder, defined in Article 248 of the Revised Penal Code, and, there being no other mitigating or aggravating circumstances, hereby imposes on each of them an indeterminate penalty of from FOURTEEN (14)YEARS, TEN (10) MONTHS and TWENTY (20) DAYS, of Reclusion Temporal, as minimum, to TWENTY (20) DAYS, of Reclusion Temporal, as minimum, to TWENTY (20) YEARS ofReclusion Temporal, as Maximum; 3. In "People versus Richard de los Santos," Criminal Case No. 86-47790, the Court finds the Accused Richard de los Santos guilty beyond reasonable doubt as principal for the crime of Murder defined in Article 248 of the Revised Penal Code and, there being no other extenuating circumstances, the Court hereby imposes on him an indeterminate penalty of from FOURTEEN (14) YEARS, TEN (10) MONTHS and TWENTY (20) DAYS of Reclusion Temporal, as Minimum, to TWENTY (20) YEARS of Reclusion Temporal as Maximum; 4. In "People versus Joselito Tamayo," Criminal Case No. 86-48538 the Court finds the Accused guilty beyond reasonable doubt as principal, for the crime of "Murder" defined in Article 248 of the Revised Penal Code and hereby imposes on him an indeterminate penalty of from FOURTEEN (14) YEARS, TEN (10) MONTHS and TWENTY (20) DAYS of Reclusion Temporal, as Minimum, to TWENTY (20) YEARS of Reclusion Temporal, as Maximum; 5. In "People versus Rolando Fernandez," Criminal Case No. 86-4893l, the Court finds that the Prosecution failed to prove the guilt of the Accused for the crime charged beyond reasonable doubt and hereby acquits him of said charge; 6. In "People versus Oliver Lozano, et al.," Criminal Case No. 86-49007, the Court finds that the Prosecution failed to prove the guilt of the Accused beyond reasonable doubt for the crime charged and hereby acquits them of said charge; 7. In "People versus Annie Ferrer," Criminal Case No. 86-49008, the Court finds the said Accused guilty beyond reasonable doubt, as accomplice to the crime of Murder under Article 18 in relation to Article 248 of the Revised Penal Code and hereby imposes on her an indeterminate penalty of NINE (9) YEARS and FOUR (4) MONTHS of Prision Mayor, as Minimum to TWELVE (12) YEARS, FIVE (5) MONTHS and ELEVEN (11) DAYS of Reclusion Temporal, as Maximum. The Accused Romeo Sison, Nilo Pacadar, Richard de los Santos, Joel Tan, Joselito Tamayo and Annie Ferrer are hereby ordered to pay, jointly and severally, to the heirs of Stephen Salcedo the total amount of P74,000.00 as actual damages and the amount of P30,000.00 as moral and exemplary damages, and one-half (1/2) of the costs of suit.

The period during which the Accused Nilo Pacadar, Romeo Sison, Joel Tan, Richard de los Santos and Joselito Tamayo had been under detention during the pendency of these cases shall be credited to them provided that they agreed in writing to abide by and comply strictly with the rules and regulations of the City Jail. The Warden of the City Jail of Manila is hereby ordered to release the Accused Gerry Nery, Raul Billosos and Rolando Fernandez from the City Jail unless they are being detained for another cause or charge. The Petition for Bail of the Accused Rolando Fernandez has become moot and academic. The Petition for Bail of the Accused Joel Tan, Romeo Sison and Joselito Tamayo is denied for lack of merit.
The bail bonds posted by the Accused Oliver Lozano and Benjamin Nuega are hereby cancelled.

22

On appeal, the Court of Appeals 23 on December 28, 1992, modified the decision of the trial court by acquitting Annie Ferrer but increasing the penalty of the rest of the accused, except for Joselito Tamayo, to reclusion perpetua. The appellate court found them guilty of murder qualified by abuse of superior strength, but convicted Joselito Tamayo of homicide because the information against him did not allege the said qualifying circumstance. The dispositive portion of the decision reads: PREMISES CONSIDERED, the decision appealed from is hereby MODIFIED as follows: 1. Accused-appellants Romeo Sison y Mejia, Nilo Pacadar y Abe, Joel Tan y Mostero and Richard de los Santos are hereby found GUILTY beyond reasonable doubt of Murder and are each hereby sentenced to suffer the penalty of Reclusion Perpetua; 2. Accused-appellant Joselito Tamayo y Oria is hereby found GUILTY beyond reasonable doubt of the crime of Homicide with the generic aggravating circumstance of abuse of superior strength and, as a consequence, an indeterminate penalty of TWELVE (12) YEARS of prision mayor as Minimum to TWENTY (20) YEARS of reclusion temporal as Maximum is hereby imposed upon him; 3. Accused-appellant Annie Ferrer is hereby ACQUITTED of being an accomplice to the crime of Murder.
CONSIDERING that the penalty of Reclusion Perpetua has been imposed in the instant consolidated cases, the said cases are now hereby certified to the Honorable Supreme Court for review.

24

Petitioners filed G.R. Nos. 108280-83 under Rule 45 of the Revised Rules of Court inasmuch as Joselito Tamayo was not sentenced to reclusion perpetua. G.R. Nos. 114931-33 was certified to us for automatic review of the decision of the Court of Appeals against the four accused-appellants sentenced to reclusion perpetua. Before this court, accused-appellants assign the following errors: I THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT NOTED THAT THE ACCUSED FAILED TO CITE ANYTHING ON RECORD TO SUPPORT THEIR AVERMENT THAT THERE WERE NO WITNESSES WHO HAVE COME FORWARD TO IDENTIFY THE PERSONS RESPONSIBLE FOR THE DEATH OF STEPHEN SALCEDO. II THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN GIVING CREDENCE TO THE UNRELIABLE, DOUBTFUL, SUSPICIOUS AND INCONCLUSIVE TESTIMONIES OF PROSECUTION WITNESS RANULFO SUMILANG. III

THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN FINDING THE ACCUSED GUILTY WHEN THERE WAS NO EVIDENCE TO PROVE THAT ANY OF THE ACCUSED CARRIED A HARD AND BLUNT INSTRUMENT, THE ADMITTED CAUSE OF THE HEMORRHAGE RESULTING IN THE DEATH OF THE DECEASED. IV THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THERE EXISTS CONSPIRACY AMONG THE PRINCIPAL ACCUSED. V
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE CRIME COMMITTED IS MURDER AND NOT DEATH (HOMICIDE) CAUSED IN A TUMULTUOUS AFFRAY.

25

In their additional brief, appellants contend that: I THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN REACHING A CONCLUSION OF FACT UTILIZING SPECULATIONS, SURMISES, NON-SEQUITUR CONCLUSIONS, AND EVEN THE DISPUTED DECISION OF THE TRIAL COURT, TO UPHOLD THE VALIDITY OF THE VERY SAME JUDGMENT, ALL CONTRARY TO THE RULES OF EVIDENCE. II THE HONORABLE COURT OF APPEALS ERRED IN ADMITTING EXHIBITS "D", "G", "O", "P", "V", TO "V-48", "W" TO "W-13", ALL OF WHICH WERE NOT PROPERLY IDENTIFIED. III THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN CONCLUDING THAT CONSPIRACY EXISTED IN THE CASE AT BAR DISREGARDING ALTOGETHER THE SETTLED JURISPRUDENCE ON THE MATTER. IV
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE CRIME COMMITTED WAS MURDER, NOT DEATH (HOMICIDE) IN TUMULTUOUS AFFRAY SIDESTEPPING IN THE PROCESS THE FACTUAL GROUNDS SURROUNDING THE INCIDENT.

26

Appellants mainly claim that the Court of Appeals erred in sustaining the testimonies of the two in prosecution eyewitnesses, Ranulfo Sumilang and Renato Banculo, because they are unreliable, doubtful and do not deserve any credence. According to them, the testimonies of these two witnesses are suspect because they surfaced only after a reward was announced by General Lim. Renato Banculo even submitted three sworn statements to the police geared at providing a new or improved version of the incident. On the witness stand, he mistakenly identified a detention prisoner in another case as accused Rolando Fernandez. 27 Ranulfo Sumilang was evasive and unresponsive prompting the trial court to reprimand him several times. 28 There is no proof that Banculo or Sumilang testified because of the reward announced by General Lim, much less that both or either of them ever received such reward from the government. On the contrary, the evidence shows that Sumilang reported the incident to the police and submitted his sworn statement immediately two hours after the mauling, even before

announcement of any reward. 29 He informed the police that he would cooperate with them and identify Salcedo's assailants if he saw them again. 30 The fact that Banculo executed three sworn statements does not make them and his testimony incredible. The sworn statements were made to identify more suspects who were apprehended during the investigation of Salcedo's death. 31 The records show that Sumilang was admonished several times by the trial court on the witness stand for being argumentative and evasive. 32 This is not enough reason to reject Sumilang's testimony for he did not exhibit this undesirable conduct all throughout his testimony. On the whole, his testimony was correctly given credence by the trial court despite his evasiveness at some instances. Except for compelling reasons, we cannot disturb the way trial courts calibrate the credence of witnesses considering their visual view of the demeanor of witnesses when on the witness stand. As trial courts, they can best appreciate the verbal and non-verbal dimensions of a witness' testimony. Banculo's mistake in identifying another person as one of the accused does not make him an entirely untrustworthy witness. 33 It does not make his whole testimony a falsity. An honest mistake is not inconsistent with a truthful testimony. Perfect testimonies cannot be expected from persons with imperfect senses. In the court's discretion, therefore, the testimony of a witness can be believed as to some facts but disbelieved with respect to the others. 34 We sustain the appellate and trial courts' findings that the witnesses' testimonies corroborate each other on all important and relevant details of the principal occurrence. Their positive identification of all petitioners jibe with each other and their narration of the events are supported by the medical and documentary evidence on record. Dr. Roberto Garcia, the medico-legal officer of the National Bureau of Investigation, testified that the victim had various wounds on his body which could have been inflicted by pressure from more than one hard object. 35 The contusions and abrasions found could have been caused by punches, kicks and blows from rough stones. 36 The fatal injury of intracranial hemorrhage was a result of fractures in Salcedo's skull which may have been caused by contact with a hard and blunt object such as fistblows, kicks and a blunt wooden instrument. 37 Appellants do not deny that Salcedo was mauled, kicked and punched. Sumilang in fact testified that Salcedo was pummeled by his assailants with stones in their hands. 38 Appellants also contend that although the appellate court correctly disregarded Exhibits "D," "G," and "P," it erroneously gave evidentiary weight to Exhibits "O," "V," "V-1" to "V-48," "W," "W-1" to "W-13." 39 Exhibit "O" is the Joint Affidavit of Pat. Flores and Pat. Bautista, the police intelligence-operatives who witnessed the rally and subsequent dispersal operation. Pat. Flores properly identified Exhibit "O" as his sworn statement and in fact gave testimony corroborating the contents thereof. 40 Besides, the Joint Affidavit merely reiterates what the other prosecution witnesses testified to. Identification by Pat. Bautista is a surplusage. If appellants wanted to impeach the said affidavit, they should have placed Pat. Flores on the witness stand. Exhibits "V," "V-1" to "V-48" are photographs taken of the victim as he was being mauled at the Luneta starting from a grassy portion to the pavement at the Rizal Monument and along Roxas Boulevard, 41 as he was being chased by his assailants 42 and as he sat pleading with his assailants. 43 Exhibits "W", "W-1" to "W-13" are photographs of Salcedo and the mauling published in local newspapers and magazines such as the Philippine Star, 44 Mr. and Ms. Magazine, 45 Philippine

Daily Inquirer, 46 and the Malaya. 47 The admissibility of these photographs is being questioned by appellants for lack of proper identification by the person or persons who took the same. The rule in this jurisdiction is that photographs, when presented in evidence, must be identified by the photographer as to its production and testified as to the circumstances under which they were produced. 48 The value of this kind of evidence lies in its being a correct representation or reproduction of the original, 49 and its admissibility is determined by its accuracy in portraying the scene at the time of the crime. 50 The photographer, however, is not the only witness who can identify the pictures he has taken. 51 The correctness of the photograph as a faithful representation of the object portrayed can be proved prima facie, either by the testimony of the person who made it or by other competent witnesses, after which the court can admit it subject to impeachment as to its accuracy. 52 Photographs, therefore, can be identified by the photographer or by any other competent witness who can testify to its exactness and accuracy. 53 This court notes that when the prosecution offered the photographs as part of its evidence, appellants, through counsel Atty. Alfredo Lazaro, Jr. objected to their admissibility for lack of proper identification. 54 However, when the accused presented their evidence, Atty. Winlove Dumayas, counsel for accused Joselito Tamayo and Gerry Neri used Exhibits "V", "V-1" to "V48" to prove that his clients were not in any of the pictures and therefore could not have participated in the mauling of the victim. 55 The photographs were adopted by appellant Joselito Tamayo and accused Gerry Neri as part of the defense exhibits. And at this hearing, Atty. Dumayas represented all the other accused per understanding with their respective counsels, including Atty. Lazaro, who were absent. At subsequent hearings, the prosecution used the photographs to crossexamine all the accused who took the witness stand. 56 No objection was made by counsel for any of the accused, not until Atty. Lazaro appeared at the third hearing and interposed a continuing objection to their admissibility. 57 The objection of Atty. Lazaro to the admissibility of the photographs is anchored on the fact that the person who took the same was not presented to identify them. We rule that the use of these photographs by some of the accused to show their alleged non-participation in the crime is an admission of the exactness and accuracy thereof. That the photographs are faithful representations of the mauling incident was affirmed when appellants Richard de los Santos, Nilo Pacadar and Joel Tan identified themselves therein and gave reasons for their presence thereat. 58 An analysis of the photographs vis-a-vis the accused's testimonies reveal that only three of the appellants, namely, Richard de los Santos, Nilo Pacadar and Joel Tan could be readily seen in various belligerent poses lunging or hovering behind or over the victim. 59 Appellant Romeo Sison appears only once and he, although afflicted with hernia is shown merely running after the victim. 60Appellant Joselito Tamayo was not identified in any of the pictures. The absence of the two appellants in the photographs does not exculpate them. The photographs did not capture the entire sequence of the killing of Salcedo but only segments thereof. While the pictures did not record Sison and Tamayo hitting Salcedo, they were unequivocally identified by Sumilang and Banculo 61Appellants' denials and alibis cannot overcome their eyeball identification. Appellants claim that the lower courts erred in finding the existence of conspiracy among the principal accused and in convicting them of murder qualified by abuse of superior strength, not death in tumultuous affray. Death in a tumultuous affray is defined in Article 251 of the Revised Penal code as follows:

Art. 251. Death caused in a tumultuous affray. When, while several persons, not composing groups organized for the common purpose of assaulting and attacking each other reciprocally, quarrel and assault each other in a confused and tumultuous manner, and in the course of the affray someone is killed, and it cannot be ascertained who actually killed the deceased, but the person or persons who inflicted serious physical injuries can be identified, such person or persons shall be punished by prison mayor. If it cannot be determined who inflicted the serious physical injuries on the deceased, the penalty ofprision correccional in its medium and maximum periods shall be imposed upon all those who shall have used violence upon the person of the victim. For this article to apply, it must be established that: (1) there be several persons; (2) that they did not compose groups organized for the common purpose of assaulting and attacking each other reciprocally; (3) these several persons quarrelled and assaulted one another in a confused and tumultuous manner; (4) someone was killed in the course of the affray; (5) it cannot be ascertained who actually killed the deceased; and (6) that the person or persons who inflicted serious physical injuries or who used violence can be identified. 62 A tumultuous affray takes place when a quarrel occurs between several persons and they engage in a confused and tumultuous affray, in the course of which some person is killed or wounded and the author thereof cannot be ascertained. 63 The quarrel in the instant case, if it can be called a quarrel, was between one distinct group and one individual. Confusion may have occurred because of the police dispersal of the rallyists, but this confusion subsided eventually after the loyalists fled to Maria Orosa Street. It was only a while later after said dispersal that one distinct group identified as loyalists picked on one defenseless individual and attacked him repeatedly, taking turns in inflicting punches, kicks and blows on him. There was no confusion and tumultuous quarrel or affray, nor was there a reciprocal aggression at this stage of the incident. 64 As the lower courts found, the victim's assailants were numerous by as much as fifty in number 65 and were armed with stones with which they hit the victim. They took advantage of their superior strength and excessive force and frustrated any attempt by Salcedo to escape and free himself. They followed Salcedo from the Chinese Garden to the Rizal Monument several meters away and hit him mercilessly even when he was already fallen on the ground. There was a time when Salcedo was able to get up, prop himself against the pavement and wipe off the blood from his face. But his attackers continued to pursue him relentlessly. Salcedo could not defend himself nor could he find means to defend himself. Sumilang tried to save him from his assailants but they continued beating him, hitting Sumilang in the process. Salcedo pleaded for mercy but they ignored his pleas until he finally lost consciousness. The deliberate and prolonged use of superior strength on a defenseless victim qualifies the killing to murder. Treachery as a qualifying circumstance cannot be appreciated in the instant case. There is no proof that the attack on Salcedo was deliberately and consciously chosen to ensure the assailants' safety from any defense the victim could have made. True, the attack on Salcedo was sudden and unexpected but it was apparently because of the fact that he was wearing a yellow t-shirt or because he allegedly flashed the "Laban" sign against the rallyists, taunting them into mauling him. As the appellate court well found, Salcedo had the opportunity to sense the temper of the rallyists and run away from them but he, unfortunately, was overtaken by them. The essence of treachery is the sudden and unexpected attack without the slightest provocation on the part of the person being attacked. 66

The qualifying circumstance of evident premeditation was alleged in the information against Joselito Tamayo. Evident premeditation cannot be appreciated in this case because the attack against Salcedo was sudden and spontaneous, spurred by the raging animosity against the so-called "Coryistas." It was not preceded by cool thought and reflection. We find however the existence of a conspiracy among appellants. At the time they were committing the crime, their actions impliedly showed a unity of purpose among them, a concerted effort to bring about the death of Salcedo. Where a conspiracy existed and is proved, a showing as to who among the conspirators inflicted the fatal wound is not required to sustain a conviction. 67 Each of the conspirators is liable for all acts of the others regardless of the intent and character of their participation, because the act of one is the act of all. 68 The trial court awarded the heirs of Salcedo P74,000.00 as actual damages, P30,000.00 as moral and exemplary damages, and one half of the costs of the suit. At the time he died on July 27, 1986, Salcedo was twenty three years old and was set to leave on August 4, 1986 for employment in Saudi Arabia. 69 The reckless disregard for such a young person's life and the anguish wrought on his widow and three small children, 70 warrant an increase in moral damages from P30,000.00 to P100,000.00. The indemnity of P50,000.00 must also be awarded for the death of the victim. 71 IN VIEW WHEREOF, the decision appealed from is hereby affirmed and modified as follows: 1. Accused-appellants Romeo Sison, Nilo Pacadar, Joel Tan and Richard de los Santos are found GUILTY beyond reasonable doubt of Murder without any aggravating or mitigating circumstance and are each hereby sentenced to suffer the penalty of reclusion perpetua; 2. Accused-appellant Joselito Tamayo is found GUILTY beyond reasonable doubt of the crime of Homicide with the generic aggravating circumstance of abuse of superior strength and, as a consequence, he is sentenced to an indeterminate penalty of TWELVE (12) YEARS of prision mayoras minimum to TWENTY (20) YEARS of reclusion temporal as maximum; 3. All accused-appellants are hereby ordered to pay jointly and severally the heirs of Stephen Salcedo the following amounts: (a) P74,000.00 as actual damages; (b) P100,000.00 as moral damages; and (c) P50,000.00 as indemnity for the death of the victim. Costs against accused-appellants. SO ORDERED. PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. RONNIE RULLEPA y GUINTO, accused-appellant. DECISION
CARPIO-MORALES, J.:

On complaint of Cyra May Francisco Buenafe, accused-appellant Ronnie Rullepa y Guinto was charged with Rape before the Regional Trial Court (RTC) of Quezon City allegedly committed as follows: That on or about the 17th day of November, 1995, in Quezon City, Philippines, the said accused, by means of force and intimidation, to wit: by then and there willfully, unlawfully and feloniously removing her panty, kissing her lips and vagina and thereafter rubbing his penis and

inserting the same to the inner portion of the vagina of the undersigned complainant, 3 years of age, a minor, against her will and without her consent. Arraigned on January 15, 1996, accused-appellant pleaded not guilty. From the testimonies of its witnesses, namely Cyra May, her mother Gloria Francisco Buenafe, Dr. Cristina V. Preyra, and SPO4 Catherine Borda, the prosecution established the following facts: On November 20, 1995, as Gloria was about to set the table for dinner at her house in Quezon City, Cyra May, then only three and a half years old, told her, Mama, si kuya Ronnie lagay niya titi niya at sinaksak sa puwit at sa bibig ko. Kuya Ronnie is accused-appellant Ronnie Rullepa, the Buenafes house boy, who was sometimes left with Cyra May at home. Gloria asked Cyra May how many times accused-appellant did those things to her, to which she answered many times. Pursuing, Gloria asked Cyra May what else he did to her, and Cyra May indicated the room where accused-appellant slept and pointed at his pillow. As on the night of November 20, 1995 accused-appellant was out with Glorias husband Col. Buenafe, she waited until their arrival at past 11:00 p.m. Gloria then sent accused-appellant out on an errand and informed her husband about their daughters plaint. Buenafe thereupon talked to Cyra May who repeated what she had earlier told her mother Gloria. When accused-appellant returned, Buenafe and Gloria verified from him whether what Cyra May had told them was true. Ronnie readily admitted doing those things but only once, at 4:00 p.m. of November 17, 1995 or three days earlier. Unable to contain her anger, Gloria slapped accused-appellant several times. Since it was already midnight, the spouses waited until the following morning to bring accused-appellant to Camp Karingal where he admitted the imputations against him, on account of which he was detained. Glorias sworn statement was then taken. Recalling what accused-appellant did to her, Cyra May declared at the witness stand: Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga, thus causing her pain and drawing her to cry. She added that accused-appellant did these to her twice in his bedroom. Dr. Ma. Cristina V. Preyra, the Medico-Legal Officer and Chief of the Biological Science Branch of the Philippine National Police Crime Laboratory who examined Crya May, came up with her report dated November 21, 1995, containing the following findings and conclusions: FINDINGS: GENERAL AND EXTRA GENITAL: Fairly developed, fairly nourished and coherent female child subject. Breasts are undeveloped. Abdomen is flat and soft. GENITAL: There is absence of pubic hair. Labia majora are full, convex and coaptated with congested and abraded labia minora presenting in between. On separating the same is disclosed an abraded posterior fourchette and an elastic, fleshy type intact hymen. External vaginal orifice does not admit the tip of the examining index finger. xxx CONCLUSION: Subject is in virgin state physically. There are no external signs of recent application of any form of trauma at the time of examination. (Emphasis supplied.)
[1] [2] [3] [4] [5] [6] [7]

By Dr. Preyras explanation, the abrasions on the labia minora could have been caused by friction with an object, perhaps an erect penis. She doubted if riding on a bicycle had caused the injuries. The defenses sole witness was accused-appellant, who was 28 and single at the time he took the witness stand on June 9, 1997. He denied having anything to do with the abrasions found in Cyra Mays genitalia, and claimed that prior to the alleged incident, he used to be ordered to buy medicine for Cyra May who had difficulty urinating. He further alleged that after he refused to answer Glorias queries if her husband Buenafe, whom he usually accompanied whenever he went out of the house, was womanizing, Gloria would always find fault in him. He suggested that Gloria was behind the filing of the complaint. Thus:
[8]

qaqaqaqaqa-

According to them you caused the abrasions found in her genital? That is not true, sir. If that is not true, what is the truth? As I have mentioned earlier that before I started working with the family I was sent to Crame to buy medicine for the daughter because she had difficulty in urinating. Did you know why the child has difficulty in urinating? No, I do not know, sir. And how about the present complaint filed against you, the complaint filed by the mother of the victim? I did not do it, sir. What is the truth, what can you say about this present complaint filed against you? As I said Mrs. Buenafe got mad at me because after I explained to her that I was going with her gusband (sic) to the children of the husband with a former marriage.[9]

Finding for the prosecution, Branch 96 of the Quezon City RTC rendered judgment, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered finding accused RONNIE RULLEPA y GUINTO guilty beyond reasonable doubt of rape, and he is accordingly sentenced to death. The accused is ordered to pay CYRA MAE BUENAFE the amount of P40,000.00 as civil indemnity. Costs to be paid by the accused. (Italics in the original.) Hence, this automatic review, accused-appellant assigning the following errors to the trial court:
[10]

THE COURT A QUO ERRED IN CONSIDERING AS ADMISSIBLE IN EVIDENCE THE ACCUSED-APPELLANTS ADMISSION.
II

THE COURT A QUO ERRED ON (sic) RULING THAT THE ACCUSED-APPELLANTS SILENCE DURING TRIAL AMOUNTED TO AN IMPLIED ADMISSION OF GUILT.
III

THE COURT A QUO ERRED IN FINDING THAT THE GUILT OF THE ACCUSED-APPELLANT FOR THE CRIME CHARGED HAS BEEN PROVEN BEYOND REASONABLE DOUBT.
IV

THE COURT A QUO GRAVELY ERRED IN IMPOSING THE SUPREME PENALTY OF DEATH UPON THE ACCUSEDAPPELLANT. (Emphasis supplied.) Accused-appellant assails the crediting by the trial court, as the following portion of its decision shows, of his admission to Gloria of having sexually assaulted Cyra May: In addition, the mother asserted that Rullepa had admitted Cyra Ma[y]s complaint during the confrontation in the house. Indeed, according to the mother, the admission was even expressly qualifiedby Rullepas insistence that he had committed the sexual assault only once, specifying
[11]

the time thereof as 4:00 pm of November 17, 1995. That qualification proved that the admission was voluntary and true. An uncoerced and truthful admission like this should be absolutely admissible and competent. xxx Remarkably, the admission was not denied by the accused during trial despite his freedom to deny it if untrue. Hence, the admission became conclusive upon him. (Emphasis supplied.) To accused-appellant, the statements attributed to him are inadmissible since they were made out of fear, having been elicited only after Cyra Mays parents bullied and questioned him. He thus submits that it was error for the trial court to take his failure to deny the statements during the trial as an admission of guilt. Accused-appellants submission does not persuade. The trial court considered his admis sion merely as an additional ground to convince itself of his culpability. Even if such admission, as well as the implication of his failure to deny the same, were disregarded, the evidence suffices to establish his guilt beyond reasonable doubt. The plain, matter-of-fact manner by which Cyra May described her abuse in the hands of her Kuya Ronnie is an eloquent testament to the truth of her accusations. Thus she testified on direct examination:
[12]

q- Do you recall if Ronnie Rullepa did anything to you? a- Yes, sir. q- What did he do to you? a- Sinaksak nya ang titi sa pepe ko, sa puwit ko, at sa bunganga q- How many times did he do that to you? a- Twice, sir. xxx q- Do you remember when he did these things to you? a- Opo. q- When was that? a- When my mother was asleep, he put he removed my panty and inserted his penis inside my vagina, my anus and my mouth, sir. xxx q- After your Kuya Ronnie did those things to you what did you feel? a- Sabi nya ganito (Witness putting her finger in her lips) Nasaktan po ako at umiyak po ako. q- Did you cry because of hurt? a- Yes. q- What part of your body hurt? a- Pepe ko po. When I went to the bathroom to urinate, I felt pain in my organ, sir. [13]

Cyra May reiterated her testimony during cross-examination, providing more revolting details of her ordeal:
q- So, you said that Kuya Ronnie did something to you what did he do to you on November 17, 1995? a- Sinaksak nga yong titi nya. He inserted his penis to my organ and to my mouth, sir. xxx q- When you said that your kuya Ronnie inserted his penis into your organ, into your mouth, and into your anus, would you describe what his penis? a- It is a round object, sir. C o u r t: Is this titi of your kuya Ronnie a part of his body? a- Opo. q- Was that in the head of kuya Ronnie? a- No, sir. q- Which part of his body that titi located?

(Witness pointing to her groin area) C o u r t: Continue xxx q- Why were you in that room? a- Gusto nya po matulog ako sa kuwarto niya. q- When you were in that room, what did Kuya Ronnie do to you? a- Hinubo po niya ang panty ko. q- And after he remove your panty, what did Kuya Ronnie do, what did he do to you? a- He inserted his penis to my organ, sir. q- Why did kuya Ronnie, was kuya Ronnie already naked or he was already wearing any clothing? a- Still had his clothing on, sir. q- So, where did his penis, saan lumabas ang penis ni Kuya Ronnie? a- Dito po, (Witness referring or pointing to her groin area) xxx q- So, thats the and at the time, you did not cry and you did not shout for help? a- Sabi nya po, not to make any noise because my mother might be roused from sleep. q- How long was kuya Ronnie did that to you? a- Matagal po. q- After kuya Ronnie scrub his penis to your vagina, what other things did he do? a- After that he inserted his penis to my mouth, and to my anus, sir. q- You did not complain and you did not shout? a- I cried, sir.[14]

Accused-appellant draws attention to the statement of Cyra May that he was not in the house on November 17 (1995), as reflected in the following transcript of her testimony:
qaqaqaIs it not a fact that you said a while ago that when your father leaves the house, he [was] usually accompanied by your kuya Ronnie? Opo. Why is it that Kuya Ronnie was in the house when you father left the house at that time, on November 17? He was with Kuya Ronnie, sir. So, it is not correct that kuya Ronnie did something to you because your kuya Ronnie [was] always with your Papa? Yes, sir.[15]

The above-quoted testimony of Cyra May does not indicate the time when her father Col. Buenafe left their house on November 17, 1995 with accused-appellant and, thus, does not preclude accused-appellants commission of rape on the same date. In any event, a young child is vulnerable to suggestion, hence, her affirmative response to the defense counsels above quoted leading questions. As for the variance in the claim regarding when Gloria was informed of the rape, Gloria having testified that she learned of it on November 20, 1995 while Cyra May said that immediately after the incident, she awakened her mother who was in the adjacent room and reported it: This is a minor matter that does not detract from Cyra Mays categorical, material testimony that accused-appellant inserted his penis into her vagina. Accused-appellant goes on to contend that Cyra May was coached, citing the following portion of her testimony:
[16] [17]

qa-

Yong sinabi mong sinira nya ang buhay mo, where did you get that phrase? It was the word of my Mama, sir.[18]

On the contrary, the foregoing testimony indicates that Cyra May was really narrating the truth, that of hearing her mother utter sinira niya ang buhay mo. Accused-appellants suggestion that Cyra May merely imagined the things of which he is accused, perhaps getting the idea from television programs, is preposterous. It is true that the ordinary child is a great weaver of romances, and her imagination may induce (her) to relate something she has heard or read in a story as personal experience. But Cyra Mays account is hardly the stuff of romance or fairy tales. Neither is it normal TV fare, if at all. This Court cannot believe that a victim of Cyra Mays age could concoct a tale of defloration, allow the examination of her private parts, and undergo the expense, trouble, inconvenience, not to mention the trauma of public trial. Besides, her testimony is corroborated by the findings of Dr. Preyra that there were abrasions in her labia minora, which she opined, could have been caused by friction with an erect penis. This Court thus accords great weight to the following assessment of the trial court regarding the competency and credibility of Cyra May as a witness: Her very tender age notwithstanding, Cyra Ma(y) nonetheless appeared to possess the necessary intelligence and perceptiveness sufficient to invest her with the competence to testify about her experience. She might have been an impressionable child as all others of her age are but her narration of Kuya Ronnies placing his titi in her pepe was certainly one which could not be considered as a common childs tale. Her responses during the examination of counsel and of the Court established her consciousness of the distinction between good and bad, which rendered inconceivable for her to describe a bad act of the accused unless it really happened to her. Needless to state, she described the act of the accused as bad. Her demeanor as a witness manifested during trial by her unhesitant, spontaneous, and plain responses to questions further enhanced her claim to credit and trustworthiness. (Italics in the original.) In a futile attempt at exculpation, accused-appellant claims that even before the alleged incident Cyra May was already suffering from pain in urinating. He surmises that she could have scratched herself which caused the abrasions. Dr. Preyra, however, was quick to rule out this possibility. She stated categorically that that part of the female organ is very sensitive and rubbing or scratching it is painful. The abrasions could not, therefore, have been self-inflicted. That the Medical-Legal Officer found no external signs of recent application of any form of trauma at the time of the examination does not preclude accused-appellants conviction since the infliction of force is immaterial in statutory rape. More. That Cyra May suffered pain in her vagina but not in her anus despite her testimony that accused-appellant inserted his penis in both orifices does not diminish her credibility. It is possible that accused-appellants penis failed to penetrate her anus as deeply as it did her vagina, the former being more resistant to extreme forces than the latter. Accused-appellants imputation of ill motive on the part of Gloria is puerile. No mother in her right mind would subject her child to the humiliation, disgrace and trauma attendant to a prosecution for rape if she were not motivated solely by the desire to incarcerate the person responsible for the childs defilement. Courts are seldom, if at all, convinced that a mother would stoop so low as to subject her daughter to physical hardship and shame concomitant to a rape prosecution just to assuage her own hurt feelings. Alternatively, accused-appellant prays that he be held liable for acts of lasciviousness instead of rape, apparently on the basis of the following testimony of Cyra May, quotedverbatim, that he merely scrubbed his penis against her vagina:
[19] [20] [21] [22] [23] [24] [25]

qaq-

Is it not a fact that kuya Ronnie just made some scrubbed his penis into your vagina? Yes, sir. And when he did not actually penetrated your vagina?

a-

Yes, sir.[26]
[27]

Dr. Preya, however, found abrasions in the labia minora, which is directly beneath the labia majora, proving that there was indeed penetration of the vagina, not just a mere rubbing or scrubbing of the penis against its surface. In fine, the crime committed by accused-appellant is not merely acts of lasciviousness but statutory rape. The two elements of statutory rape are (1) that the accused had carnal knowledge of a woman, and (2) that the woman is below twelve years of age. As shown in the previous discussion, the first element, carnal knowledge, had been established beyond reasonable doubt. The same is true with respect to the second element. The victims age is relevant in rape cases since it may constitute an element of the offense. Article 335 of the Revised Penal Code, as amended by Republic Act No. 7659, provides: Art. 335. When and how rape is committed. Rape is committed by having carnal knowledge of a woman under any of the following circumstances: x x x. 3. When the woman is under twelve years of age x x x. x x x. The crime of rape shall be punished by reclusion perpetua. x x x. Furthermore, the victims age may constitute a qualifying circumstance, warranting the imposition of the death sentence. The same Article states: The death penalty shall also be imposed if the crime of rape is committed with any of the following attendant circumstances: 1. when the victim is under eighteen (18) years of age and the offender is a parent, ascendant, step-parent, guardian, relative by consanguinity or affinity with the third civil degree, or the common-law spouse of the parent of the victim. x x x. 4. when the victim is x x x a child below seven (7) years old. x x x. Because of the seemingly conflicting decisions regarding the sufficiency of evidence of the victims age in rape cases, this Court, in the recently decided case of People v. Pruna, established a set of guidelines in appreciating age as an element of the crime or as a qualifying circumstance, to wit: 1. The best evidence to prove the age of the offended party is an original or certified true copy of the certificate of live birth of such party. 2. In the absence of a certificate of live birth, similar authentic documents such as baptismal certificate and school records which show the date of birth of the victim would suffice to prove age. 3. If the certificate of live birth or authentic document is shown to have been lost or destroyed or otherwise unavailable, the testimony, if clear and credible, of the victims mother or a member of the family either by affinity or consanguinity who is qualified to testify on matters respecting pedigree such as the exact age or date of birth of the offended party pursuant to Section 40, Rule 130 of the Rules on Evidence shall be sufficient under the following circumstances: a. If the victim is alleged to be below 3 years of age and what is sought to be proved is that she is less than 7 years old; b. If the victim is alleged to be below 7 years of age and what is sought to be proved is that she is less than 12 years old; c. If the victim is alleged to be below 12 years of age and what is sought to be proved is that she is less than 18 years old.
[28] [29] [30]

4. In the absence of a certificate of live birth, authentic document, or the testimony of the victims mother or relatives concerning the victims age, the complainants testimony will suffice provided that it is expressly and clearly admitted by the accused. 5. It is the prosecution that has the burden of proving the age of the offended party. The failure of the accused to object to the testimonial evidence regarding age shall not be taken against him. 6. The trial court should always make a categorical finding as to the age of the victim. Applying the foregoing guidelines, this Court in the Pruna case held that the therein accused-appellant could only be sentenced to suffer the penalty of reclusion perpetuasince: x x x no birth certificate or any similar authentic document, such as a baptismal certificate of LIZETTE, was presented to prove her age. x x x. x x x. However, the Medico-Legal Report relied upon by the trial court does not in any way prove the age of LIZETTE, for there is nothing therein which even mentions her age. Only testimonial evidence was presented to establish LIZETTEs age. Her mother, Jacqueline, testified (that the victim was three years old at the time of the commission of the crime). xxx Likewise, LIZETTE testified on 20 November 1996, or almost two years after the incident, that she was 5 years old. However, when the defense counsel asked her how old she was on 3 January 1995, or at the time of the rape, she replied that she was 5 years old. Upon further question as to the date she was born, she could not answer. For PRUNA to be convicted of rape in its qualified form and meted the supreme penalty of death, it must be established with certainty that LIZETTE was below 7 years old at the time of the commission of the crime. It must be stressed that the severity of the death penalty, especially its irreversible and final nature once carried out, makes the decision-making process in capital offenses aptly subject to the most exacting rules of procedure and evidence. In view of the uncertainty of LIZETTEs exact age, corroborative evidence such as her birth certificate, baptismal certificate or any other authentic document should be introduced in evidence in order that the qualifying circumstance of below seven (7) years old is appreciated against the appellant. The lack of objection on the part of the defense as to her age did not excuse the prosecution from discharging its burden. That the defense invoked LIZETTEs tender age for purposes of questioning her competency to testify is not necessarily an admission that she was below 7 years of age when PRUNA raped her on 3 January 1995. Such being the case, PRUNA cannot be convicted of qualified rape, and hence the death penalty cannot be imposed on him. However, conformably with no. 3 (b) of the foregoing guidelines, the testimony of LIZETTEs mother that she was 3 years old at the time of the commission of the crime is sufficient for purposes of holding PRUNA liable for statutory rape, or rape of a girl below 12 years of age. Under the second paragraph of Article 335, as amended by R.A. No. 7659, in relation to no. 3 of the first paragraph thereof, having carnal knowledge of a woman under 12 years of age is punishable by reclusion perpetua. Thus, the penalty to be imposed on PRUNA should be reclusion perpetua, and not death penalty. (Italics in the original.) Several cases suggest that courts may take judicial notice of the appearance of the victim in determining her age. For example, the Court, in People v. Tipay, qualified the ruling in People v. Javier, which required the presentation of the birth certificate to prove the rape victims age, with the following pronouncement: This does not mean, however, that the presentation of the certificate of birth is at all times necessary to prove minority. The minority of a victim of tender age who may be below the age of ten is quite manifest and the court can take judicial notice thereof. The crucial years pertain to the ages of fifteen to seventeen where minority may seem to be dubitable due to ones physical appearance. In this situation, the prosecution
[31] [32] [33]

has the burden of proving with certainty the fact that the victim was under 18 years of age when the rape was committed in order to justify the imposition of the death penalty under the above-cited provision. (Emphasis supplied.) On the other hand, a handful of cases holds that courts, without the requisite hearing prescribed by Section 3, Rule 129 of the Rules of Court, cannot take judicial notice of the victims age. Judicial notice signifies that there are certain facta probanda, or propositions in a partys case, as to which he will not be required to offer evidence; these will be taken for true by the tribunal without the need of evidence. Judicial notice, however, is a phrase sometimes used in a loose way to cover some other judicial action. Certain rules of Evidence, usually known under other names, are frequently referred to in terms of judicial notice. The process by which the trier of facts judges a persons age from his or her appearance cannot be categorized as judicial notice. Judicial notice is based upon convenience and expediency for it would certainly be superfluous, inconvenient, and expensive both to parties and the court to require proof, in the ordinary way, of facts which are already known to courts. As Tundag puts it, it is the cognizance of certain facts which judges may properly take and act on without proof because they already know them. Rule 129 of the Rules of Court, where the provisions governing judicial notice are found, is entitled What Need Not Be Proved. When the trier of facts observes the appearance of a person to ascertain his or her ag e, he is not taking judicial notice of such fact; rather, he is conducting an examination of the evidence, the evidence being the appearance of the person. Such a process militates against the very concept of judicial notice, the object of which is to do away with the presentation of evidence. This is not to say that the process is not sanctioned by the Rules of Court; on the contrary, it does. A persons appearance, where relevant, is admissible as object evidence, the same being addressed to the senses of the court. Section 1, Rule 130 provides: SECTION 1. Object as evidence. Objects as evidence are those addressed to the senses of the court. When an object is relevant to the fact in issue, it may be exhibited to, examined or viewed by the court. To be sure, one author writes, this practice of inspection by the court of objects, things or persons relevant to the fact in dispute, has its roots in ancient judicial procedure. The author proceeds to quote from another authority: Nothing is older or commoner in the administration of law in all countries than the submission to the senses of the tribunal itself, whether judge or jury, of objects which furnish evidence. The view of the land by the jury, in real actions, of a wound by the judge where mayhem was alleged, and of the person of one alleged to be an infant, in order to fix his age, the inspection and comparison of seals, the examination of writings, to determine whether they are ()blemished,() the implements with which a crime was committed or of a person alleged, in a b astardy proceeding, to be the child of another, are few illustrations of what may be found abundantly in our own legal records and textbooks for seven centuries past. (Emphasis supplied.) A persons appearance, as evidence of age (for example, of infancy, or of being under the age of consent to intercourse), is usually regarded as relevant; and, if so, the tribunal may properly observe the person brought before it. Experience teaches that corporal appearances are approximately an index of the age of their bearer, particularly for the marked extremes of old age and youth. In every case such evidence should be accepted and weighed for what it may be in each case worth. In particular, the outward physicalappearance of an alleged minor may be considered in judging his age; a contrary rule would for such an inference be pedantically over-cautious. Consequently, the jury or the court trying an issue of fact may be allowed to judge the age of persons in court by observation of such persons. The formal offer of the person as evidence is not necessary. The
[34] [35] [36] [37] [38] [39] [40] [41] [42] [43]

examination and cross-examination of a party before the jury are equivalent to exhibiting him before the jury and an offer of such person as an exhibit is properly refused. This Court itself has sanctioned the determination of an aliens age from his appearance. In Braca v. Collector of Customs, this Court ruled that: The customs authorities may also determine from the personal appearance of the immigrant what his age is. The person of a Chinese alien seeking admission into the Philippine Islands is evidence in an investigation by the board of special inquiry to determine his right to enter; and such body may take into consideration his appearance to determine or assist in determining his age and a finding that the applicant is not a minor based upon such appearance is not without evidence to support it. This Court has also implicitly recognized the same process in a criminal case. Thus, in United States v. Agadas, this Court held: Rosario Sabacahan testified that he was 17 years of age; that he had never purchased a cedula; and that he was going to purchase a cedula the following january. Thereupon the court asked this defendant these questions: You are a pretty big boy for seventeen. Answer: I cannot tell exactly because I do not remember when I was born, but 17 years is my guess. Court: If you are going to take advantage of that excuse, you had better get some positive evidence to that effect. Answer: I do not remember, as I already stated on what date and in what year I was born. The court, in determining the question of the age of the defendant, Rosario Sabacahan, said: The defendant, Rosario Sabacahan, testified that he thought that he was about 17 years of age, but judging by his appearance he is a youth 18 or 19 years old. He has shown that he has no positive information on the subject and no effort was made by the defense to prove the fact that he is entitled to the mitigating circumstance of article 9, paragraph 2, of the Penal code, which fact it is held to be incumbent upon the defense to establish by satisfactory evidence in order to enable the court to give an accused person the benefit of the mitigating circumstance. In United States vs. Estavillo and Perez (10 Off. Gaz., 1984) Estavillo testified, when the case was tried in the court below, that he then was only 16 years of age. There was no other testimony in the record with reference to his age. But the trial judge said: The accused Estavillo, notwithstanding his testimony giving his age as 16 years, is, as a matter of fact, not less than 20. This court, in passing upon the age of Estavillo, held: We presume that the trial court reached this conclusion with reference to the age of Estavillo from the latters personal appearance. There is no proof in the record, as we have said, which even tends to establish the assertion that this appellant understated his age. * * * It is true that the trial court had an opportunity to note the personal appearance of Estavillo for the purpose of determining his age, and by so doing reached the conclusion that he was at least 20, just two years over 18. This appellant testified that he was only 16, and this testimony stands uncontradicted. Taking into consideration the marked difference in the penalties to be imposed upon that age, we must, therefore, conclude (resolving all doubts in favor of the appellants) that the appellants ages were 16 and 14 respectively. While it is true that in the instant case Rosario testified that he was 17 years of age, yet the trial court reached the conclusion, judging from the personal appearance of Rosario, that he is a youth 18 or 19 years old. Applying the rule enunciated in the case just cited, we must conclude that there exists a reasonable doubt, at least, with reference to the question whether Rosario was, in fact 18 years of age at the time the robbery was committed. This doubt must be resolved in favor of the defendant, and he is, therefore, sentenced to six months of arresto mayor in lieu of six years ten months and one day of presidio mayor. x x x. There can be no question, therefore, as to the admissibility of a persons appearance in determining his or her age. As to the weight to accord such appearance, especially in rape cases, Pruna laid down guideline no. 3, which is again reproduced hereunder:
[44] [45] [46]

3. If the certificate of live birth or authentic document is shown to have been lost or destroyed or otherwise unavailable, the testimony, if clear and credible, of the victims mother or a member of the family either by affinity or consanguinity who is qualified to testify on matters respecting pedigree such as the exact age or date of birth of the offended party pursuant to Section 40, Rule 130 of the Rules on Evidence shall be sufficient under the following circumstances: a. If the victim is alleged to be below 3 years of age and what is sought to be proved is that she is less than 7 years old; b. If the victim is alleged to be below 7 years of age and what is sought to be proved is that she is less than 12 years old; c. If the victim is alleged to be below 12 years of age and what is sought to be proved is that she is less than 18 years old. Under the above guideline, the testimony of a relative with respect to the age of the victim is sufficient to constitute proof beyond reasonable doubt in cases (a), (b) and (c) above. In such cases, the disparity between the allegation and the proof of age is so great that the court can easily determine from the appearance of the victim the veracity of the testimony. The appearance corroborates the relatives testimony. As the alleged age approaches the age sought to be proved, the persons appearance, as object evidence of her age, loses probative value. Doubt as to her true age becomes greater and, following Agadas, supra, such doubt must be resolved in favor of the accused. This is because in the era of modernism and rapid growth, the victims mere physical appearance is not enough to gauge her exact age. For the extreme penalty of death to be upheld, nothing but proof beyond reasonable doubt of every fact necessary to constitute the crime must be substantiated. Verily, the minority of the victim should be not only alleged but likewise proved with equal certainty and clearness as the crime itself. Be it remembered that the proof of the victims age in the present case spells the difference between life and death. In the present case, the prosecution did not offer the victims certificate of live birth or similar authentic documents in evidence. The victim and her mother, however, testified that she was only three years old at the time of the rape. Cyra Mays testimony goes:
[47]

qaqaQ A Q A

Your name is Cyra Mae is that correct? Yes, sir. And you are 3 years old? Yes, sir.[48] How old was your daughter when there things happened? 3 and years old. When was she born? In Manila, May 10, 1992.[49]

That of her mother goes:

Because of the vast disparity between the alleged age (three years old) and the age sought to be proved (below twelve years), the trial court would have had no difficulty ascertaining the victims age from her appearance. No reasonable doubt, therefore, exists that the second element of statutory rape, i.e., that the victim was below twelve years of age at the time of the commission of the offense, is present. Whether the victim was below seven years old, however, is another matter. Here, reasonable doubt exists. A mature three and a half-year old can easily be mistaken for an underdeveloped seven-year old. The appearance of the victim, as object evidence, cannot be accorded much weight and, following Pruna, the testimony of the mother is, by itself, insufficient.

As it has not been established with moral certainty that Cyra May was below seven years old at the time of the commission of the offense, accused-appellant cannot be sentenced to suffer the death penalty. Only the penalty of reclusion perpetua can be imposed upon him. In line with settled jurisprudence, the civil indemnity awarded by the trial court is increased to P50,000.00. In addition, Cyra May is entitled to an award of moral damages in the amount of P50,000.00. WHEREFORE, the Decision of the Regional Trial Court of Quezon City, Branch 96, is AFFIRMED with MODIFICATION. Accused-appellant Ronnie Rullepa y Guinto is foundGUILTY of Statutory Rape, defined and punished by Article 335 (3) of the Revised Penal Code, as amended, and is sentenced to suffer the penalty of reclusion perpetua. He is ordered to pay private complainant, Cyra May Buenafe y Francisco, the amount of P50,000.00 as civil indemnity and P50,000.00 as moral damages. SO ORDERED. Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Callejo, Sr., and Azcuna, JJ., concur. Ynares-Santiago, and Corona, JJ., on leave.
[50]

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 150224 May 19, 2004 PEOPLE OF THE PHILIPPINES, appellee, vs. JOEL YATAR alias "KAWIT", appellant. DECISION PER CURIAM: On automatic review is a Decision of the Regional Trial Court of Bulanao, Tabuk, Kalinga, Branch 25, sentencing appellant Joel Yatar alias "Kawit" to Death for the special complex crime of Rape with Homicide, and ordering him to pay the heirs of the victim, Kathylyn D. Uba, civil indemnity in the amount of P75,000.00, moral damages in the amount of P200,000.00, exemplary damages in the amount of P50,000.00, actual damages in the amount of P186,410.00, or total damages amounting to P511,410.00, and costs of litigation.1 Appellant was charged with Rape with Homicide under the following Information: That on or about the afternoon of June 30, 1998 at Liwan West, Rizal, Kalinga, and within the jurisdiction of this Honorable Court, the accused, in order to have carnal knowledge of a certain KATHYLYN D. UBA, did then and there wilfully, unlawfully, and feloniously, and with use of a bladed weapon stab the latter inflicting upon her fatal injuries resulting in the death of the victim, and on the occasion or by reason thereof, accused, wilfully, unlawfully and feloniously, and by means of force and violence had carnal knowledge of said Kathlyn D. Uba against her will.

CONTRARY TO LAW.2 The facts are: On June 30, 1998, at 8:30 a.m., Judilyn Pas-a and her first cousin, seventeen year old Kathylyn Uba, were on the ground floor of the house of their grandmother, Isabel Dawang, in Liwan West, Rizal, Kalinga. They were talking about the letter sent by their aunt, Luz Yatar, to her husband, appellant Joel Yatar, through Kathylyns friend, Cecil Casingan. Kathylyn handed the letter to appellant earlier that morning.3 At 9:00 a.m. of the same day, Judilyn and her husband, together with Isabel Dawang, left for their farm in Nagbitayan some two kilometers away. Before Judilyn and her husband departed, Kathylyn told Judilyn that she intended to go to Tuguegarao, but in the event she would not be able to leave, she would just stay home and wash her clothes or go to the house of their aunt, Anita Wania. Kathylyn was left alone in the house.4 Later, at 10:00 a.m., Anita Wania and fifteen year old Beverly Deneng stopped by the house of Isabel. They saw appellant at the back of the house. They went inside the house through the back door of the kitchen to have a drink of water. Anita asked appellant what he was doing there, and he replied that he was getting lumber to bring to the house of his mother. 5 At 12:30 p.m., while Judilyn was on her way home from Nagbitayan, she saw appellant descend the ladder from the second floor of the house of Isabel Dawang and run towards the back of the house.6 She later noticed appellant, who was wearing a white shirt with collar and black pants, pacing back and forth at the back of the house. She did not find this unusual as appellant and his wife used to live in the house of Isabel Dawang.7 At 1:30 p.m., Judilyn again saw appellant when he called her near her house. This time, he was wearing a black shirt without collar and blue pants. Appellant told her that he would not be getting the lumber he had stacked, and that Isabel could use it. She noticed that appellants eyes were "reddish and sharp." Appellant asked her where her husband was as he had something important to tell him. Judilyns husband then arrived and appellant immediately left and went towards the bac k of the house of Isabel.8 In the evening of the same day, Isabel Dawang arrived home and found that the lights in her house were off. She called out for her granddaughter, Kathylyn Uba. The door to the ground floor was open. She noticed that the water container she asked Kathylyn to fill up earlier that day was still empty. She went up the ladder to the second floor of the house to see if Kathylyn was upstairs. She found that the door was tied with a rope, so she went down to get a knife. While she groped in the dark, she felt a lifeless body that was cold and rigid.9 Isabel moved her hand throughout the entire body. She found out that it was the naked body of her granddaughter, Kathylyn. She called for help. Judilyn and her husband arrived. Isabel was given a flashlight by Judilyn. She focused the beam and saw Kathylyn sprawled on the floor naked, with her intestines protruding out of her stomach. Meanwhile, neighbors had arrived to offer assistance. A daughter of Isabel, Cion, called the police.10 At 9:00 that evening, SP04 Melchor Faniswa received a report that a dead woman was found in Isabel Dawangs house. Together with fellow police officers, Faniswa went to the house and found the naked body of Kathylyn Uba with multiple stab wounds. The people in the vicinity informed the police officers that appellant was seen going down the ladder of the house of Isabel Dawang at approximately 12:30 p.m.

The police discovered the victims panties, brassiere, denim pants, bag and sandals beside her naked cadaver at t he scene of the crime, and they found a dirty white shirt splattered with blood within 50 meters from the house of Isabel. When questioned by the police authorities, appellant denied any knowledge of Kathylynss death, 11 however, he was placed under police custody. On July 3, 1998, appellant asked the police officers if he could relieve himself. Police Officer Cesar Abagan accompanied him to the toilet around seven to ten meters away from the police station. They suddenly heard someone shout in the Ilocano dialect, "Nagtaray!" (Hes running away!). Police Officer Orlando Manuel exited through the gate of the Police Station and saw appellant running away. Appellant was approximately 70 meters away from the station when Police Officer Abagan recaptured him.12 He was charged with Rape with Homicide. When he was arraigned on July 21, 1998, appellant pleaded "not guilty." After trial, appellant was convicted of the crime of Rape with Homicide, defined and penalized under Article 266-A of the Revised Penal Code, as amended by R.A. 8353, otherwise known as the Anti-Rape Law of 1997, and was accordingly, sentenced to Death. Hence, this automatic review pursuant to Article 47 of the Revised Penal Code, as amended. In his Brief, appellant assigns the following errors: I THE TRIAL COURT GRAVELY ERRED IN GIVING MUCH WEIGHT TO THE EVIDENCE PRESENTED BY THE PROSECUTION NOTWITHSTANDING THEIR DOUBTFULNESS. II THE TRIAL COURT SERIOUSLY ERRED IN NOT ACQUITTING THE ACCUSED-APPELLANT OF THE SERIOUS CRIME CHARGED DUE TO REASONABLE DOUBT. Appellants contentions are unmeritorious. The issue regarding the credibility of the prosecution witnesses should be resolved against appellant. This Court will not interfere with the judgment of the trial court in determining the credibility of witnesses unless there appears in the record some fact or circumstance of weight and influence which has been overlooked or the significance of which has been misinterpreted.13 Well-entrenched is the rule that the findings of the trial court on credibility of witnesses are entitled to great weight on appeal unless cogent reasons are presented necessitating a reexamination if not the disturbance of the same; the reason being that the former is in a better and unique position of hearing first hand the witnesses and observing their deportment, conduct and attitude.14 Absent any showing that the trial judge overlooked, misunderstood, or misapplied some facts or circumstances of weight which would affect the result of the case, the trial judges assessment of credibility deserves the appellate courts highest respect.15 Where there is nothing to show that the witnesses for the prosecution were actuated by improper motive, their testimonies are entitled to full faith and credit.16 The weight of the prosecutions evidence must be appreciated in light of the well-settled rule which provides that an accused can be convicted even if no eyewitness is available, as long as sufficient circumstantial evidence is presented by the prosecution to prove beyond doubt that the accused committed the crime.17

Reference to the records will show that a total of eleven (11) wounds, six (6) stab and five (5) incised, were found on the victims abdomen and back, causing a portion of her small intestines to spill out of her body. 18 Rigor mortisof the vicitms body was complete when Dr. Bartolo examined the victim at 9:00 a.m. on July 1, 1998. According to him, the time of death may be approximated from between nine (9) to twelve (12) hours prior to the completion ofrigor mortis.19 In other words, the estimated time of death was sometime between 9:00 a.m. to 12:00 p.m. on June 30, 1998. This was within the timeframe within which the lone presence of appellant lurking in the house of Isabel Dawang was testified to by witnesses. It should also be noted that, although the Postmortem Report by the attending physician, Dr. Pej Evan C. Bartolo, indicates that no hymenal lacerations, contusions or hematoma were noted on the victim,20 Dr. Bartolo discovered the presence of semen in the vaginal canal of the victim. During his testimony, Dr. Bartolo stated that the introduction of semen into the vaginal canal could only be done through sexual intercourse with the victim. 21In addition, it is apparent from the pictures submitted by the prosecution that the sexual violation of the victim was manifested by a bruise and some swelling in her right forearm indicating resistance to the appellants assault on her virtue.22 Significantly, subsequent testing showed that the Deoxyribonucleic acid (DNA) of the sperm specimen from the vagina of the victim was identical the semen to be that of appellants gene type. DNA is a molecule that encodes the genetic information in all living organisms.23 A persons DNA is the same in each cell and it does not change throughout a persons lifetime; the DNA in a persons blood is the same as the DNA found in his saliva, sweat, bone, the root and shaft of hair, earwax, mucus, urine, skin tissue, and vaginal and rectal cells. 24 Most importantly, because of polymorphisms in human genetic structure, no two individuals have the same DNA, with the notable exception of identical twins.25 DNA print or identification technology has been advanced as a uniquely effective means to link a suspect to a crime, or to exonerate a wrongly accused suspect, where biological evidence has been left. For purposes of criminal investigation, DNA identification is a fertile source of both inculpatory and exculpatory evidence. It can assist immensely in effecting a more accurate account of the crime committed, efficiently facilitating the conviction of the guilty, securing the acquittal of the innocent, and ensuring the proper administration of justice in every case. DNA evidence collected from a crime scene can link a suspect to a crime or eliminate one from suspicion in the same principle as fingerprints are used.26 Incidents involving sexual assault would leave biological evidence such as hair, skin tissue, semen, blood, or saliva which can be left on the victims body or at the crime scene. Hair and fiber f rom clothing, carpets, bedding, or furniture could also be transferred to the victims body during the assault.27 Forensic DNA evidence is helpful in proving that there was physical contact between an assailant and a victim. If properly collected from the victim, crime scene or assailant, DNA can be compared with known samples to place the suspect at the scene of the crime. 28 The U.P. National Science Research Institute (NSRI), which conducted the DNA tests in this case, used the Polymerase chain reaction (PCR) amplification method by Short Tandem Repeat (STR) analysis. With PCR testing, tiny amounts of a specific DNA sequence can be copied exponentially within hours. Thus, getting sufficient DNA for analysis has become much easier since it became possible to reliably amplify small samples using the PCR method. In assessing the probative value of DNA evidence, courts should consider, inter alia, the following factors: how the samples were collected, how they were handled, the possibility of contamination of the samples, the procedure followed in analyzing

the samples, whether the proper standards and procedures were followed in conducting the tests, and the qualification of the analyst who conducted the tests.29 In the case at bar, Dr. Maria Corazon Abogado de Ungria was duly qualified by the prosecution as an expert witness on DNA print or identification techniques.30 Based on Dr. de Ungrias testimony, it was determined that the gene type and DNA profile of appellant are identical to that of the extracts subject of examination.31 The blood sample taken from the appellant showed that he was of the following gene types: vWA 15/19, TH01 7/8, DHFRP2 9/10 and CSF1PO 10/11, which are identical with semen taken from the victims vaginal canal.32 Verily, a DNA match exists between the semen found in the victim and the blood sample given by the appellant in open court during the course of the trial. Admittedly, we are just beginning to integrate these advances in science and technology in the Philippine criminal justice system, so we must be cautious as we traverse these relatively uncharted waters. Fortunately, we can benefit from the wealth of persuasive jurisprudence that has developed in other jurisdictions. Specifically, the prevailing doctrine in the U.S. has proven instructive. In Daubert v. Merrell Dow,33 it was ruled that pertinent evidence based on scientifically valid principles could be used as long as it was relevant and reliable. Judges, under Daubert, were allowed greater discretion over which testimony they would allow at trial, including the introduction of new kinds of scientific techniques. DNA typing is one such novel procedure. Under Philippine law, evidence is relevant when it relates directly to a fact in issue as to induce belief in its existence or nonexistence.34 Applying the Daubert test to the case at bar, the DNA evidence obtained through PCR testing and utilizing STR analysis, and which was appreciated by the court a quo is relevant and reliable since it is reasonably based on scientifically valid principles of human genetics and molecular biology. Independently of the physical evidence of appellants semen found in the victims vaginal canal, the trial court appreciated the following circumstantial evidence as being sufficient to sustain a conviction beyond reasonable doubt: (1) Appellant and his wife were living in the house of Isabel Dawang together with the victim, Kathylyn Uba; (2) In June 1998, appellants wife lef t the house because of their frequent quarrels; (3) Appellant received from the victim, Kathylyn Uba, a letter from his estranged wife in the early morning on June 30, 1998; (4) Appellant was seen by Apolonia Wania and Beverly Denneng at 1:00 p.m. of June 30, 1998 near the kitchen of the house of Isabel Dawang, acting strangely and wearing a dirty white shirt with collar; (5) Judilyn Pas-a saw appellant going down the ladder of the house of Isabel at 12:30 p.m., wearing a dirty white shirt, and again at 1:30 p.m., this time wearing a black shirt; (6) Appellant hurriedly left when the husband of Judilyn Pas-a was approaching; (7) Salmalina Tandagan saw appellant in a dirty white shirt coming down the ladder of the house of Isabel on the day Kathylyn Uba was found dead; (8) The door leading to the second floor of the house of Isabel Dawang was tied by a rope; (9) The victim, Kathylyn Uba, lay naked in a pool of blood with her intestines protruding from her body on the second floor of the house of Isabel Dawang, with her stained pants, bra, underwear and shoes scattered along the periphery; (10) Laboratory examination revealed sperm in the victims vagina (Exhibit "H" and "J"); (11) The stained or dirty white shirt found in the c rime scene was found to be positive with blood; (12) DNA of slide, Exhibit "J" and "H", compared with the DNA profile of the appellant are identical; and (13) Appellant escaped two days after he was detained but was subsequently apprehended, such flight being indicative of guilt.35

Circumstantial evidence, to be sufficient to warrant a conviction, must form an unbroken chain which leads to a fair and reasonable conclusion that the accused, to the exclusion of others, is the perpetrator of the crime. To determine whether there is sufficient circumstantial evidence, three requisites must concur: (1) there is more than one circumstance; (2) facts on which the inferences are derived are proven; and (3) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt.36 In an attempt to exclude the DNA evidence, the appellant contends that the blood sample taken from him as well as the DNA tests were conducted in violation of his right to remain silent as well as his right against self-incrimination under Secs. 12 and 17 of Art. III of the Constitution. This contention is untenable. The kernel of the right is not against all compulsion, but against testimonial compulsion. 37 The right against self- incrimination is simply against the legal process of extracting from the lips of the accused an admission of guilt. It does not apply where the evidence sought to be excluded is not an incrimination but as part of object evidence. We ruled in People v. Rondero38 that although accused-appellant insisted that hair samples were forcibly taken from him and submitted to the National Bureau of Investigation for forensic examination, the hair samples may be admitted in evidence against him, for what is proscribed is the use of testimonial compulsion or any evidence communicative in nature acquired from the accused under duress. Hence, a person may be compelled to submit to fingerprinting, photographing, paraffin, blood and DNA, as there is no testimonial compulsion involved. Under People v. Gallarde,39 where immediately after the incident, the police authorities took pictures of the accused without the presence of counsel, we ruled that there was no violation of the right against selfincrimination. The accused may be compelled to submit to a physical examination to determine his involvement in an offense of which he is accused. It must also be noted that appellant in this case submitted himself for blood sampling which was conducted in open court on March 30, 2000, in the presence of counsel. Appellant further argues that the DNA tests conducted by the prosecution against him are unconstitutional on the ground that resort thereto is tantamount to the application of an ex-post facto law. This argument is specious. No ex-post facto law is involved in the case at bar. The science of DNA typing involves the admissibility, relevance and reliability of the evidence obtained under the Rules of Court. Whereas an ex-post facto law refers primarily to a question of law, DNA profiling requires a factual determination of the probative weight of the evidence presented. Appellants twin defense of denial and alibi cannot be sustained. The forensic DNA evidence and bloodied shirt, notwithstanding the eyewitness accounts of his presence at Isabel Dawangs house during the time when the crime was committed, undeniably link him to the June 30, 1998 incident. Appellant did not demonstrate with clear and convincing evidence an impossibility to be in two places at the same time, especially in this case where the two places are located in the same barangay.40 He lives within a one hundred (100) meter radius from the scene of the crime, and requires a mere five minute walk to reach one house from the other. This fact severely weakens his alibi. As to the second assignment of error, appellant asserts that the court a quo committed reversible error in convicting him of the crime charged. He alleges that he should be acquitted on reasonable doubt.

Appellants assertion cannot be sustained. Generally, courts should only consider and rely upon duly established evidence and never on mere conjectures or suppositions. The legal relevancy of evidence denotes "something more than a minimum of probative value," suggesting that such evidentiary relevance must contain a "plus value."41 This may be necessary to preclude the trial court from being satisfied by matters of slight value, capable of being exaggerated by prejudice and hasty conclusions. Evidence without "plus value" may be logically relevant but not legally sufficient to convict. It is incumbent upon the trial court to balance the probative value of such evidence against the likely harm that would result from its admission. The judgment in a criminal case can be upheld only when there is relevant evidence from which the court can properly find or infer that the accused is guilty beyond reasonable doubt. Proof beyond reasonable doubt requires moral certainty of guilt in order to sustain a conviction. Moral certainty is that degree of certainty that convinces and directs the understanding and satisfies the reason and judgment of those who are bound to act conscientiously upon it. It is certainty beyond reasonable doubt.42 This requires that the circumstances, taken together, should be of a conclusive nature and tendency; leading, on the whole, to a satisfactory conclusion that the accused, and no one else, committed the offense charged.43 In view of the totality of evidence appreciated thus far, we rule that the present case passes the test of moral certainty. However, as a matter of procedure, and for the purpose of meeting the requirement of proof beyond reasonable doubt, motive is essential for conviction when there is doubt as to the identity of the culprit.44 Pertinently, it must be noted that Judilyn Pas-a, first cousin of the victim, testified that she last saw the victim alive in the morning of June 30, 1998 at the house of Isabel Dawang.45 She witnessed the appellant running down the stairs of Isabels house and proceeding to the back of the same house.46 She also testified that a few days before the victim was raped and killed, the latter revealed to her that "Joel Yatar attempted to rape her after she came from the school."47 The victim told Judilyn about the incident or attempt of the appellant to rape her five days before her naked and violated body was found dead in her grandmothers house on June 25, 1998.48 In addition, Judilyn also testified that when her auntie Luz Dawang Yatar, wife of appellant, separated from her husband, "this Joel Yatar threatened to kill our family."49 According to Judilyn, who was personally present during an argument between her aunt and the appellant, the exact words uttered by appellant to his wife in the Ilocano dialect was, "If you leave me, I will kill all your family and your relatives x x x."50 These statements were not contradicted by appellant. Thus, appellants motive to sexually assault and kill the victim was evident in the instant case. It is a rule in criminal la w that motive, being a state of mind, is established by the testimony of witnesses on the acts or statements of the accused before or immediately after the commission of the offense, deeds or words that may express it or from which his motive or reason for committing it may be inferred.51 Accordingly, we are convinced that the appellant is guilty beyond reasonable doubt of the special complex crime of rape with homicide. Appellant sexually assaulted Kathylyn Uba, and by reason or on the occasion thereof, in order to conceal his lustful deed, permanently sealed the victims lips by stabbing her repeatedly, thereby causing her untimely demise. The following are the elements constitutive of rape with homicide: (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 the occasion of such carnal knowledge by means of force, threat or intimidation, appellant killed the woman. 52 However, in rape committed by

close kin, such as the victims father, step-father, uncle, or the common-law spouse of her mother, it is not necessary that actual force or intimidation be employed.53 Moral influence or ascendancy takes the place of violence and intimidation.54 The fact that the victims hymen is intact does not negate a finding that rape was committed as mere entry by the penis into the lips of the female genital organ, even without rupture or laceration of the hymen, suffices for conviction of rape. 55 The strength and dilatability of the hymen are invariable; it may be so elastic as to stretch without laceration during intercourse. Absence of hymenal lacerations does not disprove sexual abuse especially when the victim is of tender age.56 In the case at bar, appellant is the husband of the victims aunt. He is seven years older than the victim Kathylyn Uba. Before he and his wife separated, appellant lived in the house of his mother-in-law, together with the victim and his wife. After the separation, appellant moved to the house of his parents, approximately one hundred (100) meters from his mother-in-laws house. Being a relative by affinity within the third civil degree, he is deemed in legal contemplation to have moral ascendancy over the victim. Under Article 266-B of the Revised Penal Code, the penalty of death is imposed when by reason or on the occasion of the rape, homicide is committed. Although three (3) Justices of this Court maintain their position that R.A. 7659 is unconstitutional insofar as it prescribes the death penalty, they nevertheless submit to the ruling of the majority that the law is not unconstitutional, and that the death penalty can be lawfully imposed in the case at bar. As to damages, civil indemnity ex delicto of P100,000.00,57 actual damages incurred by the family of the victim that have been proved at the trial amounting to P93,190.00,58 and moral damages of P75,000.0059 should be awarded in the light of prevailing law and jurisprudence. Exemplary damages cannot be awarded as part of the civil liability since the crime was not committed with one or more aggravating circumstances.60 WHEREFORE, in view of the foregoing, the Decision of the RTC of Bulanao, Tabuk, Kalinga, Branch 25 in Criminal Case No. 35-98, sentencing appellant Joel Yatar alias "Kawit" to Death for the special complex crime of Rape with Homicide is AFFIRMED with the MODIFICATION that he be ORDERED to pay the family of the victim Kathylyn Uba civil indemnity ex delicto in the amount of P100,000.00, P93,190.00 in actual damages and P75,000.00 in moral damages. The award of exemplary damages is DELETED. Upon the finality of this Decision and in accordance with Art. 83 of the Revised Penal Code, as amended by Sec. 25 of Rep. Act No. 7659, let the records of this case be forthwith forwarded to the President of the Philippines for the possible exercise of the pardoning power. Costs de oficio. SO ORDERED. EN BANC [A.M. No. MTJ-02-1431. May 9, 2003] SPO2 JOSE B. YAP, complainant, vs. JUDGE AQUILINO A. INOPIQUEZ, JR., respondent. DECISION
SANDOVAL-GUTIERREZ, J.:

Before us is the administrative complaint filed by SPO2 Jose B. Yap of Matag-ob, Leyte Police Station against Judge Aquilino A. Inopiquez, Jr. of the Municipal Circuit Trial Court (MCTC) of Kananga-Matag-ob, same province, for grave abuse of authority and acts unbecoming a judge. In his sworn affidavit-complaint dated July 12, 1999, complainant alleged that on March 6, 1999 (Saturday), pursuant to an alias arrest warrant, he arrested Antonio Laurente, Jr., the accused in Criminal Case No. 8458 for violation of B.P. Blg. 22, pending in the Metropolitan Trial Court in Cities (MTCC) at Ormoc City. On the same day, March 6, respondent judge issued an Order of Release on the basis of a cash bond posted on March 8, 1999, as shown by the corresponding Official Receipt No. 9215725. Also on March 6, respondent judge issued another Order of Release, this time based on a property bond. This bond was subscribed and sworn to before him on March 10, 1999 (Wednesday) by bondsman Antonio Laurente, Sr. However, this date was changed to March 6. Complainant claimed that respondent judge issued the two (2) Orders of Release on March 6, 1999 although there was yet no cash bond or property bond, for actually the cash bond was posted on March 8, while the property bond was filed on March 10. Clearly, respondent judge ordered the release of the accused prematurely. Complainant finally alleged that the accused is the relative of respondents wife. On October 27, 1999, respondent judge filed his comment. He denied the charges, asserting that the relationship of his wife to the accused has no bearing to his judicial duties of approving the bail and issuing the Order of Release. On March 6, 1999, when accused Laurente, Jr. was arrested, his brother Silverio Laurente and one Salvador Almoroto went to respondents residence and presented O.R. No. 9215725 showing that on that date, a cash bond was posted with the office of respondents Clerk of Court Servando O. Veloso, Jr. The money in the amount of P18,000.00 belonged to Almoroto. Silverio Laurente also handed to respondent judge, for his signature, the Order of Release dated March 7, 1999 prepared by Clerk of Court Veloso. The latter placed the date March 7 instead of March 6 because he thought respondent judge would only be available on that date. Also on the same day, March 6, minutes after Silverio Laurente and Almoroto left, Antonio Laurente, Sr., accuseds father, an d Court Interpreter Pedro M. Beltran arrived. Laurente, Sr. presented to respondent judge a property bond and an Order of Release, also dated March 6, 1999, both prepared by Beltran. Respondent judge told them that he had already approved the cash bond and signed the corresponding Order of Release. However, Laurente, Sr. pleaded to him to approve the property bond in order that the money utilized as cash bond could be returned to Almoroto to avoid paying interest thereon. After examining the property bond, respondent judge approved the same and signed another Order of Release. Respondent judge claimed that O.R. No. 9215725 was actually issued to Almoroto on March 6 after he had posted the cash bond that same day. Respondent judge insisted though that it was Clerk of Court Veloso who altered the date appearing thereon, from March 6 to March 8, 1999, since complainant angrily protested that Veloso should not issue an official receipt dated March 6, 1999 as it was a Saturday, a non-working day. In our Resolution dated March 21, 2001, we referred the instant case to Executive Judge Fortunito L. Madrona, Regional Trial Court (RTC), Ormoc City, for investigation, report and recommendation. In his Report and Recommendation dated September 3, 2001, Executive Judge Madrona found that there is no substantial basis in the claim of complainant about the alleged anomaly in the issuance of two Orders of Release by the respondent judge. Thus, Executive Judge Madrona recommended the dismissal of the charges for lack of merit. Executive Judge Madrona further
[1] [2] [3]

recommended that respondent judge be reprimanded for his failure to avoid the appearance of impropriety by exercising proper safeguards in the performance of his official duties, considering that accused Laurente, Jr. is his relative by affinity. On this point, Executive Judge Madrona was referring to respondent judges failure to observe Section 11, Rule 114 of the Revised Rules of Criminal Procedure, as amended, quoted as follows: Sec. 11. Property bond, how posted. A property bond is an undertaking constituted as lien on the real property given as security for the amount of the bail. Within ten (10) days after the approval of the bond, the accused shall cause the annotation of the lien on the certificate of title on file with the Registry of Deeds if the land is registered, or if unregistered, in the Registration Book on the space provided therefore, in the Registry of Deeds for the province or city where the land lies, and on the corresponding tax declaration in the office of the provincial, city and municipal assessor concerned. Within the same period, the accused shall submit to the court his compliance and his failure to do so shall be sufficient cause for the cancellation of the property bind and his re-arrest and detention. It appears that respondent judge did not require the accused to cause the annotation of the lien (property bond) in the Registration Book of the Registry of Deeds and on the corresponding tax declaration in the office of the provincial, city or municipal assessor concerned. Executive Judge Madronas recommendation to dismiss the charges is based on his findings quoted as follows: (12) On this particular factual issue of the real date of the official receipt for the cash bond, which the undersigned finds crucial in the overall appreciation of the herein complaint, it is the opinion of the undersigned that the version of testimony of Mr. Veloso is credible. That is, the date of issuance of the official receipt was actually March 6, 1999 but that he caused it to change to March 8, 1999 affixing thereon his counter initial for the reason, according to him, that when complainant went to see him on March 8, he was protesting to him about the date, and to avoid further argument he did the alteration. For this indiscretion on Velosos part, he should be made to answer administratively. xxx (14) In short, the whole complaint boils down to an appreciation of the factual issues which have been substantially presented in the foregoing. As to whether there was really cash bond being posted on March 6, 1999 as could be attested to in the official receipt issued therefor and which could validate the first Order of Release issued by the respondent judge the undersigned finds in the affirmative. It is the words of Mr. Veloso, the Clerk of Court who issued the official receipt for the cash, bond as against the words of the complainant. In the absence of strong and convincing evidence to the contrary, the explanation of Mr. Veloso as regards his official acts had to be given credence as one coming from one whose official duty is presumed to have been regularly performed. (Sec. 3 (m), Rule 131, Rules of Court) (15) The factual issue surrounding the date of issuance of the official receipt for the cash bond having been resolved, there is no substantial basis in the claim of complainant about alleged anomaly in the issuance of the two Orders of Release by the respondent judge. Complainants basis is reduced only to mere suspicion. On October 10, 2001, this Court referred Executive Judge Madronas Report and Recommendation to the Office of the Court Administrator (OCA). In her Report dated March 5, 2002, Deputy Court Administrator Zenaida N. Elepao, adopted the findings of Executive Judge Madrona but recommended that: 1. The complaint against respondent judge be re-docketed as an administrative case and that he be ordered to pay a fine of Three Thousand Pesos (P3,000.00) for giving unwarranted favor to the accused who is a second cousin of his wife, by approving the two (2) bail bonds and issuing the two (2) release orders;

2. Clerk of Court Servando O. Veloso, Jr. be directed to explain within thirty days from notice why no disciplinary sanction should be imposed on him for: a) altering the date of the official receipt of the cash bond; and (b) failure to cancel the cash bond and the first Order of Release after the approval of the property bond; 3. Interpreter Pedro M. Beltran be ordered to: (a) explain within thirty days from notice why he should not be administratively sanctioned for preparing and processing bail bonds without the authority of his presiding judge; and (b) immediately cease and desist from preparing and processing bail bonds unless duly authorized. In the same Report, Deputy Court Administrator Elepao stated that respondent judge was previously adjudged guilty of abuse of authority and gross ignorance of the law and fined in the amount of Twenty Thousand Pesos (P20,000.00) and suspended without pay for three months. On May 28, 2002, we issued a Resolution approving respondent judges application for optional retirement in A.M. No. 10822 RET but directing that his retirement benefits be withheld pending the resolution of the instant case. On April 24, 2002, we resolved to (a) re-docket the case as a regular administrative matter; (b) direct Clerk of Court Veloso and Interpreter Beltran to submit their explanations as recommended by the OCA; and (c) require the parties to manifest, within twenty (20) days from notice, whether they are submitting the case for decision on the basis of the pleadings. On July 22, 2002, respondent judge filed his Manifestation that he is willing to have the case so decided. To date, or after almost one year, complainant has not yet submitted the required manifestation. Therefore, he is deemed to have agreed that the case be decided on the basis of the pleadings. Clerk of Court Veloso and Interpreter Beltran submitted the required explanations. Clerk of Court Veloso explains that he altered the date of O.R. No. 9215725 from March 6 to March 8, 1999 after complainant went to his office and inquired why it was dated March 6 (Saturday), a non-working day. Veloso stated that there was nothing wrong in rendering service on a Saturday. However, complainant refused to listen and continued to berate him. To avoid further arguments, he superimposed 8 over 6. He altered the date, believing there was nothing irregular in doing so because the cash bond had already been released to the bondsman and substituted with a property bond. Beltran states that he has been assisting litigants in the preparation of bail bonds with the knowledge of respondent judge and Clerk of Court Veloso. He does not charge fees for this service because he believes that as a court employee, it is his duty to assist anyone who seeks his help. Upon receipt of our April 24, 2002 Resolution, he immediately ceased assisting any litigant in the preparation of bail bonds. He now earnestly seeks the compassion and understanding of this Court. On January 10, 2003, Deputy Court Administrator Elepao, submitted a Report reiterating her recommendation that respondent judge be fined in the amount of Three Thousand Pesos (P3,000.00) and recommending further that Clerk of Court Veloso and Interpreter Beltran be fined in the amount of One Thousand Pesos (P1,000.00), each, with a warning that a repetition of the same acts shall be dealt with more severely. The sole issue for our resolution is whether respondent judge ordered the release of accused Antonio Laurente, Jr. although the cash or property bond for his temporary liberty had not yet been posted and approved. Section 14, Rule 114 of the Revised Rules of Criminal Procedure, as amended, provides that if the accused is arrested in a province, city or municipality other than where the case is pending, bail may be filed with any RTC of said place, or, if no judge thereof is available, with any metropolitan trial judge, municipal trial judge or municipal circuit trial judge therein.
[4]

Criminal Case No. 9458 against Antonio Laurente, Jr. was filed with the MTCC of Ormoc City but he was arrested in Matagob, Leyte. Since there was no RTC in Matag-ob, respondent judge, as Presiding Judge of MCTC, Kananga-Matag-ob, was then authorized under Rule 114 to approve the bail of Antonio Laurente, Jr. and order his release. Complainant contends that the cash bond of P18,000.00 was posted by Almoroto not on March 6, 1999, when the accused was released, but on March 8, 1999 as shown by the corresponding O.R. No. 9215725. To justify the issuance of the Order of Release on March 6, respondent judge would want us to believe that O.R. No. 9215725 was issued on March 6, not March 8, 1999, the date appearing thereon. In fact, he insisted that it was Clerk of Court Veloso who altered the date of the O.R. from March 6 to March 8. It can be readily discerned that respondent judge, in order to cover up his misdeed, even laid the blame on his Clerk of Court who, out of apparent loyalty to him, admitted having changed the date in order to make it appear that the cash bond was posted on March 6. Clerk of Court Velosos pretext that he gave in to complainants demand to avoid further arguments is too flimsy and unworthy of belief. Relative to the property bond, respondent judge maintains that it was filed also on the same day, March 6, minutes after Almoroto posted the cash bond. Consequently, he issued the corresponding Order of Release also on March 6. We observe that the property bond was subscribed and sworn to by bondsman Antonio Laurente, Sr. before respondent judge on March 10, 1999 (Wednesday). However, very clear to the naked eye is that 6 was superimposed on 10 th (day of March) to make it appear that the bail was accomplished and filed on March 6. The jurat positively shows that the property bond, in lieu of the cash bond, was filed, not on March 6, but on March 10, 1999, or four (4) days after respondent judge issued his second Order of Release on March 6, 1999. It is a basic rule of evidence that between documentary and oral evidence, the former carries more weight. The cash bond was posted on March 8 (Monday), not on March 6, 1999, as shown by O.R. No. 9215725. The property bond, in substitution of the cash bond, was filed, not on March 6, but on March 10 (Wednesday), as shown by the jurat. Both Orders of Release were issued on March 6 (Saturday). Therefore, there is no doubt that respondent judge ordered the release of the accused despite the fact that there was yet no bail filed and approved for his provisional liberty. That respondent judge issued the release orders prematurely is not difficult to understand. He admitted that accused Antonio Laurente, Jr. is his wifes relative. And in his desire to help the accused and please his wife, he would even involve his Clerk of Court and Interpreter. Considering the facts of this case, it is safe to conclude that they were constrained to comply with his instructions. Hence, they should have been spared from any administrative sanction. Section 3, Rule 114 of the Revised Rules of Criminal Procedure, as amended, provides that an accused may only be released on bail after the corresponding cash or property bond has been properly posted. Respondent judge violated this Rule when he issued the two Orders of Release on March 6, 1999 in favor of accused Antonio Laurente, Jr. despite the fact that the corresponding cash or property bond was posted only thereafter, or on March 8 and March 10, 1999, respectively. Moreover, records show that upon approval of the property bond filed after the release of the accused, respondent judge failed to order the cancellation of the cash bond. Neither did he require the accused, within ten (10) days from the approval of the bond, to cause the annotation of the bail as lien in the Registration Book of the Registry of Deeds and on the corresponding tax declaration in the office of the provincial, city or municipal assessor concerned, pursuant to Section 11, Rule 114 of the Revised Rules of Criminal Procedure, as amended, quoted earlier.
[5] [6]

We have held that the exacting standards of conduct demanded from judges are designed to promote public confidence in the integrity and impartiality of the judiciary. When the judge himself becomes a transgressor of any law which he is sworn to apply, he places his office in disrepute, encourages disrespect for the law and impairs public confidence in the integrity of the judiciary itself. This Court cannot countenance such act as it erodes the publics trust in the judiciary. In the instant case, respondent not only failed to perform his judicial duties in accordance with the rules, he acted in bad faith. Despite the fact that he ordered the release of a person lawfully arrested even before he had posted bail, he tried to hide his culpability by altering the dates of the cash bond and property bond. His actuations constitute gross misconduct which merits sanctions even if he already retired on January 1, 2002. In Canson vs. Garchitorena, this Court explained the concept of gross misconduct, thus: Misconduct is defined as any unlawful conduct on the part of a person concerned in the administration of justice prejudicial to the rights of parties or to the right determination of the cause (Blacks Law Dictionary, Fourth Ed., p. 1150). It generally means wrongful, improper, unlawful conduct motivated by a premeditated, obstinate or intentional purpose (Words and Phrases, Vol. 27, p. 466, citing Sewell vs. Sharp, La App. 102 So 2d 259, 261). The term, however, does not necessarily imply corruption or criminal intent (Ibid., citing State Ex Rel Asbaugh v. Bahr, 40 N.E. 2d 677, 680, 68 Ohio App. 308). On the other hand, the term gross connotes something "out of all measure; beyond allowance; not to be excused; flagrant; shameful" (Blacks Law Dictionary, Fourth Ed., p. 832). For administrative liability to attach it must be established that the respondent was moved by bad faith, dishonesty, hatred or some other like motive (Atty. Antonio T. Guerrero v. Hon. Adriano Villamor, AM No. RTJ-90-483; George Carlos v. Hon. Adriano Villamor, AM No. RTJ-90617, 25 September 1998). As defined Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and con scious 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 (Spiegel v. Beacon Participation, 8 NE 2nd Series, 895, 1007). It contemplates a state of mind affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior purposes (Air France v. Carrascoso, 18 SCRA 155, 166-167). Evident bad faith connotes a manifest deliberate intent on the part of the accused to do wrong or cause damage (Llorente, Jr. v. Sandiganbayan, 287 SCRA 382 [1998], citing Marcelo v. Sandiganbayan, 185 SCRA 346 [1990]). Gross misconduct under Section 8(3), Rule 140 of the Revised Rules of Court, as amended, is classified as a serious charge punishable by any of the sanctions provided under Section 11 of the same Rule, thus: Sec. 11. Sanctions. A. If the respondent is guilty of a serious charge, any of the following sanctions may be imposed: 1. Dismissal from the service, forfeiture of all or part of the benefits as the Court may determine, and disqualification from reinstatement or appointment to any public office, including government-owned or controlled corporations; Provided, however, that the forfeiture of benefits shall in no case include accrued leave benefits; 2. Suspension from office without salary and other benefits for more than three (3) but not exceeding six (6) months; or 3. A fine of more than P20,000.00 but not exceeding P40,000.00. WHEREFORE, Judge AQUILINO A. INOPIQUEZ, JR. is declared GUILTY of GROSS MISCONDUCT and is FINED in the amount of THIRTY THOUSAND PESOS (P30,000.00) to be deducted from his retirement benefits. SO ORDERED.
[7] [8] [9] [10] [11]

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-23893 October 29, 1968 VILLA REY TRANSIT, INC., plaintiff-appellant, vs. EUSEBIO E. FERRER, PANGASINAN TRANSPORTATION CO., INC. and PUBLIC SERVICE COMMISSION,defendants. EUSEBIO E. FERRER and PANGASINAN TRANSPORTATION CO., INC., defendants-appellants. PANGASINAN TRANSPORTATION CO., INC., third-party plaintiff-appellant, vs. JOSE M. VILLARAMA, third-party defendant-appellee. Chuidian Law Office for plaintiff-appellant. Bengzon, Zarraga & Villegas for defendant-appellant / third-party plaintiff-appellant. Laurea & Pison for third-party defendant-appellee. ANGELES, J.: This is a tri-party appeal from the decision of the Court of First Instance of Manila, Civil Case No. 41845, declaring null and void the sheriff's sale of two certificates of public convenience in favor of defendant Eusebio E. Ferrer and the subsequent sale thereof by the latter to defendant Pangasinan Transportation Co., Inc.; declaring the plaintiff Villa Rey Transit, Inc., to be the lawful owner of the said certificates of public convenience; and ordering the private defendants, jointly and severally, to pay to the plaintiff, the sum of P5,000.00 as and for attorney's fees. The case against the PSC was dismissed. The rather ramified circumstances of the instant case can best be understood by a chronological narration of the essential facts, to wit: Prior to 1959, Jose M. Villarama was an operator of a bus transportation, under the business name of Villa Rey Transit, pursuant to certificates of public convenience granted him by the Public Service Commission (PSC, for short) in Cases Nos. 44213 and 104651, which authorized him to operate a total of thirty-two (32) units on various routes or lines from Pangasinan to Manila, and vice-versa. On January 8, 1959, he sold the aforementioned two certificates of public convenience to the Pangasinan Transportation Company, Inc. (otherwise known as Pantranco), for P350,000.00 with the condition, among others, that the seller (Villarama) "shall not for a period of 10 years from the date of this sale, apply for any TPU service identical or competing with the buyer." Barely three months thereafter, or on March 6, 1959: a corporation called Villa Rey Transit, Inc. (which shall be referred to hereafter as the Corporation) was organized with a capital stock of P500,000.00 divided into 5,000 shares of the par value of P100.00 each; P200,000.00 was the subscribed stock; Natividad R. Villarama (wife of Jose M. Villarama) was one of the incorporators, and she subscribed for P1,000.00; the balance of P199,000.00 was subscribed by the brother and sister-in-law of Jose M. Villarama; of the subscribed capital stock, P105,000.00 was paid to the treasurer of the corporation, who was Natividad R. Villarama.

In less than a month after its registration with the Securities and Exchange Commission (March 10, 1959), the Corporation, on April 7, 1959, bought five certificates of public convenience, forty-nine buses, tools and equipment from one Valentin Fernando, for the sum of P249,000.00, of which P100,000.00 was paid upon the signing of the contract; P50,000.00 was payable upon the final approval of the sale by the PSC; P49,500.00 one year after the final approval of the sale; and the balance of P50,000.00 "shall be paid by the BUYER to the different suppliers of the SELLER." The very same day that the aforementioned contract of sale was executed, the parties thereto immediately applied with the PSC for its approval, with a prayer for the issuance of a provisional authority in favor of the vendee Corporation to operate the service therein involved.1 On May 19, 1959, the PSC granted the provisional permit prayed for, upon the condition that "it may be modified or revoked by the Commission at any time, shall be subject to whatever action that may be taken on the basic application and shall be valid only during the pendency of said application." Before the PSC could take final action on said application for approval of sale, however, the Sheriff of Manila, on July 7, 1959, levied on two of the five certificates of public convenience involved therein, namely, those issued under PSC cases Nos. 59494 and 63780, pursuant to a writ of execution issued by the Court of First Instance of Pangasinan in Civil Case No. 13798, in favor of Eusebio Ferrer, plaintiff, judgment creditor, against Valentin Fernando, defendant, judgment debtor. The Sheriff made and entered the levy in the records of the PSC. On July 16, 1959, a public sale was conducted by the Sheriff of the said two certificates of public convenience. Ferrer was the highest bidder, and a certificate of sale was issued in his name. Thereafter, Ferrer sold the two certificates of public convenience to Pantranco, and jointly submitted for approval their corresponding contract of sale to the PSC.2 Pantranco therein prayed that it be authorized provisionally to operate the service involved in the said two certificates. The applications for approval of sale, filed before the PSC, by Fernando and the Corporation, Case No. 124057, and that of Ferrer and Pantranco, Case No. 126278, were scheduled for a joint hearing. In the meantime, to wit, on July 22, 1959, the PSC issued an order disposing that during the pendency of the cases and before a final resolution on the aforesaid applications, the Pantranco shall be the one to operate provisionally the service under the two certificates embraced in the contract between Ferrer and Pantranco. The Corporation took issue with this particular ruling of the PSC and elevated the matter to the Supreme Court,3 which decreed, after deliberation, that until the issue on the ownership of the disputed certificates shall have been finally settled by the proper court, the Corporation should be the one to operate the lines provisionally. On November 4, 1959, the Corporation filed in the Court of First Instance of Manila, a complaint for the annulment of the sheriff's sale of the aforesaid two certificates of public convenience (PSC Cases Nos. 59494 and 63780) in favor of the defendant Ferrer, and the subsequent sale thereof by the latter to Pantranco, against Ferrer, Pantranco and the PSC. The plaintiff Corporation prayed therein that all the orders of the PSC relative to the parties' dispute over the said certificates be annulled. In separate answers, the defendants Ferrer and Pantranco averred that the plaintiff Corporation had no valid title to the certificates in question because the contract pursuant to which it acquired them from Fernando was subject to a suspensive condition the approval of the PSC which has not yet been fulfilled, and, therefore, the Sheriff's levy and the consequent

sale at public auction of the certificates referred to, as well as the sale of the same by Ferrer to Pantranco, were valid and regular, and vested unto Pantranco, a superior right thereto. Pantranco, on its part, filed a third-party complaint against Jose M. Villarama, alleging that Villarama and the Corporation, are one and the same; that Villarama and/or the Corporation was disqualified from operating the two certificates in question by virtue of the aforementioned agreement between said Villarama and Pantranco, which stipulated that Villarama "shall not for a period of 10 years from the date of this sale, apply for any TPU service identical or competing with the buyer." Upon the joinder of the issues in both the complaint and third-party complaint, the case was tried, and thereafter decision was rendered in the terms, as above stated. As stated at the beginning, all the parties involved have appealed from the decision. They submitted a joint record on appeal. Pantranco disputes the correctness of the decision insofar as it holds that Villa Rey Transit, Inc. (Corporation) is a distinct and separate entity from Jose M. Villarama; that the restriction clause in the contract of January 8, 1959 between Pantranco and Villarama is null and void; that the Sheriff's sale of July 16, 1959, is likewise null and void; and the failure to award damages in its favor and against Villarama. Ferrer, for his part, challenges the decision insofar as it holds that the sheriff's sale is null and void; and the sale of the two certificates in question by Valentin Fernando to the Corporation, is valid. He also assails the award of P5,000.00 as attorney's fees in favor of the Corporation, and the failure to award moral damages to him as prayed for in his counterclaim. The Corporation, on the other hand, prays for a review of that portion of the decision awarding only P5,000.00 as attorney's fees, and insisting that it is entitled to an award of P100,000.00 by way of exemplary damages. After a careful study of the facts obtaining in the case, the vital issues to be resolved are: (1) Does the stipulation between Villarama and Pantranco, as contained in the deed of sale, that the former "SHALL NOT FOR A PERIOD OF 10 YEARS FROM THE DATE OF THIS SALE, APPLY FOR ANY TPU SERVICE IDENTICAL OR COMPETING WITH THE BUYER," apply to new lines only or does it include existing lines?; (2) Assuming that said stipulation covers all kinds of lines, is such stipulation valid and enforceable?; (3) In the affirmative, that said stipulation is valid, did it bind the Corporation? For convenience, We propose to discuss the foregoing issues by starting with the last proposition. The evidence has disclosed that Villarama, albeit was not an incorporator or stockholder of the Corporation, alleging that he did not become such, because he did not have sufficient funds to invest, his wife, however, was an incorporator with the least subscribed number of shares, and was elected treasurer of the Corporation. The finances of the Corporation which, under all concepts in the law, are supposed to be under the control and administration of the treasurer keeping them as trust fund for the Corporation, were, nonetheless, manipulated and disbursed as if they were the private funds of Villarama, in such a way and extent that Villarama appeared to be the actual owner-treasurer of the business without regard to the rights of the stockholders. The following testimony of Villarama,4 together with the other evidence on record, attests to that effect: Q. Doctor, I want to go back again to the incorporation of the Villa Rey Transit, Inc. You heard the testimony presented here by the bank regarding the initial opening deposit of ONE HUNDRED FIVE THOUSAND PESOS, of which amount Eighty-Five Thousand Pesos was a check drawn by yourself personally. In the direct examination you told the Court that the reason you drew a check for Eighty-Five Thousand Pesos was because you and your wife, or your wife, had spent the money of the stockholders given to her for incorporation. Will you please tell the Honorable

Court if you knew at the time your wife was spending the money to pay debts, you personally knew she was spending the money of the incorporators? A. You know my money and my wife's money are one. We never talk about those things. Q. Doctor, your answer then is that since your money and your wife's money are one money and you did not know when your wife was paying debts with the incorporator's money? A. Because sometimes she uses my money, and sometimes the money given to her she gives to me and I deposit the money. Q. Actually, aside from your wife, you were also the custodian of some of the incorporators here, in the beginning? A. Not necessarily, they give to my wife and when my wife hands to me I did not know it belonged to the incorporators. Q. It supposes then your wife gives you some of the money received by her in her capacity as treasurer of the corporation? A. Maybe. Q. What did you do with the money, deposit in a regular account? A. Deposit in my account. Q. Of all the money given to your wife, she did not receive any check? A. I do not remember. Q. Is it usual for you, Doctor, to be given Fifty Thousand Pesos without even asking what is this? xxx xxx xxx JUDGE: Reform the question. Q. The subscription of your brother-in-law, Mr. Reyes, is Fifty-Two Thousand Pesos, did your wife give you Fiftytwo Thousand Pesos? A. I have testified before that sometimes my wife gives me money and I do not know exactly for what. The evidence further shows that the initial cash capitalization of the corporation of P105,000.00 was mostly financed by Villarama. Of the P105,000.00 deposited in the First National City Bank of New York, representing the initial paid-up capital of the Corporation, P85,000.00 was covered by Villarama's personal check. The deposit slip for the said amount of P105,000.00 was admitted in evidence as Exh. 23, which shows on its face that P20,000.00 was paid in cash and P85,000.00 thereof was covered by Check No. F-50271 of the First National City Bank of New York. The testimonies of Alfonso Sancho5 and Joaquin Amansec,6 both employees of said bank, have proved that the drawer of the check was Jose Villarama himself. Another witness, Celso Rivera, accountant of the Corporation, testified that while in the books of the corporation there appears an entry that the treasurer received P95,000.00 as second installment of the paid-in subscriptions, and, subsequently, also P100,000.00 as the first installment of the offer for second subscriptions worth P200,000.00 from the original subscribers, yet Villarama directed him (Rivera) to make vouchers liquidating the sums. 7 Thus, it was made to appear that the P95,000.00 was delivered to Villarama in payment for equipment purchased from him, and the P100,000.00 was loaned as advances to the stockholders. The said accountant, however, testified that he was not aware of any amount of

money that had actually passed hands among the parties involved,8 and actually the only money of the corporation was the P105,000.00 covered by the deposit slip Exh. 23, of which as mentioned above, P85,000.00 was paid by Villarama's personal check. Further, the evidence shows that when the Corporation was in its initial months of operation, Villarama purchased and paid with his personal checks Ford trucks for the Corporation. Exhibits 20 and 21 disclose that the said purchases were paid by Philippine Bank of Commerce Checks Nos. 992618-B and 993621-B, respectively. These checks have been sufficiently established by Fausto Abad, Assistant Accountant of Manila Trading & Supply Co., from which the trucks were purchased9 and Aristedes Solano, an employee of the Philippine Bank of Commerce,10 as having been drawn by Villarama. Exhibits 6 to 19 and Exh. 22, which are photostatic copies of ledger entries and vouchers showing that Villarama had comingled his personal funds and transactions with those made in the name of the Corporation, are very illuminating evidence. Villarama has assailed the admissibility of these exhibits, contending that no evidentiary value whatsoever should be given to them since "they were merely photostatic copies of the originals, the best evidence being the originals themselves." According to him, at the time Pantranco offered the said exhibits, it was the most likely possessor of the originals thereof because they were stolen from the files of the Corporation and only Pantranco was able to produce the alleged photostat copies thereof. Section 5 of Rule 130 of the Rules of Court provides for the requisites for the admissibility of secondary evidence when the original is in the custody of the adverse party, thus: (1) opponent's possession of the original; (2) reasonable notice to opponent to produce the original; (3) satisfactory proof of its existence; and (4) failure or refusal of opponent to produce the original in court.11 Villarama has practically admitted the second and fourth requisites.12 As to the third, he admitted their previous existence in the files of the Corporation and also that he had seen some of them.13 Regarding the first element, Villarama's theory is that since even at the time of the issuance of the subpoena duces tecum, the originals were already missing, therefore, the Corporation was no longer in possession of the same. However, it is not necessary for a party seeking to introduce secondary evidence to show that the original is in the actual possession of his adversary. It is enough that the circumstances are such as to indicate that the writing is in his possession or under his control. Neither is it required that the party entitled to the custody of the instrument should, on being notified to produce it, admit having it in his possession.14 Hence, secondary evidence is admissible where he denies having it in his possession. The party calling for such evidence may introduce a copy thereof as in the case of loss. For, among the exceptions to the best evidence rule is "when the original has been lost, destroyed, or cannot be produced in court."15 The originals of the vouchers in question must be deemed to have been lost, as even the Corporation admits such loss. Viewed upon this light, there can be no doubt as to the admissibility in evidence of Exhibits 6 to 19 and 22. Taking account of the foregoing evidence, together with Celso Rivera's testimony,16 it would appear that: Villarama supplied the organization expenses and the assets of the Corporation, such as trucks and equipment;17there was no actual payment by the original subscribers of the amounts of P95,000.00 and P100,000.00 as appearing in the books;18 Villarama made use of the money of the Corporation and deposited them to his private accounts;19 and the Corporation paid his personal accounts.20

Villarama himself admitted that he mingled the corporate funds with his own money.21 He also admitted that gasoline purchases of the Corporation were made in his name22 because "he had existing account with Stanvac which was properly secured and he wanted the Corporation to benefit from the rebates that he received."23 The foregoing circumstances are strong persuasive evidence showing that Villarama has been too much involved in the affairs of the Corporation to altogether negative the claim that he was only a part-time general manager. They show beyond doubt that the Corporation is his alter ego. It is significant that not a single one of the acts enumerated above as proof of Villarama's oneness with the Corporation has been denied by him. On the contrary, he has admitted them with offered excuses. Villarama has admitted, for instance, having paid P85,000.00 of the initial capital of the Corporation with the lame excuse that "his wife had requested him to reimburse the amount entrusted to her by the incorporators and which she had used to pay the obligations of Dr. Villarama (her husband) incurred while he was still the owner of Villa Rey Transit, a single proprietorship." But with his admission that he had received P350,000.00 from Pantranco for the sale of the two certificates and one unit,24 it becomes difficult to accept Villarama's explanation that he and his wife, after consultation,25 spent the money of their relatives (the stockholders) when they were supposed to have their own money. Even if Pantranco paid the P350,000.00 in check to him, as claimed, it could have been easy for Villarama to have deposited said check in his account and issued his own check to pay his obligations. And there is no evidence adduced that the said amount of P350,000.00 was all spent or was insufficient to settle his prior obligations in his business, and in the light of the stipulation in the deed of sale between Villarama and Pantranco that P50,000.00 of the selling price was earmarked for the payments of accounts due to his creditors, the excuse appears unbelievable. On his having paid for purchases by the Corporation of trucks from the Manila Trading & Supply Co. with his personal checks, his reason was that he was only sharing with the Corporation his credit with some companies. And his main reason for mingling his funds with that of the Corporation and for the latter's paying his private bills is that it would be more convenient that he kept the money to be used in paying the registration fees on time, and since he had loaned money to the Corporation, this would be set off by the latter's paying his bills. Villarama admitted, however, that the corporate funds in his possession were not only for registration fees but for other important obligations which were not specified.26 Indeed, while Villarama was not the Treasurer of the Corporation but was, allegedly, only a part-time manager,27he admitted not only having held the corporate money but that he advanced and lent funds for the Corporation, and yet there was no Board Resolution allowing it.28 Villarama's explanation on the matter of his involvement with the corporate affairs of the Corporation only renders more credible Pantranco's claim that his control over the corporation, especially in the management and disposition of its funds, was so extensive and intimate that it is impossible to segregate and identify which money belonged to whom. The interference of Villarama in the complex affairs of the corporation, and particularly its finances, are much too inconsistent with the ends and purposes of the Corporation law, which, precisely, seeks to separate personal responsibilities from corporate undertakings. It is the very essence of incorporation that the acts and conduct of the corporation be carried out in its own corporate name because it has its own personality.

The doctrine that a corporation is a legal entity distinct and separate from the members and stockholders who compose it is recognized and respected in all cases which are within reason and the law.29 When the fiction is urged as a means of perpetrating a fraud or an illegal act or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, the achievement or perfection of a monopoly or generally the perpetration of knavery or crime,30 the veil with which the law covers and isolates the corporation from the members or stockholders who compose it will be lifted to allow for its consideration merely as an aggregation of individuals. Upon the foregoing considerations, We are of the opinion, and so hold, that the preponderance of evidence have shown that the Villa Rey Transit, Inc. is an alter ego of Jose M. Villarama, and that the restrictive clause in the contract entered into by the latter and Pantranco is also enforceable and binding against the said Corporation. For the rule is that a seller or promisor may not make use of a corporate entity as a means of evading the obligation of his covenant.31 Where the Corporation is substantially the alter ego of the covenantor to the restrictive agreement, it can be enjoined from competing with the covenantee.32 The Corporation contends that even on the supposition that Villa Rey Transit, Inc. and Villarama are one and the same, the restrictive clause in the contract between Villarama and Pantranco does not include the purchase of existing lines but it only applies to application for the new lines. The clause in dispute reads thus: (4) The SELLER shall not, for a period of ten (10) years from the date of this sale apply for any TPU service identical or competing with the BUYER. (Emphasis supplied) As We read the disputed clause, it is evident from the context thereof that the intention of the parties was to eliminate the seller as a competitor of the buyer for ten years along the lines of operation covered by the certificates of public convenience subject of their transaction. The word "apply" as broadly used has for frame of reference, a service by the seller on lines or routes that would compete with the buyer along the routes acquired by the latter. In this jurisdiction, prior authorization is needed before anyone can operate a TPU service,33whether the service consists in a new line or an old one acquired from a previous operator. The clear intention of the parties was to prevent the seller from conducting any competitive line for 10 years since, anyway, he has bound himself not to apply for authorization to operate along such lines for the duration of such period.34 If the prohibition is to be applied only to the acquisition of new certificates of public convenience thru an application with the Public Service Commission, this would, in effect, allow the seller just the same to compete with the buyer as long as his authority to operate is only acquired thru transfer or sale from a previous operator, thus defeating the intention of the parties. For what would prevent the seller, under the circumstances, from having a representative or dummy apply in the latter's name and then later on transferring the same by sale to the seller? Since stipulations in a contract is the law between the contracting parties, Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. (Art. 19, New Civil Code.) We are not impressed of Villarama's contention that the re-wording of the two previous drafts of the contract of sale between Villarama and Pantranco is significant in that as it now appears, the parties intended to effect the least restriction. We are persuaded, after an examination of the supposed drafts, that the scope of the final stipulation, while not as long and prolix as

those in the drafts, is just as broad and comprehensive. At most, it can be said that the re-wording was done merely for brevity and simplicity. The evident intention behind the restriction was to eliminate the sellers as a competitor, and this must be, considering such factors as the good will35 that the seller had already gained from the riding public and his adeptness and proficiency in the trade. On this matter, Corbin, an authority on Contracts has this to say.36 When one buys the business of another as a going concern, he usually wishes to keep it going; he wishes to get the location, the building, the stock in trade, and the customers. He wishes to step into the seller's shoes and to enjoy the same business relations with other men. He is willing to pay much more if he can get the "good will" of the business, meaning by this the good will of the customers, that they may continue to tread the old footpath to his door and maintain with him the business relations enjoyed by the seller. ... In order to be well assured of this, he obtains and pays for the seller's promise not to reopen business in competition with the business sold. As to whether or not such a stipulation in restraint of trade is valid, our jurisprudence on the matter37says: The law concerning contracts which tend to restrain business or trade has gone through a long series of changes from time to time with the changing condition of trade and commerce. With trifling exceptions, said changes have been a continuous development of a general rule. The early cases show plainly a disposition to avoid and annul all contract which prohibited or restrained any one from using a lawful trade "at any time or at any place," as being against the benefit of the state. Later, however, the rule became well established that if the restraint was limited to "a certain time" and within "a certain place," such contracts were valid and not "against the benefit of the state." Later cases, and we think the rule is now well established, have held that a contract in restraint of trade is valid providing there is a limitation upon either time or place. A contract, however, which restrains a man from entering into business or trade without either a limitation as to time or place, will be held invalid. The public welfare of course must always be considered and if it be not involved and the restraint upon one party is not greater than protection to the other requires, contracts like the one we are discussing will be sustained. The general tendency, we believe, of modern authority, is to make the test whether the restraint is reasonably necessary for the protection of the contracting parties. If the contract is reasonably necessary to protect the interest of the parties, it will be upheld. (Emphasis supplied.) Analyzing the characteristics of the questioned stipulation, We find that although it is in the nature of an agreement suppressing competition, it is, however, merely ancillary or incidental to the main agreement which is that of sale. The suppression or restraint is only partial or limited: first, in scope, it refers only to application for TPU by the seller in competition with the lines sold to the buyer; second, in duration, it is only for ten (10) years; and third, with respect to situs or territory, the restraint is only along the lines covered by the certificates sold. In view of these limitations, coupled with the consideration of P350,000.00 for just two certificates of public convenience, and considering, furthermore, that the disputed stipulation is only incidental to a main agreement, the same is reasonable and it is not harmful nor obnoxious to public service.38 It does not appear that the ultimate result of the clause or stipulation would be to leave solely to Pantranco the right to operate along the

lines in question, thereby establishing monopoly or predominance approximating thereto. We believe the main purpose of the restraint was to protect for a limited time the business of the buyer. Indeed, the evils of monopoly are farfetched here. There can be no danger of price controls or deterioration of the service because of the close supervision of the Public Service Commission.39 This Court had stated long ago,40that "when one devotes his property to a use in which the public has an interest, he virtually grants to the public an interest in that use and submits it to such public use under reasonable rules and regulations to be fixed by the Public Utility Commission." Regarding that aspect of the clause that it is merely ancillary or incidental to a lawful agreement, the underlying reason sustaining its validity is well explained in 36 Am. Jur. 537-539, to wit: ... Numerous authorities hold that a covenant which is incidental to the sale and transfer of a trade or business, and which purports to bind the seller not to engage in the same business in competition with the purchaser, is lawful and enforceable. While such covenants are designed to prevent competition on the part of the seller, it is ordinarily neither their purpose nor effect to stifle competition generally in the locality, nor to prevent it at all in a way or to an extent injurious to the public. The business in the hands of the purchaser is carried on just as it was in the hands of the seller; the former merely takes the place of the latter; the commodities of the trade are as open to the public as they were before; the same competition exists as existed before; there is the same employment furnished to others after as before; the profits of the business go as they did before to swell the sum of public wealth; the public has the same opportunities of purchasing, if it is a mercantile business; and production is not lessened if it is a manufacturing plant. The reliance by the lower court on tile case of Red Line Transportation Co. v. Bachrach41 and finding that the stipulation is illegal and void seems misplaced. In the said Red Line case, the agreement therein sought to be enforced was virtually a division of territory between two operators, each company imposing upon itself an obligation not to operate in any territory covered by the routes of the other. Restraints of this type, among common carriers have always been covered by the general rule invalidating agreements in restraint of trade. 42 Neither are the other cases relied upon by the plaintiff-appellee applicable to the instant case. In Pampanga Bus Co., Inc. v. Enriquez,43the undertaking of the applicant therein not to apply for the lifting of restrictions imposed on his certificates of public convenience was not an ancillary or incidental agreement. The restraint was the principal objective. On the other hand, in Red Line Transportation Co., Inc. v. Gonzaga,44 the restraint there in question not to ask for extension of the line, or trips, or increase of equipment was not an agreement between the parties but a condition imposed in the certificate of public convenience itself. Upon the foregoing considerations, Our conclusion is that the stipulation prohibiting Villarama for a period of 10 years to "apply" for TPU service along the lines covered by the certificates of public convenience sold by him to Pantranco is valid and reasonable. Having arrived at this conclusion, and considering that the preponderance of the evidence have shown that Villa Rey Transit, Inc. is itself the alter ego of Villarama, We hold, as prayed for in Pantranco's third party complaint, that the said Corporation should, until the expiration of the 1-year period abovementioned, be enjoined from operating the line subject of the prohibition. To avoid any misunderstanding, it is here to be emphasized that the 10-year prohibition upon Villarama is not against his application for, or purchase of, certificates of public convenience, but merely the operation of TPU along the lines covered by

the certificates sold by him to Pantranco. Consequently, the sale between Fernando and the Corporation is valid, such that the rightful ownership of the disputed certificates still belongs to the plaintiff being the prior purchaser in good faith and for value thereof. In view of the ancient rule of caveat emptorprevailing in this jurisdiction, what was acquired by Ferrer in the sheriff's sale was only the right which Fernando, judgment debtor, had in the certificates of public convenience on the day of the sale.45 Accordingly, by the "Notice of Levy Upon Personalty" the Commissioner of Public Service was notified that "by virtue of an Order of Execution issued by the Court of First Instance of Pangasinan, the rights, interests, or participation which the defendant, VALENTIN A. FERNANDO in the above entitled case may have in the following realty/personalty is attached or levied upon, to wit: The rights, interests and participation on the Certificates of Public Convenience issued to Valentin A. Fernando, in Cases Nos. 59494, etc. ... Lines Manila to Lingayen, Dagupan, etc. vice versa." Such notice of levy only shows that Ferrer, the vendee at auction of said certificates, merely stepped into the shoes of the judgment debtor. Of the same principle is the provision of Article 1544 of the Civil Code, that "If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property." There is no merit in Pantranco and Ferrer's theory that the sale of the certificates of public convenience in question, between the Corporation and Fernando, was not consummated, it being only a conditional sale subject to the suspensive condition of its approval by the Public Service Commission. While section 20(g) of the Public Service Act provides that "subject to established limitation and exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had ... to sell, alienate, mortgage, encumber or lease its property, franchise, certificates, privileges, or rights or any part thereof, ...," the same section also provides: ... Provided, however, That nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale, alienation, or lease by any public service of any of its property in the ordinary course of its business. It is clear, therefore, that the requisite approval of the PSC is not a condition precedent for the validity and consummation of the sale. Anent the question of damages allegedly suffered by the parties, each of the appellants has its or his own version to allege. Villa Rey Transit, Inc. claims that by virtue of the "tortious acts" of defendants (Pantranco and Ferrer) in acquiring the certificates of public convenience in question, despite constructive and actual knowledge on their part of a prior sale executed by Fernando in favor of the said corporation, which necessitated the latter to file the action to annul the sheriff's sale to Ferrer and the subsequent transfer to Pantranco, it is entitled to collect actual and compensatory damages, and attorney's fees in the amount of P25,000.00. The evidence on record, however, does not clearly show that said defendants acted in bad faith in their acquisition of the certificates in question. They believed that because the bill of sale has yet to be approved by the Public Service Commission, the transaction was not a consummated sale, and, therefore, the title to or ownership of the certificates was still with the seller. The award by the lower court of attorney's fees of P5,000.00 in favor of Villa Rey Transit, Inc. is, therefore, without basis and should be set aside.

Eusebio Ferrer's charge that by reason of the filing of the action to annul the sheriff's sale, he had suffered and should be awarded moral, exemplary damages and attorney's fees, cannot be entertained, in view of the conclusion herein reached that the sale by Fernando to the Corporation was valid. Pantranco, on the other hand, justifies its claim for damages with the allegation that when it purchased ViIlarama's business for P350,000.00, it intended to build up the traffic along the lines covered by the certificates but it was rot afforded an opportunity to do so since barely three months had elapsed when the contract was violated by Villarama operating along the same lines in the name of Villa Rey Transit, Inc. It is further claimed by Pantranco that the underhanded manner in which Villarama violated the contract is pertinent in establishing punitive or moral damages. Its contention as to the proper measure of damages is that it should be the purchase price of P350,000.00 that it paid to Villarama. While We are fully in accord with Pantranco's claim of entitlement to damages it suffered as a result of Villarama's breach of his contract with it, the record does not sufficiently supply the necessary evidentiary materials upon which to base the award and there is need for further proceedings in the lower court to ascertain the proper amount. PREMISES CONSIDERED, the judgment appealed from is hereby modified as follows: 1. The sale of the two certificates of public convenience in question by Valentin Fernando to Villa Rey Transit, Inc. is declared preferred over that made by the Sheriff at public auction of the aforesaid certificate of public convenience in favor of Eusebio Ferrer; 2. Reversed, insofar as it dismisses the third-party complaint filed by Pangasinan Transportation Co. against Jose M. Villarama, holding that Villa Rey Transit, Inc. is an entity distinct and separate from the personality of Jose M. Villarama, and insofar as it awards the sum of P5,000.00 as attorney's fees in favor of Villa Rey Transit, Inc.; 3. The case is remanded to the trial court for the reception of evidence in consonance with the above findings as regards the amount of damages suffered by Pantranco; and 4. On equitable considerations, without costs. So ordered. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-28999 May 24, 1977 COMPAIA MARITIMA, plaintiff-appellee, vs. ALLIED FREE WORKERS UNION, SALVADOR T. LLUCH, MARIANO LL. BADELLES, individually and in their capacities as President and Vice-President, respectively of the Allied Free Workers Union, NICANOR HALEBAS and LAURENTINO LL. BADELLES, individually and officers of Allied Free Workers Union,defendants-appellants. Halibas, Badelles, Padilla & Sepulveda and Vicente A. Rafael & Associates for defendants-appellants. Rufino J. Abadies, Francisco Obach & Jesus Quijano for appellee.

AQUINO, J.: Antecedents. - Since the onset in 1954 of litigation between the parties herein, this is the fifth case between them that has been elevated to this Court. The incidents preceding the instant appeal are as follows: On August 11, 1952 the Compaia Maritima and the Allied Free Workers Union entered into a written contract whereby the union agreed to perform arrastre and stevedoring work for the consignees. vessels at Iligan City. The contract was to be effective for one month counted from August 12, 1952. It was stipulated that the company could revoke the contract before the expiration of the term if the union failed to render proper service. The contract could be renewed by agreement of the parties (Exh. J). At the time the contract was entered into, the union had just been organized. Its primordial desire was to find work for its members. The union agreed to the stipulation that the company would not be liable for the payment of the services of the union "for the loading, unloading and deliveries of cargoes" and that the compensation for such services would be paid "by the owners and consigness of the cargoes" as "has been the practice in the port of Iligan City" (Par. 2 of Exh. J). The union found out later that that stipulation was oppressive and that the company was unduly favored by that arrangement. Under the contract, the work of the union consisted of arrastre and stevedoring service. Arrastre, a Spanish word which refers to hauling of cargo, comprehends the handling of cargo on the wharf or between the establishment of the consignee or shipper and the ship's tackle. The service is usually performed by longshoremen. On the other hand, stevedoring refers to the handling of the cargo in the holds of the vessel or between the ship's tackle and the holds of the vessel. The shippers and consignees paid the union oth for the arrastre work. They refused to pay for the stevedoring service. They claimed that the shipowner was the one obligated to pay for the stevedoring service because the bill of lading provided that the unloading of the cargo was at the shipowner's expense (Exh. 1). On the other hand, the company refused to pay for the stevedoring service because the contract (Exh. J) explicitly provided that the compensation for both arrastre and stevedoring work should be paid by the shippers and consignees, as was the alleged practice in Iligan City, and that the shipowner would not be liable for the payment of such services. Thus, the issue of whether the company should pay for the stevedoring service became a sore point of contention between the parties. The union members labored under the impression that they were not being compensated for their stevedoring service as distinguished from arrastre service. Although the arrastre and stevedoring contract (Exh. J) was disadvantageous to the union, it did not terminate the contract because its members were in dire need of work and work, which was not adequately compensated, was preferable to having no work at all (204, 214-5, 226-7 tsn May 20, 1960). Upon the expiration of the one-month period, the said contract was verbally renewed. The company allowed the union to continue performing arrastre and stevedoring work. On July 23, 1954 the union sent a letter to the company requesting that it be recognized as the exclusive bargaining unit to load and unload the cargo of its vessels at Iligan City. The company ignored that demand. So, the union filed on August 6, 1954 in the Court of Industrial Relations (CIR) a petition praying that it be certified as the sole collective bargaining unit.

Despite that certification case, the company on August 24, 1954 served a written notice on the union that, in accordance with payment of the 1952 contract, the same would be terminated on August 31, 1954. Because of that notice, the union on August 26, 1954 filed in the CIR charges of unfair labor practice against the company. On August 31, 1954 the company entered into a new stevedoring and arrastre contract with the Iligan Stevedoring Association. On the following day, September 1, the union members picketed the wharf and prevented the Iligan Stevedoring Association from performing arrastre and stevedoring work. The picket lasted for nine days. On September 8, 1954 the company sued the union and its officers in the Court of First Instance of Lanao for the rescission of the aforementioned 1952 contract, to enjoin the union from interfering with the loading and unloading of the cargo, and for the recovery of damages. On the following day, September 9, the lower court issued ex parte a writ of preliminary injunction after the company had posted a bond in the sum of P20,000. A few hours lateron that same day the union was allowed to file a counterbond. The injunction was lifted. The union members resumed their arrastre and stevedoring work. Later, the union assailed in a prohibition action in this Court the jurisdiction of the trial court to entertain the action for damages, and injunction. A majority of this Court held that the lower court had jurisdiction to issue the injunction and to take cognizance of the damage suit filed by the company but that the injunction was void because it was issued ex parte and the procedure laid down in section 9(d) of Republic Act No. 875 was not followed by the trial court (Allied Free Workers Union vs. Judge Apostol, 102 Phil. 292, 298). After trial, the lower court rendered a decision dated December 5, 1960, amended on January 11, 1961, (1) declaring the arrastre and stevedoring contract terminated on August $1, 1954; (2) dismissing the union's counterclaim; (3) ordering the union and its officers to pay solidarily to the company P520,000 as damages, with six percent interest per annum from September 9, 1954, when the complaint. was filed; (4) permanently enjoining the union from performing any arrastre and stevedoring work for the company at Iligan City, and (5) requiring the union to post a supersedeas bond in the sum of P520,000 to stay execution. The union filed a motion for reconsideration. On the other hand, the company filed a motion for the execution pending appeal of the money judgment. It filed another motion for the immediate issuance of a writ of injunction. That second motion was filed in the municipal court of Iligan City in view of the absence of the District Judge. The municipal court issued the writ of injunction. However, this Court set it aside because it was not an interlocutory order and no special reasons were adduced to justify its issuance (Allied Free Workers Union vs. Judge Estipona, 113 Phil. 748). The union on January 6, 1961 had perfected an appeal from the lower court's original decision. It did not appeal from the amended decision. On March 24, 1962 the lower court issued an order declaring its amended decision final and executory in view of the union's failure to appeal therefrom. The court directed the clerk of court to issue a writ of execution. That order was assailed by the union in a certiorari action filed in this Court. A preliminary injunction was issued by this Court to restrain the execution of the judgment.

On May 16, 1962 this Court dissolved the injunction at the instance of the company which had filed a counterbond. Thereupon, the 225 members of the union yielded their ten-year old jobs to the new set of workers contracted by the company. The certiorari incident was decided on June 30, 1966. This Court noted that the lower court amended its decision for the purpose of correcting certain errors and omissions which were not substantial in character and that its amended decision was served upon the parties after the union had perfected its appeal from the original decision. Under those circumstances, this Court held that the union's appeal should be given due coarse, subject to the amendment of its record on appeal. This Court reserved to the members of the union the right to secure restitution under sections 2 and 5, Rule 39 of the Rules of Court (Allied Free Workers Union vs. Estipona, L-19651, June 30, 1966,17 SCRA 513, 64 O.G. 2701). Pursuant to that reservation, the union on December 16, 1966 filed a motion for restitution, praying that its 225 members be restored to their jobs and that the company be ordered to pay P 1,620,000 as damages, consisting of the lost earnings during the four-years period from May 8, 1962 to May 8, 1966. On the other hand, the company in its motion of January 18, 1967 reiterated its 1960 motion for the execution of the lower court's judgment as to the damages, of P520,000 and the permanent injunction. Later, the company called the lower court's attention to this Court's decision dated January 31, 1967. In that decision, this Court affirmed the CIR's decision holding that the company did not commit any unfair labor practice and reversed the CIR's directive that a certification election be held to determine whether the union should be the exonemtod bargaining unit. This Court held that the union could not act as a collective bargaining unit because the union was an independent contractor and its members were not employees of the company (Allied Free Workers Union vs. Compaia Maritima, L-22951-2 and L22971, 19 SCRA 258). The lower court in its order of April 25, 1967 (1) denied the union's motion for restitution and to stay execution of its amended decision on January 11, 1961 and (2) required the union to file a supersedeas bond in the sum of P100,000 within thirty days from notice. The bond was reduced to P50,000 in the lower court's order of August 16, 1967. The union posted the bond on August 24,1967. The lower court approved the union's amended record on appeal in its order of October 6, 1967. The union appealed directly to this Court because the amount involved exceeds P200,000. The appeal was perfected before Republic Act No. 5440 took effect on September 9,1968. Other proceedings. - The company in its original complaint prayed that the union and its officials be ordered to pay actual damages, amounting to P15,000 for the union's failure to load and unload cargo in and from the consignees. vessels from September 1 to 8, 1954; P50,000 as damages, due to the union's inefficiency in performing arrastre and stevedoring work "during the latter part of the existence" of the contract; P50,000 as moral and exemplary damages, (not supported by any allegation in the body of the complaint) and P5,000 as attorney's Considering (10-12, Record on Appeal). On September 15, 1954 the company added a fourth cause ofaction to its complaint. It alleged that by reason of the acts of harassment and obstruction perpetrated by the union in the loading and unloading ofcargo the company suffered additional

damage in the form of lost and unrealized freight and passenger charges in the amount of P10,000 for September 9 and 10, 1954 (66, Record on Appeal). On November 2, 1954 the company attached to its motion for the revival of the injunction against the union an auditor's report dated September 15, 1954 wherein it was indicated that the company lost freight revenues amounting to P178,579.20 during the period from January 1 to September 7, 1954 (121-143, Record on Appeal). On November 27, 1954 the company filed another motion for the restoration of the injunction. In support of that motion the company attached a trip operation report showing the unloaded cargoes on the consignees. vessels, when they docked at Iligan City on September 14, 19, 22 and 26 and October 3 and 5, 1954, as well as the delays in their departure (157-162, Record on Appeal). On March 5, 1955 the company added a fifth cause ofaction too its complaint. It alleged that during the period from September 12 to December 28, 1954 it lost freight charges on unloaded cargoes in the sum of P62,680.12, as shown in a detailed statement, and that it incurred an estimated amount of P20,000 for overhead expenses. for the delay in the dismissal of its vessels attributable to the union's unsatisfactory stevedoring and arrastre work (225-229, 237-8, Record on Appeal). Also on March 5, 1955 the union answered the original and supplemental complaints. It denied that its members had rendered inefficient service. It averred that the termination of the contract was prompted by the consignees. desire to give the work to the Iligan Stevedoring Association which the company had allegedly organized and subsidized. The union filed a counterclaim for P200,000 as compensation for its services to the company and P500,000 as other damages, (239-252, Record on Appeal). On March 9, 1960 the company filed a third supplemental complaint, It alleged that the continuation of the stevedoring and arrastre work by the union for the company from 1955 to date had caused losses to the company at the rate of P25,000 annually in the form of lost freight on shutout cargoes and the expenses. for the equipment used to assist the union members in performing their work (320-3, Record on Appeal). Plaintiff company's evidence. - Jose C. Teves, the consignees. branch manager at Iligan City, testified that on August 24, 1954 he terminated the arrastre and stevedoring contract with the union (Exh. J) upon instruction of the head office. The contract was terminated in order to avoid further losses to the company caused by the union's inefficient service (85-86 tsn March 11, 1960). After the termination of the contract, the members of the union allegedly harassed the company with the help of goons. The cargoes could not be unloaded in spite of the fact that the company had sought the protection of the law-enforcing authorities (88). The consignees. last recourse was to go to court. (89). The company supposedly suffered losses as a result of the union's inefficient service since September 1, 1954 (91). Teves hired auditors to ascertain the losses suffered by the company during the period from January 1 to September 11, 1954. The trial court awarded actual damages, amounting to P450,000 on the basis of the auditor's reports, Exhibits A to I. It did not carefully examine the said exhibits. Contrary to the trial court's impression, Exhibits B, C and D are not auditors' reports. The trial court did not bother to make a breakdown of the alleged damages, totalling P450,000. The reports of the two hired accountants, Demetrio S. Jayme and M. J. Siojo, show the following alleged damages, in the aggregate amount of P349,245.37 (not P412,663.17, as erroneously added by the consignees. counsel, 161,163-4 tsn March 11, 1960):

TABULATION OF ALLEGED DAMAGES CLAIMED BY COMPAIA MARITIMA (1) Freight for 74,751 bags of fertilizer allegedly booked for shipment in the company's vessels but loaded in other vessels during the period from Jan. 1 to August 31, 1954, Statement A in Exh. A, CPA Jayme's report......................................................... (2) Lost freight on other shutout cargoes for January 1 to August 31, 1954, Statement A in Exh. A, of CPA Jayme ......................... (3) Lost freight on shutout cargoes for September 2 to 7, 1954 booked for shipment in M. V. Mindoro, Panay and Masterhead Knot, Statement B in Exh. A, CPA Jayme's report... (4) Losses sustained in voyages of M.V. Panay and Mindoro in four voyages from September 4 to 11, 1954, with estimates, Statement B, Exh. A............................... 3,764.50 6,167.16 4,339.64 P29,900.40

(5) Other estimated losses for the said voyages of M.V. Panay and Mindoro for the same period, based on interviews of parties at the wharf, Statement B, Exh. A............... (6) Additional subsistence expenses. for the M.V. Mindoro and Panay due to the delays in their dismissal from January 1 to August 31, 1954 as certified by the pursers of the two vessels, Statement C, Exh. A..................... (7) Estimated loss in freight and passenger revenue for the period from January 1 to August 31, 1954, based on 1953 freight revenue for the same period Statement D, Exh. A..... (8) Estimated loss in passenger fares for the period from September to December 31, 1954, Statement D, Exh. A....................... (9) Lost freight charges from September 12 to December 28, 1954, as certified by the 20,000.00 100,000.00 4,407.50 10,000.00

chief clerk of the consignees. Iligan office. Exh. B............................................................. (10) Estimated overhead expenses for delay of vessels in port, Exh. B................. (11) Forklift operating expenses. for 1955, consisting of salaries and maintenance expenses, Exh. E- 1.................................... (12) Lost freight revenue for 1955, Exh. E2............................................................... (13) Forklift operating expenses. for 1956, Exh. F- 1................................................... (14) Lost freight revenue for 1956, Exh. F-2 (15) Forklift operating expenses. for 1957, Exh. G- 1................................................... (16) Lost freight revenue for 1957, Exh. G2.................................................................... (17) Forklift operating expenses. for 1958, Exh. H-1................................................... 7,503.45 14,538.10 8,259.08 3,520.90 3,849.56 17,838.78 5,677.54 20,000.00 62,680.12

(18) Lost freight revenue for 1958, Exh. H2............................................................. (19) Forklift operating expenses. for 1959, Exh. I-1.................................................... (20) Lost freight revenue for 1959, Exh. I-2 T OT A L 8,745.35 7,959.83 P349,245.37 10,193.46

We tabulated the alleged damages, to show that the trial court's award to the company of P450,000 as damages, is not supported by the evidence. On the other hand, the statement of the consignees. counsel that the damages, totalled P412,663.17 (162- 164 tsn March 11, 1960) is wrong. Teves, the consignees. branch manager, submitted a statement (Exh. K) showing the alleged cost of three forklifts, 200 pieces of pallet boards, 530 pieces of wire rope slings and two pieces of tarpaulins in the total sum of P27,215. In that statement, he claims that the damages, to the company by reason of the depreciation of the said items of equipment amounted to P38,835 or more than the cost thereof. The company's counsel, in his summary of the damages, ignored the alleged damages, of P38,835 indicated by Teves in Exhibit K. The consignees. counsel relied oth on the auditors' reports, Exhibits A and E to I and on Exhibit B, the chief clerk's statement. As already noted, those documents show that the total damages, claimed by the company amounted to P349,245.37. The best evidence on the cost of the said equipment would have been the sales invoices instead of the oral testimony of Teves. He did not produce the sales invoices. Teves further testified that Salvador T. Lluch was the president of the union; Nicanor Halibas, the treasurer; Mariano Badelles, the general manager, and Luarentino Badelles, a vice president. Appellants' statement of facts. - To sustain their appeal, the appellants made the following exceedingly short and deficient recital of the facts: Sometime in the month of August, 1954, defendant, Allied Free Workers Union filed an unfair labor practice case against defendant (should be plaintiff) and its branch manager, Mr. Jose Teves, with the Court of Industrial Relations, Manila, and docketed as Case No. 426-UPL: defendant union also filed a petition for certification election docketed as Case No, 175-MC against plaintiff; defendant union also filed a notice of strike dated August 27, 1954; the Secretary of Labor wired the public defender, Iligan City, on August 27, 1954 (see annexes 1-4, motion to dismiss, Record on Appeal, pp. 54-65).

To counteract these legitimate moves of labor, plaintiff filed the complaint docketed as Civil Case No. 577 in the Court of First Instance of Lanao (now Lanao del Norte) for damages, and/or resolution of contract with writ of preliminary injunction, On a decision adverse to their interests, defendants take this appeal. On the question of jurisdiction taken before this Honorable Tribunal in G.R. No. L-8876, it was held: ... for the instant case merely refers to the recovery of damages, occasioned by the picketing undertaken by the members of the union and the rescission of the arrastre and stevedoring contract previously entered into between the parties. The appellants did not discuss their oral and documentary evidence. * First assignment of error. - The appellants contend that the trial court erred in awarding to the company actual damages, amounting to P450,000, moral damages, of P50,000 and attorney's Considering of P20,000, and in holding that the four officers of the union are solidarily liable for the said damages. Appellants' counsel assailed the award of actual damages, on the ground that the auditors' reports, on which they were based, were hearsay. After analyzing the nature of the damages, awarded, how the same were computed, and the trustworthiness of the company's evidence, we find the first assignment of error meritorious. We have already stress that, on the basis of the reports of the two accountants, the damages, claimed by the complaint as a matter of simple addition, does not reach the sum of P 450,000 fixed by the trial court. The damages, shown in the accountants' reports and in the statement made by the consignees. chief clerk (who did not testify) amount to P349,245.37, or much less than P450,000. The company argues that the accountants' reports are admissible in evidence because of the rule that "when the original consists of numerous accounts or other documents which cannot be examined in court without great loss-of time and the fact sought to be established from them is oth the general result of the whole", the original writings need not be produced (Sec. 2[e], Rule 130, Rules of Court). That rule cannot be applied in this case because the voluminous character of the records, on which the accountants' reports were based, was not duly established (U. S. vs. Razon and Tayag, 37 Phil. 856, 861; 29 Am Jur 2nd 529). It is also a requisite for the application of the rule that the records and accounts should be made accessible to the adverse party so that the company, of the summary may be tested on cross-examination (29 Am Jur 2nd 517-8; 32A C.J.S. 111). What applies to this case is the general rule "that an audit made by, or the testimony of, a private auditor, is inadmissible in evidence as proof of the original records, books of accounts, reports or the like" (Anno 52 ALR 1266). That general rule cannot be relaxed in this case because the company failed to make a preliminary showing as to the difficulty or impossibility attending the production of the records in court and their examination and analysis as evidence by the court (29 Am Jur 2nd 529). A close scrutiny of the accountants' reports reveals their lack of probative value. The propriety of allowing the different items of damages, is discussed below.

Unrealized freight and passenger revenue for 1954 ascertained by Accountant Demetrio S. Jayme. - In his report (Exh. A, pp. 134 to 147, Record on Appeal), Jayme used the pronouns "we" and "our" and made reference to the examination made by the "auditors" and his accounting office. He did not disclose the names of other "auditors" who assisted him in making the examination of the consignees. records. He gave the impression that he was an independent accountant hired by the company to make a "special investigation" of the consignees. losses for the period from January 1 to September 7, 1954. The truth is that Jayme was a "personal friend" of Teves, the consignees. branch manager at Iligan City. Teves was the consignees. principal witness in this case. He verified the complaint. herein. He signed for the company the stevedoring and arrastre contract which he later rescinded. In fact, Teves intervened in the drafting of the contract. It was his Idea that the company should not pay the arrastre and stevedoring Considering and that those charges should be borne by the shippers and consignees. Jayme was not only the friend of Teves but was also his co-employee. Jayme was the consignees. branch manager at Ozamis City and later at Cagayan de Oro City (217-8 tsn May 20, 1960; Exh. 12). He suppressed that fact in his report of examination. Apparently, the practice of accounting was his sideline or he practised accounting and, as the saying goes, he moonlighted as the consignees. branch manager. Obviously, Jayme would be biased for the company. He violated a rule of the accountants' code of ethics by not disclosing in his report of examination that he was an employee of the company (84 tsn June 2, 1960). Accountant Jayme allegedly found from the consignees. records at Iligan City that its freight and passenger revenue for the eight- month period from January 1 to August 31, 1953 amounted to P373,333.14 and that for the same period in 1954, that revenue amounted to P470,716.29, or an increase of P97,383.12 (Statement D of Exh. A, 145, Record on Appeal). Jayme interpreted those figures as signifying that the company would have realized more revenue if the union had rendered better service. He reasoned out that there was a big volume of business in Iligan City due to the Maria Cristina Fertilizer Plant, Iligan Steel Mill and NPC Hydroelectric Plant. He imagined that the consignees. freight revenue during the first eight months of 1954 could have amounted to at least P600,000 and that since it actually realized oth P 470,716.29, its loss of freight revenue for that period could be "conservatively" estimated at least P100,000 (item 7 of the tabulation of damages). He stated that he attached to his report on the comparative statement of gross revenue a certificate of the captain of the vessel Panay showing the delays in its dismissal in Iligan City as indicated in its logbook. No such document was attached to Jayme's report. And from the fact that the total fares received by the company during the eight-month period were reduced in the sum of P3,951.58 (Jayme fixed the reduction at the round figure of P4,000), he calculated that the company suffered a loss of at least P20,000 in passenger revenue up to December 31, 1954 (Item 8 of the tabulation of damages). Jayme also included in his report (a) damages, amounting to P10,000 as his estimate of losses supposedly "based on interviews with disinterested parties at the wharf and city proper customers"; (b) damages, amounting to P3,764.50 allegedly suffered in the operation of the vessels Mindoro and Panay from September 4 to 11, 1954, consisting of extra meals, expenses. for unloading cargo, estimated loss in passage revenue for four voyages, and estimated loss from 14 re-routed freights to competing vessels" (consisting of rice, corn and bananas), and (e) the sum of P4,407.50 as alleged additional

subsistence incurred for the crew of the Panay and Mindoro from January 1 to August 31, 1954 (items 4, 5 and 6 of the tabulation of damages). The records of the purser and chief steward were allegedly examined in ascertaining those damages. It would not be proper to allow Jayme's estimates as recoverable damages. They are not supported by reliable evidence. They can hardly be sanctioned by the "generally accepted auditing standards" alluded to in Jayme's report. The pertinent records of the company should have been produced in court. The purser and steward did not testify. The rule is that the auditor's summary should not include his conclusions or inferences (29 Am Jur 2d 519). His opinion is not evidence. The trial court unreservedly gave credence to the conjectures of Jayme. Obviously, his inflated guesses are inherently speculative and devoid of probative value. Furthermore, his estimate of the unrealized freight revenue for January 1 to August 31, 1954 overlapped with his computation of the lost freight for the unloaded 74,751 bags of fertilizer and other cargoes covering the same period (Statement A of Exh. A). The foregoing discussion shows Jayme's unreliable modus operandi in ascertaining the 1954 losses which the company claimed to have suffered in consequence of the union's alleged inefficiency or poor service. It is noteworthy that those losses were not averred with particularity and certitude in the consignees. complaint. The same observations apply with equal cogency to the damages, amounting to P40,407.20 as lost freight revenue also for the year 1954 (items 1 to 3 of the tabulation of damages) which were computed by Accountant Jayme. Those items refer to (1) the sum of P29,900.40 as lost freight revenue on 74,751 bags of fertilizer, already mentioned, which were booked for shipment in the consignees. vessels from January 1 to August 31, 1954 but which were allegedly loaded in other vessels; (2) P4,339.64 as unrealized freight revenue for other cargoes booked in the consignees. vessels but not loaded therein during the same eight-month period, and (3) P6,167,16 as unrealized freight revenue on shutout cargoes not loaded in the consignees. vessels during the six-day period from September 2 to 7, 1954. Jayme allegedly based his computations on the records of the company which were not produced in court. The union objected to Jayme's report as inadmissible under the hearsay rule or as not being the best evidence. Even if the presentation of the records themselves as exhibits should have been dispensed with, yet the complaint to show good faith and fair dealing, could have brought the records in court (manifests, bills of lading, receipts for the freights, if any, etc.) and enabled the court and the union's counsel and its expert accountant to verify the accuracy of Jayme's summaries. Photostatic copies of some manifests and bills of lading proving that the company was not able to collect the stipulated freight on the alleged shutout cargoes should have been proforma. in evidence as supporting papers for Jayme's report. No such exhibits were presented. The flaw or error in relying merely on Jayme's summaries is that, as pointed out by witness Mariano LL. Badelles, cargoes might be shutout due to causes other than the supposed inefficiency of the union. He testified that cargoes were shutout deliberately by the company because they could not be loaded in one vessel (for example, 50,000 bags of fertilizer), or a shipper had no allotment, or because the company did not want to load cargoes like bananas (189-194 tsn May 20, 1960). Jayme's summaries did not take into account the probability that a part of the cargo booked in the consignees. vessel for a certain date might not have been loaded on that date but was loaded in another vessel of the company which docked at the

port a few days later, In that case, there would be no loss of freight revenue. The mere shutting out of cargo in a particular voyage did not ipso facto produce loss of freight revenue. Our conclusion is that an injustice would be perpetrated if the damages, aggregating P178,579 computed and estimated in the report of Jayme, a biased witness, should be accepted at their face value. Damages computed by Salvador M. Magante. - The company also claims as damages, for the period from September 12 to December 28, 1954 lost freight charges on shutout cargoes in the sum of P62,680.12, and the sum of P20,000 as "overhead expenses. for delay of vessels in port", as set forth by Salvador M. Magante, the consignees. chief clerk at Iligan City, in his statement, Exhibit B (items 9 and 10 of the tabulation of damages). Magante did not testify on his statement. Instead, accountant Jayme, substituting for Magante, testified on that statement. Jayme said that he verified the consignees. records on which Magante based his statement. Jayme assured the court that the figures in Magante's statement were supported by the consignees. records. But as to the damages, of P20,000, Jayme said that he could not certify as to their company, because he had not finished his investigation (33 tsn March 9, 1955). In spite of that admission, the trial court allowed that item of damages. The trial court erred in allowing the damages, totalling P82,680.12 because Magante's statement, Exhibit B, is hearsay. Magante should have been proforma. as a witness. Jayme was not competent to take his place since the statement was prepared by Magante, not by Jayme. More appropriate still, the documents and records on which the statement was based should have been proforma. as evidence or at least brought to the court for examination by the union's counsel and its accountant. The trial court required the production of the manifests supporting Magante's statement (85-86 tsn march 9, 1955). Only one such manifest, Exhibit C, was produced. The nonproduction of the other records was not explained. Lost freight revenue and operating expenses for the forklifts. - The company claimed as damages, the sum of P87,986.05 (P151,403.85 as erroneously computed by the consignees. counsel, 163 tsn March 11, 1950) consisting of supposed unrealized freight charges for shutout or unloaded cargoes for the year 1955 to 1959 (Exh. E to I, Items 11 to 20 of the tabulation of damages). The claim is covered by the company's third supplemental complaint dated March 9, 1960 wherein it was alleged that due to the acts of the union and its officers the company had suffered damages, of not less than P25,000 annually since 1955 (3203, Record on Appeal). That supplemental complaint was hurriedly filed during the trial as directed by the trial court. The said damages, were computed in the reports of Miguel J. Siojo, an accountant who, for two days and nights, March 8 to 10, 1960, or shortly before and during the trial, allegedly examined the consignees. record at Iligan City, such as its cash book, cash vouchers, reports to the head office, shipping manifests, and liquidation reports. Those records were not produced in court. Their nonproduction was not explained. If the accountant was able to summarize the contents of those records in two days, they could not have been very voluminous. They should have been offered in evidence. The alleged expenses. in the operation of the forklifts consisted of (a) the wates of the operators hired by the company and (b) the cost of gasoline and oil and expenses. for repair. The company's theory is that under the 1952 contract (Exh. J) the union was obligated to provide for forklifts in the loading and unloading of cargo. Inasmuch as the union allegedly did not have forklifts, the complaint to expedite the arrastre and

stevedoring work, purchase forklifts, hired laborers to operate the same, and paid for the maintenance expenses. The company treated those expenses as losses or damages. Those alleged damages, amounting to P87,986.05 are in the same category as the depreciation allowances amounting to P38,835 which the company claimed for the forklifts, pallet boards, tarpaulins and wire rope slings that it purchased for oth P27,215, We have stated that the consignees. counsel ignored that depreciation in his recapitulation of the damages, claimed by the plaintiff. The union contends that Siojo's reports (Exh. E to I) were inadmissible evidence because they were hearsay, meaning that the original documents, on which the reports were based, were not presented in evidence and, therefore, appellants' counsel and the court itself were not able to gauge the correctness of the figures or data contained in the said reports. The person who had personal knowledge of the operating expenses. was not examined in court. We are of the opinion that, to avoid fraud or fabrication, the documents evidencing the alleged expenses. should have been proforma. in evidence. Siojo's reports were not the best evidence on the said operating expenses. The explanation of Badelles with respect to shutout cargoes and our observations on Jayme's summaries are applicable to accountant Siojo's reports. A more substantial ground for rejecting Siojo's reports is that the said expenses, if really incurred, cannot be properly treated as darn ages to the company. The union's witness, Mariano LI. Badelles, testified that the consignees. forklifts were not used exclusively on the wharf. They were used in the fertilizer and carbide plants. Sometimes, the union supplied the driver and the gasoline for the operation of the forklifts (174-177 tsn May 20, 1960). Moreover, as stated earlier, the company was not paying the union a single centavo for arrastre and stevedoring work. The shippers and consignees paid for the arrastre service rendered by the union. The union did not receive any compensation for stevedoring work. The company complained that the union had been rendering unsatisfactory arrastre and stevedoring services. That grievance was controverted by the union. The use of the forklifts, tarpaulins pallet boards and wire rope slings immeasurably benefitted the company. It is not proper nor just that the consignees. investment in those pieces of equipment should be considered damages, just because it was able to bind the union to a one-sided contract which exempted it from the payment of arrastre and stevedoring Considering and which impliedly obligated the union to purchase the said equipment. If the service rendered by the union members was unsatisfactory, it must be because the poor stevedores were underfed and underpaid. They were underfed and underpaid because the company was astute enough to insure that it would obtain stevedoring service without paying for it. If to improve the arrastre and stevedoring service, the company had to incur expenses. for the purchase of forklifts, pallet boards, tarpaulins and wire rope slings and for the operation of the forklifts, the union should not be required to reimburse the company for those expenses. The company should bear those expenses. because the same redounded to its benefit. The trial court erred in ordering the union and its officials to pay the amount of the said expenses. as damages, to the company.

Moral damages and attorney's fees. - Considering that the consignees. claim for moral damages, was based on the same facts on which it predicated its claim for actual deduction which we have found to be groundless, it follows that the company, a juridical person, is not entitled to moral damages. Anyway, the company did not plead and prove moral damages. It merely claimed moral damages, in the prayer of its complaint. That is not sufficient (Darang vs. Ty Belizar, L-19487, January 31, 1967, 19 SCRA 214, 222). Under the facts of this case, we do not find any justification for awarding attorney's Considering to the company. Hence, the trial court's award of P20,000 as attorney's Considering is set aside. Appellants' first assignment of error, although not properly argued by their counsel, should be sustained. Other assignments of error. - The union and its officers contend that the lower court erred in dismissing their counterclaims. Their counsel did not even bother to state in their brief the amount of the counterclaims. The union filed counterclaims for P200,000 as compensation for stevedoring services from August, 1952 to March 4, 1955; P500,000 as deduction P10,000 as attorney's Considering and P5,000 as premium on the counterbond (251-2, Record on Appeal). In their supplemental counterclaim, they demanded P500,000 as stevedoring charges for the period from March 4, 1955 to March 4, 1960 and additional damages, of P10,000 (308-10, Record on Appeal). The trial court dismissed the said counterclaims. The appellants in their three-sentence argument in support of their counterclaims alleged that the company's bill of lading provided that the unloading of the cargoes was at the consignees. expense (Exh. 1); that the company had not paid the sum of P500,000 as compensation for the stevedoring services rendered by the laborers up to 1960, and that the stipulation in the arrastre contract, "that the Compaia Maritima shall not be liable for the payment of the services rendered by the Allied Free Workers Union for the loading and deliveries of cargoes as same is payable by the owners and consignees of cargoes, as it has been the practice in the port of Iligan City" (Exh. J, pp. 14, 334, 359, 500 Record on Appeal), was 'non- operative" and void, "being contrary to morals and public policy". That superficial argument is not well-taken. The printed stipulation in the bill of lading was superseded by the contractual stipulation. The contract was prepared by the union officials. As already noted, it was stipulated in the contract that the stevedoring and arrastre charges should be paid by the shippers and consignees in consonance with the practice in Iligan City. That stipulation was binding and enforceable. The supposed illegality of that stipulation was not squarely raised by the union and its officials in their answer. They merely averred that the contract did not express the true agreement of the parties. They did not sue for reformation of the instrument evidencing the contract. The lower court did not err in dismissing defendants' counterclaims. The other two errors assigned by the appellants, namely, that the lower court erred in issuing a permanent injunction against them and in executing its decision pending appeal, are devoid of merit. The appellants invoke section 9(d) of the Magna Carta of Labor regarding the issuance of injunctions. That section has no application to this case because it was definitively ruled by this Court in the certification and unfair labor practice cases that there is no employer-employee relationship between the company and the stevedores. (They work under the cabo system). The lower court did not execute the money aspect of its judgment. It merely required the defendants to file a supersedeas bond of P50,000.

As to the injunction, it should be recalled that it was this Court which, in its resolution of May 16, 1962 in the execution and appeal incident (L-19651, 17 SCRA 513), allowed the company to terminate the stevedoring and arrastre work of the union and to use another union to perform that work. The company had the contractual right to terminate the 1952 contract (Taylor vs. Uy Teng Piao, 43 Phil. 873). The lower court did not err in sustaining the consignees. rescission of the contract and in enjoining the union from performing arrastre and stevedoring work. WHEREFORE, that portion of the trial court's judgment declaring the arrastre and stevedoring contract terminated, permanently enjoining the union and its officials from performing arrastre and stevedoring work for the vessels of the Compaia Maritima, and dismissing defendants' counterclaim is affirmed. The lower court's award of damages, is reversed and set aside. No costs. SO ORDERED. Barredo, Antonio, and Martin, JJ., concur. Concepcion Jr., J., took no part. Martin, J., was designated to sit in the Second Division. Separate Opinions FERNANDO, J., concurring: Concur in the exhaustive and ably-written opinion of Justice Aquino with the observation that the objective of industrial peace and the Ideal of a "compassionate society" so clearly manifested in the present Constitution call for greater understanding and more sympathetic approach on the part of management.

Separate Opinions FERNANDO, J., concurring: Concur in the exhaustive and ably-written opinion of Justice Aquino with the observation that the objective of industrial peace and the Ideal of a "compassionate society" so clearly manifested in the present Constitution call for greater understanding and more sympathetic approach on the part of management. THIRD DIVISION [G.R. No. 150905. September 23, 2003] CITIBANK, N.A. MASTERCARD, petitioner, vs. EFREN S. TEODORO, respondent. DECISION
PANGANIBAN, J.:

Before secondary evidence may be admitted to prove the contents of original documents, the offeror must prove the due execution and the subsequent loss or unavailability of the original.

The Case The Petition for Review before us assails the July 31, 2001 Decision and the November 22, 2001 Resolution of the Court of Appeals (CA) in CA-GR SP No. 62891. The dispositive portion of the challenged Decision reads as follows: WHEREFORE, premises considered, the Petition is GRANTED; and the Decisions of the trial courts are hereby REVERSED and SET ASIDE. No costs. The assailed Resolution denied petitioners Motion for Reconsideration. The Facts Petitioner operates a credit card system through which it extends credit accommodations to its cardholders for the purchase of goods and services from its member establishments. The purchases are later on paid for by cardholders upon receipt of the billings or statements of account from the company. Respondent Efren S. Teodoro was one such cardholder. On December 14, 1990, he applied for membership with petitioner. After his application was approved, he was issued Citibank, N.A. Mastercard No. 5423-3920-4457-7009. Under the terms and conditions governing the use of the Citibank credit card, the cardholder undertakes to pay all the purchases made using the card within the period indicated on the statement of account or within thirty (30) days from the date or dates of its use. Charges that remain unpaid within the period fixed in the monthly statement of account shall earn interest at the rate of 3.5 percent per month plus a penalty fee equivalent to 5 percent of the amount due for every month or even a fraction of a months delay. Respondent made various purchases through his credit card. Accordingly, he was billed by petitioner for those purchases, for which he tendered various payments. Petitioner claims that as of January 20, 1995, the obligations of respondent stood at P191,693.25, inclusive of interest and service charges. Several times it demanded payment from him, but he refused to pay, claiming that the amount demanded did not correspond to his actual obligations. His refusal prompted petitioner to file a Complaint for collection on January 25, 1996 before the Regional Trial Court (RTC) of Makati City. The case was docketed as Civil Case No. 96-092 and raffled to Branch 133. The RTC, in an Order dated April 23, 1996, dismissed the Complaint for lack of jurisdiction over the amount involved. The case was then transferred to the Metropolitan Trial Court (MTC) of Makati City, where it was docketed as Civil Case No. 51586 and raffled to Branch 66. During the trial, petitioner presented several sales invoices or charge slips, which added up to only P24,388.36. Although mere photocopies of the originals, the invoices were marked in evidence as Exhibits F to F -4. Because all these copies appeared to bear the signatures of respondent, the trial court deemed them sufficient proof of his purchases with the use of the credit card. Accordingly, the MTC in its July 25, 2000 Decision ordered him to pay petitioner the amount of P24,388.36 plus interest and penalty fee. The material portion of the Decision reads: [Petitioner] is claiming that [respondent] made use of its credit card. And as of January 20, 1995, [respondents] obligation to [petitioner] ballooned to the sum of P191,693.25. This is clear according to [petitioner] as shown by the Statement of Accounts. To the mind of this Court, the Statement of Account alone will not prove that [respondent] has an outstanding obligation to [petitioner] in the amount of P191,693.95. This must be substantiated by the Sales Invoices which unearthed the purchases made by [respondent] when he availed himself of the credit card of [petitioner].
[1] [2] [3] [4] [5]

While it is true that [petitioner] has offered the Sales Invoices (Exhibits F, F-1, F-4) to show the purchases made by [respondent], it is equally true also that adding all the amount in said invoices, the sum of P191,693.95 which according to [petitioner] is the outstanding obligation of [respondent], is hardly met. [Petitioner] even admitted that it could not produce all the invoices. Without the other Sales Invoices, there is a cloud of doubt hovering over the claim of [petitioner] to [respondent]. In fact, summing up all the amount[s] indicated in the aforesaid Sales Invoices the fact that the [respondent] has incurred to [petitioner] an obligation in the amount of P24,388.36 as a result of the formers availment of the credit card of the latter. It is elementary procedure that [petitioner] must prove [its] case with preponderance of evidence. Without all the other Sales Invoices to uncover the purchases made by [respondent] when he used the credit card of [petitioner], it is undeniable x x x that [petitioner] is caught in the web of doubt with respect to the accuracy of its claim to the [respondent]. WHEREFORE, premises considered, this Court hereby renders judgment as follows: 1. Ordering [respondent] to pay [petitioner] P24,388.36 with an interest of 3.5% and a penalty fee equivalent to another 5% of the amount due for every month due or a fraction of a months delay starting February 21, 1995 until the entire obligation is fully paid; 2. Ordering [respondent] to pay [petitioner] 25% of any and all amounts due and payable as agreed attorneys fees plus cost of suit. Thereafter, respondent appealed the MTC judgment to the RTC of Makati City, where the appeal was docketed as Civil Case No. 00-1051 and raffled to Branch 146. In its October 30, 2000 Decision, the RTC affirmed the MTC Decision in toto. Ruling of the Court of Appeals The focal issue of the case according to the CA was whether the photocopies of the sales invoices or charge slips, marked as Exhibits F to F-4, were competent proofs of the obligations of respondent. These were the only evidence presented by petitioner that could prove the actual amount of obligation he had incurred in favor of the former. In reversing the trial courts, the CA ruled that this evidence was insufficient to prove any liability on respondents part. According to Sections 3 and 5 of Rule 130 of the Rules of Court, whenever the subject of inquiry is the content of a document, its original must be produced, as it is the best evidence to prove such content. Secondary evidence, like the subject photocopies, is inadmissible. It will be admissible only if the offeror proves (a) any of the exceptions enumerated in Section 3 and (b) the conditions for its admissibility set forth in Section 5 of Rule 130. For secondary evidence to be admissible, there must be satisfactory proof of (1) the due execution of the original; (2) the originals loss, dest ruction or unavailability that is not due to the offerors bad faith; and (3) reasonable diligence and good faith in the search for or attempt to produce the original. Although petitioner was able to prove the existence of the original sales invoices, it failed to prove their due execution or to account for their loss or unavailability. Hence, this Petition. Issues Petitioner raises the following issues for our consideration:
[6] [7] [8]

I. Whether or not the Court of Appeals erred in reversing and setting aside the decision of the trial courts for insufficiency of evidence to support its findings. II. Whether or not the Court of Appeals erred in holding that petitioner failed to prove the due execution and the cause of the unavailability and nonproduction of the charge slips marked in evidence as Exhibits F to F -4.[9]

In brief, the main issue boils down to whether the photocopies of the sales invoices or charge slips marked during trial as Exhibits F to F-4 are admissible in evidence. The Courts Ruling

The Petition has no merit. Main Issue: Admissibility of Photocopies Petitioner contends that the testimony of its principal witness - Mark Hernando, assistant manager of Citibank, N.A. Mastercard -- proves the following:
[10]

a) the existence or due execution of the original sales invoices which sufficiently proved respondents liability of P24,388.36; b) the loss or unavailability of the original sales invoices; and c) petitioners reasonable diligence and good faith in the searc h for or attempt to produce the originals.

It further argues that Hernando competently identified the signatures of respondent on the sales invoices, having recognized them as identical to the signature on the latters credit card application form. On the other hand, respondent maintains that petitioner failed to prove the due execution of the sales invoices. According to him, Hernando was not privy to such execution and could not have properly or competently declared that the signatures on the invoices and on the application form belonged to the former. The latter was not the person before whom the application form was signed, executed or acknowledged; he was not even present then. As to the sales invoices and respondents alleged signatures thereon, he saw them only after the Complaint had been filed in court or long after those invoices had been executed. He was therefore not competent to identify the signatures. Because Hernandez had not actually witnessed the execution of the sales invoices and the application form, respondent concludes that petitioner failed to observe Section 5 of Rule 130 of the Rules of Court, which provides that the contents of the original may be proven by the testimony of witnesses. Finally, respondent contends that the alleged loss or unavailability of the original sales invoices was not sufficiently established. Allegedly, Hernandez had requested the originals from Equitable Credit Card Network, Inc., but failed to show in court that he had followed up his request as advised by another witness, Zen Hipolito. Therefore, the requirement of reasonable diligence and good faith in the search for or attempt to produce the originals was not satisfied, because he had shown no proof of having followed up the request. The burden of proof rests upon petitioner, as plaintiff, to establish its case based on a preponderance of evidence. It is wellsettled that in civil cases, the party that alleges a fact has the burden of proving it. Petitioner failed to prove that respondent had an obligation in the principal amount of P24,388.36, because the photocopies of the original sales invoices it had presented in court were inadmissible in evidence. Moreover, had they been admissible, they would still have had little probative value. The original copies of the sales invoices are the best evidence to prove the alleged obligation. Photocopies thereof are mere secondary evidence. As such, they are inadmissible because petitioner, as the offeror, failed to prove any of the exceptions provided under Section 3 of Rule 130 of the Rules of Court, as well s the conditions of their admissibility. Because of the inadmissibility of the photocopies in the absence of the originals, respondents obligation was not established. Section 5 of Rule 130 of the Rules of Court states: SEC. 5. When original document is unavailable. When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated. Applying the above Rule to the present case, before a party is allowed to adduce secondary evidence to prove the contents of the original sales invoices, the offeror must prove the following: (1) the existence or due execution of the original; (2) the loss and
[11] [12] [13]

destruction of the original or the reason for its nonproduction in court; and (3) on the part of the offeror, the absence of bad faith to which the unavailability of the original can be attributed. The correct order of proof is as follows: existence, execution, loss, and contents. At the sound discretion of the court, this order may be changed if necessary. In the present case, the existence of the original sales invoices was established by the photocopies and the testimony of Hernandez. Petitioner, however, failed to prove that the originals had been lost or could not be produced in court after reasonable diligence and good faith in searching for them. Indeed, the loss of the originals and reasonable diligence in the search for them were conditions that were not met, because the sales invoices might have been found by Equitable. Hernandez, testifying that he had requested the originals from Equitable, failed to show that he had subsequently followed up the request. Finally, when more than one original copy exists, it must appear that all of them have been lost, destroyed, or cannot be produced in court before secondary evidence can be given of any one. A photocopy may not be used without accounting for the other originals. In Santos v. Santos the Court upheld the pronouncement of the CA that before the appellees therein could be allowed to adduce secondary evidence to prove the contents of the original, they had to prove -- with the requisite quantum of evidence -- the loss, the destruction or the unavailability of all original copies of the document. In the present case, triplicates were produced, although the cardholder signed the sales invoice only once. During the trial, Hernandez explained that an original copy had gone to respondent, another to the merchant, and still another to petitioner. Each of these three copies is regarded as an original in accordance with Section 4 (b) of Rule 130 of the Rules of Court. Petitioner failed to show that all three original copies were unavailable, and that due diligence had been exercised in the search for them. WHEREFORE, the Petition is DENIED. Costs against petitioner. SO ORDERED.
[14] [15] [16] [17] [18] [19] [20] [21]

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 150758 February 18, 2004 VERONICO TENEBRO, petitioner vs. THE HONORABLE COURT OF APPEALS, respondent. DECISION YNARES-SANTIAGO, J.: We are called on to decide the novel issue concerning the effect of the judicial declaration of the nullity of a second or subsequent marriage, on the ground of psychological incapacity, on an individuals criminal liability for bigamy. We hold that the subsequent judicial declaration of nullity of marriage on the ground of psychological incapacity does not retroact to the date of the celebration of the marriage insofar as the Philippines penal laws are concerned. As such, an individual who

contracts a second or subsequent marriage during the subsistence of a valid marriage is criminally liable for bigamy, notwithstanding the subsequent declaration that the second marriage is void ab initio on the ground of psychological incapacity. Petitioner in this case, Veronico Tenebro, contracted marriage with private complainant Leticia Ancajas on April 10, 1990. The two were wed by Judge Alfredo B. Perez, Jr. of the City Trial Court of Lapu-lapu City. Tenebro and Ancajas lived together continuously and without interruption until the latter part of 1991, when Tenebro informed Ancajas that he had been previously married to a certain Hilda Villareyes on November 10, 1986. Tenebro showed Ancajas a photocopy of a marriage contract between him and Villareyes. Invoking this previous marriage, petitioner thereafter left the conjugal dwelling which he shared with Ancajas, stating that he was going to cohabit with Villareyes.1 On January 25, 1993, petitioner contracted yet another marriage, this one with a certain Nilda Villegas, before Judge German Lee, Jr. of the Regional Trial Court of Cebu City, Branch 15.2 When Ancajas learned of this third marriage, she verified from Villareyes whether the latter was indeed married to petitioner. In a handwritten letter,3Villareyes confirmed that petitioner, Veronico Tenebro, was indeed her husband. Ancajas thereafter filed a complaint for bigamy against petitioner.4 The Information,5 which was docketed as Criminal Case No. 013095-L, reads: That on the 10th day of April 1990, in the City of Lapu-lapu, Philippines, and within the jurisdiction of this Honorable Court, the aforenamed accused, having been previously united in lawful marriage with Hilda Villareyes, and without the said marriage having been legally dissolved, did then and there willfully, unlawfully and feloniously contract a second marriage with LETICIA ANCAJAS, which second or subsequent marriage of the accused has all the essential requisites for validity were it not for the subsisting first marriage. CONTRARY TO LAW. When arraigned, petitioner entered a plea of "not guilty".6 During the trial, petitioner admitted having cohabited with Villareyes from 1984-1988, with whom he sired two children. However, he denied that he and Villareyes were validly married to each other, claiming that no marriage ceremony took place to solemnize their union.7 He alleged that he signed a marriage contract merely to enable her to get the allotment from his office in connection with his work as a seaman.8 He further testified that he requested his brother to verify from the Civil Register in Manila whether there was any marriage at all between him and Villareyes, but there was no record of said marriage.9 On November 10, 1997, the Regional Trial Court of Lapu-lapu City, Branch 54, rendered a decision finding the accused guilty beyond reasonable doubt of the crime of bigamy under Article 349 of the Revised Penal Code, and sentencing him to four (4) years and two (2) months of prision correccional, as minimum, to eight (8) years and one (1) day of prision mayor, as maximum.10 On appeal, the Court of Appeals affirmed the decision of the trial court. Petitioners motion for reconsideration was denied for lack of merit. Hence, the instant petition for review on the following assignment of errors: I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED, AND THIS ERROR IS CORRECTIBLE IN THIS APPEAL WHEN IT AFFIRMED THE DECISION OF THE HONORABLE COURT A QUOCONVICTING THE

ACCUSED FOR (sic) THE CRIME OF BIGAMY, DESPITE THE NON-EXISTENCE OF THE FIRST MARRIAGE AND INSUFFICIENCY OF EVIDENCE. II. THE COURT ERRED IN CONVICTING THE ACCUSED FOR (sic) THE CRIME OF BIGAMY DESPITE CLEAR PROOF THAT THE MARRIAGE BETWEEN THE ACCUSED AND PRIVATE COMPLAINANT HAD BEEN DECLARED NULL AND VOID AB INITIO AND WITHOUT LEGAL FORCE AND EFFECT.11 After a careful review of the evidence on record, we find no cogent reason to disturb the assailed judgment. Under Article 349 of the Revised Penal Code, the elements of the crime of Bigamy are: (1) that the offender has been legally married; (2) that the first marriage has not been legally dissolved or, in case his or her spouse is absent, the absent spouse could not yet be presumed dead according to the Civil Code; (3) that he contracts a second or subsequent marriage; and (4) that the second or subsequent marriage has all the essential requisites for validity.12 Petitioners assignment of errors presents a two-tiered defense, in which he (1) denies the existence of his first marriage to Villareyes, and (2) argues that the declaration of the nullity of the second marriage on the ground of psychological incapacity, which is an alleged indicator that his marriage to Ancajas lacks the essential requisites for validity, retroacts to the date on which the second marriage was celebrated.13 Hence, petitioner argues that all four of the elements of the crime of bigamy are absent, and prays for his acquittal.14 Petitioners defense must fail on both counts. First, the prosecution presented sufficient evidence, both documentary and oral, to prove the existence of the first marriage between petitioner and Villareyes. Documentary evidence presented was in the form of: (1) a copy of a marriage contract between Tenebro and Villareyes, dated November 10, 1986, which, as seen on the document, was solemnized at the Manila City Hall before Rev. Julieto Torres, a Minister of the Gospel, and certified to by the Office of the Civil Registrar of Manila;15 and (2) a handwritten letter from Villareyes to Ancajas dated July 12, 1994, informing Ancajas that Villareyes and Tenebro were legally married.16 To assail the veracity of the marriage contract, petitioner presented (1) a certification issued by the National Statistics Office dated October 7, 1995;17 and (2) a certification issued by the City Civil Registry of Manila, dated February 3, 1997.18 Both these documents attest that the respective issuing offices have no record of a marriage celebrated between Veronico B. Tenebro and Hilda B. Villareyes on November 10, 1986. To our mind, the documents presented by the defense cannot adequately assail the marriage contract, which in itself would already have been sufficient to establish the existence of a marriage between Tenebro and Villareyes. All three of these documents fall in the category of public documents, and the Rules of Court provisions relevant to public documents are applicable to all. Pertinent to the marriage contract, Section 7 of Rule 130 of the Rules of Court reads as follows: Sec. 7. Evidence admissible when original document is a public record. When the original of a document is in the custody of a public officer or is recorded in a public office, its contents may be proved by a certified copy issued by the public officer in custody thereof (Emphasis ours).

This being the case, the certified copy of the marriage contract, issued by a public officer in custody thereof, was admissible as the best evidence of its contents. The marriage contract plainly indicates that a marriage was celebrated between petitioner and Villareyes on November 10, 1986, and it should be accorded the full faith and credence given to public documents. Moreover, an examination of the wordings of the certification issued by the National Statistics Office on October 7, 1995 and that issued by the City Civil Registry of Manila on February 3, 1997 would plainly show that neither document attests as a positive fact that there was no marriage celebrated between Veronico B. Tenebro and Hilda B. Villareyes on November 10, 1986. Rather, the documents merely attest that the respective issuing offices have no record of such a marriage. Documentary evidence as to the absence of a record is quite different from documentary evidence as to the absence of a marriage ceremony, or documentary evidence as to the invalidity of the marriage between Tenebro and Villareyes. The marriage contract presented by the prosecution serves as positive evidence as to the existence of the marriage between Tenebro and Villareyes, which should be given greater credence than documents testifying merely as to absence of any record of the marriage, especially considering that there is absolutely no requirement in the law that a marriage contract needs to be submitted to the civil registrar as a condition precedent for the validity of a marriage. The mere fact that no record of a marriage exists does not invalidate the marriage, provided all requisites for its validity are present.19 There is no evidence presented by the defense that would indicate that the marriage between Tenebro and Villareyes lacked any requisite for validity, apart from the self-serving testimony of the accused himself. Balanced against this testimony are Villareyes letter, Ancajas testimony that petitioner informed her of the existence of the valid first marriage, and petitioners own conduct, which would all tend to indicate that the first marriage had all the requisites for validity. Finally, although the accused claims that he took steps to verify the non-existence of the first marriage to Villareyes by requesting his brother to validate such purported non-existence, it is significant to note that the certifications issued by the National Statistics Office and the City Civil Registry of Manila are dated October 7, 1995 and February 3, 1997, respectively. Both documents, therefore, are dated after the accuseds marriage to his second wife, private respondent in this case. As such, this Court rules that there was sufficient evidence presented by the prosecution to prove the first and second requisites for the crime of bigamy. The second tier of petitioners defense hinges on the effects of the subsequent judicial declaration20 of the nullity of the second marriage on the ground of psychological incapacity. Petitioner argues that this subsequent judicial declaration retroacts to the date of the celebration of the marriage to Ancajas. As such, he argues that, since his marriage to Ancajas was subsequently declared void ab initio, the crime of bigamy was not committed.21 This argument is not impressed with merit. Petitioner makes much of the judicial declaration of the nullity of the second marriage on the ground of psychological incapacity, invoking Article 36 of the Family Code. What petitioner fails to realize is that a declaration of the nullity of the second marriage on the ground of psychological incapacity is of absolutely no moment insofar as the States penal laws are concerned.

As a second or subsequent marriage contracted during the subsistence of petitioners valid marriage to Villareyes, petitioners marriage to Ancajas would be null and void ab initio completely regardless of petitioners psychological capacity or incapacity.22 Since a marriage contracted during the subsistence of a valid marriage is automatically void, the nullity of this second marriage is not per se an argument for the avoidance of criminal liability for bigamy. Pertinently, Article 349 of the Revised Penal Code criminalizes "any person who shall contract a second or subsequent marriage before the former marriage has been legally dissolved, or before the absent spouse has been declared presumptively dead by means of a judgment rendered in the proper proceedings". A plain reading of the law, therefore, would indicate that the provision penalizes the mere act of contracting a second or a subsequent marriage during the subsistence of a valid marriage. Thus, as soon as the second marriage to Ancajas was celebrated on April 10, 1990, during the subsistence of the valid first marriage, the crime of bigamy had already been consummated. To our mind, there is no cogent reason for distinguishing between a subsequent marriage that is null and void purely because it is a second or subsequent marriage, and a subsequent marriage that is null and void on the ground of psychological incapacity, at least insofar as criminal liability for bigamy is concerned. The States penal laws protecting the institution of marriage are in recognition of the sacrosanct character of this special contract between spouses, and punish an individuals deliberate disregard of the permanent character of the special bond between spouses, which petitioner has undoubtedly done. Moreover, the declaration of the nullity of the second marriage on the ground of psychological incapacity is not an indicator that petitioners marriage to Ancajas lacks the essential requisites for validity. The requisites for the validity of a marriage are classified by the Family Code into essential (legal capacity of the contracting parties and their consent freely given in the presence of the solemnizing officer)23 and formal (authority of the solemnizing officer, marriage license, and marriage ceremony wherein the parties personally declare their agreement to marry before the solemnizing officer in the presence of at least two witnesses).24 Under Article 5 of the Family Code, any male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Articles 3725 and 3826 may contract marriage.27 In this case, all the essential and formal requisites for the validity of marriage were satisfied by petitioner and Ancajas. Both were over eighteen years of age, and they voluntarily contracted the second marriage with the required license before Judge Alfredo B. Perez, Jr. of the City Trial Court of Lapu-lapu City, in the presence of at least two witnesses. Although the judicial declaration of the nullity of a marriage on the ground of psychological incapacity retroacts to the date of the celebration of the marriage insofar as the vinculum between the spouses is concerned, it is significant to note that said marriage is not without legal effects. Among these effects is that children conceived or born before the judgment of absolute nullity of the marriage shall be considered legitimate.28 There is therefore a recognition written into the law itself that such a marriage, although void ab initio, may still produce legal consequences. Among these legal consequences is incurring criminal liability for bigamy. To hold otherwise would render the States penal laws on bigamy completely nugatory, and allow individuals to deliberately ensure that each marital contract be flawed in some manner, and to thus escape the consequences of contracting multiple marriages, while beguiling throngs of hapless women with the promise of futurity and commitment. As such, we rule that the third and fourth requisites for the crime of bigamy are present in this case, and affirm the judgment of the Court of Appeals.

As a final point, we note that based on the evidence on record, petitioner contracted marriage a third time, while his marriages to Villareyes and Ancajas were both still subsisting. Although this is irrelevant in the determination of the accuseds guilt for purposes of this particular case, the act of the accused displays a deliberate disregard for the sanctity of marriage, and the State does not look kindly on such activities. Marriage is a special contract, the key characteristic of which is its permanence. When an individual manifests a deliberate pattern of flouting the foundation of the States basic social institution, the States criminal laws on bigamy step in. Under Article 349 of the Revised Penal Code, as amended, the penalty for the crime of bigamy is prision mayor, which has a duration of six (6) years and one (1) day to twelve (12) years. There being neither aggravating nor mitigating circumstance, the same shall be imposed in its medium period. Applying the Indeterminate Sentence Law, petitioner shall be entitled to a minimum term, to be taken from the penalty next lower in degree, i.e., prision correccional which has a duration of six (6) months and one (1) day to six (6) years. Hence, the Court of Appeals correctly affirmed the decision of the trial court which sentenced petitioner to suffer an indeterminate penalty of four (4) years and two (2) months of prision correccional, as minimum, to eight (8) years and one (1) day of prision mayor, as maximum. WHEREFORE, in view of all the foregoing, the instant petition for review is DENIED. The assailed decision of the Court of Appeals in CA-G.R. CR No. 21636, convicting petitioner Veronico Tenebro of the crime of Bigamy and sentencing him to suffer the indeterminate penalty of four (4) years and two (2) months of prision correccional, as minimum, to eight (8) years and one (1) day of prision mayor, as maximum, is AFFIRMED in toto. SO ORDERED. Davide, Jr., C.J. (Chairman), Panganiban, Sandoval-Gutierrez, Corona, and Azcuna, JJ., concur. Puno, J., join the opinion of J. Vitug. Vitug, J., see separate opinion. Quisumbing, J., join the dissent in view of void nuptia. Carpio, J., see dissenting opinion. Austria-Martinez, J., join the dissent of J. Carpio. Carpio-Morales, J., join the dissent of J. Carpio. Tinga, J., join the dissent of J. Carpio. Callejo, Sr., J., see separate dissent. SEPARATE OPINION> VITUG, J.: Veronico Tenebro has been charged with bigamy for contracting, while still being married to Hilda Villareyes, a second marriage with private complainant Leticia Ancajas. Tenebro argues that since his second marriage with Ancajas has ultimately been declared void ab initio on the ground of the latters psychological incapacity, he should be acquitted for the crime of bigamy.

The offense of bigamy is committed when one contracts "a second or subsequent marriage before the former marriage has been legally dissolved, or before the absent spouse has been declared presumptively dead by means of a judgment rendered in the proper proceedings".1 Bigamy presupposes a valid prior marriage and a subsequent marriage, contracted during the subsistence of the prior union, which would have been binding were it not for its being bigamous. Would the absolute nullity of either the first or the second marriage, prior to its judicial declaration as being void, constitute a valid defense in a criminal action for bigamy? I believe that, except for a void marriage on account of the psychological incapacity of a party or both parties to the marriage under Article 36 of the Family Code (as so hereinafter explained), the answer must be in the affirmative. Void marriages are inexistent from the very beginning, and no judicial decree is required to establish their nullity.2 As early as the case of People vs. Aragon3 this Court has underscored the fact that the Revised Penal Code itself does not, unlike the rule then prevailing in Spain, require the judicial declaration of nullity of a prior void marriage before it can be raised by way of a defense in a criminal case for bigamy. Had the law contemplated otherwise, said the Court, " an express provision to that effect would or should have been inserted in the law, (but that in) its absence, (the courts) are bound by (the) rule of strict interpretation" of penal statutes. In contrast to a voidable marriage which legally exists until judicially annulled (and, therefore, not a defense in a bigamy charge if the second marriage were contracted prior to the decree of annulment)4 the complete nullity, however, of a previously contracted marriage, being void ab initio and legally inexistent, can outrightly be defense in an indictment of bigamy. It has been held that, by virtue of Article 40 of the Family Code, a person may be convicted of bigamy although the first marriage is ultimately adjudged void ab initio if, at the time the second marriage is contracted, there has as yet no judicial declaration of nullity of the prior marriage.5 I maintain strong reservations to this ruling. Article 40 of the Family Code reads: "Article 40. The absolute nullity of the previous marriage may be invoked for purposes of remarriage on the basis solely of the final judgment declaring such previous marriage void." It is only "for purpose of remarriage" that the law has expressed that the absolute nullity of the previous marriage may be invoked "on the basis solely of the final judgment declaring such previous marriage void." It may not be amiss to state that under the regime of the Civil Code of 1950, the Supreme Court, in Wiegel vs. Judge Sempio-Diy,6 has held that a subsequent marriage of one of the spouses of a prior void marriage is itself (the subsequent marriage) void if it were contracted before a judicial declaration of nullity of the previous marriage. Although this pronouncement has been abandoned in a later decision of the court in Yap vs. Court of Appeals,7 the Family Code, however has seen it fit to adopt the Wiegel rule but only for purpose of remarriage which is just to say that the subsequent marriage shall itself be considered void. There is no clear indication to conclude that the Family Code has amended or intended to amend the Revised penal Code or to abandon the settled and prevailing jurisprudence on the matter.8 A void marriage under Article 36 of the Family Code is a class by itself. The provision has been from Canon law primarily to reconcile the grounds for nullity of marriage under civil law with those of church laws.9 The "psychological incapacity to comply" with the essential marital obligations of the spouses is completely distinct from other grounds for nullity which are confined to the essential or formal requisites of a marriage, such as lack of legal capacity or disqualification of the contracting parties, want of consent, absence of a marriage license, or the like.

The effects of a marriage attended by psychological incapacity of a party or the parties thereto may be said to have the earmarks of a voidable, more than a void, marriage, remaining to be valid until it is judicially decreed to be a nullity. Thus, Article 54 of the Family Code considers children conceived or born of such a void marriage before its judicial declaration of nullity to be legitimate similar to the rule on a voidable marriage. It is expected, even as I believe it safe to assume, that the spouses rights and obligations, property regime and successional rights would continue unaffected, as if it were a voidable marriage, unless and until the marriage is judicially declared void for basically two reasons: First, psychological incapacity, a newly-added ground for the nullity of a marriage under the Family Code, breaches neither the essential nor the formal requisites of a valid marriages;10and second, unlike the other grounds for nullity of marriage (i.e., relationship, minority of the parties, lack of license, mistake in the identity of the parties) which are capable of relatively easy demonstration, psychological incapacity, however, being a mental state, may not so readily be as evident.11 It would have been logical for the Family Code to consider such a marriage explicitly voidable rather than void if it were not for apparent attempt to make it closely coincide with the Canon Law rules and nomenclature. Indeed, a void marriage due to psychological incapacity appears to merely differ from a voidable marriage in that, unlike the latter, it is not convalidated by either cohabitation or prescription. It might be recalled that prior to republic Act No. 8533, further amending the Family Code, an action or defense of absolute nullity of marriage falling under Article 36, celebrated before the effectivity of the Code, could prescribe in ten years following the effectivity of the Family Code. The initial provision of the ten-year period of prescription seems to betray a real consciousness by the framers that marriages falling under Article 36 are truly meant to be inexistent. Considerations, both logical and practical, would point to the fact that a "void" marriage due to psychological incapacity remains, for all intents and purposes, to be binding and efficacious until judicially declared otherwise. Without such marriage having first been declared a nullity (or otherwise dissolved), a subsequent marriage could constitute bigamy. Thus, a civil case questioning the validity of the first marriage would not be a prejudicial issue much in the same way that a civil case assailing a prior "voidable" marriage (being valid until annulled) would not be a prejudicial question to the prosecution of a criminal offense for bigamy. In cases where the second marriage is void on grounds other than the existence of the first marriage, this Court has declared in a line of cases that no crime of bigamy is committed.12 The Court has explained that for a person to be held guilty of bigamy, it must, even as it needs only, be shown that the subsequent marriage has all the essential elements of a valid marriage, were it not for the subsisting first union. Hence, where it is established that the second marriage has been contracted without the necessary license and thus void,13 or that the accused is merely forced to enter into the second (voidable) marriage,14 no criminal liability for the crime of bigamy can attach. In both and like instances, however, the lapses refers to the elements required for contracting a valid marriage. If, then, all the requisites for the perfection of the contract marriage, freely and voluntarily entered into, are shown to be extant, the criminal liability for bigamy can unassailably arise. Since psychological incapacity, upon the other hand, does not relate to an infirmity in the elements, either essential or formal, in contacting a valid marriage, the declaration of nullity subsequent to the bigamous marriage due to that ground, without more, would be inconsequential in a criminal charge for bigamy. The judicial declaration of nullity of a bigamous marriage on the ground of psychological incapacity merely nullifies the effects of the marriage but it does not

negate the fact of perfection of the bigamous marriage. Its subsequent declaration of nullity dissolves the relationship of the spouses but, being alien to the requisite conditions for the perfection of the marriage, the judgment of the court is no defense on the part of the offender who had entered into it. Accordingly, I vote to dismiss the petition. SECOND DIVISION [G.R. No. 159288. October 19, 2004] JOHNSON LEE, petitioner, vs. PEOPLE OF THE PHILIPPINES and NEUGENE MARKETING, INC., respondents. DECISION
CALLEJO, SR., J.:

NEUGENE Marketing, Inc. (NMI) was incorporated on January 27, 1978 with funds provided by the Uy Family. It had an authorized capital stock of P3 million divided into 30,000 shares with a par value of P100 per share. The original incorporators, with their corresponding number of shares and the amounts thereof, are as follows: Johnson Lee 600 P 60,000.00 Lok Chun Suen 1,200 120,000.00 Charles O. Sy 1,800 180,000.00 Eugenio Flores, Jr. 2,100 210,000.00 Arsenio Yang, Jr. 300 30,000.00 T O T A L 6,000 P600,000.00 ===== ========= There were two stock dividend declarations, one on June 7, 1980 in the amount of P60,000.00 and another on May 2, 1981 for P40,000.00. On May 15, 1986 Eugenio Flores, Jr. assigned/divested himself of his shares in favor of Sonny Moreno, 1,050 shares; Arsenio Yang, Jr., 700 shares and Charles O. Sy, 700 shares.[1] On June 11, 1987, the NMI sold and delivered to the Victorias Milling Company, Inc. (VMCI), in Victorias, Negros Occidental, 77,500 pieces of empty white bags for the price ofP565,750.00. NMI issued Charge Invoice No. 0809[2] dated June 11, 1987 to VMCI covering said sale. On June 18, 1987, VMCI purchased 100,000 pieces of empty white bags from NMI for P730,000.00 for which NMI issued Charge Invoice No. 0810.[3] On June 25, 1987, VMCI again purchased 28,000 pieces of empty white bags from NMI for the price ofP204,400.00 and the latter issued Charge Invoice No. 0811[4] dated June 25, 1987. In payment of said purchases from NMI, VMCI drew and issued two Bank of the Philippine Islands (BPI) Checks: Check No. 068706 dated August 3, 1987 in the amount of P565,750.00[5] and Check No. 068993 dated August 19, 1987 in the amount of P934,400.00.[6]Both checks were payable to the order of NMI. On October 13, 1987, stockholders owning two-thirds (2/3) of the subscribed capital stock of NMI voted to call a stockholders meeting. One of the items in the agenda was the dissolution of the corporation. Pursuant thereto, a special stockholders meeting was held on October 24, 1987 in Bacolod City. The following stockholders, who were also directors, were present and voted to dissolve the corporation: Name of Stockholders Number of Shares Arsenio Yang, Jr. 1,050

Charles Sy 2,800 Lok Chun Suen 1,400 Total 5,250 Accordingly, notices were again sent to all stockholders of record, all of whom properly acknowledged the said notices, that a meeting was to be held on November 30, 1987 to consider the dissolution of the corporation. Again the stockholders who attended the October 24, 1987 meeting were present. Upon motion duly seconded, the dissolution was approved. Per Resolution of the Board of Directors, the law firm of Reyes, Treyes & Fudolin Law Office was appointed as trustee to collect all the receivables of the corporation. At the time of the approval of the dissolution of the corporation on November 30, 1987, the shares of each stockholder were as follows: Name of Stockholders Total as of Nov. 30. Johnson Lee, 600 (subscription); 60 (June 7, 1980 stock dividend); 40 (May 2, 1981 stock dividend) --------700 shares Lok Chun Suen, 1,200 (subscription); 120 (June 7, 1980 stock dividend); 80 (May 2, 1981 stock dividend) ---------1,400 shares Charles O. Sy, 1800 (subscription); 180 (June 7, 1980 stock dividend); 120 (May 2, 1981 stock dividend); 700 (acquisition from Eugenio Flores ---------2,800 shares Arsenio Yang, Jr., 300 (subscription); 30 (June 7, 1980 stock dividend); 20 (May 2, 1981 stock dividend); 700 (acquisition from Eugenio Flores) -------1,050 shares Sonny Moreno, 1,050 (acquisition From Eugenio Flores) ----------------------1,050 shares Total ---------------------------------7,000 shares Pursuant to Section 11 of the Corporation Code, the Securities and Exchange Commission approved the dissolution of the corporation on March 1, 1988 subject to compliance of the requirements, such as the sending of notices to stockholders and publication thereof in a newspaper of general circulation, among others. On March 22, 1988, Johnson Lee, Sonny Moreno, Leoncio Tan and Nicanor Martin filed a petition with the Securities and Investigation Clearing Department (SICD) of the Commission praying, among other things, for the annulment or nullification of the Certification of Filing of Resolution of Voluntary Dissolution of NMI for being contrary to law and its by-laws. In the meantime, the trustee wrote the petitioner, Johnson Lee, on March 8, 1988 requesting him to turn over to it the P1,500,150.00 he received in payment of the empty bags sold by NMI to VCMI. However, he failed to do so.[7]

A verified complaint for three (3) counts of estafa was filed against the petitioner and Sonny Moreno with the City Prosecutors Office. Appended to the complaint were photocopies of Charge Invoice Nos. 0809, 0810, and 0811, issued by NMI to VMCI. During the requisite preliminary investigation, the petitioner and Moreno submitted their counter-affidavits. The counteraffidavit of the petitioner consisted of five pages.[8] After the investigation, two (2) Amended Informations were filed against the petitioner and Moreno, with the Regional Trial Court (RTC) of Negros Occidental. Except as to the particulars of the checks, the accusatory portions of the two Informations are identical, thus: That sometime in the month of August 1987, in the City of Bacolod, Philippines, and within the jurisdiction of this Honorable Court, the herein accused, Johnson Lee, being then the President and Sonny Moreno, the General Manager of Neugene Marketing, Inc., with the duty and responsibility to collect, turn over and deliver their collections to the herein offended party, Neugene Marketing, Inc., a corporation organized and existing by and under the laws of the Philippines, represented herein by its Trustees, Roger Reyes, Ernesto Treyes, and Eutiquio Fudolin, the said accused conspiring, confederating, and acting in concert far from complying with the aforementioned obligation having collected the amount of P565,750.00 covered by BPI Check No. 068766 (sic) dated August 3, 1987 as payment of Victorias Milling Company, a customer of the herein offended party, with intent of gain, and with unfaithfulness or abuse of confidence failed and refused to deliver the aforementioned amount to the herein offended party, up to the present, in spite of proper demands, but instead, did, then and there willfully, unlawfully and feloniously convert[ed] and/or misappropriated the same to their personal use and benefit to the damage and prejudice of the herein offended party in the aforementioned amount of FIVE HUNDRED SIXTY-FIVE THOUSAND SEVEN HUNDRED FIFTY (P565,750.00) PESOS, Philippine Currency. Act contrary to law.[9] The cases were docketed as Criminal Cases Nos. 10010 and 10011. During the trial, the original copies of Charge Invoice Nos. 0809, 0810 and 0811, and of BPI Check Nos. 068766 and 068993 were not in the custody of the prosecution. To prove the loss, destruction or non-availability of the original copies of the charge invoices and checks, as well as the authenticity and due execution thereof, the prosecution presented Ban Hua Flores, who testified that she saw the two checks in the office of the petitioner at the Singson Building, Plaza Moraga, Sta. Cruz, Manila. Sometime in 1987, she went to the office of the VMCI and inquired if it still had copies of the two checks and the clerk thereat informed her that it would be difficult to locate the checks as they were stored in the bodega, where many other checks were kept.[10] Flores also testified that the signatures at the dorsal portion of the checks were those of the petitioner, the President of NMI, with whom she had been working, and that he indorsed and deposited the same on September 4, 1987 with the Solidbank, instead of the BPI Plaza Cervantes branch in Manila, the official depository bank of NMI. According to Flores, she was able to secure microfilm copies of the checks from Solidbank, and was sure that the copies of the checks and invoices were faithful reproductions of the original copies thereof. [11] Testifying for the prosecution in obedience to a subpoena issued by the court, Merlita Bayaban, Manager for Corporate Affairs of VMCI, declared that the records section of VMCI, which had custody of all checks and other corporate records, was near her office. She testified that the checks, including their other records, were lost during the flood in 1985. [12] She also testified on the Certification[13] issued by Carolina Diaz, the Comptroller of VMCI, confirming the loss of the two checks. She, however, admitted that she did not see the original copies of the checks[14] and that she was not a signatory thereto.[15] Thereafter, the prosecution formally offered in evidence the counter-affidavit of the petitioner during the preliminary investigation, as well as the charge invoices and checks, viz.

G H I J

NMI Charge Invoice No. 0809 dated June 11, 1987 NMI Charge Invoice No. 0810 dated June 18, 1987 NMI Charge Invoice No. 0811 dated June 25, 1987 Demand letter dated March 8, 1988 signed by Atty. Roger Z. Reyes

J-1

Signature appearing above the typewritten name Roger Z. Reyes duly identified by the prosecution witness, Mrs. Ban Hua Flores as the signature of Atty. Roger Z. Reyes K Bank of the Philippine Islands (BPI) Legaspi Village Extension Check No. 068706 dated August3, 1987 in the amount of P565,750.00 K-1 Signature found on the dorsal side of Exhibit K which Mrs. Flores identified as the signature of Accused Johnson Lee. K-2 Rubberstamp showing the name of Solidbank appearing on the dorsal side of Exhibit K L BPI Legaspi Village Extension Check No. 068993 dated Aug. 19, 1987 in the Amount of P934,400.00 L-1 Signature found on the dorsal side of Exhibit L which Mrs. Flores identified as the signature of accused Lee L-2 Rubberstamp showing the name of Solid bank appearing on dorsal side of

To prove that Victorias Milling Co., Inc. (VMC) ordered 77,500 pieces of empty bags from NMI on June 11, 1987 and that these bags were delivered to VMC. To prove that VMC ordered 100,000 pieces of empty bags from NMI on June 18, 1987 and that these bags were delivered to VMC. To prove that VMC ordered 28,000 pieces of empty bags from NMI on June 25, 1987 and that these bags were delivered to VMC. To prove that in 1988, NMI made a demand upon the accused for the delivery of the amount of of P1,500,150.00 representing VMCs payment for the delivery of the empty bags mentioned in Exhibits G, H and I. To prove the genuineness, authenticity and due execution of Exhibit J.

To prove that VMC made a check payable to NMI, in the amount of P565,750, as payment to NMI for the delivery of the empty bags mentioned in Exhibits G, H and I.

To prove that the accused Lee received and was in possession of Exhibit K and that he indorsed and deposited the same.

To prove that Exhibit K was deposited by accused Lee in the Solidbank which is not the official depository bank of NMI, the official NMI depository bank being the BPI Plaza Cervantes Branch. To prove that VMC made a check payable to NMI in the amount of P934,400, as payment to NMI for the delivery of the empty bags mentioned in Exhibits G, H and I. To prove that the accused Lee received and was in possession of Exhibit L and that he indorsed and deposited the same.

To prove that Exhibit L was deposited by accused Lee in the Solidbank which is not the official depository bank of NMI, the Official NMI depository bank being the BPI Plaza Cervantes

Exh. L O

Branch.16 To prove that the proceeds of Exhibit K and L in the total amount of P1,500.150 are in the possession and control of the accused and that both refused to deliver the same to NMI despite demand To prove the genuineness, due execution and authenticity of Exhibit O, which both of the accused also admitted. Same purpose as in Exhibit O.

The prosecution also offered in evidence the counter-affidavit of the petitioner during the preliminary investigation, as follows:
Counter-Affidavit dated September 9, 1988 signed and submitted by Johnson Lee in B.C.-I.S. No. 88-347, consisting of 5 pages

O-1 Signature found on page 5 of Exhibit O above the typewritten Name Johnson Lee O-2 Paragraph 6 of Exhibit O found On page 2 thereof. 17

The accused objected to the admission of the photocopies of the checks and charge invoices on the ground that the best evidence were the original copies thereof. On April 12, 2002, the trial court issued an Order admitting the counter-affidavit of the petitioner, as well as the photocopies of the checks and charge invoices, on the ground that the prosecution had adduced preponderant evidence that the original copies of the said charges and checks were lost, destroyed or non-available.18 The accused filed a motion for reconsideration of the order, claiming that the prosecution failed to prove the authenticity and due execution of the offered documents, a prerequisite to the admission thereof as secondary evidence. They also filed a Motion for Leave to File a Demurrer to Evidence. The trial court denied both motions. In a petition for certiorari under Rule 65 of the Rules of Court filed with the Court of Appeals, the petitioner alleged that Respondent judge committed grave abuse of discretion equivalent to lack or excess of jurisdiction, in admitting in evidence the Peoples documentary evidence, consisting of mere unauthenticated photocopies, in flagrant violation of the Best Evidence Rule (Sec. 3, 4, 5 and 6, Rule 130), despite the repeated vehement objections of the petitioner, thereby wantonly refusing to exclude such clearly inadmissible evidence, which actuation as embodied in his two (2) assailed Orders, is capricious, whimsical and patently erroneous, as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law, and the remedy of ordinary appeal would not afford petitioner adequate and expeditious relief, for while available eventually, such remedy is cumbersome for it requires petitioner to undergo a useless and time-consuming trial, and thus becomes an oppressive exercise of judicial authority; hence, the imperative necessity for the issuance of a temporary restraining order or preliminary injunction requiring respondent judge to refrain from further proceeding with Crim. Cases Nos. 10010 and 10011 until the Petition shall have been disposed of, otherwise, failure of justice is sure to ensue.19 On March 14, 2003, the Court of Appeals rendered judgment dismissing the petition for lack of merit. 20 The Court of Appeals ruled that the charge invoices and the checks were not the best evidence to prove receipt by the accused of the amounts allegedly misappropriated; hence, the best evidence rule does not apply. It also held that even if the contents of the checks were the subject of inquiry, based on the proofs adduced by the prosecution, such checks are admissible in evidence. The Court of Appeals declared that, in any event, the prosecution proved the loss or destruction or non-availability of the checks and charge invoices. The petitioners motion for reconsideration of the decision suffered the same fate. The petitioner then sought relief from this Court, in a petition for review on certiorari, and raises the following issues: 1. CAN (sic) PRIVATE DOCUMENT OFFERED AS AUTHENTIC BE RECEIVED IN EVIDENCE WITHOUT PROOF OF ITS DUE EXECUTION AND AUTHENTICITY? 2. CAN SECONDARY EVIDENCE BE ADMITTED WITHOUT PROOF OF ITS LOSS OR UNAVAILABILITY AND EXECUTION OF THE ORIGINAL? 3. DID THE COURT OF APPEALS ERR WHEN IT RULED THAT THE FAILURE TO PRODUCE THE ORIGINAL OF A DOCUMENTARY EVIDENCE, CONSISTING OF PRIVATE INSTRUMENTS DOES NOT VIOLATE THE BEST EVIDENCE RULE,

INASMUCH AS RECEIPT BY THE PETITIONER OF THE AMOUNT ALLEGEDLY MISAPPROPRIATED MAY BE PROVED BY EVIDENCE OTHER THAN THE ORIGINAL OF THE SAID PRIVATE DOCUMENTS? 4. IS THE FINDING OF THE COURT OF APPEALS THAT THE FACT OF LOSS OR DESTRUCTION OF THE CHECKS AND THE CHARGE INVOICES HAS BEEN ESTABLISHED BY OTHER EVIDENCE, DEVOID OF SUPPORT BY THE EVIDENCE ON RECORD AND IS, THEREFORE, A BARE CONCLUSION OR A FINDING BASED ON SURMISE AND CONJECTURES? 5. IS ANOTHER FINDING, IN THE FORM OF ASSUMPTION, OF THE COURT OF APPEALS THAT SINCE THE WITNESSES FOR THE PROSECUTION ARE OFFICERS WITH AUTHORITY TO KEEP THE QUESTIONED DOCUMENTS, THEY NECESSARILY TOOK AND CONDUCTED A THOROUGH SEARCH FOR THE MISSING DOCUMENTS, A MERE CONJECTURE OR SURMISE OR A FINDING GROUNDED ENTIRELY ON SPECULATION? 6. DID THE COURT OF APPEALS VIOLATE THE DICTUM OF THE COLD NEUTRALITY OF AN IMPARTIAL JUDGE WHEN IT DENIED PETITIONERS MOTION FOR INHIBITION GROUNDED ON ITS DISPLAY OF UNDUE INTERESTS AND WHEN A MEMBER THEREOF HAS SEEN IT FIT AND APPROPRIATE TO RECUSE HERSELF? 21 The petitioner avers that the prosecution failed to prove the loss, destruction or non-availability of the original copies of the checks and charge invoices; that diligent efforts were undertaken to locate the original copies of the checks and invoices; and that said efforts were futile. He asserts that the witness competent to prove the loss or destruction of the original of the checks would be the records custodian of VMCI. Bayaban was not a competent witness thereon, considering that she merely testified that the clerk of the VMCI failed to locate the original copies of the checks because the latter was lazy to search for the same. The petitioner posits that the prosecution failed to prove the due execution and authenticity of the charge invoices and the two checks through the testimonies of Flores and Bayaban. He contends that Bayaban even admitted that she was not privy to and had no knowledge of the execution of the said checks and of the signatories of the checks. The petitioner further avers that, although the appellate court held that the photocopies of the checks were admissible in evidence based on other proofs adduced by the prosecution, it failed to specify the other proofs adverted to by it. In its Comment on the petition, the Office of the Solicitor General asserts that through the testimony of Bayaban, the due execution and authenticity of the checks were proved by the prosecution as well as the admissions of the petitioner in his counteraffidavit during the preliminary investigation. It further averred that through the testimonies of Bayaban and Flores, it proved, with reasonable certainty, the loss or destruction of the original copies of the checks and the charge invoices. The issues for resolution are as follows: (a) whether or not the petition at bar is the proper remedy of the petitioner; and (b) whether or not the trial court committed a grave abuse of its discretion amounting to excess or lack of jurisdiction in admitting in evidence the photocopies of the checks and charge invoices in lieu of the original copies thereof. The Ruling of the Court In People v. Court of Appeals,22 we held that for a petition for certiorari or prohibition to be granted, it must set out and demonstrate, plainly and distinctly, all the facts essential to establish a right to a writ. 23 The petitioner must allege in his petition and establish facts to show that any other existing remedy is not speedy or adequate 24 and that (a) the writ is directed against a tribunal, board or officer exercising judicial or quasi-judicial functions; (b) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to excess or lack of jurisdiction; and, (c) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. 25

The trial court acts without jurisdiction if it does not have the legal power to determine the case; there is excess of jurisdiction where the respondent, being clothed with the power to determine the case, oversteps its authority as determined by law. There is grave abuse of discretion where the public respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of its judgment as to be said to be equivalent to lack of jurisdiction.26 Mere abuse of discretion is not enough. A remedy is plain, speedy and adequate if it will promptly relieve the petitioner from the injurious effects of that judgment and the acts of the tribunal or inferior court.27 A petition for certiorari cannot co-exist with an appeal or any other adequate remedy. The existence and the availability of the right to appeal are antithetical to the availment of the special civil action for certiorari. These two remedies are mutually exclusive.28 In a petition for certiorari, the jurisdiction of the court is narrow in scope. It is limited to resolving only errors of jurisdiction. It is not to stray at will and resolve questions or issues beyond its competence such as errors of judgment. Errors of judgment of the trial court are to be resolved by the appellate court in the appeal by and of error or via a petition for review on certiorari under Rule 45 of the Rules of Court, as amended. Certiorari will issue only to correct errors of jurisdiction. It is not a remedy to correct errors of judgment.29An error of judgment is one in which the court may commit in the exercise of its jurisdiction, and which error is reversible only by an appeal. Error of jurisdiction is one where the act complained of was issued by the court without or in excess of jurisdiction and which error is correctible only by the extraordinary writ of certiorari. 30 Certiorari will not be issued to cure errors made by the trial court in its appreciation of the evidence of the parties, its conclusions anchored on the said findings and its conclusions of law thereon.31 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, correctible 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. 32 In this case, there is no dispute that the RTC had jurisdiction over the cases filed by the public respondent against the petitioner for estafa. The Order admitting in evidence the photocopies of the charge invoices and checks was issued by the RTC in the exercise of its jurisdiction. Even if erroneous, the same is a mere error of judgment and not of jurisdiction. Additionally, the admission of secondary evidence in lieu of the original copies predicated on proof of the offeror of the conditions sine qua non to the admission of the said evidence is a factual issue addressed to the sound discretion of the trial court.33 Unless grave abuse of discretion amounting to excess or lack of jurisdiction is shown to have been committed by the trial court, the resolution of the trial court admitting secondary evidence must be sustained. The remedy of the petitioner, after the admission of the photocopies of the charge invoices and the checks, was to adduce his evidence, and if after trial, he is convicted, to appeal the decision to the appropriate appellate court. Moreover, under Rule 45 of the Rules of Court, as amended, only questions of law may be properly raised. In the final analysis, the threshold issue in this case is whether or not the prosecution adduced evidence, testimonial and documentary, to prove the predication to the admission of the photocopies of the charge invoices 34 and of the checks.35 The petitioner posits that the prosecution failed to discharge its burden, in contrast to the claim of the prosecution that it succeeded in doing so. In resolving the petition at bar, the court will have to delve into and calibrate the testimonial and documentary evidence adduced by the parties in the trial court, which the court is proscribed to do under Rule 45 of the Rules of Court. This was the ruling of the Court in Johnson Lee v. People:36 In other words, certiorari will issue only to correct errors of jurisdiction and not to correct errors of procedure or mistakes in the courts findings and conclusions. An interlocutory order may be assailed by certiorari or prohibition only when it is shown that the court acted without

or in excess of jurisdiction or with grave abuse of discretion. However, this Court generally frowns upon this remedial measure as regards interlocutory orders. To tolerate the practice of allowing interlocutory orders to be the subject of review by certiorari will not only delay the administration of justice but will also unduly burden the courts. We find that the allegations of the petitioners are not sufficient grounds to qualify as abuse of discretion warranting the issuance of a writ of certiorari. The petitioners present factual contentions to absolve them from the criminal charge of estafa. The criminal cases concern corporate funds petitioners allegedly received as payment for plastic bought by Victorias Milling Corporation from NMI. They refused to turn over the money to the trustee after NMIs dissolution on the ground that they were keeping the money for the protection of the corporation itself. Thus, the elements of misappropriation and damage are absent. They argue that there is no proof that, as officers of the corporation, they converted the said amount for their own personal benefit. They likewise claim that they already turned the money over to the majority stockholder of the defunct corporation. Clearly, the said allegations are defenses that must be presented as evidence in the hearing of the criminal cases. They are inappropriate for consideration in a petition for certiorari before the appellate court inasmuch as they do not affect the jurisdiction of the trial court hearing the said criminal cases but instead are defenses that might absolve them from criminal liability. A petition for certiorari must be based on jurisdictional grounds because, as long as the respondent court acted with jurisdiction, any error committed by it in the exercise thereof will amount to nothing more than an error of judgment which can be reviewed or corrected on appeal. Moreover, the petition for certiorari before the Court of Appeals was premature for the reason that there were other plain and adequate remedies at law available to the petitioners. Under Section 3(a) of Rule 117 of the Revised Rules of Criminal Procedure, the accused can move to quash the information on the ground that the facts do not constitute an offense. There is no showing that the petitioners, as the accused in the criminal cases, ever filed motions to quash the subject informations or that the same were denied. It cannot then be said that the lower court acted without or in excess of jurisdiction or with grave abuse of discretion to justify recourse to the extraordinary remedy of certiorari or prohibition. But it must be stressed that, even if petitioners did file motions to quash, the denial thereof would not have automatically given rise to a cause of action under Rule 65 of the Rules of Court. The general rule is that, where a motion to quash is denied, the remedy is not certiorari but to go to trial without prejudice to reiterating the special defenses involved in said motion, and if, after trial on the merits an adverse decision is rendered, to appeal therefrom in the manner authorized by law. And, even in the exceptional case where such denial may be the subject of a special civil action for certiorari, a motion for reconsideration must first be filed to give the trial court an opportunity to correct its error. Finally, even if a motion for reconsideration was filed and denied, the remedy under Rule 65 would still be unavailable absent any showing of the grounds provided for in Section 1 thereof. The petition before the Court of Appeals, subject of this appeal, did not allege any of such grounds. Furthermore, a petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure before this Court only allows questions of law. Inasmuch as petitioners defenses alleging circumstances that negate misappropriation definitely require appreciation of facts, i.e., testimonial and documentary evidence, this Court cannot assess the merit of the said claims.37 Moreover, the factual findings of the Court of Appeals are conclusive on the Court unless the petitioner is able to establish that the findings of facts of the appellate court are not supported by or are contrary to the evidence; or if the appellate court ignored, misconstrued or misinterpreted vital facts and circumstances, which, if considered, could change or even reverse the outcome of the case. In this, the petitioner failed. Rule 130, Section 3 of the Revised Rules of Court reads:

Original document must be produced; exceptions. When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases: (a) When the original has been lost or destroyed, or cannot be produced in court without bad faith on the part of the offeror; (b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice; (c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; (d) When the original is a public record in the custody of a public officer or is recorded in a public office. Before the onset of liberal rules of discovery, and modern technique of electronic copying, the best evidence rule was designed to guard against incomplete or fraudulent proof and the introduction of altered copies and the withholding of the originals. But the modern justification for the rule has expanded from the prevention of fraud to a recognition that writings occupy a central position in the law. The importance of the precise terms of writings in the world of legal relations, the fallibility of the human memory as reliable evidence of the terms, and the hazards of inaccurate or incomplete duplicate are the concerns addressed by the best evidence rule.38 The rule does not apply to proof of facts collateral to the issues such as the nature, appearance or condition of physical objects or to evidence relating to a matter which does not come from the foundation of the cause of action or defense; or when a party uses a document to prove the existence of an independent fact, as to which the writing is merely collated or incidental.39 The offeror of secondary evidence is burdened to prove the predicates thereof: (a) the loss or destruction of the original without bad faith on the part of the proponent/offeror which can be shown by circumstantial evidence of routine practices of destruction of documents;40 (b) the proponent must prove by a fair preponderance of evidence as to raise a reasonable inference of the loss or destruction of the original copy; and (c) it must be shown that a diligent and bona fide but unsuccessful search has been made for the document in the proper place or places. 41 It has been held that where the missing document is the foundation of the action, more strictness in proof is required than where the document is only collaterally involved.42 If the document is one in which other persons are also interested, and which has been placed in the hands of a custodian for safekeeping, the custodian must be required to make a search and the fruitlessness of such search must be shown, before secondary evidence can be admitted.43 The certificate of the custody of the document is incompetent to prove the loss or destruction thereof. Such fact must be proved by some person who has knowledge of such loss.44 The proponent is also burdened to prove the due execution or existence of the original as provided in Rule 130, Section 5 of the Revised Rules of Court: When the original document is unavailable. When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated. Rule 132, Section 20 of the Revised Rules of Court provides the procedure on how the authenticity and due execution of a private document which is offered as authentic may be proved: Proof of private document. Before any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either:
(a) By anyone who saw the document executed or written; or

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

Any other private document need only be identified as that which it is claimed to be. The testimony of an eyewitness as to the execution of a private document must be positive. He must state that the document was actually executed by the person whose name is subscribed thereto.45 The admission of that party against whom the document is offered, of the authenticity and due execution thereof, is admissible in evidence to prove the existence, authenticity and due execution of such document. In this case, there is no dispute that the original copies of the checks were returned to VMCI after the same were negotiated and honored by the drawee bank. The originals of the charge invoices were kept by VMCI. There is also no dispute that the prosecution offered the photocopies of the invoices in evidence to prove the contents thereof, namely that: (a) VMCI purchased 203,500 empty bags from NMI for the total price of P1,500,150.00; (b) VMCI received the said goods in good order and condition; and (c) NMI charged VMCI for the purchase price of said goods. The prosecution offered the checks to prove the contents thereof as well as the following: (a) VMCI drew and delivered the checks to the NMI; (b) the said checks were endorsed by the petitioner; and (c) the said checks were deposited by the petitioner with the Solidbank which was not the official depository of NMI. Thus, the prosecution was burdened to prove the loss, destruction or its inability to produce in court without bad faith on its part of the original copies of the said invoices and checks without bad faith on its part. We agree with the petitioner that the Certification signed by Carolina Diaz was inadmissible in evidence against him because of the failure of the prosecution to present her as witness and to testify on said certification. However, the records show that, in obedience to the subpoena duces tecum and ad testificandum issued by the trial court directing the VMCI to produce the originals of the checks and the charge invoices, Bayaban, the Manager for Corporate Affairs of VMCI, testified that all its records, including the charge invoices and checks, were destroyed seven years ago in a flash flood which occurred on November 28, 1995, and that such loss/destruction was known to all the employees of VMCI, including herself:
FISCAL ESQUILLA: Q Please inform this Honorable Court how were you able to appear this afternoon in connection with this case? A The Legal Department, through the instruction of our Chief Operating Officer, inquired from our Accounting through our comptroller, Carolina S. Diaz to produce the original copies of the two (2) checks which was mentioned in the subpoena issued by Prosecutor Esquilla. And then, through my direct Boss, the Chief Accountant, Mrs. Melanie Roa, instructed me to look into the two (2) checks. And since the record is under my Department, I immediately asked my subordinate to look for it. And, in fact, she was also under my supervision when we looked for the document. And I have already knowledge during the November 28, 1995 due to flash flood, we lost our records. And in fact, we have declaration to the Bureau of Internal Revenue (BIR). And we also exhausted some means to look for the documents, but we really cannot produce the original copies of the checks, even the Xerox, no more copies of the checks as requested. Q Madam Witness, when you said that you instructed your subordinate to look for the record, specifically, the records being asked in the subpoena, the original copies of the checks, these two (2) checks, will you please inform this Honorable Court where these records in 1995 including these checks, of course, have been kept by your office? A It is kept at the Records Section Office just near my table. It is just over there. It is just over there. The distance is very near. We have the vault power cards and all old records were kept are downstairs and the new ones are kept upstairs. So, we dont anticipate the flood and because that was the first time that we were hit by that flash flood. Q So, you want to impress this Honorable Court that those records which were kept downstairs your office were carried or destroyed by this flash flood which occurred in 1995 is that correct or is that what you mean?

A Yes, Your Honor. Q And can you say that if these two (2) checks, subject of this case now, were there downstairs and was destroyed by the 1995 flash flood, can you say that before this Honorable Court? A Yes, Your Honor. Q Aside from these checks downstairs which were destroyed by this flash flood, what were the other records that were kept there that were lost also? A All our Bank Vouchers, some of our General Ledgers. Actually, I cannot memorize it, but in our declaration to the Bureau of Internal Revenue (BIR) we have listings of those documents which were damaged by flash flood. Q Alright, Madam Witness. So, when this subpoena/subpoena (sic) duces tecum was received by Victorias Milling Company, addressed to the Chief Operating Officer, do I get from you that this was referred to the Legal Affairs of VICMICO? A Yes, Your Honor. COURT: Slowly, the stenographer may not be able to catch up with you. FISCAL ESQUILLA: I see. Sorry, Your Honor. And from the Legal Affairs, where did it proceed, this subpoena or this was referred to by the Legal Affairs to whom? WITNESS: A To Mrs. Carolina Diaz, the Comptroller. FISCAL ESQUILLA: Q You mentioned that she is your immediate Boss? A I have also, next to her, Mrs. Melanie Roa, and I am next to her. Q And you are holding office there at VICMICO together with the Comptroller, Carolina Diaz? A We are in the same building. Q And does she has a cubicle of her own? A Yes, Your Honor. Q And your table up to her cubicle, how far is your table from her cubicle? A They are very near. I can see from my place her office and I can see anytime she went in and out of the room. Maybe from here up to that next room. COURT: About 25 to 30 meters, more or less. FISCAL ESQUILLA: Q And, Madam Witness, may I know from you that who requested you to testify because this Certification bears the signature of Mrs. Diaz? A Ah, Mrs. Diaz, in fact, ah there is a Memo from the Legal Affairs that we will submit the Certification to the Honorable Court and the Memo was addressed to Mrs. Diaz. And there was a note from Mrs. Diaz to my direct Boss, the Chief Accountant, and then I was tasked by my immediate Boss to attend to this. Q How were you able to secure a Certification? A A Certification was issued also upon our recommendation to the Chief Accountant that we cannot produce anymore the original copies of the said document. Q Who gave you that Certification so that you can bring that today in Court? A Marie Melanie G. Roa. Q Do you have with you now the Certification? A Yes, Your Honor. Q And you are showing the original copy of the Certification? A Yes, Your Honor.

Q A Q A

I show to you the Certification dated December 6, 2001 issued by Carolina Diaz, Comptroller. Do you know whose signature is this? That is the signature of Mrs. Carolina S. Diaz. How do you know that this is her signature? Im very much familiar with her signature because in our day to day undertakings in the office, I can see this in the checks she signed, and in the Office Memorandum. And, in fact, I also prepare some of the communications for her signature. Q For the record, Madam Witness, will you please read the first paragraph of that Certification issued by Carolina Diaz? A Victorias Milling Co., Inc. Certification. This is to certify that Victorias Milling Co., Inc. no longer have the original copies of the BPI, Legaspi Village, Extension Office, Legaspi St., Makati, Metro Manila, Check No. 068766 dated August 3, 1987 and Check No. 068993 dated August 19, 1987 as the same were destroyed by flash flood that hit the province of Negros Occidental particularly the City of Victorias on November 28, 1995. FISCAL ESQUILLA: Your Honor, may I request that this Certification be marked as our Exhibit X temporarily. COURT: Mark it. FISCAL ESQUILLA: And then the signature as identified by this witness, of her immediate Boss, be encircled and marked as Exhibit X -1. COURT: Mark it. COURT INTERPRETER: Your last Exhibit is Exhibit Y. FISCAL ESQUILLA: I will change my Exhibit from Exhibit X and X -1 to Z and Z-1. No further, Your Honor. COURT: Do you want to cross? ATTY. MAGDAMIT: Yes, Your Honor. COURT: Alright, cross for the accused Moreno. We will give the Manila lawyer the first shot. CROSS-EXAMINATION OF THE WITNESS MERLITA T. BAYABAN CONDUCTED BY ATTY. SIMEON M. MAGDAMIT. ATTY. MAGDAMIT Q Madam Witness, when you received the subpoena, it contained a photocopy of the checks that were being requested, is that correct? (At this juncture, there is no answer from the witness) ATTY. MAGDAMIT: (Follow-up question) Q Did it already contain a copy of the photocopy? A Ah. Attached to the subpoena. Q Have you seen this photocopy when you received the subpoena? You did not see? A Ah, actually, the subpoena was directed to the Legal. Q You did not see. You did not see the photocopy? May I know the point of Compaero, Your Honor. WITNESS: (Answers before Atty. Magdamit) A I remember it was presented to me by Mrs. Diaz. ATTY. MAGDAMIT Q Mrs. Diaz. So, let me just clear this up. The subpoena did not immediately go to the Legal, it was presented to you by Mrs. Diaz? A No, it was presented by the Legal to our Comptroller. Then . . . ...

COURT: Q And then to? A And then to me. Q There is an initial, MGR. Do you know who is that? A That is Mrs. Melanie G. Roa, our Chief Accountant. Q And from then, when it reached you, you were the ones who sorted through the files, were you the one? A Ah, my subordinate. Q Ah, you were not the one? A No, Your Honor. Q Now, but you were certain I withdraw that question. When you received the subpoena with the attached document, were you already aware that the records, the original, were destroyed or you were not yet aware? A Very much aware that the records were destroyed by the flash flood because it was not only in that case that we were tasked to look for the documents. There were also Examiners from the Bureau of Internal Revenue who asked for the documents prior to 1995 and thats our reason , we cannot produce the documents. Q Now, wait. Were you the only one who was aware that this file was destroyed or was it a matter that was known in your company? A It was known to everybody. Q It was known? A Yeah. Q So, can you conclude that just upon receiving the subpoena and looking at the photocopy of the checks, you would immediately know that this was among the files that was destroyed by the flood? A Yes, because of the date, 1995. Q So, despite that knowledge, it still went through the process and you still looked for it, is that correct? A Yes, Your Honor. Q So, despite of your knowledge that it was destroyed, you still looked for it? A Yeah, we still looked for it because there might be some files to prove that it was really our check issuance. So even our files, even our Bank 46 Recon, we cannot produce it.

Contrary to the claim of the petitioner, the prosecution adduced preponderant evidence to prove the existence, the due execution and the authenticity of the said checks and charge invoices consisting of the admission of no less than the petitioner in his counter-affidavit. The petitioner admitted therein that he received the total amount of P1,500,150.00 from VMCI in full payment of the delivery and sale of the empty bags by NMI to VMCI and that the said amount was in the custody of the said corporation, thus:
6. That the collection by the Corporation of the amount of P1,500,150.00 is a valid act of the corporation; that it is the full and complete and just payment for the three deliveries of plastic materials by the Neugene Marketing, Inc to Victorias Milling Company on June 11, 1987, June 18, 1987 and June 25, 1987 when I was and I am still the President and Mr. Sonny Moreno, General Manager of the Neugene Marketing, Inc. and that the said Victorias Milling Company paid in full and payments were made to the Corporation and it is only a legitimate act of the Neugene Marketing, Inc. in the regular course of business to receive payment for the obligations of its customers to the Corporation; 7. That with respect to the demand letter addressed to me to turn over aforesaid P1,500,150.00, the said amount is money of the Neugene Marketing, Inc. and the corporation is the legitimate possessor thereof and that Reyes, Treyes, and Fudolin Law Firm has no right or authority to make the demand letter; and that it is the corporation that holds the money and that personally, neither I nor Sonny Moreno can just take the money to give to Reyes, Treyes and Fudolin Law Firm which cannot be trusted and which is an unauthorized entity to receive, hold and possess said funds or to file this case; 8. That the amount of P1,500,150.00 the corporate funds of the Neugene Marketing, Inc. unless authorized by the members of the Board of Directors, neither I nor Sonny Moreno can dispose of the said sum of money and it is the corporation that is holding the said amount and holding it to answer for corporation expenses on its business operations and to answer for obligations to its creditors including the claims of Sonny Moreno and myself for unpaid compensation, salaries, fringe benefits, allowances and shares in the profits of the Corporation; and that therefore, it is beyond our authority or

power to refuse the turn over or to turn over the aforesaid amount; and that if there is evidence of the malicious and criminal intent to appropriate the same for personal benefit that is more applicable to Reyes, Treyes and Fudolin who apparently without any legal authority and illegally posing as a trustee when as a matter of fact, they have never been appointed or designated a[s] trustee by the Neugene Marketing, Inc.; and therefore, complainants should be the one held criminally responsible for the illegal dissolution of the Neugene Marketing, Inc., and for which they will be charged with the corresponding action for falsification and perjury for having been able to secure a Certification of Dissolution from the Securities and 47 Exchange Commission by means of false pretenses and representations;

It bears stressing that the counter-affidavit of the petitioner was adduced in evidence by the prosecution precisely to prove the existence, authenticity and due execution of the original of the said charge invoices and checks and the trial court admitted the same for the said purpose. By his counter-affidavit, the petitioner, in effect, admitted the allegations of the affidavit-complaint of the trustee of NMI: a. Sometime on June 11, 1987, June 18, 1987 and June 25, 1987, respectively, NEUGENE MARKETING, INC. made three (3) deliveries of plastic materials to Victorias Milling Company, Victorias, Negros Occidental totalling P1,500,150.00 covered by Charge invoices b. Aforesaid charge invoices were subsequently paid by Victorias Milling Company in full and payments delivered to Johnson Lee and/or Sonny Moreno, as President and General Manager of Neugene Marketing, Inc. c. As Trustee of Neugene Marketing, Inc., the Reyes, Treyes & Fudolin Law Firm sent a demand letter addressed to Johnson Lee to turn over aforesaid P1,500,150.00. d. As of the date of this Affidavit-Complaint, Johnson Lee and/or Sonny Moreno have failed to deliver aforesaid sum to the herein trustee contrary to law. 4. Johnson Lee and/or Sonny Moreno have no authority whatsoever to withhold aforesaid sum of P1,500,150.00 and their refusal to turn over aforesaid amount is evidence of a malicious and criminal intent to appropriate the same for their own personal benefit.48 With the admissions of the petitioner in his counter-affidavit, the prosecution even no longer needed to adduce evidence aliunde to prove the existence, due execution and the authenticity of the charge invoices and the checks. All told then, the prosecution mustered the requisite quantum of evidence to prove the predicates to the admission of the photocopies of the charge invoices and checks. IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The assailed decision of the Court of Appeals is AFFIRMED. No costs. SO ORDERED. Puno, J., (Chairman), Austria-Martinez and Tinga, JJ., concur. Chico-Nazario, J., on leave.
THIRD DIVISION

SECOND DIVISION
THE CONSOLIDATED BANK AND TRUST CORPORATION (SOLIDBANK), G.R. No. 143338

P e t i t i o n e r,

Present: PUNO, Chairman, AUSTRIA-MARTINEZ, CALLEJO, SR., TINGA, and CHICO-NAZARIO, JJ.

- versus

DEL MONTE MOTOR WORKS, INC., NARCISO G. Promulgated: [1] MORALES, AND SPOUSE, R e s p o n d e n t s. July 29, 2005 x--------------------------------------------------x

DECISION
CHICO-NAZARIO, J.:
This is a petition for review on certiorari of the Decision[2] of the Court of Appeals in CA-G.R. CV No. 16886 entitled, The Consolidated Bank & Trust Corporation (SOLIDBANK) v. Del Monte Motor Wo rks, Inc., Narciso O. Morales and Spouse promulgated on 25 November 1999 and of the Resolution of the appellate court dated 11 May 2000 denying petitioners motion for reconsideration. Said decision and resolution affirmed the order dated 28 December 1987 of the Regional Trial Court (RTC), Branch 27, Manila. The facts of the case are as follows:

On 13 June 1984, petitioner filed before the RTC of Manila a complaint[3] for recovery of sum of money against respondents, impleading the spouse of respondent Narciso O. Morales (respondent Morales) in order to bind their conjugal partnership of gains. Petitioner, a domestic banking and trust corporation, alleges therein that on 23 April 1982, it extended in favor of respondents a loan in the amount of One Million Pesos (P1,000,000.00) as evidenced by a promissory note executed by respondents on the same date. Under the promissory note, respondents Del Monte Motor Works, Inc. (respondent corporation) and Morales bound themselves jointly and severally to pay petitioner the full amount of the loan through twenty-five monthly installments of P40,000.00 a month with interest pegged at 23% per annum. The note was to be paid in full by 23 May 1984. As respondents defaulted on their monthly installments, the full amount of the loan became due and demandable pursuant to the terms of the promissory note. Petitioner likewise alleges that it made oral and written demands upon respondents to settle their obligation but notwithstanding these demands, respondents still failed to pay their indebtedness which, as of 09 March 1984, stood at P1,332,474.55. Petitioner attached to its complaint as Annexes A, B, and C, respectively, a photocopy of the promissory note supposedly executed by respondents, a copy of the demand letter it sent respondents dated 20 January 1983, and statement of account pertaining to respondents loan. On 31 October 1984, petitioner filed an Ex-Parte Motion to Declare the Defendants in Default which was opposed by the defendants upon the ground that they were never served with copies of the summons and of petitioners complaint. On 23 November 1984, respondent corporation filed before the trial court a manifestation attaching thereto its answer to petitioners complaint which states the following:
2That it denies generally and specifically the allegations contained in paragraphs 3, 4, 5, 6, 7 and 8 thereof for lack of knowledge and information sufficient to form a belief as to the truth of the matters therein alleged, the truth being those alleged in the Special and Affirmative Defenses hereinbelow contained; 3ANSWERING FURTHER, and by way of a first special and affirmative defense, defendant herein states that the promissory note in question is void for want of valid consideration and/or there was no valuable consideration involved as defendant herein did not receive any consideration at all;

4ANSWERING FURTHER, and by way of a second special affirmative defense, defendant herein alleges that no demand has ever been sent to nor received by herein defendant and if ever demands were made, denies any liability as averred therein. 5ANSWERING FURTHER, and by way of a third special and affirmative defense, defendant herein avers that the complaint states no cause of action and has no basis either in fact or in law;

VERIFICATION I, JEANETTE D. TOLENTINO, of legal age, after having been duly sworn to in accordance with law, depose and state: That I am the Controller of Del Monte Motor Works, Inc., one of the defendants in this case. That for and in behalf of the defendant corporation, I caused the preparation of the above-narrated answer. That I have read the contents thereof and they are true of my own knowledge. (SGD) JEANNETTE D. TOLENTINO[4]

On 06 December 1984, respondent Morales filed his manifestation together with his answer wherein he likewise renounced any liability on the promissory note, thus:
1. He ADMIT[S] paragraphs 1, 2, and 3 of the complaint with a qualification in paragraph 3 thereof that he has long been separated from his wife and the system governing their property relations is that of complete separation of property and not that of conjugal partnership of gain[s]; 2. He [DENIES], generally and specifically, the allegations contained in paragraphs 4, 5, 6, 7, and 8 thereof, for lack of knowledge and information sufficient to form a belief and as to the truth of the matter therein averred, the truth being those alleged in the Special And Affirmative Defenses hereinbelow pleaded;

SPECIAL AND AFFIRMATIVE DEFENSES 4. 5. He has never signed the promissory note attached to the complaint in his personal and/or individual capacity as such; That the said promissory note is ineffective, unenforceable and void for lack of valid consideration;

6. That even admitting, argumenti gratia, the validity and execution of the questioned promissory note, still, defendant herein cannot be bound personally and individually to the said obligations as banking procedures requires, it being a standard operating procedure of all known banking institution, that to hold a borrower jointly and severally liable in his official as well as personal capacity, the borrower must sign a Suretyship Agreement or at least, a continuing guarranty with that of the corporation he represent(s) but which in this case is wanting; 7. That transaction/obligation in question did not, in any way, redound/inure to the benefit of the conjugal partnership of gain, as there is no conjugal partnership of gain to speak with, defendant having long been separated from his wife and their property relation is governed by the system of complete separation of property, and more importantly, he has never signed the said promissory note in his personal and individual capacity as such; VERIFICATION That I, NARCISO MORALES, after having been duly sworn to in accordance with law, hereby depose and declare that: I am one of the named defendant[s] in the above-entitled case; I have cause[d] the preparation of the foregoing Answer upon facts and figures supplied by me to my retained counsel; have read each and every allegations contained therein and hereby certify that the same are true and correct of my own knowledge and information. (SGD) NARCISO MORALES Affiant[5]

On 26 December 1984, the trial court denied petitioners motion to declare respondents in default and admitted their respective answers.[6]

During the trial on the merits of this case, petitioner presented as its sole witness, Liberato A. Lavarino (Lavarino), then the manager of its Collection Department. Substantially, Lavarino stated that respondents obtained the loan, subject of this case, from petitioner and due to respondents failure to pay a single monthly installment on this loan, petitioner was constrained to send a demand letter to respondents; that as a result of this demand letter, Jeannette Tolentino (Tolentino), respondent corporations controller, wrote a letter to petitioner requesting for some consideration because of the u nfavorable business atmosphere then buffeting their business operation; that Tolentino enclosed to said letter a check with a face value of P220,020.00 to be discounted by petitioner with the proceeds being applied as partial payment to their companys obl igation to petitioner; that after receipt of this partial payment, respondents obligation again became stagnant prompting petitioner to serve respondents with another demand letter which, unfortunately, was unheeded by respondents. Lavarino also identified the following exhibits for petitioner: photocopy of the duplicate original of the promissory note attached to the complaint as Exhibit A;[7] petitioners 20 January 1983 demand letter marked as Exhibit B;[8] Tolentinos letter to petitioner dated 10 February 1983 and marked as Exhibit C;[9] and the 09 March 1984 statement of account sent to respondents marked as Exhibit D.[10] On 26 September 1985, petitioner made its formal offer of evidence. However, as the original copy of Exhibit A could no longer be found, petitioner instead sought the admission of the duplicate original of the promissory note which was identified and marked as Exhibit E.

The trial court initially admitted into evidence Exhibit E and granted respondents motion that they be allowed to amend their respective answers to conform with this new evidence.[11] On 30 September 1985, respondent corporation filed a manifestation and motion for reconsideration [12] of the trial courts order admitting into evidence petitioners Exhibit E. Respondent corporation claims that Exhibit E should not have been admitted as it was immaterial, irrelevant, was not properly identified and hearsay evidence. Respondent corporation insists that Exhibit E was not properly identified by Lavarino who testified that he had nothing to do in the preparation and execution of petitioners exhibits, one of which was Exhibit E. Further, as there were markings in Exhibit A which were not contained in Exhibit E, the latter could not possibly be considered an original copy of Exhibit A. Lastly, respondent corporation claims that the exhibit in question had no bearing on the complaint as Lavarino admitted that Exhibit E was not the original of Exhibit A which was the foundation of the complaint and upon which respondent corporation based its own answer. Respondent Morales similarly filed a manifestation with motion to reconsider order admitting as evidence Exhibit E[13] which, other than insisting that the due execution and genuineness of the promissory note were not established as far as he was concerned, essentially raised the same arguments contained in respondent corporations manifestation with motion for reconsideration referred to above. On 06 December 1985, the trial court granted respondents motions for reconsideration.[14] Petitioner moved for the reconsideration of this order which was denied by the court a quo on 20 December 1985.[15] On 26 December 1985, respondents separately filed their motions to dismiss on the similar ground that with the exclusion of Exhibits A and E, petitioner no longer possessed any proof of respondents alleged indebtedness.[16]

On 08 April 1986, petitioner filed a motion[17] praying that the presiding judge, Judge Ricardo D. Diaz, of the court a quo inhibit himself from this case maintaining that the latter rushed into resolving its motion for reconsideration of the trial courts order of 06 December 1985 thereby depriving it the opportunity of presenting proof that the original of Exhibit A w as delivered to respondents as early as 02 April 1983. Such haste on the part of the presiding judge, according to petitioner, cast doubt on his objectivity and fairness. This motion to inhibit was denied by the trial court on 06 August 1987.[18] In an order dated 28 December 1987,[19] the case before the trial court was dismissed, the dispositive portion of which reads:
WHEREFORE, the instant case against defendants Del Monte Motor Works, Inc. and Narciso O. Morales and spouse, is hereby DISMISSED, with costs against the plaintiff.

The trial courts finding was affirmed by the Court of Appeals in the assailed decision no w before us. The dispositive portion of the appellate courts decision reads:
WHEREFORE, PREMISES CONSIDERED, the decision of the Regional Trial Court, Manila, Branch 27, dated December 28, 1987 dismissing plaintiff-appellant['s] complaint is hereby AFFIRMED. Cost against the plaintiffappellant.[20]

Petitioner thereafter filed a motion for reconsideration dated 14 December 1999 which was denied for lack of merit in a resolution of the Court of Appeals promulgated on 11 May 2000.[21]

Aggrieved by the appellate courts ruling, petitioner now seeks redress from this Court imputing the following errors on the Court of Appeals:
I THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND THAT PRIVATE RESPONDENTS DENIED THE MATERIAL ALLEGATIONS OF PETITIONER SOLIDBANKS COMPLAINT, DESPITE THE PRESENCE OF INDUBITABLE FACTS CLEARLY POINTING TO THE FACT THAT SAID PRIVATE RESPONDENTS ADMITTED THE GENUINENESS AND DUE EXECUTION OF THE SUBJECT PROMISSORY NOTE. II THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT UPHELD THE EXCLUSION OF EXHIBIT E, THE SECOND ORIGINAL OF THE PROMISSORY NOTE, DESPITE THE FACT THAT THE ORIGINAL OF EXHIBIT A (XEROX COPY OF THE DUPLICATE ORIGINAL OF THE PROMISSORY NOTE) WAS ACTUALLY IN THE POSSESSION OF PRIVATE RESPONDENTS, THUS WARRANTING THE ADMISSION OF SECONDARY EVIDENCE. III THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE TRIAL JUDGE SHOULD HAVE INHIBITED HIMSELF FROM TAKING COGNIZANCE OF AND FROM TRYING AND DECIDING THE INSTANT CASE CONSIDERING HIS PERCEIVED AND MANIFEST BIAS AND PARTIALITY IN FAVOR OF THE PRIVATE RESPONDENTS TO THE GRAVE PREJUDICE OF PETITIONER SOLIDBANK.[22]

The petition is meritorious.

In resolving the case against petitioner, the appellate court held that contrary to petitioners stance, respondents were abl e to generally and specifically deny under oath the genuineness and due execution of the promissory note, thus:
There can be no dispute to the fact that the allegations in the answer (Record, p. 20, 26-27), of both defendants, they denied generally and specifically under oath the genuineness and due execution of the promissory note and by way of special and affirmative defenses herein states that he (MORALES) never signed the promissory note attached to the complaint (Exh. A) in his personal and/or individual capacity. Moreover, what appears in the record (Record, p. 20) was an admission of paragraphs 1 & 2 but they deny generally and specifically the rest of the allegations. It would be considered that there is a sufficient compliance of the requirement of the law for specific denial.[23]

We hold otherwise. The pertinent portion of the Rules of Court on the matter provides:
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.[24]

In the case of Permanent Savings and Loan Bank v. Mariano Velarde,[25] this Court held that
. . . Respondent also denied any liability on the promissory note as he allegedly did not receive the amount stated therein, and the loan documents do not express the true intention of the parties. Respondent reiterated these allegations in his denial under oath, stating that the promissory note sued upon, assuming that it exists and bears the genuine signature

of herein defendant, the same does not bind him and that it did not truly express the real intention of the parties as stated in the defenses Respondents denials do not constitute an effective specific denial as contemplated by law. In the early case of Songco vs. Sellner,[26] the Court expounded on how to deny the genuineness and due execution of an actionable document, viz.: . . . This means that the defendant must declare under oath that he did not sign the document or that it is otherwise false or fabricated. Neither does the statement of the answer to the effect that the instrument was procured by fraudulent representation raise any issue as to its genuineness or due execution. On the contrary such a plea is an admission both of the genuineness and due execution thereof, since it seeks to avoid the instrument upon a ground not affecting either.[27]

In this case, both the court a quo and the Court of Appeals erred in ruling that respondents were able to specifically deny the allegations in petitioners complaint in the manner specifically required by the rules. In effect, respondents had, to all intents and purposes, admitted the genuineness and due execution of the subject promissory note and recognized their obligation to petitioner. The appellate court likewise sustained the ruling of the trial court that the best evidence rule or primary evidence must

be applied as the purpose of the proof is to establish the terms of the writing meaning the alleged promissory note as it is the basis of the recovery of the money allegedly loaned to the defendants (respondents herein).[28] The best evidence rule is encapsulated in Rule 130, Section 3, of the Revised Rules of Civil Procedure which provides:
Sec. 3. Original document must be produced; exceptions. When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases: (a) the offeror; When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of

(b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice; (c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and (d) When the original is a public record in the custody of a public officer or is recorded in a public office.

The best evidence rule, according to Professor Thayer, first appeared in the year 1699 -1700 when in one case involving a goldsmith, Holt, C. J., was quoted as stating that they should take into consideration the usages of trade and that the best proof that the nature of the thing will afford is only required .[29] Over the years, the phrase was used to describe rules which were already existing such as the rule that the terms of a document must be proved by the production of the document itself, in preference to evidence about the document; it was also utilized to designate the hearsay rule or the rule excluding assertions made out of court and not subject to the rigors of cross-examination; and the phrase was likewise used to designate the group of rules by which testimony of particular classes of witnesses was preferred to that of others.[30] According to McCormick, an authority on the rules of evidence, the only actual rule that the best evidence phrase denotes today is the rule requiring the production of the original writing[31] the rationale being:
(1) that precision in presenting to the court the exact words of the writing is of more than average importance, particularly as respects operative or dispositive instruments, such as deeds, wills and contracts, since a slight variation in words may mean a great difference in rights, (2) that there is a substantial hazard of inaccuracy in the human process of making a copy by handwriting or typewriting, and (3) as respects oral testimony purporting to give from memory the terms of a writing, there is a special risk of error, greater than in the case of attempts at describing other situations generally. In the light of these dangers of mistransmission, accompanying the use of written copies or of recollection, largely avoided through proving the terms by presenting the writing itself, the preference for the original writing is justified.[32]

Bearing in mind that the risk of mistransmission of the contents of a writing is the justification for the best evidence rule, we declare that this rule finds no application to this case. It should be noted that respondents never disputed the terms and conditions of the promissory note thus leaving us to conclude that as far as the parties herein are concerned, the wording or content of said note is clear enough and leaves no room for disagreement. In their responsive pleadings, respondents principal defense rests on the alleged lack of consideration of the promissory note. In addition, respondent Morales also claims that he did not sign the note in his personal capacity. These contentions clearly do not question the precise wording[33] of the promissory note which should have paved the way for the application of the best evidence rule. It was, therefore, an error for the Court of Appeals to sustain the decision of the trial court on this point. Besides, the best evidence rule as stated in our Revised Rules of Civil Procedure is not absolute. As quoted earlier, the rule accepts of exceptions one of which is when the original of the subject document is in the possession of the adverse party. As pointed out by petitioner in its motion to inhibit, had it been given the opportunity by the court a quo, it would have sufficiently established that the original of Exhibit A was in the possession of respondents which would have called into application one of the exceptions to the best evidence rule. Significantly, and as discussed earlier, respondents failed to deny specifically the execution of the promissory note. This being the case, there was no need for petitioner to present the original of the promissory note in question. Their judicial admission with respect to the genuineness and execution of the promissory note sufficiently established their liability to petitioner regardless of the fact that petitioner failed to present the original of said note.[34] Indeed, when the defendant fails to deny specifically and under oath the due execution and genuineness of a document copied in a complaint, the plaintiff need not prove that fact as it is considered admitted by the defendant. [35] In the case of Asia Banking Corporation v. Walter E. Olsen & Co.,[36] this Court held that

Another error assigned by the appellant is the fact that the lower court took into consideration the documents attached to the complaint as a part thereof, without having been expressly introduced in evidence. This was no error. In the answer of the defendants there was no denial under oath of the authenticity of these documents. Under Section 103 of the Code of Civil Procedure, the authenticity and due execution of these documents must, in that case, be deemed admitted. The effect of this is to relieve the plaintiff from the duty of expressly presenting such documents as evidence. The court, for the proper decision of the case, may and should consider, without the introduction of evidence, the facts admitted by the parties.[37]

Anent petitioners allegation that the presiding judge of the court a quo should have inhibited himself from this case, we resolve this issue against petitioner. In order for this Court to sustain a charge of partiality and prejudice brought against a judge, there must be convincing proof to show that he or she is, indeed, biased and partial. Bare allegations are not enough. Bias and prejudice are serious charges which cannot be presumed particularly if weighed against a judges sacred obligation under his oath of office to administer justice without respect to person and do equal right to the poor and the rich.[38] There must be a showing of bias and prejudice stemming from an extrajudicial source resulting in an opinion in the merits on some basis other than what the judge learned from his participation in the case.[39] In this case, as petitioner failed to proffer any evidence indicating that Judge Diaz was guilty of bias and prejudice, we affirm the Court of Appeals holding that there was no cogent reason for him to disqualify himself from this case. Finally, Rule 33, Section 1, of the Revised Rules of Civil Procedure states the rule on the effect of judgment on demurrer to evidence. It reads:
SECTION 1. Demurrer to evidence.- After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If

his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence.

A demurrer to evidence abbreviates judicial proceedings, it being an instrument for the expeditious termination of an action. Caution, however, must be exercised by the party seeking the dismissal of a case upon this ground as under the rules, if the movants plea for the dismissal on demurrer to evidence is granted and the order of dismissal is reversed on appeal, he l oses his right to adduce evidence. If the defendants motion for judgment on demurrer to evidence is granted and the order is subsequently reversed on appeal, judgment is rendered in favor of the adverse party because the movant loses his right to present evidence.[40] The reviewing court cannot remand the case for further proceedings; rather, it should render judgment on the basis of the evidence presented by the plaintiff.[41] Under the promissory note executed by respondents in this case, they are obligated to petitioner in the amount of One Million Pesos, this being the amount of loan they obtained on 23 April 1982. In addition, they also bound themselves to pay the 23% interest per annum on the loan; and a penalty charge of 3% per annum on the amount due until fully paid. Respondents likewise agreed to pay attorneys fees equivalent to 10% of the total amount due, but in no case less thanP200.00, plus costs of suit with both these amounts bearing a 1% interest per month until paid. Costs against respondents. WHEREFORE, premises considered, the Court of Appeals decision dated 25 November 1999 as well as its Resolution of 11 May 2000, affirming the order of the Regional Trial Court, Manila, Branch 27, dated 28 December 1987, are hereby REVERSED and SET ASIDE. Respondents are ordered to pay One Million Pesos (P1,000,000.00) plus 23% interest per annum, penalty charge of 3% interest per annum, and 10% of the amount due as attorneys fees together with a 1% interest per month until fully paid. The sum of P220,020.00 which was the value of the postdated check given

by respondents to petitioner as partial payment should be deducted from the amount due from respondents. SO ORDERED.

Republic of the Philippines

Supreme Court
Manila SECOND DIVISION REPUBLIC OF THE PHILIPPINES Petitioner, G. R. No. 171701

Present: - versus BRION, J., Acting Chairperson, VILLARAMA, JR., PEREZ, SERENO, and REYES, JJ.

MA. IMELDA IMEE R. MARCOSMANOTOC, FERDINAND BONGBONG R. MARCOS, JR., GREGORIO MA. ARANETA III, IRENE R. MARCOS-ARANETA, YEUNG CHUN FAN, YEUNG CHUN HO, YEUNG CHUN KAM, and PANTRANCO EMPLOYEES ASSOCIATION (PEA)-PTGWO, Respondents.

Promulgated:

February 8, 2012

x------------------------------------------------- -x DECISION

SERENO, J.: Before this Court is a Petition for Review filed by the Republic of the Philippines assailing the Resolutions[1] issued by the Sandiganbayan in connection with an alleged portion of the Marcoses supposed ill-gotten wealth. This case involves P200 billion of the Marcoses alleged accumulated ill-gotten wealth. It also includes the alleged use of the media networks IBC-13, BBC-2 and RPN-9 for the Marcos familys personal benefit; the alleged use of De Soleil Apparel for dollar salting; and the alleged illegal acquisition and operation of the bus company Pantranco North Express, Inc. (Pantranco).

The Facts After the EDSA People Power Revolution in 1986, the first executive act of then President Corazon C. Aquino was to create the Presidential Commission on Good Government (PCGG). Pursuant to Executive Order No. 1, the PCGG was given the following mandate: Sec. 2. The Commission shall be charged with the task of assisting the President in regard to the following matters: (a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates, whether located in the Philippines or abroad, including the takeover or sequestration of all business enterprises and entities owned or controlled by them, during his administration, directly or through nominees, by taking undue advantage of their public office and/or using their powers, authority, influence, connections or relationship. (b) The investigation of such cases of graft and corruption as the President may assign to the Commission from time to time. (c) The adoption of safeguards to ensure that the above practices shall not be repeated in any manner under the new government, and the institution of adequate measures to prevent the occurrence of corruption. Sec. 3. The Commission shall have the power and authority: (a) To conduct investigation as may be necessary in order to accomplish and carry out the purposes of this order. (b) To sequester or place or cause to be placed under its control or possession any building or office wherein any illgotten wealth or properties may be found, and any records pertaining thereto, in order to prevent their destruction, concealment or disappearance which would frustrate or hamper the investigation or otherwise prevent the Commission from accomplishing its task. (c) To provisionally take over in the public interest or to prevent its disposal or dissipation, business enterprises and properties taken over by the government of the Marcos Administration or by entities or persons close to former President Marcos, until the transactions leading to such acquisition by the latter can be disposed of by the appropriate authorities.

(d) To enjoin or restrain any actual or threatened commission of facts by any person or entity that may render moot and academic, or frustrate, or otherwise make ineffectual the efforts of the Commission to carry out its tasks under this order. (e) To administer oaths, and issue subpoena requiring the attendance and testimony of witnesses and/or the production of such books, papers, contracts, records, statement of accounts and other documents as may be material to the investigation conducted by the Commission. (f) To hold any person in direct or indirect contempt and impose the appropriate penalties, following the same procedures and penalties provided in the Rules of Court. (g) To seek and secure the assistance of any office, agency or instrumentality of the government. (h) To promulgate such rules and regulations as may be necessary to carry out the purpose of this order.

Thus, numerous civil and criminal cases were subsequently filed. One of the civil cases filed before the Sandiganbayan to recover the Marcoses alleged ill-gotten wealth was Civil Case No. 0002, now subject of this Petition. On 16 July 1987, the PCGG, acting on behalf of the Republic and assisted by the Office of the Solicitor General (OSG), filed a Complaint for Reversion, Reconveyance, Restitution, Accounting and Damages against Ferdinand E. Marcos, who was later substituted by his estate upon his death; Imelda R. Marcos; and herein respondents Imee Marcos-Manotoc, Irene Marcos-Araneta, Bongbong Marcos, Tomas Manotoc, and Gregorio Araneta III. On 1 October 1987, the PCGG filed an amended Complaint to add Constante Rubio as defendant. Again on 9 February 1988, it amended the Complaint, this time to include as defendants Nemesio G. Co and herein respondents Yeung Chun Kam, Yeung Chun Ho, and Yeung Chun Fan. For the third time, on 23 April 1990, the PCGG amended its Complaint, adding to its growing list of defendants Imelda Cojuangco, the estate of Ramon Cojuangco, and Prime Holdings, Inc.[2] The PCGG filed a fourth amended Complaint, which was later denied by the Sandiganbayan in its Resolution dated 2 September 1998. The allegations contained in the Complaint specific to herein respondents are the following:[3]
29. Defendants Imelda (IMEE) R. Marcos-Manotoc, Tomas Manotoc, Irene R. Manotoc (sic) Araneta, Gregorio Ma. Araneta III, and Ferdinand R. Marcos, Jr., actively collaborated, with Defendants Ferdinand E. Marcos and Imelda R. Marcos among others, in confiscating and/or unlawfully appropriating funds and other property, and in concealing the same as described above. In addition, each of the said Defendants, either by taking undue advantage of their relationship with Defendants Ferdinand E. Marcos and Imelda R. Marcos, or by reason of the above-described active collaboration, unlawfully acquired or received property, shares of stocks in corporations, illegal payments such as commissions, bribes or kickbacks, and other forms of improper privileges, income, revenues and benefits. Defendant Araneta in particular made use of Asialand Development Corporation which is included in Annex A hereof as corporate vehicle to benefit in the manner stated above.

31. Defendants Nemesio G. Co, Yeung Chun Kam, Yeung Chun Ho and Yeung Chun Fan are the controlling stockholders of Glorious Sun Fashion Manufacturing Corporation (Phils.). Through Glorious Sun (Phils.), they acted as fronts or dummies, cronies or otherwise willing tools of spouses Ferdinand and Imelda Marcos and/or the family, particularly of Defendant Imelda (Imee) Marcos-Manotoc, in the illegal salting of foreign [4] exchange by importing denim fabrics from only one supplier a Hong Kong based corporation which was also owned and controlled by defendant Hong Kong investors, at prices much higher than those being paid by other users of similar materials to the grave and irreparable damage of Plaintiff.

Thus, petitioner set forth the following causes of action in its Complaint:[5]
32. First Cause of Action: BREACH OF PUBLIC TRUST A public office is a public trust. By committing all the acts described above, Defendants repeatedly breached public trust and the law, making them liable solidarily to Plaintiff. The funds and other property acquired by Defendants following, or as a result of, their breach of public trust, some of wh ich are mentioned or described above, estimated to amount to 200 billion are deemed to have been acquired for the benefit of Plaintiff and are, therefore, impressed with constructive trust in favor of Plaintiff and the Filipino people. Consequently, Defendants are solidarily liable to restore or reconvey to Plaintiff all such funds and property thus impressed with constructive trust for the benefit of Plaintiff and the Filipino people. 33. Second Cause of Action: ABUSE OF RIGHT AND POWER (a) Defendants, in perpetrating the unlawful acts described above, committed abuse of right and power which caused untold misery, sufferings and damages to Plaintiff. Defendants violated, among others Articles 19, 20, and 21 of the Civil Code of the Philippines; (b) As a result of the foregoing acts, Defendants acquired the title to the beneficial interest in funds and other property and concealed such title, funds and interest through the use of relatives, business associates, nominees, agents, or dummies. Defendants are, therefore, solidarily liable to Plaintiff to return and reconvey all such funds and other property unlawfully acquired by them estimated at TWO HUNDRED BILLION PESOS, or alternatively, to pay Plaintiff, solidarily, by way of indemnity, the damage caused to Plaintiff equivalent to the amount of such funds or the value of other property not returned or restored to Plaintiff, plus interest thereon from the date of unlawful acquisition until full payment thereof. 34. Third Cause of Action: UNJUST ENRICHMENT Defendants illegally accumulated funds and other property whose estimated value is 200 billion in violation of the laws of t he Philippines and in breach of their official functions and fiduciary obligations. Defendants, therefore, have unjustly enriched themselves to the grave and irreparable damage and prejudice of Plaintiff. Defendants have an obligation at law, independently of breach of trust and abuse of right and power, and as an alternative, to solidarily return to Plaintiff such funds and other property with which Defendants, in gross evident bad faith, have unjustly enriched themselves or, in default thereof, restore to Plaintiff the amount of such funds and the value of the other property including those which may have been wasted, and/or lost estimated at 200 billion with interest thereon from the date of unlawful acquisition until full payment thereof. 35. Fourth Cause of Action: ACCOUNTING The Commission, acting pursuant to the provisions of the applicable law, believe that Defendants, acting singly or collectively, in unlawful concert with one another, and with the active collaboration of third persons, subject of separate suits, acquired funds, assets and property during the incumbency of Defendant public officers, manifestly out of proportion to their salaries, to their other lawful income and income from legitimately acquired property. Consequently, they are required to show to the satisfaction of this Honorable Court that they have lawfully acquired all such funds, assets and property which are in excess of their legal net income, and for this Honorable Court to decree that the Defendants are under obligation to account to Plaintiff with respect to all legal or beneficial interests in funds, properties and assets of whatever kind and wherever located in excess of the lawful earnings or lawful income from legitimately acquired property. 36. Fifth Cause of Action LIABILITY FOR DAMAGES

(a) By reason of the unlawful acts set forth above, Plaintiff and the Filipino people have suffered actual damages in an amount representing the pecuniary loss sustained by the latter as a result of the Defendants unlawful acts, the approximate value a nd interest of which, from the time of their wrongful acquisition, are estimated at 200 billion plus expe nses which Plaintiff has been compelled to incur and shall continue to incur in its effort to recover Defendants ill-gotten wealth all over the world, which expenses are reasonably estimated at 250 million. Defendants are, therefore, jointly and severally liable to Plaintiff for actual damages in an amount reasonably estimated at 200 Billion Pesos and to reimburse expenses for recovery of Defendants ill-gotten wealth estimated to cost 250 million or in such amount as are proven during the trial. (b) As a result of Defendants acts described above, Plaintiff and the Filipino people had painfully endured and suffered moral da mages for more than twenty long years, anguish, fright, sleepless nights, serious anxiety, wounded feelings and moral shock as well as besmirched reputation and social humiliation before the international community. (c) In addition, Plaintiff and the Filipino people are entitled to temperate damages for their sufferings which, by their very nature are incapable of pecuniary estimation, but which this Honorable Court may determine in the exercise of its sound discretion. (d) Defendants, by reason of the above described unlawful acts, have violated and invaded the inalienable right of Plaintiff and the Filipino people to a fair and decent way of life befitting a Nation with rich natural and human resources. This basic and fundamental right of Plaintiff and the Filipino people should be recognized and vindicated by awarding nominal damages in an amount to be determined by the Honorable Court in the exercise of its sound discretion. (e) By way of example and correction for the public good and in order to ensure that Defendants unlawful, malicious, immoral and wanton acts are not repeated, said Defendants are solidarily liable to Plaintiff for exemplary damages.

In the meantime, the Pantranco Employees Association-PTGWO (PEA-PTGWO), a union of Pantranco employees, moved to intervene before the Sandiganbayan. The former alleged that the trust funds in the account of Pantranco North Express, Inc. (Pantranco) amounting to 55 million rightfully belonged to the Pantranco employees, pursuant to the money judgment the National Labor Re lations Commission (NLRC) awarded in favor of the employees and against Pantranco. Thus, PEA-PTGWO contested the allegation of petitioner that the assets of Pantranco were ill-gotten because, otherwise, these assets would be returned to the government and not to the employees. Thereafter, petitioner presented and formally offered its evidence against herein respondents. However, the latter objected to the offer primarily on the ground that the documents violated the best evidence rule of the Rules of Court, as these documents were unauthenticated; moreover, petitioner had not provided any reason for its failure to present the originals. On 11 March 2002, the Sandiganbayan issued a Resolution[6] admitting the pieces of evidence while expressing some reservation, to wit:
WHEREFORE, taking note of the objections of accused Marcoses and the reply thereto by the plaintiff, all the documentary exhibits formally offered by the prosecution are hereby admitted in evidence; however, their evidentiary value shall be left to the determination of the Court.

SO ORDERED.

Imelda R. Marcos; Imee Marcos-Manotoc and Bongbong Marcos, Jr.; Irene Marcos-Araneta and Gregorio Ma. Araneta III; Yeung Chun Kam, Yeung Chun Ho and Yeung Chun Fan; and the PEA-PTGWO subsequently filed their respective Demurrers to Evidence. On 6 December 2005, the Sandiganbayan issued the assailed Resolution,[7] which granted all the Demurrers to Evidence except the one filed by Imelda R. Marcos. The dispositive portion reads:
WHEREFORE, premises considered, the Demurrer to Evidence filed by defendant Imelda R. Marcos is hereby DENIED. The Demurrer to Evidence filed by defendants Maria Imelda Marcos Manotoc, Ferdinand Marcos, Jr., Irene Marcos Araneta, Gregorio Maria Araneta III, Yeung Chun Kam, Yeung Chun Fan, Yeung Chun Ho, and intervenor PEA-PTGWO, are hereby GRANTED. The sequestration orders on the properties in the name of defendant Gregorio Maria Araneta III, are accordingly ordered lifted. SO ORDERED.

The Sandiganbayan denied Imelda R. Marcos Demurrer primarily because she had categorically admitted that she and her husband owned properties enumerated in the Complaint, while stating that these properties had been lawfully acquired. The court held that the evidence presented by petitioner constituted aprima facie case against her, considering that the value of the properties involved was grossly disproportionate to the Marcos spouses lawful income. Thus, this admission and the fact that Imelda R. Marcos was the compulsory heir and administratrix of the Marcos estate were the primary reasons why the court held that she was responsible for accounting for the funds and properties alleged to be ill-gotten. Secondly, the court pointed out that Rolando Gapud, whose deposition was taken in Hong Kong, referred to her as one directly involved in amassing ill-gotten wealth. The court also considered the compromise agreement between petitioner and Antonio O. Floirendo, who disclosed that he had performed several business transactions upon the instructions of the Marcos spouses. With regard to the siblings Imee Marcos-Manotoc and Bongbong Marcos, Jr., the court noted that their involvement in the alleged illegal activities was never established. In fact, they were never mentioned by any of the witnesses presented. Neither did the documentary evidence pinpoint any specific involvement of the Marcos children. Moreover, the court held that the evidence, in particular, exhibits P,[8] Q,[9] R,[10] S,[11] and T,[12] were considered hearsay, because their originals were not presented in court, nor were they authenticated by the persons who executed them. Furthermore, the court pointed out that petitioner failed to provide any valid reason why it did not present the originals in court. These exhibits were

supposed to show the interests of Imee Marcos-Manotok in the media networks IBC-13, BBC-2 and RPN-9, all three of which she had allegedly acquired illegally. These exhibits also sought to prove her alleged participation in dollar salting through De Soleil Apparel. Finally, the court held that the relationship of respondents to the Marcos spouses was not enough reason to hold the former liable. In the matter of the spouses Irene Marcos and Gregorio Araneta III, the court similarly held that there was no testimonial or documentary evidence that supported petitioners allegations against the couple. Again, petitioner failed to present the orig inal documents that supposedly supported the allegations against them. Instead, it merely presented photocopies of documents that sought to prove how the Marcoses used the Potencianos[13] as dummies in acquiring and operating the bus company Pantranco. Meanwhile, as far as the Yeungs were concerned, the court found the allegations against them baseless. Petitioner failed to demonstrate how their business, Glorious Sun Fashion Garments Manufacturing, Co. Phils. (Glorious Sun), was used as a vehicle for dollar salting; or to show that they themselves were dummies of the Marcoses. Again, the court held that the documentary evidence relevant to this allegation was inadmissible for being mere photocopies, and that the affiants had not been presented as witnesses. Finally, the court also granted the Demurrer filed by PEA-PTGWO. While the court held that there was no evidence to show that Pantranco was illegally acquired, the former nevertheless held that there was a need to first determine the ownership of the disputed funds before they could be ordered released to the rightful owner. On 20 December 2005, petitioner filed its Motion for Partial Reconsideration, insisting that there was a preponderance of evidence to show that respondents Marcos siblings and Gregorio Araneta III had connived with their parents in acquiring ill-gotten wealth. It pointed out that respondents were compulsory heirs to the deposed President and were thus obliged to render an accounting and to return the ill-gotten wealth. Moreover, petitioner asserted that the evidence established that the Yeungs were dummies of the Marcoses, and that the Pantranco assets were part of the Marcoses alleged ill-gotten wealth. Finally, petitioner questioned the courts ruling that the evidence previously admitted was later held to be inadmissible in evidence against respondents, thus, depriving the former of due process.

Inadvertently, petitioner was not able to serve a copy of the motion on respondents Imee Marcos-Manotoc and Bongbong Marcos, Jr. But upon realizing the oversight, it immediately did so and filed the corresponding Manifestation and Motion before the court. Nonetheless, this inadvertence prompted Imee Marcos-Manotoc and Bongbong Marcos, Jr. to file their Motion for Entry of Judgment. On 2 March 2006, the court issued the second assailed Resolution,[14] denying petitioners Motion. The court pointed out its reservation in its Resolution dated 12 March 2002, wherein it said that it would still assess and weigh the evidentiary value of the admitted evidence. Furthermore, it said that even if it included the testimonies of petitioners witnesses, these were not substantial to hold respondents liable. Thus, the court said:
WHEREFORE, there being no sufficient reason to set aside the resolution dated December 6, 2005, the plaintiffs Motion for Partial Reconsideration is hereby DENIED. The plaintiffs Motion and Manifestation dated January 18, 2006 is GRANTED in the interest of justice. The Motion for Entry of Judgment filed by defendants Imee Marcos and Bongbong Marcos is DENIED. SO ORDERED.

Hence, this Petition. Petitioner raises the same issues it raised in its Motion for Reconsideration filed before the Sandiganbayan, to wit:[15]
I. THE SANDIGANBAYAN ERRED IN GRANTING THE DEMURRER TO EVIDENCE FILED BY RESPONDENTS MA. IMELDA (IMEE) R. MARCOS AND FERDINAND (BONGBONG) R. MARCOS, JR., CONSIDERING THAT MORE THAN PREPONDERANT EVIDENCE ON RECORD CLEARLY DEMONSTRATES THEIR CONNIVANCE WITH FORMER PRESIDENT FERDINAND E. MARCOS AND OTHER MARCOS DUMMIES AND ABUSED THEIR POWER AND INFLUENCE IN UNLAWFULLY AMASSING FUNDS FROM THE NATIONAL TREASURY. PETITION PROVED, BY MORE THAN PREPONDERANT EVIDENCE, THAT RESPONDENT-SPOUSES GREGORIO ARANETA III AND IRENE MARCOS ARANETA CONNIVED WITH FORMER PRESIDENT MARCOS IN UNLAWFULLY ACQUIRING BUSINESS INTERESTS WHICH ARE GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT, AND IN A MANNER PROHIBITED UNDER THE CONSTITUTION AND ANTI-GRAFT STATUTES. RESPONDENTS IMEE, BONGBONG, AND IRENE MARCOS ARE COMPULSORY HEIRS OF FORMER PRESIDENT MARCOS AND ARE EQUALLY OBLIGED TO RENDER AN ACCOUNTING AND RETURN THE ALLEGED ILL-GOTTEN WEALTH OF THE MARCOSES. THERE EXISTS CONCRETE EVIDENCE PROVING THAT RESPONDENTS YEUNG CHUN KAM, YEUNG CHUN FAN, AND YEUNG CHUN HO ACTED AS DUMMIES FOR THE MARCOSES, AND USED THE CORPORATION, GLORIOUS SUN, AS A CONDUIT IN AMASSING THE ILL-GOTTEN WEALTH. ACCORDINGLY, THE SANDIGANBAYAN ERRED IN GRANTING THEIR DEMURRER TO EVIDENCE.

II.

III.

IV.

V.

THE DEMURRER TO EVIDENCE FILED BY INTERVENOR PEA-PTGWO WITH RESPECT TO THE PANTRANCO ASSETS SHOULD NOT HAVE BEEN GRANTED SINCE AMPLE EVIDENCE PROVES THAT THE SAID ASSETS INDUBITABLY FORM PART OF THE MARCOS ILL-GOTTEN WEALTH, AS BUTTRESSED BY THE FACT THAT NO JUDICIAL DETERMINATION HAS BEEN MADE AS TO WHOM THESE ASSETS RIGHTFULLY BELONG. THE SANDIGANBAYANS RULING WHICH REJECTED PEITITONERS DOCUMENTARY EXHIBITS ALLEGEDLY FOR BEING INADMISSIBLE DIRECTLY CONTRADICTS ITS EARLIER RULING ADMITTING AL L SAID DOCUMENTARY EVIDENCE AND WAS RENDERED IN A MANNER THAT DEPRIVED PETITIONERS RIGHT TO DUE PROCESS OF LAW.

VI.

There is some merit in petitioners contention. The Marcos Siblings and Gregorio Araneta III Closely analyzing petitioners Complaint and the present Petition for Review, it is clear that the Marcos siblings are being sued in two capacities: first, as co-conspirators in the alleged accumulation of ill-gotten wealth; and second, as the compulsory heirs of their father, Ferdinand E. Marcos.[16] With regard to the first allegation, as contained in paragraph 29 of its Third Amended Complaint quoted above, petitioner accused the Marcos siblings of having collaborated with, participated in, and/or benefitted from their parents alleged accumulation of ill-gotten wealth. In particular, as far as Imee Marcos-Manotoc was concerned, she was accused of dollar salting by using Glorious Sun to import denim fabrics from one supplier at prices much higher than those paid by other users of similar materials. It was also alleged that the Marcoses personally benefitted from the sequestered media networks IBC-13, BBC-2, and RPN-9, in which Imee Marcos had a substantial interest. Irene Marcos-Araneta, on the other hand, was accused of having conspired with her husband, respondent Gregorio Araneta III, in his being President Marcos conduit to Pantranco, thereby paving the way for the Presidents ownership of the com pany in violation of Article VII, Section 4, paragraph 2 of the 1973 Constitution.[17] To prove the general allegations against the Marcos siblings, petitioner primarily relied on the Sworn Statement[18] and the Deposition[19] of one of the financial advisors of President Marcos, Rolando C. Gapud, taken in Hong Kong on various dates.

Meanwhile, to prove the participation and interests of Imee Marcos-Manotoc in De Soleil Apparel and the media networks, petitioner relied on the Affidavits of Ramon S. Monzon,[20] Yeung Kwok Ying,[21] and Rodolfo V. Puno;[22] and the transcript of stenographic notes (TSN) taken during the PCGG hearing held on 8 June 1987.[23] As to spouses Irene Marcos-Araneta and Gregorio Araneta III, petitioner submitted the Articles of Incorporation of Northern Express Transport, Inc.;[24] the Memorandum of Agreement[25] and the Purchase Agreement[26] between Pantranco and Batangas Laguna Tayabas Bus Company, Inc. (BLTBCo.); the Confidential Memorandum regarding the sale of the Pantranco assets; [27] the Affidavit[28] and the letter to the PCGG[29] of Dolores A. Potenciano, owner of BLTBCo.; the Affidavit[30] and the Memorandum[31] of Eduardo Fajardo, who was then the Senior Vice-President of the Account Management Group of the Philippine National Bank (PNB), which was in turn the creditor for the Pantranco sale; and the Affidavit of Florencio P. Lucio, who was the Senior Account Specialist of the National Investment and Development Corporation.[32] Petitioner contends that these documents fall under the Rules third exception, that is, these documents are public records i n the custody of a public officer or are recorded in a public office. It is its theory that since these documents were collected by the PCGG, then, necessarily, the conditions for the exception to apply had been met. Alternatively, it asserts that the documents were offer ed to prove not only the truth of the recitals of the documents, but also of other external or collateral facts.[33] The Courts Ruling Petitioner failed to observe the best evidence rule. It is petitioners burden to prove the allegations in its Complaint. For relief to be granted, the operative act on how and in what manner the Marcos siblings participated in and/or benefitted from the acts of the Marcos couple must be clearly shown through a preponderance of evidence. Should petitioner fail to discharge this burden, the Court is constrained and is left with no choice but to uphold the Demurrer to Evidence filed by respondents. First, petitioner does not deny that what should be proved are the contents of the documents themselves. It is imperative, therefore, to submit the original documents that could prove petitioners allegations.

Thus, the photocopied documents are in violation Rule 130, Sec. 3 of the Rules of Court, otherwise known as the best evidence rule, which mandates that the evidence must be the original document itself. The origin of the best evidence rule can be found and traced to as early as the 18th century in Omychund v. Barker,[34] wherein the Court of Chancery said:
The judges and sages of the law have laid it down that there is but one general rule of evidence, the best that the nature of the case will admit. The rule is, that if the writings have subscribing witnesses to them, they must be proved by those witnesses. The first ground judges have gone upon in departing from strict rules, is an absolute strict necessity. Secondly, a presumed necessity. In the case of writings, subscribed by witnesses, if all are dead, the proof of one of their hands is sufficient to establish the deed: where an original is lost, a copy may be admitted; if no copy, then a proof by witnesses who have heard the deed, and yet it is a thing the law abhors to admit the memory of man for evidence.

Petitioner did not even attempt to provide a plausible reason why the originals were not presented, or any compelling ground why the court should admit these documents as secondary evidence absent the testimony of the witnesses who had executed them. In particular, it may not insist that the photocopies of the documents fall under Sec. 7 of Rule 130, which states:
Evidence admissible when original document is a public record. When the original of a document is in the custody of a public officer or is recorded in a public office, its contents may be proved be a certified copy issued by the public officer in custody thereof.

Secs. 19 and 20 of Rule 132 provide: SECTION 19. Classes of documents. For the purpose of their presentation in evidence, documents are either public or private. Public documents are: (a) The written official acts, or records of the official acts of the sovereign authority, official bodies and tribunals, and public officers, whether of the Philippines, or of a foreign country; (b) Documents acknowledged before a notary public except last wills and testaments; and (c) Public records, kept in the Philippines, of private documents required by law to be entered therein.
All other writings are private.

SECTION 20. Proof of private document. Before any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either: (a) By anyone who saw the document executed or written; or (b) By evidence of the genuineness of the signature or handwriting of the maker. Any other private document need only be identified as that which it is claimed to be.

The fact that these documents were collected by the PCGG in the course of its investigations does not make them per se public records referred to in the quoted rule.

Petitioner presented as witness its records officer, Maria Lourdes Magno, who testified that these public and private documents had been gathered by and taken into the custody of the PCGG in the course of the Commissions investigation of the alleged ill -gotten wealth of the Marcoses. However, given the purposes for which these documents were submitted, Magno was not a credible witness who could testify as to their contents. To reiterate, [i]f the writings have subscribing witnesses to them, they must be proved by those witnesses. Witnesses can testify only to those facts which are of their personal knowledge; that is, those derived from their own perception.[35] Thus, Magno could only testify as to how she obtained custody of these documents, but not as to the contents of the documents themselves. Neither did petitioner present as witnesses the affiants of these Affidavits or Memoranda submitted to the court. Basic is the rule that, while affidavits may be considered as public documents if they are acknowledged before a notary public, these Affidavits are still classified as hearsay evidence. The reason for this rule is that they are not generally prepared by the affiant, but by another one who uses his or her own language in writing the affiant's statements, parts of which may thus be either omitted or misunderstood by the one writing them. Moreover, the adverse party is deprived of the opportunity to cross-examine the affiants. For this reason, affidavits are generally rejected for being hearsay, unless the affiants themselves are placed on the witness stand to testify thereon.[36] As to the copy of the TSN of the proceedings before the PCGG, while it may be considered as a public document since it was taken in the course of the PCGGs exercise of its mandate, it was not attested to by the legal custodian to be a correct copy of the origi nal. This omission falls short of the requirement of Rule 132, Secs. 24 and 25 of the Rules of Court.[37]

In summary, we adopt the ruling of the Sandiganbayan, to wit:


Further, again contrary to the theory of the plaintiff, the presentation of the originals of the aforesaid exhibits is not validly excepted under Rule 130, Section 3 (a), (b), and (d) of the Rules of Court. Under paragraph (d), when the original document is a public record in the custody of a public officer or is recorded in a public office, presentation of the original thereof is excepted. However, as earlier obse rved, all except one of the exhibits introduced by the plaintiff were not necessarily public documents. The transcript of stenographic notes (TSN) of the proceedings purportedly before the PCGG, the plaintiffs exhibit Q, may be a public document, but what was presented by the plaintiff was a mere photocopy of the purported TSN. The Rules provide that when the original document is in the custody of a public officer or is recorded in a public office, its contents may be proved by a certified copy issued by the public officer in custody thereof. Exhibit Q was not a certified copy and it was not even signed by the stenographer who supposedly took down the proceedings.

The rest of the above-mentioned exhibits cannot likewise be excepted under paragraphs (a) and (b) of Section 3. Section 5 of the same Rule provides that when the original documents has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated. Thus, in order that secondary evidence may be admissible, there must be proof by satisfactory evidence of (1) due execution of the original; (2) loss, destruction or unavailability of all such originals and (3) reasonable diligence and good faith in the search for or attempt to produce the original. None of these requirements were complied with by the plaintiff. Similar to exhibit Q, exhibits P, R, S, and T were all photocopies. P, R, and T were affidavits of persons who did not testify before the Court. Exhibit S is a letter which is clearly a private document. Not only does it n ot fall within the exceptions of Section 3, it is also a mere photocopy. As We previously emphasized, even if originals of these affidavits were presented, they would still be considered hearsay evidence if the affiants do not testify and identify them.[38]

Thus, absent any convincing evidence to hold otherwise, it follows that petitioner failed to prove that the Marcos siblings and Gregorio Araneta III collaborated with former President Marcos and Imelda R. Marcos and participated in the first couples alleged accumulation of ill-gotten wealth insofar as the specific allegations herein were concerned. The Marcos siblings are compulsory heirs. To reiterate, in its third Amended Complaint, petitioner prays that the Marcos respondents be made to (1) pay for the value of the alleged ill-gotten wealth with interest from the date of acquisition; (2) render a complete accounting and inventory of all funds and other pieces of property legally or beneficially held and/or controlled by them, as well as their legal and beneficial interest therein; (3) pay actual damages estimated at P200 billion and additional actual damages to reimburse expenses for the recovery of the alleged ill-gotten wealth estimated at P250 million or in such amount as may be proven during trial; (4) pay moral damages amounting to P50 billion; (5) pay temperate and nominal damages, as well as attorneys fees and litigation expenses in an amount to be proven during the tr ial; (6) pay exemplary damages in the amount of P1 billion; and (7) pay treble judicial costs.[39] It must be stressed that we are faced with exceptional circumstances, given the nature and the extent of the properties involved in the case pending with the Sandiganbayan. It bears emphasis that the Complaint is one for the reversion, the reconveyance, the restitution and the accounting of alleged ill-gotten wealth and the payment of damages. Based on the allegations of the Complaint, the court is charged with the task of (1) determining the properties in the Marcos estate that constitute the alleged ill-gotten wealth; (2) tracing where these properties are; (3) issuing the appropriate orders for the accounting, the recovery, and the payment of these properties; and, finally, (4) determining if the award of damages is proper.

Since the pending case before the Sandiganbayan survives the death of Ferdinand E. Marcos, it is imperative therefore that the estate be duly represented. The purpose behind this rule is the protection of the right to due process of every party to a litigation who may be affected by the intervening death. The deceased litigant is himself protected, as he continues to be properly represented in the suit through the duly appointed legal representative of his estate.[40] On that note, we take judicial notice of the probate proceedings regarding the will of Ferdinand E. Marcos. In Republic of the Philippines v. Marcos II,[41] we upheld the grant by the Regional Trial Court (RTC) of letters testamentary in solidum to Ferdinand R. Marcos, Jr. and Imelda Romualdez-Marcos as executors of the last will and testament of the late Ferdinand E. Marcos. Unless the executors of the Marcos estate or the heirs are ready to waive in favor of the state their right to defend or protect the estate or those properties found to be ill-gotten in their possession, control or ownership, then they may not be dropped as defendants in the civil case pending before the Sandiganbayan. Rule 3, Sec. 7 of the Rules of Court defines indispensable parties as those parties-in-interest without whom there can be no final determination of an action. They are those parties who possess such an interest in the controversy that a final decree would necessarily affect their rights, so that the courts cannot proceed without their presence. Parties are indispensable if their interest in the subject matter of the suit and in the relief sought is inextricably intertwined with that of the other parties.[42] In order to reach a final determination of the matters concerning the estate of Ferdinand E. Marcos that is, the accounting and the recovery of ill-gotten wealth the present case must be maintained against Imelda Marcos and herein respondent Ferdinand Bongbong R. Marcos, Jr., as executors of the Marcos estate pursuant to Sec. 1 of Rule 87 of the Rules of Court. According to this provision, actions may be commenced to recover from the estate, real or personal property, or an interest therein, or to enforce a lien thereon; and actions to recover damages for an injury to person or property, real or personal, may be commenced against the executors. We also hold that the action must likewise be maintained against Imee Marcos-Manotoc and Irene Marcos-Araneta on the basis of the non-exhaustive list attached as Annex A to the Third Amended Complaint, which states that the listed properties therein were owned by Ferdinand and Imelda Marcos and their immediate family.[43] It is only during the trial of Civil Case No. 0002 before the Sandiganbayan that there could be a determination of whether these properties are indeed ill-gotten or were legitimately acquired by

respondents and their predecessors. Thus, while it was not proven that respondents conspired in accumulating ill-gotten wealth, they may be in possession, ownership or control of such ill-gotten properties or the proceeds thereof as heirs of the Marcos couple. Thus, their lack of participation in any illegal act does not remove the character of the property as ill-gotten and, therefore, as rightfully belonging to the State. Secondly, under the rules of succession, the heirs instantaneously became co-owners of the Marcos properties upon the death of the President. The property rights and obligations to the extent of the value of the inheritance of a person are transmitted to another through the decedents death.[44] In this concept, nothing prevents the heirs from exercising their right to transfer or dispose of the properties that constitute their legitimes, even absent their declaration or absent the partition or the distribution of the estate. In Jakosalem v. Rafols,[45] we said:
Article 440 of the Civil Code provides that the possession of hereditary property is deemed to be transmitted to the heir without interruption from the instant of the death of the decedent, in case the inheritance be accepted. And Manresa with reason states that upon the death of a person, each of his heirs becomes the undivided owner of the whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership being thus formed among the coowners of the estate while it remains undivided. (3 Manresa, 357; Alcala vs. Alcala, 35 Phil. 679.) And according to article 399 of the Civil Code, every part owner may assign or mortgage his part in the common property, and the effect of such assignment or mortgage shall be limited to the portion which may be allotted him in the partition upon the dissolution of the community.Hence, in the case of Ramirez vs. Bautista, 14 Phil. 528, where some of the heirs, without the concurrence of the others, sold a property left by their deceased father, this Court, speaking thru its then Chief Justice Cayetano Arellano, said that the sale was valid, but that the effect thereof was limited to the share which may be allotted to the vendors upon the partition of the estate. (Emphasis supplied)

Lastly, petitioners prayer in its Third Amended Complaint directly refers to herein respondents, to wit:
1. AS TO THE FIRST SECOND AND THIRD CAUSES OF ACTION To return and reconvey to Plaintiff all funds and other property acquired by Defendants during their incumbency as public officers, which funds and other property are manifestly out of proportion to their salaries, other lawful income and income from legitimately acquired property which Defendants have failed to establish as having been, in fact, lawfully acquired by them, alternatively, to solidarily pay Plaintiff the value thereof with interest thereon from the date of acquisition until full payment. 2. AS TO THE FOURTH CAUSE OF ACTION to individually render to this Honorable Court a complete accounting and inventory, subject to evaluation of Court-appointed assessors, of all funds and other property legally or beneficially held and/or controlled by them, as well as their legal and beneficial interest in such funds and other property. (Emphasis supplied)

In sum, the Marcos siblings are maintained as respondents, because (1) the action pending before the Sandiganbayan is one that survives death, and, therefore, the rights to the estate must be duly protected; (2) they allegedly control, possess or own ill-gotten wealth, though their direct involvement in accumulating or acquiring such wealth may not have been proven.

Yeung Chun Kam, Yeung Chun Ho And Yeung Chun Fan It is worthy to note that respondents draw our attention to American Inter-Fashion Corporation v. Office of the President[46] in which they contend that this Court considered the allegation of dollar salting as baseless. The cited case, however, finds no application herein as the former merely ruled that Glorious Sun was denied due process when it was not furnished by the Garments and Textile Export Board (GTEB) any basis for the cancellation of the export quota because of allegations of dollar salting. That Decision did not prevent petitioner from adducing evidence to support its allegation in Civil Case No. 0002 before the Sandiganbayan under a different cause of action. Nevertheless, the allegations against Yeung Chun Kam, Yeung Chun Ho and Yeung Chun Fan in the case at bar were also proved to be baseless. Again, petitioner failed to illustrate how respondents herein acted as dummies of the Marcoses in acquiring ill-gotten wealth. This Court notes that the Complaint against the Yeungs alleges that the Marcoses used Glorious Sun the garment company in which the Yeungs are controlling stockholders for illegal dollar salting through the companys importation of denim fabrics from only one supplier at prices much higher than those being paid by other users of similar materials. Notably, no mention of De Soleil Apparel was made. To prove its allegations, petitioner submitted the controverted Exhibits P, Q, R, S, and T. As earlier discussed in detail, these pieces of evidence were mere photocopies of the originals and were unauthenticated by the persons who executed them; thus, they have no probative value. Even the allegations of petitioner itself in its Petition for Review are bereft of any factual basis for holding that these documents undoubtedly show respondents participation in the alleged dollar salting. The pertinent portion of the Petition reads:
To illustrate, the Affidavit dated May 29, 1987 executed by Mr. Ramon Monzon which was submitted as Exhibit P, showed that respondent Imee Marcos-Manotoc owns and controls IBC-13, BBC-2 and (R)PN-9, and has interest in the De Soleil Apparel. The testimony of Mr. Ramon Monzon during the hearing on June 8, 1987 before the Presidential Commission on Good Government as shown in the Transcript of Stenographic Notes also affirmed his declarations in the Affidavit dated May 29, 1987. The Transcript of Stenographic Notes dated June 8, 1987 was presented as Exhibit Q. Moreover, the Affidavit dated March 21, 1986 of Yeung Kwok Ying which was presented as Exhibit R disclosed that Imee Marcos-Manotoc is the owner of 67% equity of De Soleil Apparel. The letter dated July 17, 1984 signed by seven (7) incorporators of De Soleil Apparel, addressed to Hongkong investors which was presented as Exhibit S confirmed that the signatories hold or own 67% equity of the corporation in behalf of the beneficial owners previously disclosed to the addressees. In addition to the foregoing documents, petitioner

presented the Affidavit of Rodolfo V. Puno, Chairman of the Garments and Textile Export Group (GTEB) as Exhibit Twherein he categorically declared that the majority of De Soleil Apparel was actually owned by respondent Imee Marcos-Manotoc.[47]

The foregoing quotation from the Petition is bereft of any factual matter that warrants a consideration by the Court. Straight from the horses mouth, these documents are only meant to show the ownership and interest of Imee Marcos Manotoc in De Soleil and not how respondent supposedly participated in dollar salting or in the accumulation of ill-gotten wealth. PEA-PTGWO The PEA-PTGWO Demurrer to Evidence was granted primarily as a consequence of the prosecutions failure to establish that the assets of Pantranco were ill-gotten, as discussed earlier. Thus, we find no error in the assailed Order of the Sandiganbayan. A Final Note As earlier adverted to, the best evidence rule has been recognized as an evidentiary standard since the 18th century. For three centuries, it has been practiced as one of the most basic rules in law. It is difficult to conceive that one could have finished law school and passed the bar examinations without knowing such elementary rule. Thus, it is deeply disturbing that the PCGG and the Office of the Solicitor General (OSG) the very agencies sworn to protect the interest of the state and its people could conduct their prosecution in the manner that they did. To emphasize, the PCGG is a highly specialized office focused on the recovery of ill-gotten wealth, while the OSG is the principal legal defender of the government. The lawyers of these government agencies are expected to be the best in the legal profession. However, despite having the expansive resources of government, the members of the prosecution did not even bother to provide any reason whatsoever for their failure to present the original documents or the witnesses to support the governments claims. Even worse was presenting in evidence a photocopy of the TSN of the PCGG proceedings instead of the original, or a certified true copy of the original, which the prosecutors themselves should have had in their custody. Such manner of legal practice deserves the reproof of this Court. We are constrained to call attention to this apparently serious failure to follow a most basic rule in law, given the special circumstances surrounding this case.

The public prosecutors should employ and use all government resources and powers efficiently, effectively, honestly and economically, particularly to avoid wastage of public funds and revenues. They should perform and discharge their duties with the highest degree of excellence, professionalism, intelligence and skill.[48] The basic ideal of the legal profession is to render service and secure justice for those seeking its aid.[49] In order to do this, lawyers are required to observe and adhere to the highest ethical and professional standards. The legal profession is so imbued with public interest that its practitioners are accountable not only to their clients, but to the public as well. The public prosecutors, aside from being representatives of the government and the state, are, first and foremost, officers of the court. They took the oath to exert every effort and to consider it their duty to assist in the speedy and efficient administration of justice.[50] Lawyers owe fidelity to the cause of the client and should be mindful of the trust and confidence reposed in them. [51] Hence, should serve with competence and diligence.[52] We note that there are instances when this Court may overturn the dismissal of the lower courts in instances when it is shown that the prosecution has deprived the parties their due process of law. In Merciales v. Court of Appeals,[53] we reversed the Decision of the RTC in dismissing the criminal case for rape with homicide. In that case, it was very apparent that the public prosecutor violated the due process rights of the private complainant owing to its blatant disregard of procedural rules and the failure to present available crucial evidence, which would tend to prove the guilt or innocence of the accused therein. Moreover, we likewise found that the trial court was gravely remiss in its duty to ferret out the truth and, instead, just passively watched as the public prosecutor bungled the case. However, it must be emphasized that Merciales was filed exactly to determine whether the prosecution and the trial court gravely abused their discretion in the proceedings of the case, thus resulting in the denial of the offended partys due process. Mea nwhile, the present case merely alleges that there was an error in the Sandiganbayans consideration of the probative value of evidence. We also note that in Merciales, both the prosecution and the trial court were found to be equally guilty of serious nonfeasance, which prompted us to remand the case to the trial court for further proceedings and reception of evidence. Merciales is thus inapplicable to the case at bar. Nevertheless, given the particular context of this case, the failure of the prosecution to adhere to something as basic as the best evidence rule raises serious doubts on the level and quality of effort given to the governments cause. Thus, we highly encourage the Office of the President, the OSG, and the PCGG to conduct the appropriate investigation and consequent action on this matter.

WHEREFORE, in view of the foregoing, the Petition is PARTIALLY GRANTED. The assailed Sandiganbayan Resolution dated 6 December 2005 is AFFIRMED with MODIFICATION. For the reasons stated herein, respondents Imelda Marcos-Manotoc, Irene Marcos-Araneta, and Ferdinand R. Marcos, Jr. shall be maintained as defendants in Civil Case No. 0002 pending before the Sandiganbayan. Let a copy of this Decision be furnished to the Office of the President so that it may look into the circumstances of this case and determine the liability, if any, of the lawyers of the Office of the Solicitor General and the Presidential Commission on Good Government in the manner by which this case was handled in the Sandiganbayan. SO ORDERED.