IMELDA MANALAYSAY PILAPIL, petitioner,
petitioner "had an affair with a certain William Chia as
vs.
HON. CORONA IBAY-SOMERA, in her capacity as
Presiding Judge of the Regional Trial Court of Manila,
Branch XXVI; HON. LUIS C. VICTOR, in his capacity
as the City Fiscal of Manila; and ERICH EKKEHARD
GEILING, respondents.
An ill-starred marriage of a Filipina and a foreigner which
ended in a foreign absolute divorce, only to be followed
by a criminal infidelity suit of the latter against the former,
provides Us the opportunity to lay down a decisional rule
on what hitherto appears to be an unresolved
jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay
Pilapil, a Filipino citizen, and private respondent Erich
Ekkehard Geiling, a German national, were married
before the Registrar of Births, Marriages and Deaths at
Friedensweiler in the Federal Republic of Germany. The
marriage started auspiciously enough, and the couple
lived together for some time in Malate, Manila where their
only child, Isabella Pilapil Geiling, was born on April 20,
1980. 1
Thereafter, marital discord set in, with mutual
recriminations between the spouses, followed by a
separation de facto between them.
After about three and a half years of marriage, such
connubial disharmony eventuated in private respondent
initiating a divorce proceeding against petitioner in
Germany before the Schoneberg Local Court in January,
1983. He claimed that there was failure of their marriage
and that they had been living apart since April, 1982. 2
Petitioner, on the other hand, filed an action for legal
separation, support and separation of property before the
Regional Trial Court of Manila, Branch XXXII, on January
23, 1983 where the same is still pending as Civil Case No.
83-15866. 3
On January 15, 1986, Division 20 of the Schoneberg
Local Court, Federal Republic of Germany, promulgated
a decree of divorce on the ground of failure of marriage of
the spouses. The custody of the child was granted to
petitioner. The records show that under German law said
court was locally and internationally competent for the
divorce proceeding and that the dissolution of said
marriage was legally founded on and authorized by the
applicable law of that foreign jurisdiction. 4
On June 27, 1986, or more than five months after the
issuance of the divorce decree, private respondent filed
two complaints for adultery before the City Fiscal of
Manila alleging that, while still married to said respondent,
early as 1982 and with yet another man named Jesus
Chua sometime in 1983". Assistant Fiscal Jacinto A. de
los Reyes, Jr., after the corresponding investigation,
recommended the dismissal of the cases on the ground
of insufficiency of evidence. 5 However, upon review, the
respondent city fiscal approved a resolution, dated
January 8, 1986, directing the filing of two complaints for
adultery against the petitioner. 6 The complaints were
accordingly filed and were eventually raffled to two
branches of the Regional Trial Court of Manila. The case
entitled "People of the Philippines vs. Imelda Pilapil and
William Chia", docketed as Criminal Case No. 87-52435,
was assigned to Branch XXVI presided by the respondent
judge; while the other case, "People of the Philippines vs.
Imelda Pilapil and James Chua", docketed as Criminal
Case No. 87-52434 went to the sala of Judge Leonardo
Cruz, Branch XXV, of the same court. 7
On March 14, 1987, petitioner filed a petition with the
Secretary of Justice asking that the aforesaid resolution
of respondent fiscal be set aside and the cases against
her be dismissed. 8 A similar petition was filed by James
Chua, her co-accused in Criminal Case No. 87-52434.
The Secretary of Justice, through the Chief State
Prosecutor, gave due course to both petitions and
directed the respondent city fiscal to inform the
Department of Justice "if the accused have already been
arraigned and if not yet arraigned, to move to defer further
proceedings" and to elevate the entire records of both
cases to his office for review. 9
Petitioner thereafter filed a motion in both criminal cases
to defer her arraignment and to suspend further
proceedings thereon. 10 As a consequence, Judge
Leonardo Cruz suspended proceedings in Criminal Case
No. 87-52434. On the other hand, respondent judge
merely reset the date of the arraignment in Criminal Case
No. 87-52435 to April 6, 1987. Before such scheduled
date, petitioner moved for the cancellation of the
arraignment and for the suspension of proceedings in said
Criminal Case No. 87-52435 until after the resolution of
the petition for review then pending before the Secretary
of Justice. 11 A motion to quash was also filed in the same
case on the ground of lack of jurisdiction, 12 which motion
was denied by the respondent judge in an order dated
September 8, 1987. The same order also directed the
arraignment of both accused therein, that is, petitioner
and William Chia. The latter entered a plea of not guilty
while the petitioner refused to be arraigned. Such refusal
of the petitioner being considered by respondent judge as
direct contempt, she and her counsel were fined and the
former was ordered detained until she submitted herself
for arraignment. 13 Later, private respondent entered a
plea of not guilty. 14
On October 27, 1987, petitioner filed this special civil
action for certiorari and prohibition, with a prayer for a
temporary restraining order, seeking the annulment of the
order of the lower court denying her motion to quash. The
petition is anchored on the main ground that the court is
without jurisdiction "to try and decide the charge of
1
adultery, which is a private offense that cannot be
prosecuted de officio (sic), since the purported
complainant, a foreigner, does not qualify as an offended
spouse having obtained a final divorce decree under his
national law prior to his filing the criminal complaint." 15
On October 21, 1987, this Court issued a temporary
restraining order enjoining the respondents from
implementing the aforesaid order of September 8, 1987
and from further proceeding with Criminal Case No. 87-
52435. Subsequently, on March 23, 1988 Secretary of
Justice Sedfrey A. Ordoez acted on the aforesaid
petitions for review and, upholding petitioner's
ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the
complaints against the petitioner. 16
We find this petition meritorious. The writs prayed for shall
accordingly issue.
Under Article 344 of the Revised Penal Code, 17 the
crime of adultery, as well as four other crimes against
chastity, cannot be prosecuted except upon a sworn
written complaint filed by the offended spouse. It has long
since been established, with unwavering consistency,
that compliance with this rule is a jurisdictional, and not
merely a formal, requirement. 18 While in point of strict
law the jurisdiction of the court over the offense is vested
in it by the Judiciary Law, the requirement for a sworn
written complaint is just as jurisdictional a mandate since
it is that complaint which starts the prosecutory
proceeding 19 and without which the court cannot
exercise its jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for
adultery and concubinage the person who can legally file
the complaint should be the offended spouse, and nobody
else. Unlike the offenses of seduction, abduction, rape
and acts of lasciviousness, no provision is made for the
prosecution of the crimes of adultery and concubinage by
the parents, grandparents or guardian of the offended
party. The so-called exclusive and successive rule in the
prosecution of the first four offenses above mentioned do
not apply to adultery and concubinage. It is significant that
while the State, as parens patriae, was added and vested
by the 1985 Rules of Criminal Procedure with the power
to initiate the criminal action for a deceased or
incapacitated victim in the aforesaid offenses of
seduction, abduction, rape and acts of lasciviousness, in
default of her parents, grandparents or guardian, such
amendment did not include the crimes of adultery and
concubinage. In other words, only the offended spouse,
and no other, is authorized by law to initiate the action
therefor.
Corollary to such exclusive grant of power to the offended
spouse to institute the action, it necessarily follows that
such initiator must have the status, capacity or legal
representation to do so at the time of the filing of the
criminal action. This is a familiar and express rule in civil
actions; in fact, lack of legal capacity to sue, as a ground
for a motion to dismiss in civil cases, is determined as of
the filing of the complaint or petition.
The absence of an equivalent explicit rule in the
prosecution of criminal cases does not mean that the
same requirement and rationale would not apply.
Understandably, it may not have been found necessary
since criminal actions are generally and fundamentally
commenced by the State, through the People of the
Philippines, the offended party being merely the
complaining witness therein. However, in the so-called
"private crimes" or those which cannot be prosecuted de
oficio, and the present prosecution for adultery is of such
genre, the offended spouse assumes a more predominant
role since the right to commence the action, or to refrain
therefrom, is a matter exclusively within his power and
option.
This policy was adopted out of consideration for the
aggrieved party who might prefer to suffer the outrage in
silence rather than go through the scandal of a public trial.
20 Hence, as cogently argued by petitioner, Article 344 of
the Revised Penal Code thus presupposes that the
marital relationship is still subsisting at the time of the
institution of the criminal action for, adultery. This is a
logical consequence since the raison d'etre of said
provision of law would be absent where the supposed
offended party had ceased to be the spouse of the alleged
offender at the time of the filing of the criminal case. 21
In these cases, therefore, it is indispensable that the
status and capacity of the complainant to commence the
action be definitely established and, as already
demonstrated, such status or capacity must indubitably
exist as of the time he initiates the action. It would be
absurd if his capacity to bring the action would be
determined by his status before or subsequent to the
commencement thereof, where such capacity or status
existed prior to but ceased before, or was acquired
subsequent to but did not exist at the time of, the
institution of the case. We would thereby have the
anomalous spectacle of a party bringing suit at the very
time when he is without the legal capacity to do so.
To repeat, there does not appear to be any local
precedential jurisprudence on the specific issue as to
when precisely the status of a complainant as an offended
spouse must exist where a criminal prosecution can be
commenced only by one who in law can be categorized
as possessed of such status. Stated differently and with
reference to the present case, the inquiry ;would be
whether it is necessary in the commencement of a
criminal action for adultery that the marital bonds between
the complainant and the accused be unsevered and
existing at the time of the institution of the action by the
former against the latter.
American jurisprudence, on cases involving statutes in
that jurisdiction which are in pari materia with ours, yields
the rule that after a divorce has been decreed, the
innocent spouse no longer has the right to institute
2
proceedings against the offenders where the statute
provides that the innocent spouse shall have the
exclusive right to institute a prosecution for adultery.
Where, however, proceedings have been properly
commenced, a divorce subsequently granted can have no
legal effect on the prosecution of the criminal proceedings
to a conclusion. 22
In the cited Loftus case, the Supreme Court of Iowa held
that
'No prosecution for adultery can be commenced except
on the complaint of the husband or wife.' Section 4932,
Code. Though Loftus was husband of defendant when the
offense is said to have been committed, he had ceased to
be such when the prosecution was begun; and appellant
insists that his status was not such as to entitle him to
make the complaint. We have repeatedly said that the
offense is against the unoffending spouse, as well as the
state, in explaining the reason for this provision in the
statute; and we are of the opinion that the unoffending
spouse must be such when the prosecution is
commenced. (Emphasis supplied.)
We see no reason why the same doctrinal rule should not
apply in this case and in our jurisdiction, considering our
statutory law and jural policy on the matter. We are
convinced that in cases of such nature, the status of the
complainant vis-a-vis the accused must be determined as
of the time the complaint was filed. Thus, the person who
initiates the adultery case must be an offended spouse,
and by this is meant that he is still married to the accused
spouse, at the time of the filing of the complaint.
In the present case, the fact that private respondent
obtained a valid divorce in his country, the Federal
Republic of Germany, is admitted. Said divorce and its
legal effects may be recognized in the Philippines insofar
as private respondent is concerned 23 in view of the
nationality principle in our civil law on the matter of status
of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et
al., 24 after a divorce was granted by a United States
court between Alice Van Dornja Filipina, and her
American husband, the latter filed a civil case in a trial
court here alleging that her business concern was
conjugal property and praying that she be ordered to
render an accounting and that the plaintiff be granted the
right to manage the business. Rejecting his pretensions,
this Court perspicuously demonstrated the error of such
stance, thus:
There can be no question as to the validity of that Nevada
divorce in any of the States of the United States. The
decree is binding on private respondent as an American
citizen. For instance, private respondent cannot sue
petitioner, as her husband, in any State of the Union. ...
It is true that owing to the nationality principle embodied
in Article 15 of the Civil Code, only Philippine nationals
are covered by the policy against absolute divorces the
same being considered contrary to our concept of public
policy and morality. However, aliens may obtain divorces
abroad, which may be recognized in the Philippines,
provided they are valid according to their national law. ...
Thus, pursuant to his national law, private respondent is
no longer the husband of petitioner. He would have no
standing to sue in the case below as petitioner's husband
entitled to exercise control over conjugal assets. ... 25
Under the same considerations and rationale, private
respondent, being no longer the husband of petitioner,
had no legal standing to commence the adultery case
under the imposture that he was the offended spouse at
the time he filed suit.
The allegation of private respondent that he could not
have brought this case before the decree of divorce for
lack of knowledge, even if true, is of no legal significance
or consequence in this case. When said respondent
initiated the divorce proceeding, he obviously knew that
there would no longer be a family nor marriage vows to
protect once a dissolution of the marriage is decreed.
Neither would there be a danger of introducing spurious
heirs into the family, which is said to be one of the reasons
for the particular formulation of our law on adultery, 26
since there would thenceforth be no spousal relationship
to speak of. The severance of the marital bond had the
effect of dissociating the former spouses from each other,
hence the actuations of one would not affect or cast
obloquy on the other.
The aforecited case of United States vs. Mata cannot be
successfully relied upon by private respondent. In
applying Article 433 of the old Penal Code, substantially
the same as Article 333 of the Revised Penal Code, which
punished adultery "although the marriage be afterwards
declared void", the Court merely stated that "the
lawmakers intended to declare adulterous the infidelity of
a married woman to her marital vows, even though it
should be made to appear that she is entitled to have her
marriage contract declared null and void, until and unless
she actually secures a formal judicial declaration to that
effect". Definitely, it cannot be logically inferred therefrom
that the complaint can still be filed after the declaration of
nullity because such declaration that the marriage is void
ab initio is equivalent to stating that it never existed. There
being no marriage from the beginning, any complaint for
adultery filed after said declaration of nullity would no
longer have a leg to stand on. Moreover, what was
consequently contemplated and within the purview of the
decision in said case is the situation where the criminal
action for adultery was filed before the termination of the
marriage by a judicial declaration of its nullity ab initio. The
same rule and requisite would necessarily apply where
the termination of the marriage was effected, as in this
case, by a valid foreign divorce.
3
Private respondent's invocation of Donio-Teves, et al. vs.
Vamenta, hereinbefore cited, 27 must suffer the same
fate of inapplicability. A cursory reading of said case
reveals that the offended spouse therein had duly and
seasonably filed a complaint for adultery, although an
issue was raised as to its sufficiency but which was
resolved in favor of the complainant. Said case did not
involve a factual situation akin to the one at bar or any
issue determinative of the controversy herein.
WHEREFORE, the questioned order denying petitioner's
motion to quash is SET ASIDE and another one entered
DISMISSING the complaint in Criminal Case No. 87-
52435 for lack of jurisdiction. The temporary restraining
order issued in this case on October 21, 1987 is hereby
made permanent.
SO ORDERED.
GRACE J. GARCIA, a.k.a. GRACE J. GARCIA-RECIO,
petitioner, vs. REDERICK A. RECIO, respondent.
A divorce obtained abroad by an alien may be recognized
in our jurisdiction, provided such decree is valid according
to the national law of the foreigner. However, the divorce
decree and the governing personal law of the alien
spouse who obtained the divorce must be proven. Our
courts do not take judicial notice of foreign laws and
judgments; hence, like any other facts, both the divorce
decree and the national law of the alien must be alleged
and proven according to our law on evidence.
The Case
Before us is a Petition for Review under Rule 45 of the
Rules of Court, seeking to nullify the January 7, 1999
Decision[1] and the March 24, 1999 Order[2] of the
Regional Trial Court of Cabanatuan City, Branch 28, in
Civil Case No. 3026AF. The assailed Decision disposed
as follows:
WHEREFORE, this Court declares the marriage between
Grace J. Garcia and Rederick A. Recio solemnized on
January 12, 1994 at Cabanatuan City as dissolved and
both parties can now remarry under existing and
applicable laws to any and/or both parties.[3]
The assailed Order denied reconsideration of the above-
quoted Decision.
The Facts
Rederick A. Recio, a Filipino, was married to Editha
Samson, an Australian citizen, in Malabon, Rizal, on
March 1, 1987.[4] They lived together as husband and
wife in Australia. On May 18, 1989, [5] a decree of divorce,
purportedly dissolving the marriage, was issued by an
Australian family court.
On June 26, 1992, respondent became an Australian
citizen, as shown by a Certificate of Australian Citizenship
issued by the Australian government.[6] Petitioner -- a
Filipina -- and respondent were married on January 12,
1994 in Our Lady of Perpetual Help Church in
Cabanatuan City.[7] In their application for a marriage
license, respondent was declared as single and
Filipino.[8]
Starting October 22, 1995, petitioner and respondent lived
separately without prior judicial dissolution of their
marriage. While the two were still in Australia, their
conjugal assets were divided on May 16, 1996, in
accordance with their Statutory Declarations secured in
Australia.[9]
On March 3, 1998, petitioner filed a Complaint for
Declaration of Nullity of Marriage[10] in the court a quo,
on the ground of bigamy -- respondent allegedly had a
prior subsisting marriage at the time he married her on
January 12, 1994. She claimed that she learned of
respondents marriage to Editha Samson only in
November, 1997.
In his Answer, respondent averred that, as far back as
1993, he had revealed to petitioner his prior marriage and
its subsequent dissolution.[11] He contended that his first
marriage to an Australian citizen had been validly
dissolved by a divorce decree obtained in Australia in
1989;[12] thus, he was legally capacitated to marry
petitioner in 1994.
On July 7, 1998 -- or about five years after the couples
wedding and while the suit for the declaration of nullity
was pending -- respondent was able to secure a divorce
decree from a family court in Sydney, Australia because
the marriage ha[d] irretrievably broken down.[13]
Respondent prayed in his Answer that the Complaint be
dismissed on the ground that it stated no cause of
action.[14] The Office of the Solicitor General agreed with
respondent.[15] The court marked and admitted the
documentary evidence of both parties.[16] After they
submitted their respective memoranda, the case was
submitted for resolution.[17]
Thereafter, the trial court rendered the assailed Decision
and Order.
Ruling of the Trial Court
4
The trial court declared the marriage dissolved on the
ground that the divorce issued in Australia was valid and
recognized in the Philippines. It deemed the marriage
ended, but not on the basis of any defect in an essential
element of the marriage; that is, respondents alleged lack
of legal capacity to remarry. Rather, it based its Decision
on the divorce decree obtained by respondent. The
Australian divorce had ended the marriage; thus, there
was no more marital union to nullify or annul.
Hence, this Petition.[18]
Issues
Petitioner submits the following issues for our
consideration:
1 Code requires the presentation of the foreign law to show
The trial court gravely erred in finding that the divorce
decree obtained in Australia by the respondent ipso facto
terminated his first marriage to Editha Samson thereby
capacitating him to contract a second marriage with the
petitioner.
2 as the take-off points for our discussion. Philippine law
The failure of the respondent, who is now a naturalized
Australian, to present a certificate of legal capacity to
marry constitutes absence of a substantial requisite
voiding the petitioners marriage to the respondent
3
The trial court seriously erred in the application of Art. 26
of the Family Code in this case.
4 recognized in the Philippines, provided it is consistent with
The trial court patently and grievously erred in
disregarding Arts. 11, 13, 21, 35, 40, 52 and 53 of the
Family Code as the applicable provisions in this case.
5 pleading and proof are concerned, can be made. Van
The trial court gravely erred in pronouncing that the
divorce decree obtained by the respondent in Australia
ipso facto capacitated the parties to remarry, without first
securing a recognition of the judgment granting the
divorce decree before our courts.[19]
The Petition raises five issues, but for purposes of this
Decision, we shall concentrate on two pivotal ones: (1)
whether the divorce between respondent and Editha
Samson was proven, and (2) whether respondent was
proven to be legally capacitated to marry petitioner.
Because of our ruling on these two, there is no more
necessity to take up the rest.
The Courts Ruling
The Petition is partly meritorious.
First Issue:
Proving the Divorce Between Respondent and Editha
Samson
Petitioner assails the trial courts recognition of the divorce
between respondent and Editha Samson. Citing Adong v.
Cheong Seng Gee,[20] petitioner argues that the divorce
decree, like any other foreign judgment, may be given
recognition in this jurisdiction only upon proof of the
existence of (1) the foreign law allowing absolute divorce
and (2) the alleged divorce decree itself. She adds that
respondent miserably failed to establish these elements.
Petitioner adds that, based on the first paragraph of
Article 26 of the Family Code, marriages solemnized
abroad are governed by the law of the place where they
were celebrated (the lex loci celebrationis). In effect, the
the conformity of the marriage in question to the legal
requirements of the place where the marriage was
performed.
At the outset, we lay the following basic legal principles
does not provide for absolute divorce; hence, our courts
cannot grant it.[21] A marriage between two Filipinos
cannot be dissolved even by a divorce obtained abroad,
because of Articles 15[22] and 17[23] of the Civil
Code.[24] In mixed marriages involving a Filipino and a
foreigner, Article 26[25] of the Family Code allows the
former to contract a subsequent marriage in case the
divorce is validly obtained abroad by the alien spouse
capacitating him or her to remarry.[26] A divorce obtained
abroad by a couple, who are both aliens, may be
their respective national laws.[27]
A comparison between marriage and divorce, as far as
Dorn v. Romillo Jr. decrees that aliens may obtain
divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their
national law.[28] Therefore, before a foreign divorce
decree can be recognized by our courts, the party
pleading it must prove the divorce as a fact and
demonstrate its conformity to the foreign law allowing
it.[29] Presentation solely of the divorce decree is
insufficient.
Divorce as a Question of Fact
Petitioner insists that before a divorce decree can be
admitted in evidence, it must first comply with the
registration requirements under Articles 11, 13 and 52 of
the Family Code. These articles read as follows:
5
ART. 11. Where a marriage license is required, each of
the contracting parties shall file separately a sworn
application for such license with the proper local civil
registrar which shall specify the following:
xxxxxxxxx
(5) If previously married, how, when and where the
previous marriage was dissolved or annulled;
xxxxxxxxx
ART. 13. In case either of the contracting parties has been
previously married, the applicant shall be required to
ART. 13. In case either of the contracting parties has been
previously married, the applicant shall be required to
furnish, instead of the birth or baptismal certificate
required in the last preceding article, the death certificate
of the deceased spouse or the judicial decree of the
absolute divorce, or the judicial decree of annulment or
declaration of nullity of his or her previous marriage. x x x.
ART. 52. The judgment of annulment or of absolute nullity
of the marriage, the partition and distribution of the
properties of the spouses, and the delivery of the
childrens presumptive legitimes shall be recorded in the
appropriate civil registry and registries of property;
otherwise, the same shall not affect their persons.
Respondent, on the other hand, argues that the Australian
divorce decree is a public document -- a written official act
of an Australian family court. Therefore, it requires no
further proof of its authenticity and due execution.
Respondent is getting ahead of himself. Before a foreign
judgment is given presumptive evidentiary value, the
document must first be presented and admitted in
evidence.[30] A divorce obtained abroad is proven by the
divorce decree itself. Indeed the best evidence of a
judgment is the judgment itself.[31] The decree purports
to be a written act or record of an act of an official body or
tribunal of a foreign country.[32]
Under Sections 24 and 25 of Rule 132, on the other hand,
a writing or document may be proven as a public or official
record of a foreign country by either (1) an official
publication or (2) a copy thereof attested[33] by the officer
having legal custody of the document. If the record is not
kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the record
is kept and (b) authenticated by the seal of his office. [34]
The divorce decree between respondent and Editha
Samson appears to be an authentic one issued by an
Australian family court.[35] However, appearance is not
sufficient; compliance with the aforementioned rules on
evidence must be demonstrated.
Fortunately for respondents cause, when the divorce
decree of May 18, 1989 was submitted in evidence,
counsel for petitioner objected, not to its admissibility, but
only to the fact that it had not been registered in the Local
Civil Registry of Cabanatuan City.[36] The trial court ruled
that it was admissible, subject to petitioners
qualification.[37] Hence, it was admitted in evidence and
accorded weight by the judge. Indeed, petitioners failure
to object properly rendered the divorce decree admissible
as a written act of the Family Court of Sydney,
Australia.[38]
Compliance with the quoted articles (11, 13 and 52) of the
Family Code is not necessary; respondent was no longer
bound by Philippine personal laws after he acquired
Australian citizenship in 1992.[39] Naturalization is the
legal act of adopting an alien and clothing him with the
political and civil rights belonging to a citizen.[40]
Naturalized citizens, freed from the protective cloak of
their former states, don the attires of their adoptive
countries. By becoming an Australian, respondent
severed his allegiance to the Philippines and the vinculum
juris that had tied him to Philippine personal laws.
Burden of Proving Australian Law
Respondent contends that the burden to prove Australian
divorce law falls upon petitioner, because she is the party
challenging the validity of a foreign judgment. He
contends that petitioner was satisfied with the original of
the divorce decree and was cognizant of the marital laws
of Australia, because she had lived and worked in that
country for quite a long time. Besides, the Australian
divorce law is allegedly known by Philippine courts; thus,
judges may take judicial notice of foreign laws in the
exercise of sound discretion.
We are not persuaded. The burden of proof lies with the
party who alleges the existence of a fact or thing
necessary in the prosecution or defense of an action.[41]
In civil cases, plaintiffs have the burden of proving the
material allegations of the complaint when those are
denied by the answer; and defendants have the burden of
proving the material allegations in their answer when they
introduce new matters.[42] Since the divorce was a
defense raised by respondent, the burden of proving the
pertinent Australian law validating it falls squarely upon
him.
It is well-settled in our jurisdiction that our courts cannot
take judicial notice of foreign laws.[43] Like any other
facts, they must be alleged and proved. Australian marital
laws are not among those matters that judges are
supposed to know by reason of their judicial function.[44]
The power of judicial notice must be exercised with
6
caution, and every reasonable doubt upon the subject
should be resolved in the negative.
Second Issue: Respondents Legal Capacity to Remarry
Petitioner contends that, in view of the insufficient proof of
the divorce, respondent was legally incapacitated to
marry her in 1994. Hence, she concludes that their
marriage was void ab initio.
Respondent replies that the Australian divorce decree,
which was validly admitted in evidence, adequately
established his legal capacity to marry under Australian
law.
Respondents contention is untenable. In its strict legal
sense, divorce means the legal dissolution of a lawful
union for a cause arising after marriage. But divorces are
of different types. The two basic ones are (1) absolute
divorce or a vinculo matrimonii and (2) limited divorce or
a mensa et thoro. The first kind terminates the marriage,
while the second suspends it and leaves the bond in full
force.[45] There is no showing in the case at bar which
type of divorce was procured by respondent.
Respondent presented a decree nisi or an interlocutory
decree -- a conditional or provisional judgment of divorce.
It is in effect the same as a separation from bed and
board, although an absolute divorce may follow after the
lapse of the prescribed period during which no
reconciliation is effected.[46]
Even after the divorce becomes absolute, the court may
under some foreign statutes and practices, still restrict
remarriage. Under some other jurisdictions, remarriage
may be limited by statute; thus, the guilty party in a divorce
which was granted on the ground of adultery may be
prohibited from marrying again. The court may allow a
remarriage only after proof of good behavior.[47]
On its face, the herein Australian divorce decree contains
a restriction that reads:
1. A party to a marriage who marries again before this
decree becomes absolute (unless the other party has
died) commits the offence of bigamy.[48]
This quotation bolsters our contention that the divorce
obtained by respondent may have been restricted. It did
not absolutely establish his legal capacity to remarry
according to his national law. Hence, we find no basis for
the ruling of the trial court, which erroneously assumed
that the Australian divorce ipso facto restored
respondents capacity to remarry despite the paucity of
evidence on this matter.
We also reject the claim of respondent that the divorce
decree raises a disputable presumption or presumptive
evidence as to his civil status based on Section 48, Rule
39[49] of the Rules of Court, for the simple reason that no
proof has been presented on the legal effects of the
divorce decree obtained under Australian laws.
Significance of the Certificate of Legal Capacity
Petitioner argues that the certificate of legal capacity
required by Article 21 of the Family Code was not
submitted together with the application for a marriage
license. According to her, its absence is proof that
respondent did not have legal capacity to remarry.
We clarify. To repeat, the legal capacity to contract
marriage is determined by the national law of the party
concerned. The certificate mentioned in Article 21 of the
Family Code would have been sufficient to establish the
legal capacity of respondent, had he duly presented it in
court. A duly authenticated and admitted certificate is
prima facie evidence of legal capacity to marry on the part
of the alien applicant for a marriage license.[50]
As it is, however, there is absolutely no evidence that
proves respondents legal capacity to marry petitioner. A
review of the records before this Court shows that only the
following exhibits were presented before the lower court:
(1) for petitioner: (a) Exhibit A Complaint;[51] (b) Exhibit B
Certificate of Marriage Between Rederick A. Recio
(Filipino-Australian) and Grace J. Garcia (Filipino) on
January 12, 1994 in Cabanatuan City, Nueva Ecija;[52]
(c) Exhibit C Certificate of Marriage Between Rederick A.
Recio (Filipino) and Editha D. Samson (Australian) on
March 1, 1987 in Malabon, Metro Manila;[53] (d) Exhibit
D Office of the City Registrar of Cabanatuan City
Certification that no information of annulment between
Rederick A. Recio and Editha D. Samson was in its
records;[54] and (e) Exhibit E Certificate of Australian
Citizenship of Rederick A. Recio;[55] (2) for respondent:
(a) Exhibit 1 -- Amended Answer;[56] (b) Exhibit 2 Family
Law Act 1975 Decree Nisi of Dissolution of Marriage in
the Family Court of Australia;[57] (c) Exhibit 3 Certificate
of Australian Citizenship of Rederick A. Recio;[58] (d)
Exhibit 4 Decree Nisi of Dissolution of Marriage in the
Family Court of Australia Certificate;[59] and Exhibit 5 --
Statutory Declaration of the Legal Separation Between
Rederick A. Recio and Grace J. Garcia Recio since
October 22, 1995.[60]
Based on the above records, we cannot conclude that
respondent, who was then a naturalized Australian
citizen, was legally capacitated to marry petitioner on
January 12, 1994. We agree with petitioners contention
that the court a quo erred in finding that the divorce decree
ipso facto clothed respondent with the legal capacity to
remarry without requiring him to adduce sufficient
evidence to show the Australian personal law governing
his status; or at the very least, to prove his legal capacity
to contract the second marriage.
7
Neither can we grant petitioners prayer to declare her
marriage to respondent null and void on the ground of
bigamy. After all, it may turn out that under Australian law,
he was really capacitated to marry petitioner as a direct
result of the divorce decree. Hence, we believe that the
most judicious course is to remand this case to the trial
court to receive evidence, if any, which show petitioners
legal capacity to marry petitioner. Failing in that, then the
court a quo may declare a nullity of the parties marriage
on the ground of bigamy, there being already in evidence
two existing marriage certificates, which were both
obtained in the Philippines, one in Malabon, Metro Manila
dated March 1, 1987 and the other, in Cabanatuan City
dated January 12, 1994.
WHEREFORE, in the interest of orderly procedure and
substantial justice, we REMAND the case to the court a
quo for the purpose of receiving evidence which
conclusively show respondents legal capacity to marry
petitioner; and failing in that, of declaring the parties
marriage void on the ground of bigamy, as above
discussed. No costs.
FE D. QUITA, petitioner, vs. COURT OF APPEALS and
BLANDINA DANDAN,* respondents.
FE D. QUITA and Arturo T. Padlan, both Filipinos, were
married in the Philippines on 18 May 1941. They were not
however blessed with children. Somewhere along the way
their relationship soured. Eventually Fe sued Arturo for
divorce in San Francisco, California, U.S.A. She
submitted in the divorce proceedings a private writing
dated 19 July 1950 evidencing their agreement to live
separately from each other and a settlement of their
conjugal properties. On 23 July 1954 she obtained a final
judgment of divorce. Three (3) weeks thereafter she
married a certain Felix Tupaz in the same locality but their
relationship also ended in a divorce. Still in the U.S.A.,
she married for the third time, to a certain Wernimont.
On 16 April 1972 Arturo died. He left no will. On 31 August
1972 Lino Javier Inciong filed a petition with the Regional
Trial Court of Quezon City for issuance of letters of
administration concerning the estate of Arturo in favor of
the Philippine Trust Company. Respondent Blandina
Dandan (also referred to as Blandina Padlan), claiming to
be the surviving spouse of Arturo Padlan, and Claro,
Alexis, Ricardo, Emmanuel, Zenaida and Yolanda, all
surnamed Padlan, named in the petition as surviving
children of Arturo Padlan, opposed the petition and
prayed for the appointment instead of Atty. Leonardo
Cabasal, which was resolved in favor of the latter. Upon
motion of the oppositors themselves, Atty. Cabasal was
later replaced by Higino Castillon. On 30 April 1973 the
oppositors (Blandina and the Padlan children) submitted
certified photocopies of the 19 July 1950 private writing
and the final judgment of divorce between petitioner and
Arturo. Later Ruperto T. Padlan, claiming to be the sole
surviving brother of the deceased Arturo, intervened.
On 7 October 1987 petitioner moved for the immediate
declaration of heirs of the decedent and the distribution of
his estate. At the scheduled hearing on 23 October 1987,
private respondent as well as the six (6) Padlan children
and Ruperto failed to appear despite due notice. On the
same day, the trial court required the submission of the
records of birth of the Padlan children within ten (10) days
from receipt thereof, after which, with or without the
documents, the issue on the declaration of heirs would be
considered submitted for resolution. The prescribed
period lapsed without the required documents being
submitted.
The trial court invoking Tenchavez v. Escao[1] which held
that "a foreign divorce between Filipino citizens sought
and decreed after the effectivity of the present Civil Code
(Rep. Act 386) was not entitled to recognition as valid in
this jurisdiction,"[2] disregarded the divorce between
petitioner and Arturo. Consequently, it expressed the view
that their marriage subsisted until the death of Arturo in
1972. Neither did it consider valid their extrajudicial
settlement of conjugal properties due to lack of judicial
approval.[3] On the other hand, it opined that there was
no showing that marriage existed between private
respondent and Arturo, much less was it shown that the
alleged Padlan children had been acknowledged by the
deceased as his children with her. As regards Ruperto, it
found that he was a brother of Arturo. On 27 November
1987[4] only petitioner and Ruperto were declared the
intestate heirs of Arturo. Accordingly, equal adjudication
of the net hereditary estate was ordered in favor of the two
intestate heirs.[5]
On motion for reconsideration, Blandina and the Padlan
children were allowed to present proofs that the
recognition of the children by the deceased as his
legitimate children, except Alexis who was recognized as
his illegitimate child, had been made in their respective
records of birth. Thus on 15 February 1988[6] partial
reconsideration was granted declaring the Padlan
children, with the exception of Alexis, entitled to one-half
of the estate to the exclusion of Ruperto Padlan, and
petitioner to the other half.[7] Private respondent was not
declared an heir. Although it was stated in the
aforementioned records of birth that she and Arturo were
married on 22 April 1947, their marriage was clearly void
since it was celebrated during the existence of his
previous marriage to petitioner.
In their appeal to the Court of Appeals, Blandina and her
children assigned as one of the errors allegedly
committed by the trial court the circumstance that the
case was decided without a hearing, in violation of Sec.
1, Rule 90, of the Rules of Court, which provides that if
there is a controversy before the court as to who are the
lawful heirs of the deceased person or as to the
distributive shares to which each person is entitled under
the law, the controversy shall be heard and decided as in
ordinary cases.
8
Respondent appellate court found this ground alone
sufficient to sustain the appeal; hence, on 11 September
1995 it declared null and void the 27 November 1987
decision and 15 February 1988 order of the trial court, and
directed the remand of the case to the trial court for further
proceedings.[8] On 18 April 1996 it denied
reconsideration.[9]
Should this case be remanded to the lower court for
further proceedings? Petitioner insists that there is no
need because, first, no legal or factual issue obtains for
resolution either as to the heirship of the Padlan children
or as to their respective shares in the intestate estate of
the decedent; and, second, the issue as to who between
petitioner and private respondent is the proper heir of the
decedent is one of law which can be resolved in the
present petition based on established facts and
admissions of the parties.
We cannot sustain petitioner. The provision relied upon
by respondent court is clear: If there is a controversy
before the court as to who are the lawful heirs of the
deceased person or as to the distributive shares to which
each person is entitled under the law, the controversy
shall be heard and decided as in ordinary cases.
We agree with petitioner that no dispute exists either as
to the right of the six (6) Padlan children to inherit from the
decedent because there are proofs that they have been
duly acknowledged by him and petitioner herself even
recognizes them as heirs of Arturo Padlan;[10] nor as to
their respective hereditary shares. But controversy
remains as to who is the legitimate surviving spouse of
Arturo. The trial court, after the parties other than
petitioner failed to appear during the scheduled hearing
on 23 October 1987 of the motion for immediate
declaration of heirs and distribution of estate, simply
issued an order requiring the submission of the records of
birth of the Padlan children within ten (10) days from
receipt thereof, after which, with or without the
documents, the issue on declaration of heirs would be
deemed submitted for resolution.
We note that in her comment to petitioner's motion private
respondent raised, among others, the issue as to whether
petitioner was still entitled to inherit from the decedent
considering that she had secured a divorce in the U.S.A.
and in fact had twice remarried. She also invoked the
above quoted procedural rule.[11] To this, petitioner
replied that Arturo was a Filipino and as such remained
legally married to her in spite of the divorce they
obtained.[12] Reading between the lines, the implication
is that petitioner was no longer a Filipino citizen at the time
of her divorce from Arturo. This should have prompted the
trial court to conduct a hearing to establish her citizenship.
The purpose of a hearing is to ascertain the truth of the
matters in issue with the aid of documentary and
testimonial evidence as well as the arguments of the
parties either supporting or opposing the evidence.
Instead, the lower court perfunctorily settled her claim in
her favor by merely applying the ruling in Tenchavez v.
Escao.
Then in private respondent's motion to set aside and/or
reconsider the lower court's decision she stressed that the
citizenship of petitioner was relevant in the light of the
ruling in Van Dorn v. Romillo Jr.[13] that aliens may obtain
divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their
national law. She prayed therefore that the case be set for
hearing.[14] Petitioner opposed the motion but failed to
squarely address the issue on her citizenship.[15] The
trial court did not grant private respondent's prayer for a
hearing but proceeded to resolve her motion with the
finding that both petitioner and Arturo were "Filipino
citizens and were married in the Philippines."[16] It
maintained that their divorce obtained in 1954 in San
Francisco, California, U.S.A., was not valid in Philippine
jurisdiction. We deduce that the finding on their citizenship
pertained solely to the time of their marriage as the trial
court was not supplied with a basis to determine
petitioner's citizenship at the time of their divorce. The
doubt persisted as to whether she was still a Filipino
citizen when their divorce was decreed. The trial court
must have overlooked the materiality of this aspect. Once
proved that she was no longer a Filipino citizen at the time
of their divorce, Van Dorn would become applicable and
petitioner could very well lose her right to inherit from
Arturo.
Respondent again raised in her appeal the issue on
petitioner's citizenship;[17] it did not merit enlightenment
however from petitioner.[18] In the present proceeding,
petitioner's citizenship is brought anew to the fore by
private respondent. She even furnishes the Court with the
transcript of stenographic notes taken on 5 May 1995
during the hearing for the reconstitution of the original of
a certain transfer certificate title as well as the issuance of
new owner's duplicate copy thereof before another trial
court. When asked whether she was an American citizen
petitioner answered that she was since 1954.[19]
Significantly, the decree of divorce of petitioner and Arturo
was obtained in the same year. Petitioner however did not
bother to file a reply memorandum to erase the
uncertainty about her citizenship at the time of their
divorce, a factual issue requiring hearings to be
conducted by the trial court. Consequently, respondent
appellate court did not err in ordering the case returned to
the trial court for further proceedings.
We emphasize however that the question to be
determined by the trial court should be limited only to the
right of petitioner to inherit from Arturo as his surviving
spouse. Private respondent's claim to heirship was
already resolved by the trial court. She and Arturo were
married on 22 April 1947 while the prior marriage of
petitioner and Arturo was subsisting thereby resulting in a
bigamous marriage considered void from the beginning
under Arts. 80 and 83 of the Civil Code. Consequently,
she is not a surviving spouse that can inherit from him as
this status presupposes a legitimate relationship.[20]
As regards the motion of private respondent for petitioner
and her counsel to be declared in contempt of court and
that the present petition be dismissed for forum
9
shopping,[21] the same lacks merit. For forum shopping
to exist the actions must involve the same transactions
and same essential facts and circumstances. There must
also be identical causes of action, subject matter and
issue.[22] The present petition deals with declaration of
heirship while the subsequent petitions filed before the
three (3) trial courts concern the issuance of new owner's
duplicate copies of titles of certain properties belonging to
the estate of Arturo. Obviously, there is no reason to
declare the existence of forum shopping.
WHEREFORE, the petition is DENIED. The decision of
respondent Court of Appeals ordering the remand of the
case to the court of origin for further proceedings and
declaring null and void its decision holding petitioner Fe
D. Quita and Ruperto T. Padlan as intestate heirs is
AFFIRMED. The order of the appellate court modifying its
previous decision by granting one-half (1/2) of the net
hereditary estate to the Padlan children, namely, Claro,
Ricardo, Emmanuel, Zenaida and Yolanda, with the
exception of Alexis, all surnamed Padlan, instead of
Arturo's brother Ruperto Padlan, is likewise AFFIRMED.
The Court however emphasizes that the reception of
evidence by the trial court should be limited to the
hereditary rights of petitioner as the surviving spouse of
Arturo Padlan.
The motion to declare petitioner and her counsel in
contempt of court and to dismiss the present petition for
forum shopping is DENIED.
SO ORDERED.
ELMAR O. PEREZ, Petitioner,
vs.
COURT OF APPEALS, Fifth Division, TRISTAN A.
CATINDIG and LILY GOMEZ-CATINDIG,
Respondents.
This petition for certiorari and prohibition under Rule 65 of
the Rules of Court assails the July 25, 2003 Decision1 of
the Court of Appeals in CA-G.R. SP No. 74456 which set
aside and declared as null and void the September 30,
2002 Order2 of the Regional Trial Court of Quezon City,
Branch 84, granting petitioners motion for leave to file
intervention and admitting the Complaint-in-Intervention3
in Civil Case No. Q-01-44847; and its January 23, 2004
Resolution4 denying the motion for reconsideration.
Private respondent Tristan A. Catindig married Lily
Gomez Catindig5 twice on May 16, 1968. The first
marriage ceremony was celebrated at the Central
Methodist Church at T.M. Kalaw Street, Ermita, Manila
while the second took place at the Lourdes Catholic
Church in La Loma, Quezon City. The marriage produced
four children.
Several years later, the couple encountered marital
problems that they decided to separate from each other.
Upon advice of a mutual friend, they decided to obtain a
divorce from the Dominican Republic. Thus, on April 27,
1984, Tristan and Lily executed a Special Power of
Attorney addressed to the Judge of the First Civil Court of
San Cristobal, Dominican Republic, appointing an
attorney-in-fact to institute a divorce action under its
laws.6
Thereafter, on April 30, 1984, the private respondents
filed a joint petition for dissolution of conjugal partnership
with the Regional Trial Court of Makati. On June 12, 1984,
the civil court in the Dominican Republic ratified the
divorce by mutual consent of Tristan and Lily.
Subsequently, on June 23, 1984, the Regional Trial Court
of Makati City, Branch 133, ordered the complete
separation of properties between Tristan and Lily.
On July 14, 1984, Tristan married petitioner Elmar O.
Perez in the State of Virginia in the United States7 and
both lived as husband and wife until October 2001. Their
union produced one offspring.8
During their cohabitation, petitioner learned that the
divorce decree issued by the court in the Dominican
Republic which "dissolved" the marriage between Tristan
and Lily was not recognized in the Philippines and that her
marriage to Tristan was deemed void under Philippine
law. When she confronted Tristan about this, the latter
assured her that he would legalize their union after he
obtains an annulment of his marriage with Lily. Tristan
further promised the petitioner that he would adopt their
son so that he would be entitled to an equal share in his
estate as that of each of his children with Lily.9
On August 13, 2001, Tristan filed a petition for the
declaration of nullity of his marriage to Lily with the
Regional Trial Court of Quezon City, docketed as Case
No. Q-01-44847.
Subsequently, petitioner filed a Motion for Leave to File
Intervention10 claiming that she has a legal interest in the
matter in litigation because she knows certain information
which might aid the trial court at a truthful, fair and just
adjudication of the annulment case, which the trial court
granted on September 30, 2002. Petitioners complaint-
in-intervention was also ordered admitted.
Tristan filed a petition for certiorari and prohibition with the
Court of Appeals seeking to annul the order dated
September 30, 2002 of the trial court. The Court of
Appeals granted the petition and declared as null and void
the September 30, 2002 Order of the trial court granting
the motion for leave to file intervention and admitting the
complaint-in-intervention.
10
Petitioners motion for reconsideration was denied, hence
this petition for certiorari and prohibition filed under Rule
65 of the Rules of Court. Petitioner contends that the
Court of Appeals gravely abused its discretion in
disregarding her legal interest in the annulment case
between Tristan and Lily.
The petition lacks merit.
Ordinarily, the proper recourse of an aggrieved party from
a decision of the Court of Appeals is a petition for review
on certiorari under Rule 45 of the Rules of Court.
However, if the error subject of the recourse is one of
jurisdiction, or the act complained of was granted by a
court with grave abuse of discretion amounting to lack or
excess of jurisdiction, as alleged in this case, the proper
remedy is a petition for certiorari under Rule 65 of the said
Rules.11 This is based on the premise that in issuing the
assailed decision and resolution, the Court of Appeals
acted with grave abuse of discretion, amounting to excess
of lack of jurisdiction and there is no plain, speedy and
adequate remedy in the ordinary course of law. A remedy
is considered plain, speedy, and adequate if it will
promptly relieve the petitioner from the injurious effect of
the judgment and the acts of the lower court.12
It is therefore incumbent upon the petitioner to establish
that the Court of Appeals acted with grave abuse of
discretion amounting to excess or lack of jurisdiction when
it promulgated the assailed decision and resolution.
We have previously ruled that grave abuse of discretion
may arise when a lower court or tribunal violates or
contravenes the Constitution, the law or existing
jurisprudence. By grave abuse of discretion is meant,
such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion
must be grave as where the power is exercised in an
arbitrary or despotic manner by reason of passion or
personal hostility and must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal
to perform the duty enjoined by or to act at all in
contemplation of law.13 The word "capricious," usually
used in tandem with the term "arbitrary," conveys the
notion of willful and unreasoning action. Thus, when
seeking the corrective hand of certiorari, a clear showing
of caprice and arbitrariness in the exercise of discretion is
imperative.14
The Rules of Court laid down the parameters before a
person, not a party to a case can intervene, thus:
Who may intervene. A person who has a legal interest
in the matter in litigation, or in the success of either of the
parties, or an interest against both, or is so situated as to
be adversely affected by a distribution or other disposition
of property in the custody of the court or of an officer
thereof may, with leave of court, be allowed to intervene
in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication
of the rights of the original parties, and whether or not the
intervenors rights may be fully protected in a separate
proceeding.15
The requirements for intervention are: [a] legal interest in
the matter in litigation; and [b] consideration must be
given as to whether the adjudication of the original parties
may be delayed or prejudiced, or whether the intervenors
rights may be protected in a separate proceeding or
not.16
Legal interest, which entitles a person to intervene, must
be in the matter in litigation and of such direct and
immediate character that the intervenor will either gain or
lose by direct legal operation and effect of the
judgment.17 Such interest must be actual, direct and
material, and not simply contingent and expectant.18
Petitioner claims that her status as the wife and
companion of Tristan for 17 years vests her with the
requisite legal interest required of a would-be intervenor
under the Rules of Court.
Petitioners claim lacks merit. Under the law, petitioner
was never the legal wife of Tristan, hence her claim of
legal interest has no basis.
When petitioner and Tristan married on July 14, 1984,
Tristan was still lawfully married to Lily. The divorce
decree that Tristan and Lily obtained from the Dominican
Republic never dissolved the marriage bond between
them. It is basic that laws relating to family rights and
duties, or to the status, condition and legal capacity of
persons are binding upon citizens of the Philippines, even
though living abroad.19 Regardless of where a citizen of
the Philippines might be, he or she will be governed by
Philippine laws with respect to his or her family rights and
duties, or to his or her status, condition and legal capacity.
Hence, if a Filipino regardless of whether he or she was
married here or abroad, initiates a petition abroad to
obtain an absolute divorce from spouse and eventually
becomes successful in getting an absolute divorce
decree, the Philippines will not recognize such absolute
divorce.20
When Tristan and Lily married on May 18, 1968, their
marriage was governed by the provisions of the Civil
Code21 which took effect on August 30, 1950. In the case
of Tenchavez v. Escano22 we held:
(1) That a foreign divorce between Filipino citizens,
sought and decreed after the effectivity of the present Civil
Code (Rep. Act No. 386), is not entitled to recognition as
valid in this jurisdiction; and neither is the marriage
contracted with another party by the divorced consort,
subsequently to the foreign decree of divorce, entitled to
validity in the country. (Emphasis added)
11

Thus, petitioners claim that she is the wife of Tristan even
if their marriage was celebrated abroad lacks merit. Thus,
petitioner never acquired the legal interest as a wife upon
which her motion for intervention is based.
Since petitioners motion for leave to file intervention was
bereft of the indispensable requirement of legal interest,
the issuance by the trial court of the order granting the
same and admitting the complaint-in-intervention was
attended with grave abuse of discretion. Consequently,
the Court of Appeals correctly set aside and declared as
null and void the said order.
WHEREFORE, the petition is DISMISSED. The assailed
Decision dated July 25, 2003 and Resolution dated
January 23, 2004 of the Court of Appeals in CA-G.R. SP
No. 74456 are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
EDGAR SAN LUIS, Petitioner,
vs.
FELICIDAD SAN LUIS, Respondent.
Before us are consolidated petitions for review assailing
the February 4, 1998 Decision 1 of the Court of Appeals
in CA-G.R. CV No. 52647, which reversed and set aside
the September 12, 1995 2 and January 31, 1996 3
Resolutions of the Regional Trial Court of Makati City,
Branch 134 in SP. Proc. No. M-3708; and its May 15,
1998 Resolution 4 denying petitioners motion for
reconsideration.
The instant case involves the settlement of the estate of
Felicisimo T. San Luis (Felicisimo), who was the former
governor of the Province of Laguna. During his lifetime,
Felicisimo contracted three marriages. His first marriage
was with Virginia Sulit on March 17, 1942 out of which
were born six children, namely: Rodolfo, Mila, Edgar,
Linda, Emilita and Manuel. On August 11, 1963, Virginia
predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry
Lee Corwin, with whom he had a son, Tobias. However,
on October 15, 1971, Merry Lee, an American citizen,
filed a Complaint for Divorce 5 before the Family Court of
the First Circuit, State of Hawaii, United States of America
(U.S.A.), which issued a Decree Granting Absolute
Divorce and Awarding Child Custody on December 14,
1973. 6
On June 20, 1974, Felicisimo married respondent
Felicidad San Luis, then surnamed Sagalongos, before
Rev. Fr. William Meyer, Minister of the United
Presbyterian at Wilshire Boulevard, Los Angeles,
California, U.S.A. 7 He had no children with respondent
but lived with her for 18 years from the time of their
marriage up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their
conjugal partnership assets and the settlement of
Felicisimos estate. On December 17, 1993, she filed a
petition for letters of administration 8 before the Regional
Trial Court of Makati City, docketed as SP. Proc. No. M-
3708 which was raffled to Branch 146 thereof.
Respondent alleged that she is the widow of Felicisimo;
that, at the time of his death, the decedent was residing
at 100 San Juanico Street, New Alabang Village,
Alabang, Metro Manila; that the decedents surviving heirs
are respondent as legal spouse, his six children by his first
marriage, and son by his second marriage; that the
decedent left real properties, both conjugal and exclusive,
valued at P30,304,178.00 more or less; that the decedent
does not have any unpaid debts. Respondent prayed that
the conjugal partnership assets be liquidated and that
letters of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of
the children of Felicisimo by his first marriage, filed a
motion to dismiss 9 on the grounds of improper venue and
failure to state a cause of action. Rodolfo claimed that the
petition for letters of administration should have been filed
in the Province of Laguna because this was Felicisimos
place of residence prior to his death. He further claimed
that respondent has no legal personality to file the petition
because she was only a mistress of Felicisimo since the
latter, at the time of his death, was still legally married to
Merry Lee.
On February 15, 1994, Linda invoked the same grounds
and joined her brother Rodolfo in seeking the dismissal
10 of the petition. On February 28, 1994, the trial court
issued an Order 11 denying the two motions to dismiss.
Unaware of the denial of the motions to dismiss,
respondent filed on March 5, 1994 her opposition 12
thereto. She submitted documentary evidence showing
that while Felicisimo exercised the powers of his public
office in Laguna, he regularly went home to their house in
New Alabang Village, Alabang, Metro Manila which they
bought sometime in 1982. Further, she presented the
decree of absolute divorce issued by the Family Court of
the First Circuit, State of Hawaii to prove that the marriage
of Felicisimo to Merry Lee had already been dissolved.
Thus, she claimed that Felicisimo had the legal capacity
to marry her by virtue of paragraph 2, 13 Article 26 of the
Family Code and the doctrine laid down in Van Dorn v.
Romillo, Jr. 14
12
Thereafter, Linda, Rodolfo and herein petitioner Edgar
San Luis, separately filed motions for reconsideration
from the Order denying their motions to dismiss. 15 They
asserted that paragraph 2, Article 26 of the Family Code
cannot be given retroactive effect to validate respondents
bigamous marriage with Felicisimo because this would
impair vested rights in derogation of Article 256 16 of the
Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo
from his first marriage, filed a motion to disqualify Acting
Presiding Judge Anthony E. Santos from hearing the
case.
On October 24, 1994, the trial court issued an Order 17
denying the motions for reconsideration. It ruled that
respondent, as widow of the decedent, possessed the
legal standing to file the petition and that venue was
properly laid. Meanwhile, the motion for disqualification
was deemed moot and academic 18 because then Acting
Presiding Judge Santos was substituted by Judge
Salvador S. Tensuan pending the resolution of said
motion.
Mila filed a motion for inhibition 19 against Judge Tensuan
on November 16, 1994. On even date, Edgar also filed a
motion for reconsideration 20 from the Order denying their
motion for reconsideration arguing that it does not state
the facts and law on which it was based.
On November 25, 1994, Judge Tensuan issued an Order
21 granting the motion for inhibition. The case was re-
raffled to Branch 134 presided by Judge Paul T. Arcangel.
On April 24, 1995, 22 the trial court required the parties to
submit their respective position papers on the twin issues
of venue and legal capacity of respondent to file the
petition. On May 5, 1995, Edgar manifested 23 that he is
adopting the arguments and evidence set forth in his
previous motion for reconsideration as his position paper.
Respondent and Rodolfo filed their position papers on
June 14, 24 and June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the
petition for letters of administration. It held that, at the time
of his death, Felicisimo was the duly elected governor and
a resident of the Province of Laguna. Hence, the petition
should have been filed in Sta. Cruz, Laguna and not in
Makati City. It also ruled that respondent was without legal
capacity to file the petition for letters of administration
because her marriage with Felicisimo was bigamous,
thus, void ab initio. It found that the decree of absolute
divorce dissolving Felicisimos marriage to Merry Lee was
not valid in the Philippines and did not bind Felicisimo who
was a Filipino citizen. It also ruled that paragraph 2, Article
26 of the Family Code cannot be retroactively applied
because it would impair the vested rights of Felicisimos
legitimate children.
Respondent moved for reconsideration 26 and for the
disqualification 27 of Judge Arcangel but said motions
were denied. 28
Respondent appealed to the Court of Appeals which
reversed and set aside the orders of the trial court in its
assailed Decision dated February 4, 1998, the dispositive
portion of which states:
WHEREFORE, the Orders dated September 12, 1995
and January 31, 1996 are hereby REVERSED and SET
ASIDE; the Orders dated February 28 and October 24,
1994 are REINSTATED; and the records of the case is
REMANDED to the trial court for further proceedings. 29
The appellante court ruled that under Section 1, Rule 73
of the Rules of Court, the term "place of residence" of the
decedent, for purposes of fixing the venue of the
settlement of his estate, refers to the personal, actual or
physical habitation, or actual residence or place of abode
of a person as distinguished from legal residence or
domicile. It noted that although Felicisimo discharged his
functions as governor in Laguna, he actually resided in
Alabang, Muntinlupa. Thus, the petition for letters of
administration was properly filed in Makati City.
The Court of Appeals also held that Felicisimo had legal
capacity to marry respondent by virtue of paragraph 2,
Article 26 of the Family Code and the rulings in Van Dorn
v. Romillo, Jr. 30 and Pilapil v. Ibay-Somera. 31 It found
that the marriage between Felicisimo and Merry Lee was
validly dissolved by virtue of the decree of absolute
divorce issued by the Family Court of the First Circuit,
State of Hawaii. As a result, under paragraph 2, Article 26,
Felicisimo was capacitated to contract a subsequent
marriage with respondent. Thus
With the well-known rule express mandate of paragraph
2, Article 26, of the Family Code of the Philippines, the
doctrines in Van Dorn, Pilapil, and the reason and
philosophy behind the enactment of E.O. No. 227,
there is no justiciable reason to sustain the individual view
sweeping statement of Judge Arc[h]angel, that
"Article 26, par. 2 of the Family Code, contravenes the
basic policy of our state against divorce in any form
whatsoever." Indeed, courts cannot deny what the law
grants. All that the courts should do is to give force and
effect to the express mandate of the law. The foreign
divorce having been obtained by the Foreigner on
December 14, 1992, 32 the Filipino divorcee, "shall x x x
have capacity to remarry under Philippine laws". For this
reason, the marriage between the deceased and
petitioner should not be denominated as "a bigamous
marriage.
Therefore, under Article 130 of the Family Code, the
petitioner as the surviving spouse can institute the judicial
proceeding for the settlement of the estate of the
deceased. x x x 33
13

Edgar, Linda, and Rodolfo filed separate motions for
reconsideration 34 which were denied by the Court of
Appeals.
On July 2, 1998, Edgar appealed to this Court via the
instant petition for review on certiorari. 35 Rodolfo later
filed a manifestation and motion to adopt the said petition
which was granted. 36
In the instant consolidated petitions, Edgar and Rodolfo
insist that the venue of the subject petition for letters of
administration was improperly laid because at the time of
his death, Felicisimo was a resident of Sta. Cruz, Laguna.
They contend that pursuant to our rulings in Nuval v.
Guray 37 and Romualdez v. RTC, Br. 7, Tacloban City,
38 "residence" is synonymous with "domicile" which
denotes a fixed permanent residence to which when
absent, one intends to return. They claim that a person
can only have one domicile at any given time. Since
Felicisimo never changed his domicile, the petition for
letters of administration should have been filed in Sta.
Cruz, Laguna.
Petitioners also contend that respondents marriage to
Felicisimo was void and bigamous because it was
performed during the subsistence of the latters marriage
to Merry Lee. They argue that paragraph 2, Article 26
cannot be retroactively applied because it would impair
vested rights and ratify the void bigamous marriage. As
such, respondent cannot be considered the surviving wife
of Felicisimo; hence, she has no legal capacity to file the
petition for letters of administration.
The issues for resolution: (1) whether venue was properly
laid, and (2) whether respondent has legal capacity to file
the subject petition for letters of administration.
The petition lacks merit.
Under Section 1, 39 Rule 73 of the Rules of Court, the
petition for letters of administration of the estate of
Felicisimo should be filed in the Regional Trial Court of
the province "in which he resides at the time of his death."
In the case of Garcia Fule v. Court of Appeals, 40 we laid
down the doctrinal rule for determining the residence as
contradistinguished from domicile of the decedent for
purposes of fixing the venue of the settlement of his
estate:
[T]he term "resides" connotes ex vi termini "actual
residence" as distinguished from "legal residence or
domicile." This term "resides," like the terms "residing"
and "residence," is elastic and should be interpreted in the
light of the object or purpose of the statute or rule in which
it is employed. In the application of venue statutes and
rules Section 1, Rule 73 of the Revised Rules of Court
is of such nature residence rather than domicile is the
significant factor. Even where the statute uses the word
"domicile" still it is construed as meaning residence and
not domicile in the technical sense. Some cases make a
distinction between the terms "residence" and "domicile"
but as generally used in statutes fixing venue, the terms
are synonymous, and convey the same meaning as the
term "inhabitant." In other words, "resides" should be
viewed or understood in its popular sense, meaning, the
personal, actual or physical habitation of a person, actual
residence or place of abode. It signifies physical presence
in a place and actual stay thereat. In this popular sense,
the term means merely residence, that is, personal
residence, not legal residence or domicile. Residence
simply requires bodily presence as an inhabitant in a
given place, while domicile requires bodily presence in
that place and also an intention to make it ones domicile.
No particular length of time of residence is required
though; however, the residence must be more than
temporary. 41 (Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for
purposes of fixing the venue of the settlement of the
estate of Felicisimo, is synonymous with "domicile." The
rulings in Nuval and Romualdez are inapplicable to the
instant case because they involve election cases.
Needless to say, there is a distinction between
"residence" for purposes of election laws and "residence"
for purposes of fixing the venue of actions. In election
cases, "residence" and "domicile" are treated as
synonymous terms, that is, the fixed permanent residence
to which when absent, one has the intention of returning.
42 However, for purposes of fixing venue under the Rules
of Court, the "residence" of a person is his personal,
actual or physical habitation, or actual residence or place
of abode, which may not necessarily be his legal
residence or domicile provided he resides therein with
continuity and consistency. 43 Hence, it is possible that a
person may have his residence in one place and domicile
in another.
In the instant case, while petitioners established that
Felicisimo was domiciled in Sta. Cruz, Laguna,
respondent proved that he also maintained a residence in
Alabang, Muntinlupa from 1982 up to the time of his
death. Respondent submitted in evidence the Deed of
Absolute Sale 44 dated January 5, 1983 showing that the
deceased purchased the aforesaid property. She also
presented billing statements 45 from the Philippine Heart
Center and Chinese General Hospital for the period
August to December 1992 indicating the address of
Felicisimo at "100 San Juanico, Ayala Alabang,
Muntinlupa." Respondent also presented proof of
membership of the deceased in the Ayala Alabang Village
Association 46 and Ayala Country Club, Inc., 47 letter-
envelopes 48 from 1988 to 1990 sent by the deceaseds
children to him at his Alabang address, and the
deceaseds calling cards 49 stating that his home/city
address is at "100 San Juanico, Ayala Alabang Village,
Muntinlupa" while his office/provincial address is in
"Provincial Capitol, Sta. Cruz, Laguna."
14
From the foregoing, we find that Felicisimo was a resident
of Alabang, Muntinlupa for purposes of fixing the venue of
the settlement of his estate. Consequently, the subject
petition for letters of administration was validly filed in the
Regional Trial Court 50 which has territorial jurisdiction
over Alabang, Muntinlupa. The subject petition was filed
on December 17, 1993. At that time, Muntinlupa was still
a municipality and the branches of the Regional Trial
Court of the National Capital Judicial Region which had
territorial jurisdiction over Muntinlupa were then seated in
Makati City as per Supreme Court Administrative Order
No. 3. 51 Thus, the subject petition was validly filed before
the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidads legal
personality to file the petition for letters of administration,
we must first resolve the issue of whether a Filipino who
is divorced by his alien spouse abroad may validly
remarry under the Civil Code, considering that Felicidads
marriage to Felicisimo was solemnized on June 20, 1974,
or before the Family Code took effect on August 3, 1988.
In resolving this issue, we need not retroactively apply the
provisions of the Family Code, particularly Art. 26, par. (2)
considering that there is sufficient jurisprudential basis
allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52 involved a
marriage between a foreigner and his Filipino wife, which
marriage was subsequently dissolved through a divorce
obtained abroad by the latter. Claiming that the divorce
was not valid under Philippine law, the alien spouse
alleged that his interest in the properties from their
conjugal partnership should be protected. The Court,
however, recognized the validity of the divorce and held
that the alien spouse had no interest in the properties
acquired by the Filipino wife after the divorce. Thus:
In this case, the divorce in Nevada released private
respondent from the marriage from the standards of
American law, under which divorce dissolves the
marriage. As stated by the Federal Supreme Court of the
United States in Atherton vs. Atherton, 45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the
bond of matrimony by a competent jurisdiction are to
change the existing status or domestic relation of
husband and wife, and to free them both from the bond.
The marriage tie, when thus severed as to one party,
ceases to bind either. A husband without a wife, or a wife
without a husband, is unknown to the law. When the law
provides, in the nature of a penalty, that the guilty party
shall not marry again, that party, as well as the other, is
still absolutely freed from the bond of the former
marriage."
Thus, pursuant to his national law, private respondent is
no longer the husband of petitioner. He would have no
standing to sue in the case below as petitioners husband
entitled to exercise control over conjugal assets. As he is
bound by the Decision of his own countrys Court, which
validly exercised jurisdiction over him, and whose
decision he does not repudiate, he is estopped by his own
representation before said Court from asserting his right
over the alleged conjugal property. 53
As to the effect of the divorce on the Filipino wife, the
Court ruled that she should no longer be considered
married to the alien spouse. Further, she should not be
required to perform her marital duties and obligations. It
held:
To maintain, as private respondent does, that, under our
laws, petitioner has to be considered still married to
private respondent and still subject to a wife's obligations
under Article 109, et. seq. of the Civil Code cannot be just.
Petitioner should not be obliged to live together with,
observe respect and fidelity, and render support to private
respondent. The latter should not continue to be one of
her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country if
the ends of justice are to be served. 54 (Emphasis added)
This principle was thereafter applied in Pilapil v. Ibay-
Somera 55 where the Court recognized the validity of a
divorce obtained abroad. In the said case, it was held that
the alien spouse is not a proper party in filing the adultery
suit against his Filipino wife. The Court stated that "the
severance of the marital bond had the effect of
dissociating the former spouses from each other, hence
the actuations of one would not affect or cast obloquy on
the other." 56
Likewise, in Quita v. Court of Appeals, 57 the Court stated
that where a Filipino is divorced by his naturalized foreign
spouse, the ruling in Van Dorn applies. 58 Although
decided on December 22, 1998, the divorce in the said
case was obtained in 1954 when the Civil Code provisions
were still in effect.
The significance of the Van Dorn case to the development
of limited recognition of divorce in the Philippines cannot
be denied. The ruling has long been interpreted as
severing marital ties between parties in a mixed marriage
and capacitating the Filipino spouse to remarry as a
necessary consequence of upholding the validity of a
divorce obtained abroad by the alien spouse. In his
treatise, Dr. Arturo M. Tolentino cited Van Dorn stating
that "if the foreigner obtains a valid foreign divorce, the
Filipino spouse shall have capacity to remarry under
Philippine law." 59 In Garcia v. Recio, 60 the Court
likewise cited the aforementioned case in relation to
Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the
historical background and legislative intent behind
paragraph 2, Article 26 of the Family Code were
discussed, to wit:
Brief Historical Background
15

On July 6, 1987, then President Corazon Aquino signed
into law Executive Order No. 209, otherwise known as the
"Family Code," which took effect on August 3, 1988.
Article 26 thereof states:
All marriages solemnized outside the Philippines in
accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall also
be valid in this country, except those prohibited under
Articles 35, 37, and 38.
On July 17, 1987, shortly after the signing of the original
Family Code, Executive Order No. 227 was likewise
signed into law, amending Articles 26, 36, and 39 of the
Family Code. A second paragraph was added to Article
26. As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines
in accordance with the laws in force in the country where
they were solemnized, and valid there as such, shall also
be valid in this country, except those prohibited under
Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a
foreigner is validly celebrated and a divorce is thereafter
validly obtained abroad by the alien spouse capacitating
him or her to remarry, the Filipino spouse shall have
capacity to remarry under Philippine law. (Emphasis
supplied)
xxxx
Legislative Intent
Records of the proceedings of the Family Code
deliberations showed that the intent of Paragraph 2 of
Article 26, according to Judge Alicia Sempio-Diy, a
member of the Civil Code Revision Committee, is to avoid
the absurd situation where the Filipino spouse remains
married to the alien spouse who, after obtaining a divorce,
is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to
the 1985 case of Van Dorn v. Romillo, Jr. The Van Dorn
case involved a marriage between a Filipino citizen and a
foreigner. The Court held therein that a divorce decree
validly obtained by the alien spouse is valid in the
Philippines, and consequently, the Filipino spouse is
capacitated to remarry under Philippine law. 63
(Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving
a situation where a divorce is validly obtained abroad by
the alien spouse. With the enactment of the Family Code
and paragraph 2, Article 26 thereof, our lawmakers
codified the law already established through judicial
precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by
rendering its continuance intolerable to one of the parties
and productive of no possible good to the community,
relief in some way should be obtainable. 64 Marriage,
being a mutual and shared commitment between two
parties, cannot possibly be productive of any good to the
society where one is considered released from the marital
bond while the other remains bound to it. Such is the state
of affairs where the alien spouse obtains a valid divorce
abroad against the Filipino spouse, as in this case.
Petitioners cite Articles 15 65 and 17 66 of the Civil Code
in stating that the divorce is void under Philippine law
insofar as Filipinos are concerned. However, in light of
this Courts rulings in the cases discussed above, the
Filipino spouse should not be discriminated against in his
own country if the ends of justice are to be served. 67 In
Alonzo v. Intermediate Appellate Court, 68 the Court
stated:
But as has also been aptly observed, we test a law by its
results; and likewise, we may add, by its purposes. It is a
cardinal rule that, in seeking the meaning of the law, the
first concern of the judge should be to discover in its
provisions the intent of the lawmaker. Unquestionably, the
law should never be interpreted in such a way as to cause
injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume
the good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of
but in consonance with justice. Law and justice are
inseparable, and we must keep them so. To be sure, there
are some laws that, while generally valid, may seem
arbitrary when applied in a particular case because of its
peculiar circumstances. In such a situation, we are not
bound, because only of our nature and functions, to apply
them just the same, in slavish obedience to their
language. What we do instead is find a balance between
the word and the will, that justice may be done even as
the law is obeyed.
As judges, we are not automatons. We do not and must
not unfeelingly apply the law as it is worded, yielding like
robots to the literal command without regard to its cause
and consequence. "Courts are apt to err by sticking too
closely to the words of a law," so we are warned, by
Justice Holmes again, "where these words import a policy
that goes beyond them."
xxxx
More than twenty centuries ago, Justinian defined justice
"as the constant and perpetual wish to render every one
his due." That wish continues to motivate this Court when
16
it assesses the facts and the law in every case brought to
it for decision. Justice is always an essential ingredient of
its decisions. Thus when the facts warrants, we interpret
the law in a way that will render justice, presuming that it
was the intention of the lawmaker, to begin with, that the
law be dispensed with justice. 69
Applying the above doctrine in the instant case, the
divorce decree allegedly obtained by Merry Lee which
absolutely allowed Felicisimo to remarry, would have
vested Felicidad with the legal personality to file the
present petition as Felicisimos surviving spouse.
However, the records show that there is insufficient
evidence to prove the validity of the divorce obtained by
Merry Lee as well as the marriage of respondent and
Felicisimo under the laws of the U.S.A. In Garcia v. Recio,
70 the Court laid down the specific guidelines for pleading
and proving foreign law and divorce judgments. It held
that presentation solely of the divorce decree is
insufficient and that proof of its authenticity and due
execution must be presented. Under Sections 24 and 25
of Rule 132, a writing or document may be proven as a
public or official record of a foreign country by either (1)
an official publication or (2) a copy thereof attested by the
officer having legal custody of the document. If the record
is not kept in the Philippines, such copy must be (a)
accompanied by a certificate issued by the proper
diplomatic or consular officer in the Philippine foreign
service stationed in the foreign country in which the record
is kept and (b) authenticated by the seal of his office. 71
With regard to respondents marriage to Felicisimo
allegedly solemnized in California, U.S.A., she submitted
photocopies of the Marriage Certificate and the annotated
text 72 of the Family Law Act of California which
purportedly show that their marriage was done in
accordance with the said law. As stated in Garcia,
however, the Court cannot take judicial notice of foreign
laws as they must be alleged and proved. 73
Therefore, this case should be remanded to the trial court
for further reception of evidence on the divorce decree
obtained by Merry Lee and the marriage of respondent
and Felicisimo.
Even assuming that Felicisimo was not capacitated to
marry respondent in 1974, nevertheless, we find that the
latter has the legal personality to file the subject petition
for letters of administration, as she may be considered the
co-owner of Felicisimo as regards the properties that were
acquired through their joint efforts during their
cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that
letters of administration may be granted to the surviving
spouse of the decedent. However, Section 2, Rule 79
thereof also provides in part:
SEC. 2. Contents of petition for letters of administration.
A petition for letters of administration must be filed by
an interested person and must show, as far as known to
the petitioner: x x x.
An "interested person" has been defined as one who
would be benefited by the estate, such as an heir, or one
who has a claim against the estate, such as a creditor.
The interest must be material and direct, and not merely
indirect or contingent. 75
In the instant case, respondent would qualify as an
interested person who has a direct interest in the estate
of Felicisimo by virtue of their cohabitation, the existence
of which was not denied by petitioners. If she proves the
validity of the divorce and Felicisimos capacity to
remarry, but fails to prove that her marriage with him was
validly performed under the laws of the U.S.A., then she
may be considered as a co-owner under Article 144 76 of
the Civil Code. This provision governs the property
relations between parties who live together as husband
and wife without the benefit of marriage, or their marriage
is void from the beginning. It provides that the property
acquired by either or both of them through their work or
industry or their wages and salaries shall be governed by
the rules on co-ownership. In a co-ownership, it is not
necessary that the property be acquired through their joint
labor, efforts and industry. Any property acquired during
the union is prima facie presumed to have been obtained
through their joint efforts. Hence, the portions belonging
to the co-owners shall be presumed equal, unless the
contrary is proven. 77
Meanwhile, if respondent fails to prove the validity of both
the divorce and the marriage, the applicable provision
would be Article 148 of the Family Code which has filled
the hiatus in Article 144 of the Civil Code by expressly
regulating the property relations of couples living together
as husband and wife but are incapacitated to marry. 78 In
Saguid v. Court of Appeals, 79 we held that even if the
cohabitation or the acquisition of property occurred before
the Family Code took effect, Article 148 governs. 80 The
Court described the property regime under this provision
as follows:
The regime of limited co-ownership of property governing
the union of parties who are not legally capacitated to
marry each other, but who nonetheless live together as
husband and wife, applies to properties acquired during
said cohabitation in proportion to their respective
contributions. Co-ownership will only be up to the extent
of the proven actual contribution of money, property or
industry. Absent proof of the extent thereof, their
contributions and corresponding shares shall be
presumed to be equal.
xxxx
17
In the cases of Agapay v. Palang, and Tumlos v.
Fernandez, which involved the issue of co-ownership of
properties acquired by the parties to a bigamous marriage
and an adulterous relationship, respectively, we ruled that
proof of actual contribution in the acquisition of the
property is essential. x x x
As in other civil cases, the burden of proof rests upon the
party who, as determined by the pleadings or the nature
of the case, asserts an affirmative issue. Contentions
must be proved by competent evidence and reliance must
be had on the strength of the partys own evidence and
not upon the weakness of the opponents defense. x x x
81
In view of the foregoing, we find that respondents legal
capacity to file the subject petition for letters of
administration may arise from her status as the surviving
wife of Felicisimo or as his co-owner under Article 144 of
the Civil Code or Article 148 of the Family Code.
WHEREFORE, the petition is DENIED. The Decision of
the Court of Appeals reinstating and affirming the
February 28, 1994 Order of the Regional Trial Court which
denied petitioners motion to dismiss and its October 24,
1994 Order which dismissed petitioners motion for
reconsideration is AFFIRMED. Let this case be
REMANDED to the trial court for further proceedings.
SO ORDERED.
SOLEDAD L. LAVADIA, Petitioner,
vs.
HEIRS OF JUAN LUCES LUNA, represented by
GREGORIO Z. LUNA and EUGENIA ZABALLERO-
LUNA, Respondents.
Divorce between Filipinos is void and ineffectual under
the nationality rule adopted by Philippine law. Hence, any
settlement of property between the parties of the first
marriage involving Filipinos submitted as an incident of a
divorce obtained in a foreign country lacks competent
judicial approval, and cannot be enforceable against the
assets of the husband who contracts a subsequent
marriage.
The Case
The petitioner, the second wife of the late Atty. Juan
Luces Luna, appeals the adverse decision promulgated
on November 11, 2005,1 whereby the Court of Appeals
(CA) affirmed with modification the decision rendered on
August 27, 2001 by the Regional Trial Court (RTC),
Branch 138, in Makati City.2 The CA thereby denied her
right in the 25/100 pro indiviso share of the husband in a
condominium unit, and in the law books of the husband
acquired during the second marriage.
Antecedents
The antecedent facts were summarized by the CA as
follows:
ATTY. LUNA, a practicing lawyer, was at first a name
partner in the prestigious law firm Sycip, Salazar, Luna,
Manalo, Hernandez & Feliciano Law Offices at that time
when he was living with his first wife, herein intervenor-
appellant Eugenia Zaballero-Luna (EUGENIA), whom he
initially married ina civil ceremony conducted by the
Justice of the Peace of Paraaque, Rizal on September
10, 1947 and later solemnized in a church ceremony at
the Pro-Cathedral in San Miguel, Bulacan on September
12, 1948. In ATTY. LUNAs marriage to EUGENIA, they
begot seven (7) children, namely: Regina Maria L. Nadal,
Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria L.
Tabunda, Gregorio Macario Luna, Carolina Linda L.
Tapia, and Cesar Antonio Luna. After almost two (2)
decades of marriage, ATTY. LUNA and EUGENIA
eventually agreed to live apart from each other in
February 1966 and agreed to separation of property, to
which end, they entered into a written agreement entitled
"AGREEMENT FOR SEPARATION AND PROPERTY
SETTLEMENT" dated November 12, 1975, whereby they
agreed to live separately and to dissolve and liquidate
their conjugal partnership of property.
On January 12, 1976, ATTY. LUNA obtained a divorce
decree of his marriage with EUGENIA from the Civil and
Commercial Chamber of the First Circumscription of the
Court of First Instance of Sto. Domingo, Dominican
Republic. Also in Sto.Domingo, Dominican Republic, on
the same date, ATTY. LUNA contracted another
marriage, this time with SOLEDAD. Thereafter, ATTY.
LUNA and SOLEDAD returned to the Philippines and
lived together as husband and wife until 1987.
Sometime in 1977, ATTY. LUNA organized a new law firm
named: Luna, Puruganan, Sison and Ongkiko
(LUPSICON) where ATTY. LUNA was the managing
partner.
On February 14, 1978, LUPSICON through ATTY. LUNA
purchased from Tandang Sora Development Corporation
the 6th Floor of Kalaw-Ledesma Condominium
Project(condominium unit) at Gamboa St., Makati City,
consisting of 517.52 square meters, for P1,449,056.00, to
be paid on installment basis for 36months starting on April
15, 1978. Said condominium unit was to be usedas law
office of LUPSICON. After full payment, the Deed of
Absolute Sale over the condominium unit was executed
on July 15, 1983, and CCT No. 4779 was issued on
August 10, 1983, which was registered bearing the
following names:
18
"JUAN LUCES LUNA, married to Soledad L. Luna
(46/100); MARIO E. ONGKIKO, married to Sonia P.G.
Ongkiko (25/100); GREGORIO R. PURUGANAN,
married to Paz A. Puruganan (17/100); and TERESITA
CRUZ SISON, married to Antonio J.M. Sison (12/100) x x
x" Subsequently, 8/100 share of ATTY. LUNA and 17/100
share of Atty. Gregorio R. Puruganan in the condominium
unit was sold to Atty. Mario E. Ongkiko, for which a new
CCT No. 21761 was issued on February 7, 1992 in the
following names:
"JUAN LUCES LUNA, married to Soledad L. Luna
(38/100); MARIO E. ONGKIKO, married to Sonia P.G.
Ongkiko (50/100); TERESITA CRUZ SISON, married to
Antonio J.M. Sison (12/100) x x x"
Sometime in 1992, LUPSICON was dissolved and the
condominium unit was partitioned by the partners but the
same was still registered in common under CCT No.
21716. The parties stipulated that the interest of ATTY.
LUNA over the condominium unit would be 25/100 share.
ATTY. LUNA thereafter established and headed another
law firm with Atty. Renato G. Dela Cruzand used a portion
of the office condominium unit as their office. The said law
firm lasted until the death of ATTY. JUAN on July 12,
1997.
After the death of ATTY. JUAN, his share in the
condominium unit including the lawbooks, office furniture
and equipment found therein were taken over by Gregorio
Z. Luna, ATTY. LUNAs son of the first marriage. Gregorio
Z. Luna thenleased out the 25/100 portion of the
condominium unit belonging to his father to Atty. Renato
G. De la Cruz who established his own law firm named
Renato G. De la Cruz & Associates.
The 25/100 pro-indiviso share of ATTY. Luna in the
condominium unit as well as the law books, office furniture
and equipment became the subject of the complaint filed
by SOLEDAD against the heirs of ATTY. JUAN with the
RTC of Makati City, Branch 138, on September 10, 1999,
docketed as Civil Case No. 99-1644. The complaint
alleged that the subject properties were acquired during
the existence of the marriage between ATTY. LUNA and
SOLEDAD through their joint efforts that since they had
no children, SOLEDAD became co-owner of the said
properties upon the death of ATTY. LUNA to the extent of
pro-indiviso share consisting of her share in the said
properties plus her share in the net estate of ATTY.
LUNA which was bequeathed to her in the latters last will
and testament; and thatthe heirs of ATTY. LUNA through
Gregorio Z. Luna excluded SOLEDAD from her share in
the subject properties. The complaint prayed that
SOLEDAD be declared the owner of the portion of the
subject properties;that the same be partitioned; that an
accounting of the rentals on the condominium unit
pertaining to the share of SOLEDAD be conducted; that a
receiver be appointed to preserve ad administer the
subject properties;and that the heirs of ATTY. LUNA be
ordered to pay attorneys feesand costs of the suit to
SOLEDAD.3
Ruling of the RTC
On August 27, 2001, the RTC rendered its decision after
trial upon the aforementioned facts,4 disposing thusly:
WHEREFORE, judgment is rendered as follows:
(a) The 24/100 pro-indiviso share in the condominium unit
located at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE
HUNDRED SEVENTEEN (517/100) SQUARE METERS
is adjudged to have been acquired by Juan Lucas Luna
through his sole industry;
(b) Plaintiff has no right as owner or under any other
concept over the condominium unit, hence the entry in
Condominium Certificate of Title No. 21761 of the
Registry of Deeds of Makati with respect to the civil status
of Juan Luces Luna should be changed from "JUAN
LUCES LUNA married to Soledad L. Luna" to "JUAN
LUCES LUNA married to Eugenia Zaballero Luna";
(c) Plaintiff is declared to be the owner of the books
Corpus Juris, Fletcher on Corporation, American
Jurisprudence and Federal Supreme Court Reports found
in the condominium unit and defendants are ordered to
deliver them to the plaintiff as soon as appropriate
arrangements have been madefor transport and storage.
No pronouncement as to costs.
SO ORDERED.5
Decision of the CA
Both parties appealed to the CA.6
On her part, the petitioner assigned the following errors to
the RTC, namely:
I. THE LOWER COURT ERRED IN RULING THAT THE
CONDOMINIUM UNIT WAS ACQUIRED THRU THE
SOLE INDUSTRY OF ATTY. JUAN LUCES LUNA;
II. THE LOWER COURT ERRED IN RULING THAT
PLAINTIFFAPPELLANT DID NOT CONTRIBUTE
MONEY FOR THE ACQUISITION OF THE
CONDOMINIUM UNIT;
19

III. THE LOWER COURT ERRED IN GIVING
CREDENCE TO PORTIONS OF THE TESTIMONY OF
GREGORIO LUNA, WHO HAS NO ACTUAL
KNOWLEDGE OF THE ACQUISITION OF THE UNIT,
BUT IGNORED OTHER PORTIONS OF HIS
TESTIMONY FAVORABLE TO THE PLAINTIFF-
APPELLANT;
IV. THE LOWER COURT ERRED IN NOT GIVING
SIGNIFICANCE TO THE FACT THAT THE CONJUGAL
PARTNERSHIP BETWEEN LUNA AND INTERVENOR-
APPELLANT WAS ALREADY DISSOLVED AND
LIQUIDATED PRIOR TO THE UNION OF PLAINTIFF-
APPELLANT AND LUNA;
V. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE ABSENCE OF THE
DISPOSITION OF THE CONDOMINIUM UNIT IN THE
HOLOGRAPHIC WILL OF THE PLAINTIFF-
APPELLANT;
VI. THE LOWER COURT ERRED IN GIVING UNDUE
SIGNIFICANCE TO THE FACTTHAT THE NAME OF
PLAINTIFF-APPELLANT DID NOT APPEAR IN THE
DEED OF ABSOLUTE SALE EXECUTED BY TANDANG
SORA DEVELOPMENT CORPORATION OVER THE
CONDOMINIUM UNIT;
VII. THE LOWER COURT ERRED IN RULING THAT
NEITHER ARTICLE 148 OF THE FAMILYCODE NOR
ARTICLE 144 OF THE CIVIL CODE OF THE
PHILIPPINES ARE APPLICABLE;
VIII. THE LOWER COURT ERRED IN NOT RULING
THAT THE CAUSE OF ACTION OF THE INTERVENOR-
APPELLANT HAS BEEN BARRED BY PESCRIPTION
AND LACHES; and
IX. THE LOWER COURT ERRED IN NOT
EXPUNGING/DISMISSING THE INTERVENTION FOR
FAILURE OF INTERVENOR-APPELLANT TO PAY
FILING FEE.7
In contrast, the respondents attributedthe following errors
to the trial court, to wit:
I. THE LOWER COURT ERRED IN HOLDING THAT
CERTAIN FOREIGN LAW BOOKS IN THE LAW OFFICE
OF ATTY. LUNA WERE BOUGHT WITH THE USE OF
PLAINTIFFS MONEY;
II. THE LOWER COURT ERRED IN HOLDING THAT
PLAINTIFF PROVED BY PREPONDERANCE OF
EVIDENCE (HER CLAIM OVER) THE SPECIFIED
FOREIGN LAW BOOKS FOUND IN ATTY. LUNAS LAW
OFFICE; and
III. THE LOWER COURT ERRED IN NOT HOLDING
THAT, ASSUMING PLAINTIFF PAID FOR THE SAID
FOREIGN LAW BOOKS, THE RIGHT TO RECOVER
THEM HAD PRESCRIBED AND BARRED BY LACHES
AND ESTOPPEL.8
On November 11, 2005, the CA promulgated its assailed
modified decision,9 holding and ruling:
EUGENIA, the first wife, was the legitimate wife of ATTY.
LUNA until the latters death on July 12, 1997. The
absolute divorce decree obtained by ATTY. LUNA inthe
Dominican Republic did not terminate his prior marriage
with EUGENIA because foreign divorce between Filipino
citizens is not recognized in our jurisdiction. x x x10
xxxx
WHEREFORE, premises considered, the assailed
August 27, 2001 Decision of the RTC of MakatiCity,
Branch 138, is hereby MODIFIEDas follows:
(a) The 25/100 pro-indiviso share in the condominium unit
at the SIXTH FLOOR of the KALAW LEDESMA
CONDOMINIUM PROJECT covered by Condominium
Certificate of Title No. 21761 consisting of FIVE
HUNDRED SEVENTEEN (517/100) (sic) SQUARE
METERS is hereby adjudged to defendants-appellants,
the heirs of Juan Luces Luna and Eugenia Zaballero-Luna
(first marriage), having been acquired from the sole funds
and sole industry of Juan Luces Luna while marriage of
Juan Luces Luna and Eugenia Zaballero-Luna (first
marriage) was still subsisting and valid;
(b) Plaintiff-appellant Soledad Lavadia has no right as
owner or under any other concept over the condominium
unit, hence the entry in Condominium Certificate of Title
No. 21761 of the Registry of Deeds ofMakati with respect
to the civil status of Juan Luces Luna should be changed
from "JUAN LUCES LUNA married to Soledad L. Luna"
to "JUAN LUCES LUNA married to Eugenia Zaballero
Luna";
(c) Defendants-appellants, the heirs of Juan Luces Luna
and Eugenia Zaballero-Luna(first marriage) are hereby
declared to be the owner of the books Corpus Juris,
Fletcher on Corporation, American Jurisprudence and
Federal Supreme Court Reports found in the
condominium unit.
No pronouncement as to costs.
20
SO ORDERED.11
On March 13, 2006,12 the CA denied the petitioners
motion for reconsideration.13
Issues
In this appeal, the petitioner avers in her petition for
review on certiorarithat:
A. The Honorable Court of Appeals erred in ruling that the
Agreement for Separation and Property Settlement
executed by Luna and Respondent Eugenia was
unenforceable; hence, their conjugal partnership was not
dissolved and liquidated;
B. The Honorable Court of Appeals erred in not
recognizing the Dominican Republic courts approval of
the Agreement;
C. The Honorable Court of Appeals erred in ruling that
Petitioner failed to adduce sufficient proof of actual
contribution to the acquisition of purchase of the
subjectcondominium unit; and
D. The Honorable Court of Appeals erred in ruling that
Petitioner was not entitled to the subject law books.14
The decisive question to be resolved is who among the
contending parties should be entitled to the 25/100 pro
indivisoshare in the condominium unit; and to the law
books (i.e., Corpus Juris, Fletcher on Corporation,
American Jurisprudence and Federal Supreme Court
Reports).
The resolution of the decisive question requires the Court
to ascertain the law that should determine, firstly, whether
the divorce between Atty. Luna and Eugenia Zaballero-
Luna (Eugenia) had validly dissolved the first marriage;
and, secondly, whether the second marriage entered into
by the late Atty. Luna and the petitioner entitled the latter
to any rights in property. Ruling of the Court
We affirm the modified decision of the CA.
1. Atty. Lunas first marriage with Eugenia
subsisted up to the time of his death
The first marriage between Atty. Luna and Eugenia, both
Filipinos, was solemnized in the Philippines on
September 10, 1947. The law in force at the time of the
solemnization was the Spanish Civil Code, which adopted
the nationality rule. The Civil Codecontinued to follow the
nationality rule, to the effect that Philippine laws relating
to family rights and duties, or to the status, condition and
legal capacity of persons were binding upon citizens of
the Philippines, although living abroad.15 Pursuant to the
nationality rule, Philippine laws governed thiscase by
virtue of bothAtty. Luna and Eugenio having remained
Filipinos until the death of Atty. Luna on July 12, 1997
terminated their marriage.
From the time of the celebration ofthe first marriage on
September 10, 1947 until the present, absolute divorce
between Filipino spouses has not been recognized in the
Philippines. The non-recognition of absolute divorce
between Filipinos has remained even under the Family
Code,16 even if either or both of the spouses are residing
abroad.17 Indeed, the only two types of defective marital
unions under our laws have beenthe void and the
voidable marriages. As such, the remedies against such
defective marriages have been limited to the declaration
of nullity ofthe marriage and the annulment of the
marriage.
It is true that on January 12, 1976, the Court of First
Instance (CFI) of Sto. Domingo in the Dominican Republic
issued the Divorce Decree dissolving the first marriage of
Atty. Luna and Eugenia.18 Conformably with the
nationality rule, however, the divorce, even if voluntarily
obtained abroad, did not dissolve the marriage between
Atty. Luna and Eugenia, which subsisted up to the time of
his death on July 12, 1997. This finding conforms to the
Constitution, which characterizes marriage as an
inviolable social institution,19 and regards it as a special
contract of permanent union between a man and a
woman for the establishment of a conjugal and family
life.20 The non-recognition of absolute divorce in the
Philippines is a manifestation of the respect for the
sanctity of the marital union especially among Filipino
citizens. It affirms that the extinguishment of a valid
marriage must be grounded only upon the death of either
spouse, or upon a ground expressly provided bylaw. For
as long as this public policy on marriage between Filipinos
exists, no divorce decree dissolving the marriage between
them can ever be given legal or judicial recognition and
enforcement in this jurisdiction.
2. The Agreement for Separation and Property Settlement
was void for lack of court approval
The petitioner insists that the Agreement for Separation
and Property Settlement (Agreement) that the late Atty.
Luna and Eugenia had entered into and executed in
connection with the divorce proceedings before the CFI of
Sto. Domingo in the Dominican Republic to dissolve and
liquidate their conjugal partnership was enforceable
against Eugenia. Hence, the CA committed reversible
error in decreeing otherwise.
The insistence of the petitioner was unwarranted.
21

Considering that Atty. Luna and Eugenia had not entered
into any marriage settlement prior to their marriage on
September 10, 1947, the system of relative community or
conjugal partnership of gains governed their property
relations. This is because the Spanish Civil Code, the law
then in force at the time of their marriage, did not specify
the property regime of the spouses in the event that they
had not entered into any marriage settlement before or at
the time of the marriage. Article 119 of the Civil
Codeclearly so provides, to wit:
Article 119. The future spouses may in the marriage
settlements agree upon absolute or relative community of
property, or upon complete separation of property, or
upon any other regime. In the absence of marriage
settlements, or when the same are void, the system of
relative community or conjugal partnership of gains as
established in this Code, shall govern the property
relations between husband and wife.
Article 142 of the Civil Codehas defined a conjugal
partnership of gains thusly:
Article 142. By means of the conjugal partnership of gains
the husband and wife place in a common fund the fruits
of their separate property and the income from their work
or industry, and divide equally, upon the dissolution of the
marriage or of the partnership, the net gains or benefits
obtained indiscriminately by either spouse during the
marriage.
The conjugal partnership of gains subsists until
terminated for any of various causes of termination
enumerated in Article 175 of the Civil Code, viz:
Article 175. The conjugal partnership of gains terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled;
(4) In case of judicial separation of property under Article
191.
The mere execution of the Agreement by Atty. Luna and
Eugenia did not per sedissolve and liquidate their
conjugal partnership of gains. The approval of the
Agreement by a competent court was still required under
Article 190 and Article 191 of the Civil Code, as follows:
Article 190. In the absence of an express declaration in
the marriage settlements, the separation of property
between spouses during the marriage shall not take place
save in virtue of a judicial order. (1432a)
Article 191. The husband or the wife may ask for the
separation of property, and it shall be decreed when the
spouse of the petitioner has been sentenced to a penalty
which carries with it civil interdiction, or has been declared
absent, or when legal separation has been granted.
xxxx
The husband and the wife may agree upon the dissolution
of the conjugal partnership during the marriage, subject to
judicial approval. All the creditors of the husband and of
the wife, as well as of the conjugal partnership shall be
notified of any petition for judicialapproval or the voluntary
dissolution of the conjugal partnership, so that any such
creditors may appear atthe hearing to safeguard his
interests. Upon approval of the petition for dissolution of
the conjugal partnership, the court shall take such
measures as may protect the creditors and other third
persons.
After dissolution of the conjugal partnership, the
provisions of articles 214 and 215 shall apply. The
provisions of this Code concerning the effect of partition
stated in articles 498 to 501 shall be applicable. (1433a)
But was not the approval of the Agreement by the CFI of
Sto. Domingo in the Dominican Republic sufficient in
dissolving and liquidating the conjugal partnership of
gains between the late Atty. Luna and Eugenia?
The query is answered in the negative. There is no
question that the approval took place only as an incident
ofthe action for divorce instituted by Atty. Luna and
Eugenia, for, indeed, the justifications for their execution
of the Agreement were identical to the grounds raised in
the action for divorce.21 With the divorce not being itself
valid and enforceable under Philippine law for being
contrary to Philippine public policy and public law, the
approval of the Agreement was not also legally valid and
enforceable under Philippine law. Consequently, the
conjugal partnership of gains of Atty. Luna and Eugenia
subsisted in the lifetime of their marriage.
3. Atty. Lunas marriage with Soledad, being bigamous,
was void; properties acquired during their marriage
were governed by the rules on co-ownership
What law governed the property relations of the second
marriage between Atty. Luna and Soledad?
22
The CA expressly declared that Atty. Lunas subsequent
marriage to Soledad on January 12, 1976 was void for
being bigamous,22 on the ground that the marriage
between Atty. Luna and Eugenia had not been dissolved
by the Divorce Decree rendered by the CFI of Sto.
Domingo in the Dominican Republic but had subsisted
until the death of Atty. Luna on July 12, 1997.
The Court concurs with the CA.
In the Philippines, marriages that are bigamous,
polygamous, or incestuous are void. Article 71 of the Civil
Codeclearly states:
Article 71. All marriages performed outside the Philippines
in accordance with the laws in force in the country where
they were performed, and valid there as such, shall also
be valid in this country, except bigamous, polygamous, or
incestuous marriages as determined by Philippine law.
Bigamy is an illegal marriage committed by contracting a
second or subsequent marriage before the first 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.23 A
bigamous marriage is considered void ab initio.24
Due to the second marriage between Atty. Luna and the
petitioner being void ab initioby virtue of its being
bigamous, the properties acquired during the bigamous
marriage were governed by the rules on co-ownership,
conformably with Article 144 of the Civil Code, viz:
Article 144. When a man and a woman live together as
husband and wife, but they are not married, ortheir
marriage is void from the beginning, the property acquired
by eitheror both of them through their work or industry or
their wages and salaries shall be governed by the rules
on co-ownership.(n)
In such a situation, whoever alleges co-ownership carried
the burden of proof to confirm such fact.1wphi1 To
establish co-ownership, therefore, it became imperative
for the petitioner to offer proof of her actual contributions
in the acquisition of property. Her mere allegation of co-
ownership, without sufficient and competent evidence,
would warrant no relief in her favor. As the Court
explained in Saguid v. Court of Appeals:25
In the cases of Agapay v. Palang, and Tumlos v.
Fernandez, which involved the issue of co-ownership
ofproperties acquired by the parties to a bigamous
marriage and an adulterous relationship, respectively, we
ruled that proof of actual contribution in the acquisition of
the property is essential. The claim of co-ownership of the
petitioners therein who were parties to the bigamous and
adulterousunion is without basis because they failed to
substantiate their allegation that they contributed money
in the purchase of the disputed properties. Also in Adriano
v. Court of Appeals, we ruled that the fact that the
controverted property was titled in the name of the parties
to an adulterous relationship is not sufficient proof of
coownership absent evidence of actual contribution in the
acquisition of the property.
As in other civil cases, the burden of proof rests upon the
party who, as determined by the pleadings or the nature
of the case, asserts an affirmative issue. Contentions
must be proved by competent evidence and reliance must
be had on the strength of the partys own evidence and
not upon the weakness of the opponents defense. This
applies with more vigor where, as in the instant case, the
plaintiff was allowed to present evidence ex
parte.1wphi1 The plaintiff is not automatically entitled to
the relief prayed for. The law gives the defendantsome
measure of protection as the plaintiff must still prove the
allegations in the complaint. Favorable relief can be
granted only after the court isconvinced that the facts
proven by the plaintiff warrant such relief. Indeed, the
party alleging a fact has the burden of proving it and a
mereallegation is not evidence.26
The petitioner asserts herein that she sufficiently proved
her actual contributions in the purchase of the
condominium unit in the aggregate amount of at least
P306,572.00, consisting in direct contributions of
P159,072.00, and in repaying the loans Atty. Luna had
obtained from Premex Financing and Banco Filipino
totaling P146,825.30;27 and that such aggregate
contributions of P306,572.00 corresponded to almost the
entire share of Atty. Luna in the purchase of the
condominium unit amounting to P362,264.00 of the units
purchase price of P1,449,056.00.28 The petitioner further
asserts that the lawbooks were paid for solely out of her
personal funds, proof of which Atty. Luna had even sent
her a "thank you" note;29 that she had the financial
capacity to make the contributions and purchases; and
that Atty. Luna could not acquire the properties on his own
due to the meagerness of the income derived from his law
practice.
Did the petitioner discharge her burden of proof on the co-
ownership?
In resolving the question, the CA entirely debunked the
petitioners assertions on her actual contributions through
the following findings and conclusions, namely:
SOLEDAD was not able to prove by preponderance of
evidence that her own independent funds were used to
buy the law office condominium and the law books subject
matter in contentionin this case proof that was required
for Article 144 of the New Civil Code and Article 148 of
the Family Code to apply as to cases where properties
were acquired by a man and a woman living together as
husband and wife but not married, or under a marriage
which was void ab initio. Under Article 144 of the New Civil
Code, the rules on co-ownership would govern. But this
23
was not readily applicable to many situations and thus it
created a void at first because it applied only if the parties
were not in any way incapacitated or were without
impediment to marry each other (for it would be absurd to
create a co-ownership where there still exists a prior
conjugal partnership or absolute community between the
man and his lawful wife). This void was filled upon
adoption of the Family Code. Article 148 provided that:
only the property acquired by both of the parties through
their actual joint contribution of money, property or
industry shall be owned in common and in proportion to
their respective contributions. Such contributions and
corresponding shares were prima faciepresumed to be
equal. However, for this presumption to arise, proof of
actual contribution was required. The same rule and
presumption was to apply to joint deposits of money and
evidence of credit. If one of the parties was validly married
to another, his or her share in the co-ownership accrued
to the absolute community or conjugal partnership
existing in such valid marriage. If the party who acted in
bad faith was not validly married to another, his or her
share shall be forfeited in the manner provided in the last
paragraph of the Article 147. The rules on forfeiture
applied even if both parties were in bad faith. Co-
ownership was the exception while conjugal partnership
of gains was the strict rule whereby marriage was an
inviolable social institution and divorce decrees are not
recognized in the Philippines, as was held by the
Supreme Court in the case of Tenchavez vs. Escao,
G.R. No. L-19671, November 29, 1965, 15 SCRA 355,
thus:
xxxx
As to the 25/100pro-indivisoshare of ATTY. LUNA in the
condominium unit, SOLEDAD failed to prove that she
made an actual contribution to purchase the said
property. She failed to establish that the four (4) checks
that she presented were indeed used for the acquisition
of the share of ATTY. LUNA in the condominium unit. This
was aptly explained in the Decision of the trial court, viz.:
"x x x The first check, Exhibit "M" for P55,000.00 payable
to Atty. Teresita Cruz Sison was issued on January 27,
1977, which was thirteen (13) months before the
Memorandum of Agreement, Exhibit "7" was signed.
Another check issued on April 29, 1978 in the amount of
P97,588.89, Exhibit "P" was payable to Banco Filipino.
According to the plaintiff, thiswas in payment of the loan
of Atty. Luna. The third check which was for P49,236.00
payable to PREMEX was dated May 19, 1979, also for
payment of the loan of Atty. Luna. The fourth check,
Exhibit "M", for P4,072.00 was dated December 17, 1980.
None of the foregoing prove that the amounts delivered
by plaintiff to the payees were for the acquisition of the
subject condominium unit. The connection was simply not
established. x x x"
SOLEDADs claim that she made a cash contribution of
P100,000.00 is unsubstantiated. Clearly, there is no basis
for SOLEDADs claim of co-ownership over the 25/100
portion of the condominium unit and the trial court
correctly found that the same was acquired through the
sole industry of ATTY. LUNA, thus:
"The Deed of Absolute Sale, Exhibit "9", covering the
condominium unit was in the name of Atty. Luna, together
with his partners in the law firm. The name of the plaintiff
does not appear as vendee or as the spouse of Atty. Luna.
The same was acquired for the use of the Law firm of Atty.
Luna. The loans from Allied Banking Corporation and Far
East Bank and Trust Company were loans of Atty. Luna
and his partners and plaintiff does not have evidence to
show that she paid for them fully or partially. x x x"
The fact that CCT No. 4779 and subsequently, CCT No.
21761 were in the name of "JUAN LUCES LUNA, married
to Soledad L. Luna" was no proof that SOLEDAD was a
co-owner of the condominium unit. Acquisition of title and
registration thereof are two different acts. It is well settled
that registration does not confer title but merely confirms
one already existing. The phrase "married to" preceding
"Soledad L. Luna" is merely descriptive of the civil status
of ATTY. LUNA.
SOLEDAD, the second wife, was not even a lawyer. So it
is but logical that SOLEDAD had no participation in the
law firm or in the purchase of books for the law firm.
SOLEDAD failed to prove that she had anything to
contribute and that she actually purchased or paid for the
law office amortization and for the law books. It is more
logical to presume that it was ATTY. LUNA who bought
the law office space and the law books from his earnings
from his practice of law rather than embarrassingly beg or
ask from SOLEDAD money for use of the law firm that he
headed.30
The Court upholds the foregoing findings and conclusions
by the CA both because they were substantiated by the
records and because we have not been shown any
reason to revisit and undo them. Indeed, the petitioner, as
the party claiming the co-ownership, did not discharge her
burden of proof. Her mere allegations on her
contributions, not being evidence,31 did not serve the
purpose. In contrast, given the subsistence of the first
marriage between Atty. Luna and Eugenia, the
presumption that Atty. Luna acquired the properties out of
his own personal funds and effort remained. It should then
be justly concluded that the properties in litislegally
pertained to their conjugal partnership of gains as of the
time of his death. Consequently, the sole ownership of the
25/100 pro indivisoshare of Atty. Luna in the condominium
unit, and of the lawbooks pertained to the respondents as
the lawful heirs of Atty. Luna.
WHEREFORE, the Court AFFIRMS the decision
promulgated on November 11, 2005; and ORDERS the
petitioner to pay the costs of suit.
SO ORDERED.
24
DAVID A. NOVERAS, Petitioner,

vs. USA

LETICIA T. NOVERAS, Respondent. PROPERTY FAIR MARKET VALUE

House and Lot at 1155 Hanover Street, Daly City,

California
Before the Court is a petition for review assailing the 9
May 2008 Decision1 of the Court of Appeals in CA-G.R .. $550,000.00(unpaid debt of $285,000.00)
CV No. 88686, which affirmed in part the 8 December
2006 Decision2 of the Regional Trial Court (RTC) of
Baler, Aurora, Branch 96. Furniture and furnishings

$3,000
The factual antecedents are as follow:

Jewelries (ring and watch)

David A. Noveras (David) and Leticia T. Noveras (Leticia) $9,000
were married on 3 December 1988 in Quezon City,
Philippines. They resided in California, United States of
America (USA) where they eventually acquired American
2000 Nissan Frontier 4x4 pickup truck
citizenship. They then begot two children, namely:
Jerome T. $13,770.00

Noveras, who was born on 4 November 1990 and JenaT. Bank of America Checking Account
Noveras, born on 2 May 1993. David was engaged in
courier service business while Leticia worked as a nurse $8,000
in San Francisco, California.

Bank of America Cash Deposit

During the marriage, they acquired the following
Life Insurance (Cash Value)
properties in the Philippines and in the USA:
$100,000.00

PHILIPPINES
Retirement, pension, profit-sharing, annuities
PROPERTY FAIR MARKET VALUE
$56,228.00
House and Lot with an area of 150 sq. m. located at 1085
Norma Street, Sampaloc, Manila (Sampaloc property)

P1,693,125.00 The Sampaloc property used to beowned by Davids

parents. The parties herein secured a loan from a bank
and mortgaged the property. When said property was
Agricultural land with an area of 20,742 sq. m. located at about to be foreclosed, the couple paid a total of P1.5
Laboy, Dipaculao, Aurora Million for the redemption of the same.

P400,000.00
Due to business reverses, David left the USA and
returned to the Philippines in 2001. In December
A parcel of land with an area of 2.5 hectares located at 2002,Leticia executed a Special Power of Attorney (SPA)
Maria Aurora, Aurora authorizing David to sell the Sampaloc property for P2.2
Million. According to Leticia, sometime in September
P490,000.00
2003, David abandoned his family and lived with Estrellita
Martinez in Aurora province. Leticia claimed that David
agreed toand executed a Joint Affidavit with Leticia in the
A parcel of land with an area of 175 sq.m. located at presence of Davids father, Atty. Isaias Noveras, on 3
Sabang Baler, Aurora December 2003 stating that: 1) the P1.1Million proceeds
from the sale of the Sampaloc property shall be paid to
and collected by Leticia; 2) that David shall return and pay
P175,000.00 to Leticia P750,000.00, which is equivalent to half of the
amount of the redemption price of the Sampaloc property;
3-has. coconut plantation in San Joaquin Maria Aurora, and 3) that David shall renounce and forfeit all his rights
Aurora and interest in the conjugal and real properties situated in
P750,000.00 the Philippines.5 David was able to collect P1,790,000.00

25
from the sale of the Sampaloc property, leaving an unpaid
balance of P410,000.00.
Upon learning that David had an extra-marital affair,
Leticia filed a petition for divorce with the Superior Court
of California, County of San Mateo, USA. The California
court granted the divorce on 24 June 2005 and judgment
was duly entered on 29 June 2005.6 The California court
granted to Leticia the custody of her two children, as well
as all the couples properties in the USA.7
On 8 August 2005, Leticia filed a petition for Judicial
Separation of Conjugal Property before the RTC of Baler,
Aurora. She relied on the 3 December 2003 Joint Affidavit
and Davids failure to comply with his obligation under the
same. She prayed for: 1) the power to administer all
conjugal properties in the Philippines; 2) David and his
partner to cease and desist from selling the subject
conjugal properties; 3) the declaration that all conjugal
properties be forfeited in favor of her children; 4) David to
remit half of the purchase price as share of Leticia from
the sale of the Sampaloc property; and 5) the payment
ofP50,000.00 and P100,000.00 litigation expenses.8
In his Answer, David stated that a judgment for the
dissolution of their marriage was entered on 29 June 2005
by the Superior Court of California, County of San Mateo.
He demanded that the conjugal partnership properties,
which also include the USA properties, be liquidated and
that all expenses of liquidation, including attorneys fees
of both parties be charged against the conjugal
partnership.9
The RTC of Baler, Aurora simplified the issues as follow:
1. Whether or not respondent David A. Noveras
committed acts of abandonment and marital infidelity
which can result intothe forfeiture of the parties properties
in favor of the petitioner and their two (2) children.
2. Whether or not the Court has jurisdiction over the
properties in California, U.S.A. and the same can be
included in the judicial separation prayed for.
3. Whether or not the "Joint Affidavit" x x x executed by
petitioner Leticia T. Noveras and respondent David A.
Noveras will amount to a waiver or forfeiture of the latters
property rights over their conjugal properties.
4. Whether or not Leticia T. Noveras isentitled to
reimbursement of onehalf of the P2.2 [M]illion sales
proceeds of their property in Sampaloc, Manila and one-
half of the P1.5 [M]illion used to redeem the property of
Atty. Isaias Noveras, including interests and charges.
5. How the absolute community properties should be
distributed.
6. Whether or not the attorneys feesand litigation
expenses of the parties were chargeable against their
conjugal properties.
Corollary to the aboveis the issue of:
Whether or not the two common children of the parties are
entitled to support and presumptive legitimes.10
On 8 December 2006, the RTC rendered judgment as
follows:
1. The absolute community of property of the parties is
hereby declared DISSOLVED;
2. The net assets of the absolute community of property
ofthe parties in the Philippines are hereby ordered to be
awarded to respondent David A. Noveras only, with the
properties in the United States of America remaining in
the sole ownership of petitioner Leticia Noveras a.k.a.
Leticia Tacbiana pursuant to the divorce decree issuedby
the Superior Court of California, County of San Mateo,
United States of America, dissolving the marriage of the
parties as of June 24, 2005. The titles presently covering
said properties shall be cancelled and new titles be issued
in the name of the party to whom said properties are
awarded;
3. One-half of the properties awarded to respondent
David A. Noveras in the preceding paragraph are hereby
given to Jerome and Jena, his two minor children with
petitioner LeticiaNoveras a.k.a. Leticia Tacbiana as their
presumptive legitimes and said legitimes must be
annotated on the titles covering the said properties.Their
share in the income from these properties shall be
remitted to them annually by the respondent within the
first half of January of each year, starting January 2008;
4. One-half of the properties in the United States of
America awarded to petitioner Leticia Noveras a.k.a.
Leticia Tacbiana in paragraph 2 are hereby given to
Jerome and Jena, her two minor children with respondent
David A. Noveras as their presumptive legitimes and said
legitimes must be annotated on the titles/documents
covering the said properties. Their share in the income
from these properties, if any, shall be remitted to them
annually by the petitioner within the first half of January of
each year, starting January 2008;
5. For the support of their two (2) minor children, Jerome
and Jena, respondent David A. Noveras shall give them
US$100.00 as monthly allowance in addition to their
26
income from their presumptive legitimes, while petitioner
Leticia Tacbiana shall take care of their food, clothing,
education and other needs while they are in her custody
in the USA. The monthly allowance due from the
respondent shall be increased in the future as the needs
of the children require and his financial capacity can
afford;
6. Of the unpaid amount of P410,000.00 on the purchase
price of the Sampaloc property, the Paringit Spouses are
hereby ordered to pay P5,000.00 to respondent David A.
Noveras and P405,000.00 to the two children. The share
of the respondent may be paid to him directly but the
share of the two children shall be deposited with a local
bank in Baler, Aurora, in a joint account tobe taken out in
their names, withdrawal from which shall only be made by
them or by their representative duly authorized with a
Special Power of Attorney. Such payment/deposit shall be
made withinthe period of thirty (30) days after receipt of a
copy of this Decision, with the passbook of the joint
account to be submitted to the custody of the Clerk of
Court of this Court within the same period. Said passbook
can be withdrawn from the Clerk of Court only by the
children or their attorney-in-fact; and
7. The litigation expenses and attorneys fees incurred by
the parties shall be shouldered by them individually.11
The trial court recognized that since the parties are US
citizens, the laws that cover their legal and personalstatus
are those of the USA. With respect to their marriage, the
parties are divorced by virtue of the decree of dissolution
of their marriage issued by the Superior Court of
California, County of San Mateo on 24June 2005. Under
their law, the parties marriage had already been
dissolved. Thus, the trial court considered the petition filed
by Leticia as one for liquidation of the absolute community
of property regime with the determination of the legitimes,
support and custody of the children, instead of an action
for judicial separation of conjugal property.
With respect to their property relations, the trial court first
classified their property regime as absolute community of
property because they did not execute any marriage
settlement before the solemnization of their marriage
pursuant to Article 75 of the Family Code. Then, the trial
court ruled that in accordance with the doctrine of
processual presumption, Philippine law should apply
because the court cannot take judicial notice of the US
law since the parties did not submit any proof of their
national law. The trial court held that as the instant petition
does not fall under the provisions of the law for the grant
of judicial separation of properties, the absolute
community properties cannot beforfeited in favor of Leticia
and her children. Moreover, the trial court observed that
Leticia failed to prove abandonment and infidelity with
preponderant evidence.
The trial court however ruled that Leticia is not entitled to
the reimbursements she is praying for considering that
she already acquired all of the properties in the USA.
Relying still on the principle of equity, the Court also
adjudicated the Philippine properties to David, subject to
the payment of the childrens presumptive legitimes. The
trial court held that under Article 89 of the Family Code,
the waiver or renunciation made by David of his property
rights in the Joint Affidavit is void.
On appeal, the Court of Appeals modified the trial courts
Decision by directing the equal division of the Philippine
properties between the spouses. Moreover with respect
to the common childrens presumptive legitime, the
appellate court ordered both spouses to each pay their
children the amount of P520,000.00, thus:
WHEREFORE, the instant appeal is PARTLY GRANTED.
Numbers 2, 4 and 6 of the assailedDecision dated
December 8, 2006 of Branch 96, RTC of Baler, Aurora
Province, in Civil Case No. 828 are hereby MODIFIED to
read as follows:
2. The net assets of the absolute community of property
of the parties in the Philippines are hereby divided equally
between petitioner Leticia Noveras a.k.a. Leticia
Tacbiana (sic) and respondent David A. Noveras;
xxx
4. One-half of the properties awarded to petitioner Leticia
Tacbiana (sic) in paragraph 2 shall pertain to her minor
children, Jerome and Jena, as their presumptive legitimes
which shall be annotated on the titles/documents covering
the said properties. Their share in the income therefrom,
if any, shall be remitted to them by petitioner annually
within the first half of January, starting 2008;
xxx
6. Respondent David A. Noveras and petitioner Leticia
Tacbiana (sic) are each ordered to pay the amount
ofP520,000.00 to their two children, Jerome and Jena, as
their presumptive legitimes from the sale of the Sampaloc
property inclusive of the receivables therefrom, which
shall be deposited to a local bank of Baler, Aurora, under
a joint account in the latters names. The payment/deposit
shall be made within a period of thirty (30) days from
receipt ofa copy of this Decision and the corresponding
passbook entrusted to the custody ofthe Clerk of Court a
quowithin the same period, withdrawable only by the
children or their attorney-in-fact.
A number 8 is hereby added, which shall read as follows:
8. Respondent David A. Noveras is hereby ordered to pay
petitioner Leticia Tacbiana (sic) the amount of
27
P1,040,000.00 representing her share in the proceeds
from the sale of the Sampaloc property.
The last paragraph shall read as follows:
Send a copy of this Decision to the local civil registry of
Baler, Aurora; the local civil registry of Quezon City; the
Civil RegistrarGeneral, National Statistics Office, Vibal
Building, Times Street corner EDSA, Quezon City; the
Office of the Registry of Deeds for the Province of Aurora;
and to the children, Jerome Noveras and Jena Noveras.
The rest of the Decision is AFFIRMED.12
In the present petition, David insists that the Court of
Appeals should have recognized the California Judgment
which awarded the Philippine properties to him because
said judgment was part of the pleading presented and
offered in evidence before the trial court. David argues
that allowing Leticia to share in the Philippine properties
is tantamount to unjust enrichment in favor of Leticia
considering that the latter was already granted all US
properties by the California court.
In summary and review, the basic facts are: David and
Leticia are US citizens who own properties in the USA and
in the Philippines. Leticia obtained a decree of divorce
from the Superior Court of California in June 2005
wherein the court awarded all the properties in the USA
to Leticia. With respect to their properties in the
Philippines, Leticiafiled a petition for judicial separation
ofconjugal properties.
At the outset, the trial court erred in recognizing the
divorce decree which severed the bond of marriage
between the parties. In Corpuz v. Sto. Tomas,13 we
stated that:
The starting point in any recognition of a foreign divorce
judgment is the acknowledgment that our courts do not
take judicial notice of foreign judgments and laws. Justice
Herrera explained that, as a rule, "no sovereign is bound
to give effect within its dominion to a judgment rendered
by a tribunal of another country." This means that the
foreign judgment and its authenticity must beproven as
facts under our rules on evidence, together with the
aliens applicable national law to show the effect of the
judgment on the alien himself or herself. The recognition
may be made in an action instituted specifically for the
purpose or in another action where a party invokes the
foreign decree as an integral aspect of his claim or
defense.14
The requirements of presenting the foreign divorce
decree and the national law of the foreigner must comply
with our Rules of Evidence. Specifically, for Philippine
courts to recognize a foreign judgment relating to the
status of a marriage, a copy of the foreign judgment may
be admitted in evidence and proven as a fact under Rule
132, Sections 24 and 25, in relation to Rule 39, Section
48(b) of the Rules of Court.15
Under Section 24 of Rule 132, the record of public
documents of a sovereign authority or tribunal may be
proved by: (1) an official publication thereof or (2) a copy
attested by the officer having the legal custody thereof.
Such official publication or copy must beaccompanied, if
the record is not kept in the Philippines, with a certificate
that the attesting officer has the legal custody thereof. The
certificate may be issued by any of the authorized
Philippine embassy or consular officials stationed in the
foreign country in which the record is kept, and
authenticated by the seal of his office. The attestation
must state, in substance, that the copy is a correct copy
of the original, or a specific part thereof, asthe case may
be, and must be under the official seal of the attesting
officer.
Section 25 of the same Rule states that whenever a copy
of a document or record is attested for the purpose of
evidence, the attestation must state, in substance, that
the copy is a correct copy of the original, or a specific part
thereof, as the case may be. The attestation must be
under the official seal of the attesting officer, if there be
any, or if hebe the clerk of a court having a seal, under
the seal of such court.
Based on the records, only the divorce decree was
presented in evidence. The required certificates to prove
its authenticity, as well as the pertinent California law on
divorce were not presented.
It may be noted that in Bayot v. Court of Appeals,16 we
relaxed the requirement on certification where we held
that "[petitioner therein] was clearly an American
citizenwhen she secured the divorce and that divorce is
recognized and allowed in any of the States of the Union,
the presentation of a copy of foreign divorce decree duly
authenticatedby the foreign court issuing said decree is,
as here, sufficient." In this case however, it appears that
there is no seal from the office where the divorce decree
was obtained.
Even if we apply the doctrine of processual
presumption17 as the lower courts did with respect to the
property regime of the parties, the recognition of divorce
is entirely a different matter because, to begin with,
divorce is not recognized between Filipino citizens in the
Philippines. Absent a valid recognition of the divorce
decree, it follows that the parties are still legally married
in the Philippines. The trial court thus erred in proceeding
directly to liquidation.
As a general rule, any modification in the marriage
settlements must be made before the celebration of
marriage. An exception to this rule is allowed provided
28
that the modification isjudicially approved and refers only
to the instances provided in Articles 66,67, 128, 135 and
136 of the Family Code.18
Leticia anchored the filing of the instant petition for judicial
separation of property on paragraphs 4 and 6 of Article
135 of the Family Code, to wit:
Art. 135. Any of the following shall be considered
sufficient cause for judicial separation of property:
(1) That the spouse of the petitioner has been sentenced
to a penalty which carries with it civil interdiction;
(2) That the spouse of the petitioner has been judicially
declared an absentee;
(3) That loss of parental authority ofthe spouse of
petitioner has been decreed by the court;
(4) That the spouse of the petitioner has abandoned the
latter or failed to comply with his or her obligations to the
family as provided for in Article 101;
(5) That the spouse granted the power of administration
in the marriage settlements has abused that power; and
(6) That at the time of the petition, the spouses have been
separated in fact for at least one year and reconciliation
is highly improbable.
In the cases provided for in Numbers (1), (2), and (3), the
presentation of the final judgment against the guiltyor
absent spouse shall be enough basis for the grant of the
decree ofjudicial separation of property. (Emphasis
supplied).
The trial court had categorically ruled that there was no
abandonment in this case to necessitate judicial
separation of properties under paragraph 4 of Article 135
of the Family Code. The trial court ratiocinated:
Moreover, abandonment, under Article 101 of the Family
Code quoted above, must be for a valid cause and the
spouse is deemed to have abandoned the other when
he/she has left the conjugal dwelling without intention of
returning. The intention of not returning is prima facie
presumed if the allegedly [sic] abandoning spouse failed
to give any information as to his or her whereabouts within
the period of three months from such abandonment.
In the instant case, the petitioner knows that the
respondent has returned to and stayed at his hometown
in Maria Aurora, Philippines, as she even went several
times to visit him there after the alleged abandonment.
Also, the respondent has been going back to the USA to
visit her and their children until the relations between them
worsened. The last visit of said respondent was in
October 2004 when he and the petitioner discussed the
filing by the latter of a petition for dissolution of marriage
with the California court. Such turn for the worse of their
relationship and the filing of the saidpetition can also be
considered as valid causes for the respondent to stay in
the Philippines.19
Separation in fact for one year as a ground to grant a
judicial separation of property was not tackled in the trial
courts decision because, the trial court erroneously
treated the petition as liquidation of the absolute
community of properties.
The records of this case are replete with evidence that
Leticia and David had indeed separated for more than a
year and that reconciliation is highly improbable. First,
while actual abandonment had not been proven, it is
undisputed that the spouses had been living separately
since 2003 when David decided to go back to the
Philippines to set up his own business. Second, Leticia
heard from her friends that David has been cohabiting
with Estrellita Martinez, who represented herself as
Estrellita Noveras. Editha Apolonio, who worked in the
hospital where David was once confined, testified that she
saw the name of Estrellita listed as the wife of David in
the Consent for Operation form.20 Third and more
significantly, they had filed for divorce and it was granted
by the California court in June 2005.
Having established that Leticia and David had actually
separated for at least one year, the petition for judicial
separation of absolute community of property should be
granted.
The grant of the judicial separation of the absolute
community property automatically dissolves the absolute
community regime, as stated in the 4th paragraph of
Article 99 ofthe Family Code, thus:
Art. 99. The absolute community terminates:
(1) Upon the death of either spouse;
(2) When there is a decree of legal separation;
(3) When the marriage is annulled or declared void; or
29
(4) In case of judicial separation of property during the
marriage under Articles 134 to 138. (Emphasis supplied).
Under Article 102 of the same Code, liquidation follows
the dissolution of the absolute community regime and the
following procedure should apply:
Art. 102. Upon dissolution of the absolute community
regime, the following procedure shall apply:
(1) An inventory shall be prepared, listing separately all
the properties of the absolute community and the
exclusive properties of each spouse.
(2) The debts and obligations of the absolute community
shall be paid out of its assets. In case of insufficiency of
said assets, the spouses shall be solidarily liable for the
unpaid balance with their separate properties in
accordance with the provisions of the second paragraph
of Article 94.
(3) Whatever remains of the exclusive properties of the
spouses shall thereafter be delivered to each of them.
(4) The net remainder of the properties of the absolute
community shall constitute its net assets, which shall be
divided equally between husband and wife, unless a
different proportion or division was agreed upon in the
marriage settlements, or unless there has been a
voluntary waiver of such share provided in this Code. For
purposes of computing the net profits subject to forfeiture
in accordance with Articles 43, No. (2) and 63, No. (2),the
said profits shall be the increase in value between the
market value of the community property at the time of the
celebration of the marriage and the market value at the
time of its dissolution.
(5) The presumptive legitimes of the common children
shall be delivered upon partition, in accordance with
Article 51.
(6) Unless otherwise agreed upon by the parties, in the
partition of the properties, the conjugal dwelling and the
lot on which it is situated shall be adjudicated tothe
spouse with whom the majority of the common children
choose to remain. Children below the age of seven years
are deemed to have chosen the mother, unless the court
has decided otherwise. In case there is no such majority,
the court shall decide, taking into consideration the best
interests of said children. At the risk of being repetitious,
we will not remand the case to the trial court. Instead, we
shall adopt the modifications made by the Court of
Appeals on the trial courts Decision with respect to
liquidation.
We agree with the appellate court that the Philippine
courts did not acquire jurisdiction over the California
properties of David and Leticia. Indeed, Article 16 of the
Civil Code clearly states that real property as well as
personal property is subject to the law of the country
where it is situated. Thus, liquidation shall only be limited
to the Philippine properties.
We affirm the modification madeby the Court of Appeals
with respect to the share of the spouses in the
absolutecommunity properties in the Philippines, as well
as the payment of their childrens presumptive legitimes,
which the appellate court explained in this wise:
Leticia and David shall likewise have an equal share in
the proceeds of the Sampaloc property.1wphi1 While
both claimed to have contributed to the redemption of the
Noveras property, absent a clear showing where their
contributions came from, the same is presumed to have
come from the community property. Thus, Leticia is not
entitled to reimbursement of half of the redemption
money.
David's allegation that he used part of the proceeds from
the sale of the Sampaloc property for the benefit of the
absolute community cannot be given full credence. Only
the amount of P120,000.00 incurred in going to and from
the U.S.A. may be charged thereto. Election expenses in
the amount of P300,000.00 when he ran as municipal
councilor cannot be allowed in the absence of receipts or
at least the Statement of Contributions and Expenditures
required under Section 14 of Republic Act No. 7166 duly
received by the Commission on Elections. Likewise,
expenses incurred to settle the criminal case of his
personal driver is not deductible as the same had not
benefited the family. In sum, Leticia and David shall share
equally in the proceeds of the sale net of the amount of
P120,000.00 or in the respective amounts of
P1,040,000.00.
xxxx
Under the first paragraph of Article 888 of the Civil Code,
"(t)he legitime of legitimate children and descendants
consists of one-half or the hereditary estate of the father
and of the mother." The children arc therefore entitled to
half of the share of each spouse in the net assets of the
absolute community, which shall be annotated on the
titles/documents covering the same, as well as to their
respective shares in the net proceeds from the sale of the
Sampaloc property including the receivables from Sps.
Paringit in the amount of P410,000.00. Consequently,
David and Leticia should each pay them the amount of
P520,000.00 as their presumptive legitimes therefrom.21
WHEREFORE, the petition is DENIED. The assailed
Decision of the Court of Appeals in CA G.R. CV No. 88686
is AFFIRMED.
SO ORDERED.
30
ORION SAVINGS BANK, Petitioner,
vs.
SHIGEKANE SUZUKI, Respondent.
DECISION
BRION, J.:
Before us is the Petition for Review on Certiorari1 filed by
petitioner Orion Savings Bank (Orion) under Rule 45 of
the Rules of Court, assailing the decision2 dated August
23, 2012 and the resolution3 dated January 25, 2013 of
the Court of Appeals (CA) in CA-G.R. CV No. 94104.
The Factual Antecedents
In the first week of August 2003, respondent Shigekane
Suzuki (Suzuki), a Japanese national, met with Ms. Helen
Soneja (Soneja) to inquire about a condominium unit and
a parking slot at Cityland Pioneer, Mandaluyong City,
allegedly owned by Yung Sam Kang (Kang), a Korean
national and a Special Resident Retiree's Visa (SRRV)
holder.
At the meeting, Soneja informed Suzuki that Unit No. 536
[covered by Condominium Certificate of Title (CCT) No.
18186]4 and Parking Slot No. 42 [covered by CCT No.
9118]5 were for sale for P3,000,000.00. Soneja likewise
assured Suzuki that the titles to the unit and the parking
slot were clean. After a brief negotiation, the parties
agreed to reduce the price to P2,800,000.00. On August
5, 2003, Suzuki issued Kang a Bank of the Philippine
Island (BPI) Check No. 833496 for One Hundred
Thousand Pesos (P100,000.00) as reservation fee.7 On
August 21, 2003, Suzuki issued Kang another check, BPI
Check No. 83350,8 this time for P2,700,000.00
representing the remaining balance of the purchase price.
Suzuki and Kang then executed a Deed of Absolute Sale
dated August 26, 20039 covering Unit No. 536 and
Parking Slot No. 42. Soon after, Suzuki took possession
of the condominium unit and parking lot, and commenced
the renovation of the interior of the condominium unit.
Kang thereafter made several representations with
Suzuki to deliver the titles to the properties, which were
then allegedly in possession of Alexander Perez (Perez,
Orions Loans Officer) for safekeeping. Despite several
verbal demands, Kang failed to deliver the documents.
Suzuki later on learned that Kang had left the country,
prompting Suzuki to verify the status of the properties with
the Mandaluyong City Registry of Deeds.
Before long, Suzuki learned that CCT No. 9118
representing the title to the Parking Slot No. 42 contained
no annotations although it remained under the name of
Cityland Pioneer. This notwithstanding, Cityland Pioneer,
through Assistant Vice President Rosario D. Perez,
certified that Kang had fully paid the purchase price of
Unit. No. 53610 and Parking Slot No. 42.11 CCT No.
18186 representing the title to the condominium unit had
no existing encumbrance, except for anannotation under
Entry No. 73321/C-10186 which provided that any
conveyance or encumbrance of CCT No. 18186 shall be
subject to approval by the Philippine Retirement Authority
(PRA). Although CCT No. 18186 contained Entry No.
66432/C-10186 dated February 2, 1999 representing a
mortgage in favor of Orion for a P1,000,000.00 loan, that
annotation was subsequently cancelled on June 16, 2000
by Entry No. 73232/T. No. 10186. Despite the
cancellation of the mortgage to Orion, the titles to the
properties remained in possession of Perez.
To protect his interests, Suzuki thenexecuted an Affidavit
of Adverse Claim12 dated September 8, 2003, withthe
Registry of Deeds of Mandaluyong City, annotated as
Entry No. 3292/C-No. 18186 in CCT No. 18186. Suzuki
then demanded the delivery of the titles.13 Orion,
(through Perez), however, refused to surrender the titles,
and cited the need to consult Orions legal counsel as its
reason.
On October 14, 2003, Suzuki received a letter from
Orions counsel dated October 9, 2003, stating that Kang
obtained another loan in the amount of P1,800,000.00.
When Kang failed to pay, he executed a Dacion en
Pagodated February 2, 2003, in favorof Orion covering
Unit No. 536. Orion, however, did not register the Dacion
en Pago, until October 15, 2003.
On October 28, 2003, Suzuki executed an Affidavit of
Adverse Claim over Parking Slot No. 42 (covered by CCT
No. 9118) and this was annotated as Entry No. 4712/C-
No. 9118 in the parking lots title.
On January 27, 2004, Suzuki filed a complaint for specific
performance and damages against Kang and Orion. At
the pre-trial, the parties made the following admissions
and stipulations:
1. That as of August 26, 2003, Kang was the registered
owner of Unit No. 536 and Parking Slot No. 42;
2. That the mortgage in favor ofOrion supposedly
executed by Kang, with Entry No. 66432/C-10186 dated
February 2, 1999, was subsequently cancelled by Entry
No. 73232/T No. 10186 dated June 16, 2000;
3. That the alleged Dacion en Pagowas never annotated
in CCT Nos. 18186 and 9118;
31
4. That Orion only paid the appropriate capital gains tax
and the documentary stamp tax for the alleged Dacion en
Pago on October 15, 2003;
5. That Parking Slot No. 42, covered by CCT No. 9118,
was never mortgaged to Orion; and
6. That when Suzuki bought the properties, he went to
Orion to obtain possession of the titles.
The RTC Ruling
In its decision14 dated June 29, 2009, the Regional Trial
Court (RTC), Branch 213, Mandaluyong City ruled infavor
of Suzuki and ordered Orion to deliver the CCT Nos.
18186 and 9118 to Suzuki.
The court found that Suzuki was an innocent purchaser
for value whose rights over the properties prevailed over
Orions. The RTC further noted that Suzuki exerted efforts
to verify the status of the properties but he did not find any
existing encumbrance inthe titles. Although Orion claims
to have purchased the property by way of a Dacion en
Pago, Suzuki only learned about it two (2) months after
he bought the properties because Orion never bothered
to register or annotate the Dacion en Pagoin CCT Nos.
18186 and 9116.
The RTC further ordered Orion and Kang to jointly and
severally pay Suzuki moral damages, exemplary
damages, attorneys fees, appearance fees, expenses for
litigation and cost ofsuit. Orion timely appealed the RTC
decision with the CA.
The CA Ruling
On August 23, 2012, the CA partially granted Orions
appeal and sustained the RTC insofar as it upheld
Suzukis right over the properties. The CA further noted
that Entry No. 73321/C-10186 pertaining to the
withdrawal of investment of an SRRV only serves as a
warning to an SRRV holder about the implications of a
conveyance of a property investment. It deviated from the
RTC ruling, however, by deleting the award for moral
damages, exemplary damages, attorneys fees,
expenses for litigation and cost of suit.
Orion sought a reconsideration of the CA decision but the
CA denied the motion in its January 25, 2013 resolution.
Orion then filed a petition for review on certiorariunder
Rule 45 with this Court.
The Petition and Comment
Orions petition is based on the following
grounds/arguments:15
1. The Deed of Sale executed by Kang in favor of Suzuki
is null and void. Under Korean law, any conveyance of a
conjugal property should be made with the consent of
both spouses;
2. Suzuki is not a buyer in good faith for he failed to check
the owners duplicate copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No.
73321/C-10186, which prohibits any conveyance or
encumbrance of the property investment, defeats the
alleged claim of good faith by Suzuki; and
4. Orion should not be faulted for exercising due diligence.
In his Comment,16 Suzuki asserts that the issue on
spousal consent was belatedly raised on appeal.
Moreover, proof of acquisition during the marital coverture
is a condition sine qua nonfor the operation of the
presumption of conjugal ownership.17 Suzuki additionally
maintains that he is a purchaser in good faith, and is thus
entitled to the protection of the law.
The Courts Ruling
We deny the petition for lack of merit.
The Court may inquire into conclusions of fact when the
inference made is manifestly mistaken
In a Rule 45 petition, the latitude of judicial review
generally excludes a factual and evidentiary re-
evaluation, and the Court ordinarily abides by the uniform
factual conclusions of the trial court and the appellate
court.18 In the present case, while the courts below both
arrived at the same conclusion, there appears tobe an
incongruence in their factual findings and the legal
principle they applied to the attendant factual
circumstances. Thus, we are compelled to examine
certain factual issues in the exercise of our sound
discretion to correct any mistaken inference that may
have been made.19
Philippine Law governs the transfer of real property
Orion believes that the CA erred in not ruling on the issue
of spousal consent. We cannot uphold this position,
however, because the issue of spousal consent was only
32
raised on appeal to the CA. It is a well-settled principle
that points of law, theories, issues, and arguments not
brought to the attention of the trial court cannot be raised
for the first time on appeal and considered by a reviewing
court.20 To consider these belated arguments would
violate basic principles of fairplay, justice, and due
process.
Having said these, we shall nonetheless discuss the
issues Orion belatedly raised, if only to put an end to
lingering doubts on the correctness of the denial of the
present petition.
It is a universal principle thatreal or immovable property is
exclusively subject to the laws of the country or state
where it is located.21 The reason is found in the very
nature of immovable property its immobility.
Immovables are part of the country and so closely
connected to it that all rights over them have their natural
center of gravity there.22
Thus, all matters concerning the titleand disposition ofreal
property are determined by what is known as the lex loci
rei sitae, which can alone prescribe the mode by which a
title canpass from one person to another, or by which an
interest therein can be gained or lost.23 This general
principle includes all rules governing the descent,
alienation and transfer of immovable property and the
validity, effect and construction of wills and other
conveyances.24
This principle even governs the capacity of the person
making a deed relating to immovable property, no matter
what its nature may be. Thus, an instrument will be
ineffective to transfer title to land if the person making it is
incapacitated by the lex loci rei sitae, even though under
the law of his domicile and by the law of the place where
the instrument is actually made, his capacity is
undoubted.25
On the other hand, property relations between spouses
are governed principally by the national law of the
spouses.26 However, the party invoking the application of
a foreign law has the burden of proving the foreign law.
The foreign law is a question of fact to be properly pleaded
and proved as the judge cannot take judicial notice of a
foreign law.27 He is presumed to know only domestic or
the law of the forum.28
To prove a foreign law, the party invoking it must present
a copy thereof and comply with Sections 24 and 25 of
Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. The record of public
documents referred to in paragraph (a) of Section 19,
when admissible for any purpose, may be evidenced by
an official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the
foreign country inwhich the record is kept, and
authenticated by the seal of his office. (Emphasis
supplied)
SEC. 25. What attestation ofcopy must state.
Whenever a copy of a document or record is attested for
the purpose of the evidence, the attestation must state, in
substance, that the copy is a correct copy of the original,
or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting
officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.
Accordingly, matters concerning the title and disposition
of real property shall be governed by Philippine law while
issues pertaining to the conjugal natureof the property
shall be governed by South Korean law, provided it is
proven as a fact.
In the present case, Orion, unfortunately failed to prove
the South Korean law on the conjugal ownership
ofproperty. It merely attached a "Certification from the
Embassy of the Republic of Korea"29 to prove the
existence of Korean Law. This certification, does not
qualify as sufficient proof of the conjugal nature of the
property for there is no showing that it was properly
authenticated bythe seal of his office, as required under
Section 24 of Rule 132.30
Accordingly, the International Law doctrine of presumed-
identity approachor processual presumption comes into
play, i.e., where a foreign law is not pleaded or, evenif
pleaded, is not proven, the presumption is that foreign law
is the same as Philippine Law.31
Under Philippine Law, the phrase "Yung Sam Kang
married to' Hyun Sook Jung" is merely descriptive of the
civil status of Kang.32 In other words, the import from the
certificates of title is that Kang is the owner of the
properties as they are registered in his name alone, and
that he is married to Hyun Sook Jung.
We are not unmindful that in numerous cases we have
held that registration of the property in the name of only
one spouse does not negate the possibility of it being
conjugal or community property.33 In those cases,
however, there was proof that the properties, though
registered in the name of only one spouse, were indeed
either conjugal or community properties.34 Accordingly,
we see no reason to declare as invalid Kangs
conveyance in favor of Suzuki for the supposed lack of
spousal consent.
33

The petitioner failed to adduce sufficient evidence to
prove the due execution of the Dacion en Pago
Article 1544 of the New Civil Codeof the Philippines
provides that:
ART. 1544. 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.
Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain
to the person who in good faith was first in the possession;
and, in the absence thereof, to the person who presents
the oldest title, provided there is good faith.
The application of Article 1544 of the New Civil Code
presupposes the existence of two or more duly executed
contracts of sale. In the present case, the Deed of Sale
dated August 26, 200335 between Suzuki and Kang was
admitted by Orion36 and was properly identified by
Suzukis witness Ms. Mary Jane Samin (Samin).37
It is not disputed, too, that the Deed of Sale dated August
26, 2003 was consummated. In a contract of sale, the
seller obligates himself to transfer the ownership of the
determinate thing sold, and to deliver the same to the
buyer, who obligates himself to pay a price certain to the
seller.38 The execution of the notarized deed of saleand
the actual transfer of possession amounted to delivery
that produced the legal effect of transferring ownership to
Suzuki.39
On the other hand, although Orion claims priority in right
under the principle of prius tempore, potior jure (i.e.,first
in time, stronger in right), it failedto prove the existence
and due execution of the Dacion en Pagoin its favor.
At the outset, Orion offered the Dacion en Pagoas Exhibit
"5"with submarkings "5-a" to "5-c" to prove the existence
of the February 6, 2003 transaction in its Formal Offer
dated July 20, 2008. Orion likewise offered in evidence
the supposed promissory note dated September 4, 2002
as Exhibit "12"to prove the existence of the additional
P800,000.00 loan. The RTC, however, denied the
admission of Exhibits "5" and "12,"among others, in its
order dated August 19, 2008 "since the same [were] not
identified in court by any witness."40
Despite the exclusion of its most critical documentary
evidence, Orion failed to make a tender ofexcluded
evidence, as provided under Section 40, Rule 132 of the
Rules of Court. For this reason alone, we are prevented
from seriously considering Exhibit "5" and its submarkings
and Exhibit "12" in the present petition.
Moreover, even if we consider Exhibit "5" and its
submarkings and Exhibit "12" in the present petition, the
copious inconsistencies and contradictions in the
testimonial and documentary evidence of Orion, militate
against the conclusion that the Dacion en Pagowas duly
executed. First, there appears to be no due and
demandable obligation when the Dacion en Pago was
executed, contrary to the allegations of Orion. Orions
witness Perez tried to impress upon the RTC that Kang
was in default in his P1,800,000.00 loan. During his direct
examination, he stated:
ATTY. CRUZAT:
Q: Okay, so this loan of P1.8 million, what happened to
this loan, Mr. Witness?
A: Well it became past due, there has been delayed
interest payment by Mr. Kangand...
Q: So what did you do after there were defaults[?]
A: We have to secure the money or the investment of the
bank through loans and we have executed a dacion en
pagobecause Mr. Kang said he has no money. So we just
execute[d] the dacion en pago rather than going through
the Foreclosure proceedings.
xxxx
Q: Can you tell the court when was this executed?
A: February 6, 2003, your Honor.41
A reading of the supposed promissory note, however,
shows that there was nodefault to speak of when the
supposed Dacion en Pagowas executed.
Based on the promissory note, Kangs loan obligation
wouldmature only on August 27, 2003. Neither can Orion
claim that Kang had been in default in his installment
payments because the wordings of the promissory note
provide that "[t]he principal of this loanand its interest and
other charges shall be paid by me/us in accordance
hereunder: SINGLE PAYMENT LOANS.42 "There was
34
thus no due and demandable loan obligation when the
alleged Dacion en Pago was executed.
Second, Perez, the supposed person who prepared the
Dacion en Pago,appears to only have a vague idea of the
transaction he supposedly prepared. During his cross-
examination, he testified:
ATTY. DE CASTRO:
Q: And were you the one who prepared this [dacion en
pago] Mr. witness?
A: Yes, sir. I personally prepared this.
xxxx
Q: So this 1.8 million pesos is already inclusive of all the
penalties, interest and surcharge due from Mr. Yung Sam
Kang?
A: Its just the principal, sir.
Q: So you did not state the interest [and] penalties?
A: In the [dacion en pago], we do not include interest, sir.
We may actually includethat but....
Q: Can you read the Second Whereas Clause, Mr.
Witness?
A: Whereas the first party failed to pay the said loan to the
second party and as of February 10, 2003, the
outstanding obligation which is due and demandable
principal and interest and other charges included amounts
to P1,800,000.00 pesos, sir.
xxxx
Q: You are now changing your answer[.] [I]t now includes
interest and other charges, based on this document?
A: Yes, based on that document, sir.43
Third, the Dacion en Pago,mentioned that the
P1,800,000.00 loan was secured by a real estate
mortgage. However, no document was ever presented to
prove this real estate mortgage aside from it being
mentioned in the Dacion en Pago itself.
ATTY. DE CASTRO:
Q: Would you know if there is any other document like a
supplement to that Credit Line Agreement referring to this
1.8 million peso loan by Mr. Yung Sam Kang which says
that there was a subsequent collateralization or security
given by Mr. Yung [Sam]
Kang for the loan?
xxxx
A: The [dacion en pago], sir.44
Fourth,the Dacion en Pago was first mentioned only two
(2) months after Suzuki and Samin demanded the
delivery of the titles sometime in August 2003,and after
Suzuki caused the annotation of his affidavit of adverse
claim. Records show that it was only on October 9, 2003,
when Orion, through its counsel, Cristobal Balbin Mapile
& Associates first spoke of the Dacion en Pago.45 Not
even Perez mentioned any Dacion en Pago on October
1, 2003, when he personally received a letter demanding
the delivery of the titles.Instead, Perez refused to accept
the letter and opted to first consult with his lawyer.46
Notably, even the October 9, 2003 letter contained
material inconsistencies in its recital of facts surrounding
the execution of the Dacion en Pago. In particular, it
mentioned that "on [September 4, 2002], after paying the
original loan, [Kang] applied and was granted a new
Credit Line Facility by [Orion] x x x for ONE MILLION
EIGHT HUNDRED THOUSAND PESOS
(P1,800,000.00)." Perez, however, testified that there was
"no cash movement" in the original P1,000,000.00 loan.
In his testimony, he said:
COURT:
xxxx
Q: Would you remember what was the subject matter of
that real estate mortgage for that first P1,000,000.00
loan?
A: Its a condominium Unit in Cityland, sir.
xxxx
Q: Would you recall if there was any payment by Mr. Yung
Sam Kang of this P1,000,000.00 loan?
A: None sir.
Q: No payments?
A: None sir.
Q: And from 1999 to 2002, there was no payment, either
by way of payment to the principal, by way ofpayment of
interest, there was no payment by Mr. Yung Sam Kang of
this loan?
A: Literally, there was no actual cash movement, sir.
Q: There was no actual cash?
A: Yes, sir.
35
Q: And yet despite no payment, the bank Orion Savings
Bank still extended an P800,000.00 additional right?
A: Yes, sir.47
Fifth, it is undisputed that notwithstanding the supposed
execution of theDacion en Pago on February 2, 2003,
Kang remained in possession of the condominium unit. In
fact, nothing in the records shows that Orion even
bothered to take possession of the property even six (6)
months after the supposed date of execution of the
Dacion en Pago. Kang was even able to transfer
possession of the condominium unit to Suzuki, who then
made immediate improvements thereon. If Orion really
purchased the condominium unit on February 2, 2003 and
claimed to be its true owner, why did it not assert its
ownership immediately after the alleged sale took place?
Why did it have to assert its ownership only after Suzuki
demanded the delivery of the titles? These gaps have
remained unanswered and unfilled.
In Suntay v. CA,48 we held that the most prominent index
of simulation is the complete absence of anattempt on the
part of the vendee to assert his rights of ownership over
the property in question. After the sale, the vendee should
have entered the land and occupied the premises. The
absence of any attempt on the part of Orion to assert its
right of dominion over the property allegedly soldto it is a
clear badge of fraud. That notwithstanding the execution
of the Dacion en Pago, Kang remained in possession of
the disputed condominium unit from the time of the
execution of the Dacion en Pagountil the propertys
subsequent transfer to Suzuki unmistakably
strengthens the fictitious nature of the Dacion en Pago.
These circumstances, aside from the glaring
inconsistencies in the documents and testimony of
Orions witness, indubitably prove the spurious nature of
the Dacion en Pago.
The fact that the Dacion en Pago
is a notarized document does not
support the conclusion that the
sale it embodies is a true
conveyance
Public instruments are evidence of the facts that gave rise
to their execution and are to be considered as containing
all the terms of the agreement.49 While a notarized
document enjoys this presumption, "the fact that a deed
is notarized is not a guarantee of the validity of its
contents."50 The presumption of regularity of notarized
documents is not absolute and may be rebutted by clear
and convincing evidence to the contrary.51
In the present case, the presumption cannot apply
because the regularity in the execution of the Dacion en
Pago and the loan documents was challenged in the
proceedings below where their prima facievalidity was
overthrown by the highly questionable circumstances
surrounding their execution.52
Effect of the PRA restriction on
the validity of Suzukis title to the property
Orion argues that the PRA restriction in CCT No. 18186
affects the conveyance to Suzuki. In particular, Orion
assails the status of Suzuki as a purchaser in good faith
in view of the express PRA restriction contained in CCT
No. 18186.53
We reject this suggested approachoutright because, to
our mind, the PRA restriction cannot affect the
conveyance in favor of Suzuki. On this particular point, we
concur withthe following findings of the CA:
x x x the annotation merely servesas a warning to the
owner who holds a Special Resident Retirees
Visa(SRRV) that he shall lose his visa if he disposes his
property which serves as his investment in order to qualify
for such status. Section 14 of the Implementing
Investment Guidelines under Rule VIII-A of the Rules and
Regulations Implementing Executive Order No. 1037,
Creating the Philippine Retirement Park System
Providing Funds Therefor and For Other Purpose (
otherwise known as the Philippine Retirement Authority)
states:
Section 14. Should the retiree-investor withdraw his
investment from the Philippines, or transfer the same to
another domestic enterprise, orsell, convey or transfer his
condominium unit or units to another person, natural or
juridical without the prior approval of the Authority, the
Special Resident Retirees Visa issued to him, and/or
unmarried minor child or children[,] may be cancelled or
revoked by the Philippine Government, through the
appropriate government department or agency, upon
recommendation of the Authority.54
Moreover, Orion should not be allowed to successfully
assail the good faith of Suzuki on the basis of the PRA
restriction. Orion knew of the PRA restriction when it
transacted with Kang. Incidentally, Orion admitted
accommodating Kangs request to cancel the mortgage
annotation despite the lack of payment to circumvent the
PRA restriction. Orion, thus, is estopped from impugning
the validity of the conveyance in favor of Suzuki on the
basis of the PRA restriction that Orion itself ignored and
"attempted" to circumvent.
With the conclusion that Orion failed to prove the
authenticity of the Dacion en Pago, we see no reason for
the application of the rules on double sale under Article
1544 of the New Civil Code. Suzuki, moreover,
successfully adduced sufficient evidence to establish the
validity of conveyance in his favor.
36
WHEREFORE, premises considered, we DENY the
petition for lack of merit. Costs against petitioner Orion
Savings Bank.
NORMA A. DEL SOCORRO, for and in behalf of her
minor child RODERIGO NORJO VAN WILSEM,
Petitioner,
vs.
ERNST JOHAN BRINKMAN VAN WILSEM,
Respondent.
Before the Court is a petition for review on certiorari under
Rule 45 of the Rules of Court seeking to reverse and set
aside the Orders1 dated February 19, 2010 and
September 1, 2010, respectively, of the Regional Trial
Court of Cebu City (RTC-Cebu), which dismissed the
criminal case entitled People of the Philippines v. Ernst
Johan Brinkman Van Wilsem, docketed as Criminal Case
No. CBU-85503, for violation of Republic Act (R.A.) No.
9262, otherwise known as the Anti-Violence Against
Women and Their Children Act of 2004.
The following facts are culled from the records:
Petitioner Norma A. Del Socorro and respondent Ernst
Johan Brinkman Van Wilsem contracted marriage in
Holland on September 25, 1990.2 On January 19, 1994,
they were blessed with a son named Roderigo Norjo Van
Wilsem, who at the time of the filing of the instant petition
was sixteen (16) years of age.3
Unfortunately, their marriage bond ended on July 19,
1995 by virtue of a Divorce Decree issued by the
appropriate Court of Holland.4 At that time, their son was
only eighteen (18) months old.5 Thereafter, petitioner and
her son came home to the Philippines.6
According to petitioner, respondent made a promise to
provide monthly support to their son in the amount of Two
Hundred Fifty (250) Guildene (which is equivalent to
Php17,500.00 more or less).7 However, since the arrival
of petitioner and her son in the Philippines, respondent
never gave support to the son, Roderigo.8
Not long thereafter, respondent cameto the Philippines
and remarried in Pinamungahan, Cebu, and since then,
have been residing thereat.9 Respondent and his new
wife established a business known as Paree Catering,
located at Barangay Tajao, Municipality of
Pinamungahan, Cebu City.10 To date, all the parties,
including their son, Roderigo, are presently living in Cebu
City.11
On August 28, 2009, petitioner, through her counsel, sent
a letter demanding for support from respondent. However,
respondent refused to receive the letter.12
Because of the foregoing circumstances, petitioner filed a
complaint affidavit with the Provincial Prosecutor of Cebu
City against respondent for violation of Section 5,
paragraph E(2) of R.A. No. 9262 for the latters unjust
refusal to support his minor child with petitioner.13
Respondent submitted his counter-affidavit thereto, to
which petitioner also submitted her reply-affidavit.14
Thereafter, the Provincial Prosecutor of Cebu City issued
a Resolution recommending the filing of an information for
the crime charged against herein respondent.
The information, which was filed with the RTC-Cebu and
raffled to Branch 20 thereof, states that:
That sometime in the year 1995 and up to the present,
more or less, in the Municipality of Minglanilla, Province
of Cebu, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, did then
and there wilfully, unlawfully and deliberately deprive,
refuse and still continue to deprive his son RODERIGO
NORJO VAN WILSEM, a fourteen (14) year old minor, of
financial support legally due him, resulting in economic
abuse to the victim. CONTRARY TO LAW.15
Upon motion and after notice and hearing, the RTC-Cebu
issued a Hold Departure Order against respondent.16
Consequently, respondent was arrested and,
subsequently, posted bail.17 Petitioner also filed a
Motion/Application of Permanent Protection Order to
which respondent filed his Opposition.18 Pending the
resolution thereof, respondent was arraigned.19
Subsequently, without the RTC-Cebu having resolved the
application of the protection order, respondent filed a
Motion to Dismiss on the ground of: (1) lack of jurisdiction
over the offense charged; and (2) prescription of the crime
charged.20
On February 19, 2010, the RTC-Cebu issued the herein
assailed Order,21 dismissing the instant criminal case
against respondent on the ground that the facts charged
in the information do not constitute an offense with
respect to the respondent who is an alien, the dispositive
part of which states:
WHEREFORE, the Court finds that the facts charged in
the information do not constitute an offense with respect
to the accused, he being an alien, and accordingly, orders
this case DISMISSED.
The bail bond posted by accused Ernst Johan Brinkman
Van Wilsem for his provisional liberty is hereby cancelled
(sic) and ordered released.
SO ORDERED.
37
Cebu City, Philippines, February 19, 2010.22
Thereafter, petitioner filed her Motion for Reconsideration
thereto reiterating respondents obligation to support their
child under Article 19523 of the Family Code, thus, failure
to do so makes him liable under R.A. No. 9262 which
"equally applies to all persons in the Philippines who are
obliged to support their minor children regardless of the
obligors nationality."24
On September 1, 2010, the lower court issued an Order25
denying petitioners Motion for Reconsideration and
reiterating its previous ruling. Thus:
x x x The arguments therein presented are basically a
rehash of those advanced earlier in the memorandum of
the prosecution. Thus, the court hereby reiterates its
ruling that since the accused is a foreign national he is not
subject to our national law (The Family Code) in regard to
a parents duty and obligation to givesupport to his child.
Consequently, he cannot be charged of violating R.A.
9262 for his alleged failure to support his child. Unless it
is conclusively established that R.A. 9262 applies to a
foreigner who fails to give support tohis child,
notwithstanding that he is not bound by our domestic law
which mandates a parent to give such support, it is the
considered opinion of the court that no prima faciecase
exists against the accused herein, hence, the case should
be dismissed.
WHEREFORE, the motion for reconsideration is hereby
DENIED for lack of merit.
SO ORDERED.
Cebu City, Philippines, September 1, 2010.26
Hence, the present Petition for Review on Certiorari
raising the following issues:
1. Whether or not a foreign national has an obligation to
support his minor child under Philippine law; and
2. Whether or not a foreign national can be held criminally
liable under R.A. No. 9262 for his unjustified failure to
support his minor child.27
At the outset, let it be emphasized that We are taking
cognizance of the instant petition despite the fact that the
same was directly lodged with the Supreme Court,
consistent with the ruling in Republic v. Sunvar Realty
Development Corporation,28 which lays down the
instances when a ruling of the trial court may be brought
on appeal directly to the Supreme Court without violating
the doctrine of hierarchy of courts, to wit:
x x x Nevertheless, the Rules do not prohibit any of the
parties from filing a Rule 45 Petition with this Court, in
case only questions of law are raised or involved. This
latter situation was one that petitioners found themselves
in when they filed the instant Petition to raise only
questions of law. In Republic v. Malabanan, the Court
clarified the three modes of appeal from decisions of the
RTC, to wit: (1) by ordinary appeal or appeal by writ of
error under Rule 41, whereby judgment was rendered in
a civil or criminal action by the RTC in the exercise of its
original jurisdiction; (2) by a petition for review under Rule
42, whereby judgment was rendered by the RTC in the
exercise of its appellate jurisdiction; and (3) by a petition
for review on certiorari before the Supreme Court under
Rule 45. "The first mode of appeal is taken to the [Court
of Appeals] on questions of fact or mixed questions of fact
and law. The second mode of appeal is brought to the CA
on questions of fact, of law, or mixed questions of fact and
law. The third mode of appealis elevated to the Supreme
Court only on questions of law." (Emphasis supplied)
There is a question of law when the issue does not call for
an examination of the probative value of the evidence
presented or of the truth or falsehood of the facts being
admitted, and the doubt concerns the correct application
of law and jurisprudence on the matter. The resolution of
the issue must rest solely on what the law provides on the
given set of circumstances.29
Indeed, the issues submitted to us for resolution involve
questions of law the response thereto concerns the
correct application of law and jurisprudence on a given set
of facts, i.e.,whether or not a foreign national has an
obligation to support his minor child under Philippine law;
and whether or not he can be held criminally liable under
R.A. No. 9262 for his unjustified failure to do so.
It cannot be negated, moreover, that the instant petition
highlights a novel question of law concerning the liability
of a foreign national who allegedly commits acts and
omissions punishable under special criminal laws,
specifically in relation to family rights and duties. The
inimitability of the factual milieu of the present case,
therefore, deserves a definitive ruling by this Court, which
will eventually serve as a guidepost for future cases.
Furthermore, dismissing the instant petition and
remanding the same to the CA would only waste the time,
effort and resources of the courts. Thus, in the present
case, considerations of efficiency and economy in the
administration of justice should prevail over the
observance of the hierarchy of courts.
Now, on the matter of the substantive issues, We find the
petition meritorious. Nonetheless, we do not fully agree
with petitioners contentions.
38
To determine whether or not a person is criminally liable
under R.A. No. 9262, it is imperative that the legal
obligation to support exists.
Petitioner invokes Article 19530 of the Family Code,
which provides the parents obligation to support his child.
Petitioner contends that notwithstanding the existence of
a divorce decree issued in relation to Article 26 of the
Family Code,31 respondent is not excused from
complying with his obligation to support his minor child
with petitioner.
On the other hand, respondent contends that there is no
sufficient and clear basis presented by petitioner that she,
as well as her minor son, are entitled to financial
support.32 Respondent also added that by reason of the
Divorce Decree, he is not obligated topetitioner for any
financial support.33
On this point, we agree with respondent that petitioner
cannot rely on Article 19534 of the New Civil Code in
demanding support from respondent, who is a foreign
citizen, since Article 1535 of the New Civil Code stresses
the principle of nationality. In other words, insofar as
Philippine laws are concerned, specifically the provisions
of the Family Code on support, the same only applies to
Filipino citizens. By analogy, the same principle applies to
foreigners such that they are governed by their national
law with respect to family rights and duties.36
The obligation to give support to a child is a matter that
falls under family rights and duties. Since the respondent
is a citizen of Holland or the Netherlands, we agree with
the RTC-Cebu that he is subject to the laws of his country,
not to Philippinelaw, as to whether he is obliged to give
support to his child, as well as the consequences of his
failure to do so.37
In the case of Vivo v. Cloribel,38 the Court held that
Furthermore, being still aliens, they are not in position to
invoke the provisions of the Civil Code of the Philippines,
for that Code cleaves to the principle that family rights and
duties are governed by their personal law, i.e.,the laws of
the nation to which they belong even when staying in a
foreign country (cf. Civil Code, Article 15).39
It cannot be gainsaid, therefore, that the respondent is not
obliged to support petitioners son under Article195 of the
Family Code as a consequence of the Divorce Covenant
obtained in Holland. This does not, however, mean that
respondent is not obliged to support petitioners son
altogether.
In international law, the party who wants to have a foreign
law applied to a dispute or case has the burden of proving
the foreign law.40 In the present case, respondent hastily
concludes that being a national of the Netherlands, he is
governed by such laws on the matter of provision of and
capacity to support.41 While respondent pleaded the laws
of the Netherlands in advancing his position that he is not
obliged to support his son, he never proved the same.
It is incumbent upon respondent to plead and prove that
the national law of the Netherlands does not impose upon
the parents the obligation to support their child (either
before, during or after the issuance of a divorce decree),
because Llorente v. Court of Appeals,42 has already
enunciated that:
True, foreign laws do not prove themselves in our
jurisdiction and our courts are not authorized to
takejudicial notice of them. Like any other fact, they must
be alleged and proved.43
In view of respondents failure to prove the national law of
the Netherlands in his favor, the doctrine of processual
presumption shall govern. Under this doctrine, if the
foreign law involved is not properly pleaded and proved,
our courts will presume that the foreign law is the same
as our local or domestic or internal law.44 Thus, since the
law of the Netherlands as regards the obligation to
support has not been properly pleaded and proved in the
instant case, it is presumed to be the same with Philippine
law, which enforces the obligation of parents to support
their children and penalizing the non-compliance
therewith.
Moreover, while in Pilapil v. Ibay-Somera,45 the Court
held that a divorce obtained in a foreign land as well as its
legal effects may be recognized in the Philippines in view
of the nationality principle on the matter of status of
persons, the Divorce Covenant presented by respondent
does not completely show that he is notliable to give
support to his son after the divorce decree was issued.
Emphasis is placed on petitioners allegation that under
the second page of the aforesaid covenant, respondents
obligation to support his child is specifically stated,46
which was not disputed by respondent.
We likewise agree with petitioner that notwithstanding that
the national law of respondent states that parents have no
obligation to support their children or that such obligation
is not punishable by law, said law would still not find
applicability,in light of the ruling in Bank of America, NT
and SA v. American Realty Corporation,47 to wit:
In the instant case, assuming arguendo that the English
Law on the matter were properly pleaded and proved in
accordance with Section 24, Rule 132 of the Rules of
Court and the jurisprudence laid down in Yao Kee, et al.
vs. Sy-Gonzales, said foreign law would still not find
applicability.
39
Thus, when the foreign law, judgment or contract is
contrary to a sound and established public policy of the
forum, the said foreign law, judgment or order shall not be
applied.
Additionally, prohibitive laws concerning persons, their
acts or property, and those which have for their object
public order, public policy and good customs shall not be
rendered ineffective by laws or judgments promulgated,
or by determinations or conventions agreed upon in a
foreign country.
The public policy sought to be protected in the instant
case is the principle imbedded in our jurisdiction
proscribing the splitting up of a single cause of action.
Section 4, Rule 2 of the 1997 Rules of Civil Procedure is
pertinent
If two or more suits are instituted on the basis of the same
cause of action, the filing of one or a judgment upon the
merits in any one is available as a ground for the dismissal
of the others. Moreover, foreign law should not be applied
when its application would work undeniable injustice to
the citizens or residents of the forum. To give justice is the
most important function of law; hence, a law, or judgment
or contract that is obviously unjust negates the
fundamental principles of Conflict of Laws.48
Applying the foregoing, even if the laws of the
Netherlands neither enforce a parents obligation to
support his child nor penalize the noncompliance
therewith, such obligation is still duly enforceable in the
Philippines because it would be of great injustice to the
child to be denied of financial support when the latter is
entitled thereto.
We emphasize, however, that as to petitioner herself,
respondent is no longer liable to support his former wife,
in consonance with the ruling in San Luis v. San Luis,49
to wit:
As to the effect of the divorce on the Filipino wife, the
Court ruled that she should no longerbe considered
marriedto the alien spouse. Further, she should not be
required to perform her marital duties and obligations. It
held:
To maintain, as private respondent does, that, under our
laws, petitioner has to be considered still married to
private respondent and still subject to a wife's obligations
under Article 109, et. seq. of the Civil Code cannot be just.
Petitioner should not be obliged to live together with,
observe respect and fidelity, and render support to private
respondent. The latter should not continue to be one of
her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country if
the ends of justice are to be served. (Emphasis added)50
Based on the foregoing legal precepts, we find that
respondent may be made liable under Section 5(e) and (i)
of R.A. No. 9262 for unjustly refusing or failing to give
support topetitioners son, to wit:
SECTION 5. Acts of Violence Against Women and Their
Children.- The crime of violence against women and their
children is committed through any of the following acts:
xxxx
(e) Attempting to compel or compelling the woman or her
child to engage in conduct which the woman or her child
has the right to desist from or desist from conduct which
the woman or her child has the right to engage in, or
attempting to restrict or restricting the woman's or her
child's freedom of movement or conduct by force or threat
of force, physical or other harm or threat of physical or
other harm, or intimidation directed against the woman or
child. This shall include, butnot limited to, the following
acts committed with the purpose or effect of controlling or
restricting the woman's or her child's movement or
conduct:
xxxx
(2) Depriving or threatening to deprive the woman or her
children of financial support legally due her or her family,
or deliberately providing the woman's children insufficient
financial support; x x x x
(i) Causing mental or emotional anguish, public ridicule or
humiliation to the woman or her child, including, but not
limited to, repeated verbal and emotional abuse, and
denial of financial support or custody of minor childrenof
access to the woman's child/children.51
Under the aforesaid special law, the deprivation or denial
of financial support to the child is considered anact of
violence against women and children.
In addition, considering that respondent is currently living
in the Philippines, we find strength in petitioners claim
that the Territoriality Principle in criminal law, in relation to
Article 14 of the New Civil Code, applies to the instant
case, which provides that: "[p]enal laws and those of
public security and safety shall be obligatory upon all who
live and sojourn in Philippine territory, subject to the
principle of public international law and to treaty
40
stipulations." On this score, it is indisputable that the
alleged continuing acts of respondent in refusing to
support his child with petitioner is committed here in the
Philippines as all of the parties herein are residents of the
Province of Cebu City. As such, our courts have territorial
jurisdiction over the offense charged against respondent.
It is likewise irrefutable that jurisdiction over the
respondent was acquired upon his arrest.
Finally, we do not agree with respondents argument that
granting, but not admitting, that there is a legal basis for
charging violation of R.A. No. 9262 in the instant case, the
criminal liability has been extinguished on the ground of
prescription of crime52 under Section 24 of R.A. No.
9262, which provides that:
SECTION 24. Prescriptive Period. Acts falling under
Sections 5(a) to 5(f) shall prescribe in twenty (20) years.
Acts falling under Sections 5(g) to 5(I) shall prescribe in
ten (10) years.
The act of denying support to a child under Section 5(e)(2)
and (i) of R.A. No. 9262 is a continuing offense,53 which
started in 1995 but is still ongoing at present. Accordingly,
the crime charged in the instant case has clearly not
prescribed.
Given, however, that the issue on whether respondent
has provided support to petitioners child calls for an
examination of the probative value of the evidence
presented, and the truth and falsehood of facts being
admitted, we hereby remand the determination of this
issue to the RTC-Cebu which has jurisdiction over the
case.
WHEREFORE, the petition is GRANTED. The Orders
dated February 19, 2010 and September 1, 2010,
respectively, of the Regional Trial Court of the City of
Cebu are hereby REVERSED and SET ASIDE. The case
is REMANDED to the same court to conduct further
proceedings based on the merits of the case.
SO ORDERED.
ORION SAVINGS BANK, Petitioner,
vs.
SHIGEKANE SUZUKI, Respondent.
DECISION
BRION, J.:
Before us is the Petition for Review on Certiorari1 filed by
petitioner Orion Savings Bank (Orion) under Rule 45 of
the Rules of Court, assailing the decision2 dated August
23, 2012 and the resolution3 dated January 25, 2013 of
the Court of Appeals (CA) in CA-G.R. CV No. 94104.
The Factual Antecedents
In the first week of August 2003, respondent Shigekane
Suzuki (Suzuki), a Japanese national, met with Ms. Helen
Soneja (Soneja) to inquire about a condominium unit and
a parking slot at Cityland Pioneer, Mandaluyong City,
allegedly owned by Yung Sam Kang (Kang), a Korean
national and a Special Resident Retiree's Visa (SRRV)
holder.
At the meeting, Soneja informed Suzuki that Unit No. 536
[covered by Condominium Certificate of Title (CCT) No.
18186]4 and Parking Slot No. 42 [covered by CCT No.
9118]5 were for sale for P3,000,000.00. Soneja likewise
assured Suzuki that the titles to the unit and the parking
slot were clean. After a brief negotiation, the parties
agreed to reduce the price to P2,800,000.00. On August
5, 2003, Suzuki issued Kang a Bank of the Philippine
Island (BPI) Check No. 833496 for One Hundred
Thousand Pesos (P100,000.00) as reservation fee.7 On
August 21, 2003, Suzuki issued Kang another check, BPI
Check No. 83350,8 this time for P2,700,000.00
representing the remaining balance of the purchase price.
Suzuki and Kang then executed a Deed of Absolute Sale
dated August 26, 20039 covering Unit No. 536 and
Parking Slot No. 42. Soon after, Suzuki took possession
of the condominium unit and parking lot, and commenced
the renovation of the interior of the condominium unit.
Kang thereafter made several representations with
Suzuki to deliver the titles to the properties, which were
then allegedly in possession of Alexander Perez (Perez,
Orions Loans Officer) for safekeeping. Despite several
verbal demands, Kang failed to deliver the documents.
Suzuki later on learned that Kang had left the country,
prompting Suzuki to verify the status of the properties with
the Mandaluyong City Registry of Deeds.
Before long, Suzuki learned that CCT No. 9118
representing the title to the Parking Slot No. 42 contained
no annotations although it remained under the name of
Cityland Pioneer. This notwithstanding, Cityland Pioneer,
through Assistant Vice President Rosario D. Perez,
certified that Kang had fully paid the purchase price of
Unit. No. 53610 and Parking Slot No. 42.11 CCT No.
18186 representing the title to the condominium unit had
no existing encumbrance, except for anannotation under
Entry No. 73321/C-10186 which provided that any
conveyance or encumbrance of CCT No. 18186 shall be
subject to approval by the Philippine Retirement Authority
(PRA). Although CCT No. 18186 contained Entry No.
66432/C-10186 dated February 2, 1999 representing a
mortgage in favor of Orion for a P1,000,000.00 loan, that
annotation was subsequently cancelled on June 16, 2000
by Entry No. 73232/T. No. 10186. Despite the
cancellation of the mortgage to Orion, the titles to the
properties remained in possession of Perez.
41

To protect his interests, Suzuki thenexecuted an Affidavit
of Adverse Claim12 dated September 8, 2003, withthe
Registry of Deeds of Mandaluyong City, annotated as
Entry No. 3292/C-No. 18186 in CCT No. 18186. Suzuki
then demanded the delivery of the titles.13 Orion,
(through Perez), however, refused to surrender the titles,
and cited the need to consult Orions legal counsel as its
reason.
On October 14, 2003, Suzuki received a letter from
Orions counsel dated October 9, 2003, stating that Kang
obtained another loan in the amount of P1,800,000.00.
When Kang failed to pay, he executed a Dacion en
Pagodated February 2, 2003, in favorof Orion covering
Unit No. 536. Orion, however, did not register the Dacion
en Pago, until October 15, 2003.
On October 28, 2003, Suzuki executed an Affidavit of
Adverse Claim over Parking Slot No. 42 (covered by CCT
No. 9118) and this was annotated as Entry No. 4712/C-
No. 9118 in the parking lots title.
On January 27, 2004, Suzuki filed a complaint for specific
performance and damages against Kang and Orion. At
the pre-trial, the parties made the following admissions
and stipulations:
1. That as of August 26, 2003, Kang was the registered
owner of Unit No. 536 and Parking Slot No. 42;
2. That the mortgage in favor ofOrion supposedly
executed by Kang, with Entry No. 66432/C-10186 dated
February 2, 1999, was subsequently cancelled by Entry
No. 73232/T No. 10186 dated June 16, 2000;
3. That the alleged Dacion en Pagowas never annotated
in CCT Nos. 18186 and 9118;
4. That Orion only paid the appropriate capital gains tax
and the documentary stamp tax for the alleged Dacion en
Pago on October 15, 2003;
5. That Parking Slot No. 42, covered by CCT No. 9118,
was never mortgaged to Orion; and
6. That when Suzuki bought the properties, he went to
Orion to obtain possession of the titles.
The RTC Ruling
In its decision14 dated June 29, 2009, the Regional Trial
Court (RTC), Branch 213, Mandaluyong City ruled infavor
of Suzuki and ordered Orion to deliver the CCT Nos.
18186 and 9118 to Suzuki.
The court found that Suzuki was an innocent purchaser
for value whose rights over the properties prevailed over
Orions. The RTC further noted that Suzuki exerted efforts
to verify the status of the properties but he did not find any
existing encumbrance inthe titles. Although Orion claims
to have purchased the property by way of a Dacion en
Pago, Suzuki only learned about it two (2) months after
he bought the properties because Orion never bothered
to register or annotate the Dacion en Pagoin CCT Nos.
18186 and 9116.
The RTC further ordered Orion and Kang to jointly and
severally pay Suzuki moral damages, exemplary
damages, attorneys fees, appearance fees, expenses for
litigation and cost ofsuit. Orion timely appealed the RTC
decision with the CA.
The CA Ruling
On August 23, 2012, the CA partially granted Orions
appeal and sustained the RTC insofar as it upheld
Suzukis right over the properties. The CA further noted
that Entry No. 73321/C-10186 pertaining to the
withdrawal of investment of an SRRV only serves as a
warning to an SRRV holder about the implications of a
conveyance of a property investment. It deviated from the
RTC ruling, however, by deleting the award for moral
damages, exemplary damages, attorneys fees,
expenses for litigation and cost of suit.
Orion sought a reconsideration of the CA decision but the
CA denied the motion in its January 25, 2013 resolution.
Orion then filed a petition for review on certiorariunder
Rule 45 with this Court.
The Petition and Comment
Orions petition is based on the following
grounds/arguments:15
1. The Deed of Sale executed by Kang in favor of Suzuki
is null and void. Under Korean law, any conveyance of a
conjugal property should be made with the consent of
both spouses;
2. Suzuki is not a buyer in good faith for he failed to check
the owners duplicate copies of the CCTs;
42
3. Knowledge of the PRA restriction under Entry No.
73321/C-10186, which prohibits any conveyance or
encumbrance of the property investment, defeats the
alleged claim of good faith by Suzuki; and
4. Orion should not be faulted for exercising due diligence.
In his Comment,16 Suzuki asserts that the issue on
spousal consent was belatedly raised on appeal.
Moreover, proof of acquisition during the marital coverture
is a condition sine qua nonfor the operation of the
presumption of conjugal ownership.17 Suzuki additionally
maintains that he is a purchaser in good faith, and is thus
entitled to the protection of the law.
The Courts Ruling
We deny the petition for lack of merit.
The Court may inquire into conclusions of fact when the
inference made is manifestly mistaken
In a Rule 45 petition, the latitude of judicial review
generally excludes a factual and evidentiary re-
evaluation, and the Court ordinarily abides by the uniform
factual conclusions of the trial court and the appellate
court.18 In the present case, while the courts below both
arrived at the same conclusion, there appears tobe an
incongruence in their factual findings and the legal
principle they applied to the attendant factual
circumstances. Thus, we are compelled to examine
certain factual issues in the exercise of our sound
discretion to correct any mistaken inference that may
have been made.19
Philippine Law governs the transfer of real property
Orion believes that the CA erred in not ruling on the issue
of spousal consent. We cannot uphold this position,
however, because the issue of spousal consent was only
raised on appeal to the CA. It is a well-settled principle
that points of law, theories, issues, and arguments not
brought to the attention of the trial court cannot be raised
for the first time on appeal and considered by a reviewing
court.20 To consider these belated arguments would
violate basic principles of fairplay, justice, and due
process.
Having said these, we shall nonetheless discuss the
issues Orion belatedly raised, if only to put an end to
lingering doubts on the correctness of the denial of the
present petition.
It is a universal principle thatreal or immovable property is
exclusively subject to the laws of the country or state
where it is located.21 The reason is found in the very
nature of immovable property its immobility.
Immovables are part of the country and so closely
connected to it that all rights over them have their natural
center of gravity there.22
Thus, all matters concerning the titleand disposition ofreal
property are determined by what is known as the lex loci
rei sitae, which can alone prescribe the mode by which a
title canpass from one person to another, or by which an
interest therein can be gained or lost.23 This general
principle includes all rules governing the descent,
alienation and transfer of immovable property and the
validity, effect and construction of wills and other
conveyances.24
This principle even governs the capacity of the person
making a deed relating to immovable property, no matter
what its nature may be. Thus, an instrument will be
ineffective to transfer title to land if the person making it is
incapacitated by the lex loci rei sitae, even though under
the law of his domicile and by the law of the place where
the instrument is actually made, his capacity is
undoubted.25
On the other hand, property relations between spouses
are governed principally by the national law of the
spouses.26 However, the party invoking the application of
a foreign law has the burden of proving the foreign law.
The foreign law is a question of fact to be properly pleaded
and proved as the judge cannot take judicial notice of a
foreign law.27 He is presumed to know only domestic or
the law of the forum.28
To prove a foreign law, the party invoking it must present
a copy thereof and comply with Sections 24 and 25 of
Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. The record of public
documents referred to in paragraph (a) of Section 19,
when admissible for any purpose, may be evidenced by
an official publication thereof or by a copy attested by the
officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a
foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general,
consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the
foreign country inwhich the record is kept, and
authenticated by the seal of his office. (Emphasis
supplied)
SEC. 25. What attestation ofcopy must state.
Whenever a copy of a document or record is attested for
the purpose of the evidence, the attestation must state, in
43
substance, that the copy is a correct copy of the original,
or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting
officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.
Accordingly, matters concerning the title and disposition
of real property shall be governed by Philippine law while
issues pertaining to the conjugal natureof the property
shall be governed by South Korean law, provided it is
proven as a fact.
In the present case, Orion, unfortunately failed to prove
the South Korean law on the conjugal ownership
ofproperty. It merely attached a "Certification from the
Embassy of the Republic of Korea"29 to prove the
existence of Korean Law. This certification, does not
qualify as sufficient proof of the conjugal nature of the
property for there is no showing that it was properly
authenticated bythe seal of his office, as required under
Section 24 of Rule 132.30
Accordingly, the International Law doctrine of presumed-
identity approachor processual presumption comes into
play, i.e., where a foreign law is not pleaded or, evenif
pleaded, is not proven, the presumption is that foreign law
is the same as Philippine Law.31
Under Philippine Law, the phrase "Yung Sam Kang
married to' Hyun Sook Jung" is merely descriptive of the
civil status of Kang.32 In other words, the import from the
certificates of title is that Kang is the owner of the
properties as they are registered in his name alone, and
that he is married to Hyun Sook Jung.
We are not unmindful that in numerous cases we have
held that registration of the property in the name of only
one spouse does not negate the possibility of it being
conjugal or community property.33 In those cases,
however, there was proof that the properties, though
registered in the name of only one spouse, were indeed
either conjugal or community properties.34 Accordingly,
we see no reason to declare as invalid Kangs
conveyance in favor of Suzuki for the supposed lack of
spousal consent.
The petitioner failed to adduce sufficient evidence to
prove the due execution of the Dacion en Pago
Article 1544 of the New Civil Codeof the Philippines
provides that:
ART. 1544. 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.
Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith first
recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain
to the person who in good faith was first in the possession;
and, in the absence thereof, to the person who presents
the oldest title, provided there is good faith.
The application of Article 1544 of the New Civil Code
presupposes the existence of two or more duly executed
contracts of sale. In the present case, the Deed of Sale
dated August 26, 200335 between Suzuki and Kang was
admitted by Orion36 and was properly identified by
Suzukis witness Ms. Mary Jane Samin (Samin).37
It is not disputed, too, that the Deed of Sale dated August
26, 2003 was consummated. In a contract of sale, the
seller obligates himself to transfer the ownership of the
determinate thing sold, and to deliver the same to the
buyer, who obligates himself to pay a price certain to the
seller.38 The execution of the notarized deed of saleand
the actual transfer of possession amounted to delivery
that produced the legal effect of transferring ownership to
Suzuki.39
On the other hand, although Orion claims priority in right
under the principle of prius tempore, potior jure (i.e.,first
in time, stronger in right), it failedto prove the existence
and due execution of the Dacion en Pagoin its favor.
At the outset, Orion offered the Dacion en Pagoas Exhibit
"5"with submarkings "5-a" to "5-c" to prove the existence
of the February 6, 2003 transaction in its Formal Offer
dated July 20, 2008. Orion likewise offered in evidence
the supposed promissory note dated September 4, 2002
as Exhibit "12"to prove the existence of the additional
P800,000.00 loan. The RTC, however, denied the
admission of Exhibits "5" and "12,"among others, in its
order dated August 19, 2008 "since the same [were] not
identified in court by any witness."40
Despite the exclusion of its most critical documentary
evidence, Orion failed to make a tender ofexcluded
evidence, as provided under Section 40, Rule 132 of the
Rules of Court. For this reason alone, we are prevented
from seriously considering Exhibit "5" and its submarkings
and Exhibit "12" in the present petition.
Moreover, even if we consider Exhibit "5" and its
submarkings and Exhibit "12" in the present petition, the
copious inconsistencies and contradictions in the
testimonial and documentary evidence of Orion, militate
against the conclusion that the Dacion en Pagowas duly
executed. First, there appears to be no due and
demandable obligation when the Dacion en Pago was
44
executed, contrary to the allegations of Orion. Orions
witness Perez tried to impress upon the RTC that Kang
was in default in his P1,800,000.00 loan. During his direct
examination, he stated:
ATTY. CRUZAT:
Q: Okay, so this loan of P1.8 million, what happened to
this loan, Mr. Witness?
A: Well it became past due, there has been delayed
interest payment by Mr. Kangand...
Q: So what did you do after there were defaults[?]
A: We have to secure the money or the investment of the
bank through loans and we have executed a dacion en
pagobecause Mr. Kang said he has no money. So we just
execute[d] the dacion en pago rather than going through
the Foreclosure proceedings.
xxxx
Q: Can you tell the court when was this executed?
A: February 6, 2003, your Honor.41
A reading of the supposed promissory note, however,
shows that there was nodefault to speak of when the
supposed Dacion en Pagowas executed.
Based on the promissory note, Kangs loan obligation
wouldmature only on August 27, 2003. Neither can Orion
claim that Kang had been in default in his installment
payments because the wordings of the promissory note
provide that "[t]he principal of this loanand its interest and
other charges shall be paid by me/us in accordance
hereunder: SINGLE PAYMENT LOANS.42 "There was
thus no due and demandable loan obligation when the
alleged Dacion en Pago was executed.
Second, Perez, the supposed person who prepared the
Dacion en Pago,appears to only have a vague idea of the
transaction he supposedly prepared. During his cross-
examination, he testified:
ATTY. DE CASTRO:
Q: And were you the one who prepared this [dacion en
pago] Mr. witness?
A: Yes, sir. I personally prepared this.
xxxx
Q: So this 1.8 million pesos is already inclusive of all the
penalties, interest and surcharge due from Mr. Yung Sam
Kang?
A: Its just the principal, sir.
Q: So you did not state the interest [and] penalties?
A: In the [dacion en pago], we do not include interest, sir.
We may actually includethat but....
Q: Can you read the Second Whereas Clause, Mr.
Witness?
A: Whereas the first party failed to pay the said loan to the
second party and as of February 10, 2003, the
outstanding obligation which is due and demandable
principal and interest and other charges included amounts
to P1,800,000.00 pesos, sir.
xxxx
Q: You are now changing your answer[.] [I]t now includes
interest and other charges, based on this document?
A: Yes, based on that document, sir.43
Third, the Dacion en Pago,mentioned that the
P1,800,000.00 loan was secured by a real estate
mortgage. However, no document was ever presented to
prove this real estate mortgage aside from it being
mentioned in the Dacion en Pago itself.
ATTY. DE CASTRO:
Q: Would you know if there is any other document like a
supplement to that Credit Line Agreement referring to this
1.8 million peso loan by Mr. Yung Sam Kang which says
that there was a subsequent collateralization or security
given by Mr. Yung [Sam]
Kang for the loan?
xxxx
A: The [dacion en pago], sir.44
Fourth,the Dacion en Pago was first mentioned only two
(2) months after Suzuki and Samin demanded the
45
delivery of the titles sometime in August 2003,and after
Suzuki caused the annotation of his affidavit of adverse
claim. Records show that it was only on October 9, 2003,
when Orion, through its counsel, Cristobal Balbin Mapile
& Associates first spoke of the Dacion en Pago.45 Not
even Perez mentioned any Dacion en Pago on October
1, 2003, when he personally received a letter demanding
the delivery of the titles.Instead, Perez refused to accept
the letter and opted to first consult with his lawyer.46
Notably, even the October 9, 2003 letter contained
material inconsistencies in its recital of facts surrounding
the execution of the Dacion en Pago. In particular, it
mentioned that "on [September 4, 2002], after paying the
original loan, [Kang] applied and was granted a new
Credit Line Facility by [Orion] x x x for ONE MILLION
EIGHT HUNDRED THOUSAND PESOS
(P1,800,000.00)." Perez, however, testified that there was
"no cash movement" in the original P1,000,000.00 loan.
In his testimony, he said:
COURT:
xxxx
Q: Would you remember what was the subject matter of
that real estate mortgage for that first P1,000,000.00
loan?
A: Its a condominium Unit in Cityland, sir.
xxxx
Q: Would you recall if there was any payment by Mr. Yung
Sam Kang of this P1,000,000.00 loan?
A: None sir.
Q: No payments?
A: None sir.
Q: And from 1999 to 2002, there was no payment, either
by way of payment to the principal, by way ofpayment of
interest, there was no payment by Mr. Yung Sam Kang of
this loan?
A: Literally, there was no actual cash movement, sir.
Q: There was no actual cash?
A: Yes, sir.
Q: And yet despite no payment, the bank Orion Savings
Bank still extended an P800,000.00 additional right?
A: Yes, sir.47
Fifth, it is undisputed that notwithstanding the supposed
execution of theDacion en Pago on February 2, 2003,
Kang remained in possession of the condominium unit. In
fact, nothing in the records shows that Orion even
bothered to take possession of the property even six (6)
months after the supposed date of execution of the
Dacion en Pago. Kang was even able to transfer
possession of the condominium unit to Suzuki, who then
made immediate improvements thereon. If Orion really
purchased the condominium unit on February 2, 2003 and
claimed to be its true owner, why did it not assert its
ownership immediately after the alleged sale took place?
Why did it have to assert its ownership only after Suzuki
demanded the delivery of the titles? These gaps have
remained unanswered and unfilled. FAR EAST BANK v
THEMISTOCLES PACILAN, JR.,
Before the Court is the petition for review on certiorari filed
by Far East Bank and Trust Company (now Bank of the
Philippines Islands) seeking the reversal of the
Decision[1] dated August 30, 2002 of the Court of Appeals
(CA) in CA-G.R. CV No. 36627 which ordered it, together
with its branch accountant, Roger Villadelgado, to pay
respondent Themistocles Pacilan, Jr.[2] the total sum of
P100,000.00 as moral and exemplary damages. The
assailed decision affirmed with modification that of the
Regional Trial Court (RTC) of Negros Occidental, Bacolod
City, Branch 54, in Civil Case No. 4908. Likewise sought
to be reversed and set aside is the Resolution dated
January 17, 2003 of the appellate court, denying
petitioner banks motion for reconsideration.
The case stemmed from the following undisputed facts:
Respondent Pacilan opened a current account with
petitioner banks Bacolod Branch on May 23, 1980. His
account was denominated as Current Account No. 53208
(0052-00407-4). The respondent had since then issued
several postdated checks to different payees drawn
against the said account. Sometime in March 1988, the
respondent issued Check No. 2434886 in the amount of
P680.00 and the same was presented for payment to
petitioner bank on April 4, 1988.
Upon its presentment on the said date, Check No.
2434886 was dishonored by petitioner bank. The next
day, or on April 5, 1988, the respondent deposited to his
current account the amount of P800.00. The said amount
was accepted by petitioner bank; hence, increasing the
balance of the respondents deposit to P1,051.43.
Subsequently, when the respondent verified with
petitioner bank about the dishonor of Check No. 2434866,
he discovered that his current account was closed on the
ground that it was improperly handled. The records of
petitioner bank disclosed that between the period of
March 30,
1988 and April 5, 1988, the respondent issued four
checks, to wit: Check No. 2480416 for P6,000.00; Check
No. 2480419 for P50.00; Check No. 2434880 for P680.00
and; Check No. 2434886 for P680.00, or a total amount
of P7,410.00. At the time, however, the respondents
current account with petitioner bank only had a deposit of
P6,981.43. Thus, the total amount of the checks
presented for payment on April 4, 1988 exceeded the
balance of the respondents deposit in his account. For
this reason, petitioner bank, through its branch
accountant, Villadelgado, closed the respondents current
account effective the evening of April 4, 1988 as it then
46
had an overdraft of P428.57. As a consequence of the
overdraft, Check No. 2434886 was dishonored.
On April 18, 1988, the respondent wrote to petitioner bank
complaining that the closure of his account was
unjustified. When he did not receive a reply from petitioner
bank, the respondent filed with the RTC of Negros
Occidental, Bacolod City, Branch 54, a complaint for
damages against petitioner bank and Villadelgado. The
case was docketed as Civil Case No. 4908. The
respondent, as complainant therein, alleged that the
closure of his current account by petitioner bank was
unjustified because on the first banking hour of April 5,
1988, he already deposited an amount sufficient to fund
his checks. The respondent pointed out that Check No.
2434886, in particular, was delivered to petitioner bank at
the close of banking hours on April 4, 1988 and, following
normal banking procedure, it
(petitioner bank) had until the last clearing hour of the
following day, or on April 5, 1988, to honor the check or
return it, if not funded. In disregard of this banking
procedure and practice, however, petitioner bank hastily
closed the respondents current account and dishonored
his Check No. 2434886.
The respondent further alleged that prior to the closure of
his current account, he had issued several other
postdated checks. The petitioner banks act of closing his
current account allegedly preempted the deposits that he
intended to make to fund those checks. Further, the
petitioner banks act exposed him to criminal prosecution
for violation of Batas Pambansa Blg. 22.
According to the respondent, the indecent haste that
attended the closure of his account was patently
malicious and intended to embarrass him. He claimed that
he is a Cashier of Prudential Bank and Trust Company,
whose branch office is located just across that of
petitioner bank, and a prominent and respected leader
both in the civic and banking communities. The alleged
malicious acts of petitioner bank besmirched the
respondents reputation and caused him social
humiliation, wounded feelings, insurmountable worries
and sleepless nights entitling him to an award of
damages.
In their answer, petitioner bank and Villadelgado
maintained that the respondents current account was
subject to petitioner banks Rules and Regulations
Governing the Establishment and Operation of Regular
Demand
Deposits which provide that the Bank reserves the right to
close an account if the depositor frequently draws checks
against insufficient funds and/or uncollected deposits and
that the Bank reserves the right at any time to return
checks of the depositor which are drawn against
insufficient funds or for any reason.[3]
They showed that the respondent had improperly and
irregularly handled his current account. For example, in
1986, the respondents account was overdrawn 156 times,
in 1987, 117 times and in 1988, 26 times. In all these
instances, the account was overdrawn due to the
issuance of checks against insufficient funds. The
respondent had also signed several checks with a
different signature from the specimen on file for dubious
reasons.
When the respondent made the deposit on April 5, 1988,
it was obviously to cover for issuances made the previous
day against an insufficiently funded account. When his
Check No. 2434886 was presented for payment on April
4, 1988, he had already incurred an overdraft; hence,
petitioner bank rightfully dishonored the same for
insufficiency of funds.
After due proceedings, the court a quo rendered judgment
in favor of the respondent as it ordered the petitioner bank
and Villadelgado, jointly and severally, to pay the
respondent the amounts of P100,000.00 as moral
damages and P50,000.00 as exemplary damages and
costs of suit. In so ruling, the court a quo also cited
petitioner banks rules and regulations which state that a
charge of P10.00 shall be levied against the depositor for
any check that is taken up as a returned item due to
insufficiency of funds on the date of receipt from the
clearing office even if said check is honored and/or
covered by sufficient deposit the following banking day.
The same rules and regulations also provide that a check
returned for insufficiency of funds for any reason of similar
import may be subsequently recleared for one more time
only, subject to the same charges.
According to the court a quo, following these rules and
regulations, the respondent, as depositor, had the right to
put up sufficient funds for a check that was taken as a
returned item for insufficient funds the day following the
receipt of said check from the clearing office. In fact, the
said check could still be recleared for one more time. In
previous instances, petitioner bank notified the
respondent when he incurred an overdraft and he would
then deposit sufficient funds the following day to cover the
overdraft. Petitioner bank thus acted unjustifiably when it
immediately closed the respondents account on April 4,
1988 and deprived him of the opportunity to reclear his
check or deposit sufficient funds therefor the following
day.
As a result of the closure of his current account, several
of the respondents checks were subsequently dishonored
and because of this, the respondent was humiliated,
embarrassed and lost his credit standing in the business
community. The court a quo further ratiocinated that even
granting arguendo that petitioner bank had the right to
close the respondents account, the manner which
attended the closure constituted an abuse of the
said right. Citing Article 19 of the Civil Code of the
Philippines which states that [e]very person must, in the
exercise of his rights and in the performance of his duties,
47
act with justice, give everyone his due, and observe
honesty and good faith and Article 20 thereof which states
that [e]very person who, contrary to law, wilfully or
negligently causes damage to another, shall indemnify
the latter for the same, the court a quo adjudged petitioner
bank of acting in bad faith. It held that, under the foregoing
circumstances, the respondent is entitled to an award of
moral and exemplary damages.
The decretal portion of the court a quos decision reads:
WHEREFORE, PREMISES CONSIDERED, judgment is
hereby rendered:
1. Ordering the defendants [petitioner bank and
Villadelgado], jointly and severally, to pay plaintiff [the
respondent] the sum of P100,000.00 as moral damages;
2. Ordering the defendants, jointly and severally, to pay
plaintiff the sum of P50,000.00 as exemplary damages
plus costs and expenses of the suit; and
3. Dismissing [the] defendants counterclaim for lack of
merit.
SO ORDERED.[4]
On appeal, the CA rendered the Decision dated August
30, 2002, affirming with modification the decision of the
court a quo.
The appellate court substantially affirmed the factual
findings of the court a quo as it held that petitioner bank
unjustifiably closed the respondents account
notwithstanding that its own rules and regulations
allow that a check returned for insufficiency of funds or
any reason of similar import, may be subsequently
recleared for one more time, subject to standard charges.
Like the court a quo, the appellate court observed that in
several instances in previous years, petitioner bank would
inform the respondent when he incurred an overdraft and
allowed him to make a timely deposit to fund the checks
that were initially dishonored for insufficiency of funds.
However, on April 4, 1988, petitioner bank immediately
closed the respondents account without even notifying
him that he had incurred an overdraft. Even when they
had already closed his account on April 4, 1988, petitioner
bank still accepted the deposit that the respondent made
on April 5, 1988, supposedly to cover his checks.
Echoing the reasoning of the court a quo, the CA declared
that even as it may be conceded that petitioner bank had
reserved the right to close an account for repeated
overdrafts by the respondent, the exercise of that right
must never be despotic or arbitrary. That petitioner bank
chose to close the account outright and return the check,
even after accepting a deposit sufficient to cover the said
check, is contrary to its duty to handle the respondents
account with utmost fidelity. The exercise of the right is
not absolute and good faith, at least, is required. The
manner by which petitioner bank closed the account of the
respondent runs afoul of Article 19 of the Civil Code which
enjoins every person, in the exercise of his rights, to give
every one his due, and observe honesty and good faith.
The CA concluded that petitioner banks precipitate and
imprudent closure of the respondents account had
caused him, a respected officer of several civic and
banking associations, serious anxiety and humiliation. It
had, likewise, tainted his credit standing. Consequently,
the award of damages is warranted. The CA, however,
reduced the amount of damages awarded by the court a
quo as it found the same to be excessive:
We, however, find excessive the amount of damages
awarded by the RTC. In our view the reduced amount of
P75,000.00 as moral damages and P25,000.00 as
exemplary damages are in order. Awards for damages
are not meant to enrich the plaintiff-appellee [the
respondent] at the expense of defendants-appellants [the
petitioners], but to obviate the moral suffering he has
undergone. The award is aimed at the restoration, within
limits possible, of the status quo ante, and should be
proportionate to the suffering inflicted.[5]
The dispositive portion of the assailed CA decision reads:
WHEREFORE, the decision appealed from is hereby
AFFIRMED, subject to the MODIFICATION that the
award of moral damages is reduced to P75,000.00 and
the award of exemplary damages reduced to P25,000.00.
SO ORDERED.[6]
Petitioner bank sought the reconsideration of the said
decision but in the assailed Resolution dated January 17,
2003, the appellate court denied its motion. Hence, the
recourse to this Court.
Petitioner bank maintains that, in closing the account of
the respondent in the evening of April 4, 1988, it acted in
good faith and in accordance with the rules and
regulations governing the operation of a
48
regular demand deposit which reserves to the bank the
right to close an account if the depositor frequently draws
checks against insufficient funds and/or uncollected
deposits. The same rules and regulations also provide
that the depositor is not entitled, as a matter of right, to
overdraw on this deposit and the bank reserves the right
at any time to return checks of the depositor which are
drawn against insufficient funds or for any reason.
It cites the numerous instances that the respondent had
overdrawn his account and those instances where he
deliberately signed checks using a signature different
from the specimen on file. Based on these facts, petitioner
bank was constrained to close the respondents account
for improper and irregular handling and returned his
Check No. 2434886 which was presented to the bank for
payment on April 4, 1988.
Petitioner bank further posits that there is no law or rule
which gives the respondent a legal right to make good his
check or to deposit the corresponding amount to cover
said check within 24 hours after the same is dishonored
or returned by the bank for having been drawn against
insufficient funds. It vigorously denies having violated
Article 19 of the Civil Code as it insists that it acted in good
faith and in accordance with the pertinent banking rules
and regulations.
The petition is impressed with merit.
A perusal of the respective decisions of the court a quo
and the appellate court show that the award of damages
in the respondents favor was anchored mainly on Article
19 of the Civil Code which, quoted anew below, reads:
Art. 19. Every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
The elements of abuse of rights are the following: (a) the
existence of a legal right or duty; (b) which is exercised in
bad faith; and (c) for the sole intent of prejudicing or
injuring another.[7] Malice or bad faith is at the core of the
said provision.[8] The law always presumes good faith
and any person who seeks to be awarded damages due
to acts of another has the burden of proving that the latter
acted in bad faith or with ill-motive.[9] Good faith refers to
the state of the mind which is manifested by the acts of
the individual concerned. It consists of the intention to
abstain from taking an unconscionable and unscrupulous
advantage of another.[10] Bad faith does not simply
connote bad judgment or simple negligence, dishonest
purpose or some moral obliquity and conscious doing of
a wrong, a breach of known duty due to some motives or
interest or ill-will that partakes of the nature of fraud.[11]
Malice connotes ill-will or spite and speaks not in
response to duty. It implies an intention to do ulterior and
unjustifiable harm. Malice is bad faith or bad motive.[12]
Undoubtedly, petitioner bank has the right to close the
account of the respondent based on the following
provisions of its Rules and Regulations Governing the
Establishment and Operation of Regular Demand
Deposits:
10) The Bank reserves the right to close an account if
the depositor frequently draws checks against insufficient
funds and/or uncollected deposits.
12)
However, it is clearly understood that the depositor is not
entitled, as a matter of right, to overdraw on this deposit
and the bank reserves the right at any time to return
checks of the depositor which are drawn against
insufficient funds or for any other reason.
The facts, as found by the court a quo and the appellate
court, do not establish that, in the exercise of this right,
petitioner bank committed an abuse thereof. Specifically,
the second and third elements for abuse of rights are not
attendant in the present case. The evidence presented by
petitioner bank negates the existence of bad faith or
malice on its part in closing the respondents account on
April 4, 1988 because on the said date the same was
already overdrawn. The respondent issued four checks,
all due on April 4, 1988, amounting to P7,410.00 when the
balance of his current account deposit was only
P6,981.43. Thus, he incurred an overdraft of P428.57
which resulted in the dishonor of his Check No. 2434886.
Further, petitioner bank showed that in 1986, the current
account of the respondent was overdrawn 156 times due
to his issuance of checks against insufficient funds.[13] In
1987, the said account was overdrawn 117 times for the
same
reason.[14] Again, in 1988, 26 times.[15] There were also
several instances when the respondent issued checks
deliberately using a signature different from his specimen
signature on file with petitioner bank.[16] All these
circumstances taken together justified the petitioner
banks closure of the respondents account on April 4, 1988
for improper handling.
It is observed that nowhere under its rules and regulations
is petitioner bank required to notify the respondent, or any
depositor for that matter, of the closure of the account for
frequently drawing checks against insufficient funds. No
malice or bad faith could be imputed on petitioner bank
for so acting since the records bear out that the
respondent had indeed been improperly and irregularly
handling his account not just a few times but hundreds of
times. Under the circumstances, petitioner bank could not
be faulted for exercising its right in accordance with the
express rules and regulations governing the current
accounts of its depositors. Upon the opening of his
account, the respondent had agreed to be bound by these
terms and conditions.
49
Neither the fact that petitioner bank accepted the deposit 2003 of the Court of Appeals in CA-G.R. CV No. 36627
made by the respondent the day following the closure of are REVERSED AND SET ASIDE.
his account constitutes bad faith or malice on the part of
petitioner bank. The same could be characterized as
simple negligence by its personnel. Said act, by itself, is
not constitutive of bad faith.

The respondent had thus failed to discharge his burden of

proving bad faith on the part of petitioner bank or that it
was motivated by ill-will or spite in closing his account on
April 4, 1988 and in inadvertently accepting his deposit on
April 5, 1988.

Further, it has not been shown that these acts were done
by petitioner bank with the sole intention of prejudicing
and injuring the respondent. It is conceded that the
respondent may have suffered damages as a result of the
closure of his current account. However, there is a
material distinction between damages and injury. The
Court had the occasion to explain the distinction between
damages and injury in this wise:

Injury is the illegal invasion of a legal right; damage is the

loss, hurt or harm which results from the injury; and
damages are the recompense or compensation awarded
for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm
was not the result of a violation of a legal duty. In such
cases, the consequences must be borne by the injured
person alone, the law affords no remedy for damages
resulting from an act which does not amount to a legal
injury or wrong. These situations are often called damnum
absque injuria.

In other words, in order that a plaintiff may maintain an

action for the injuries of which he complains, he must
establish that such injuries resulted from a breach of duty
which the defendant owed to the plaintiff a concurrence of
injury to the plaintiff and legal responsibility by the person
causing it. The underlying basis for the award of tort
damages is the premise that the individual was injured in
contemplation of law. Thus, there must first be a breach
of some duty and the imposition of liability for that breach
before damages may be awarded; and the breach of such
duty should be the proximate cause of the injury.[17]

Whatever damages the respondent may have suffered as

a consequence, e.g., dishonor of his other insufficiently
funded checks, would have to be borne by him alone. It
was the respondents repeated improper

and irregular handling of his account which constrained

petitioner bank to close the same in accordance with the
rules and regulations governing its depositors current
accounts. The respondents case is clearly one of
damnum absque injuria.

WHEREFORE, the petition is GRANTED. The Decision

dated August 30, 2002 and Resolution dated January 17,

50
ERNESTO RAMAS UYPITCHING and RAMAS
UYPITCHING SONS, INC., petitioners,
vs.
ERNESTO QUIAMCO, respondent.
Honeste vivere, non alterum laedere et jus suum cuique
tribuere. To live virtuously, not to injure others and to give
everyone his due. These supreme norms of justice are the
underlying principles of law and order in society. We
reaffirm them in this petition for review on certiorari
assailing the July 26, 2000 decision1 and October 18,
2000 resolution of the Court of Appeals (CA) in CA-G.R.
CV No. 47571.
In 1982, respondent Ernesto C. Quiamco was
approached by Juan Davalan,2 Josefino Gabutero and
Raul Generoso to amicably settle the civil aspect of a
criminal case for robbery3 filed by Quiamco against them.
They surrendered to him a red Honda XL-100 motorcycle
and a photocopy of its certificate of registration.
Respondent asked for the original certificate of
registration but the three accused never came to see him
again. Meanwhile, the motorcycle was parked in an open
space inside respondents business establishment,
Avesco-AVNE Enterprises, where it was visible and
accessible to the public.
It turned out that, in October 1981, the motorcycle had
been sold on installment basis to Gabutero by petitioner
Ramas Uypitching Sons, Inc., a family-owned corporation
managed by petitioner Atty. Ernesto Ramas Uypitching.
To secure its payment, the motorcycle was mortgaged to
petitioner corporation.4
When Gabutero could no longer pay the installments,
Davalan assumed the obligation and continued the
payments. In September 1982, however, Davalan
stopped paying the remaining installments and told
petitioner corporations collector, Wilfredo Verao, that
the motorcycle had allegedly been "taken by respondents
men."
Nine years later, on January 26, 1991, petitioner
Uypitching, accompanied by policemen,5 went to Avesco-
AVNE Enterprises to recover the motorcycle. The leader
of the police team, P/Lt. Arturo Vendiola, talked to the
clerk in charge and asked for respondent. While P/Lt.
Vendiola and the clerk were talking, petitioner Uypitching
paced back and forth inside the establishment uttering
"Quiamco is a thief of a motorcycle."
On learning that respondent was not in Avesco-AVNE
Enterprises, the policemen left to look for respondent in
his residence while petitioner Uypitching stayed in the
establishment to take photographs of the motorcycle.
Unable to find respondent, the policemen went back to
Avesco-AVNE Enterprises and, on petitioner Uypitchings
instruction and over the clerks objection, took the
motorcycle.
On February 18, 1991, petitioner Uypitching filed a
criminal complaint for qualified theft and/or violation of the
Anti-Fencing Law6 against respondent in the Office of the
City Prosecutor of Dumaguete City.7 Respondent moved
for dismissal because the complaint did not charge an
offense as he had neither stolen nor bought the
motorcycle. The Office of the City Prosecutor dismissed
the complaint8 and denied petitioner Uypitchings
subsequent motion for reconsideration.
Respondent filed an action for damages against
petitioners in the RTC of Dumaguete City, Negros
Oriental, Branch 37.9 He sought to hold the petitioners
liable for the following: (1) unlawful taking of the
motorcycle; (2) utterance of a defamatory remark (that
respondent was a thief) and (3) precipitate filing of a
baseless and malicious complaint. These acts humiliated
and embarrassed the respondent and injured his
reputation and integrity.
On July 30, 1994, the trial court rendered a decision10
finding that petitioner Uypitching was motivated with
malice and ill will when he called respondent a thief, took
the motorcycle in an abusive manner and filed a baseless
complaint for qualified theft and/or violation of the Anti-
Fencing Law. Petitioners acts were found to be contrary
to Articles 1911 and 2012 of the Civil Code. Hence, the
trial court held petitioners liable to respondent for
P500,000 moral damages, P200,000 exemplary
damages and P50,000 attorneys fees plus costs.
Petitioners appealed the RTC decision but the CA
affirmed the trial courts decision with modification,
reducing the award of moral and exemplary damages to
P300,000 and P100,000, respectively.13 Petitioners
sought reconsideration but it was denied. Thus, this
petition.
In their petition and memorandum, petitioners submit that
the sole (allegedly) issue to be resolved here is whether
the filing of a complaint for qualified theft and/or violation
of the Anti-Fencing Law in the Office of the City
Prosecutor warranted the award of moral damages,
exemplary damages, attorneys fees and costs in favor of
respondent.
Petitioners suggestion is misleading. They were held
liable for damages not only for instituting a groundless
complaint against respondent but also for making a
slanderous remark and for taking the motorcycle from
respondents establishment in an abusive manner.
Correctness of the Findings of the RTC and CA
As they never questioned the findings of the RTC and CA
that malice and ill will attended not only the public
imputation of a crime to respondent14 but also the taking
of the motorcycle, petitioners were deemed to have
51
accepted the correctness of such findings. This alone was
sufficient to hold petitioners liable for damages to
respondent.
Nevertheless, to address petitioners concern, we also
find that the trial and appellate courts correctly ruled that
the filing of the complaint was tainted with malice and bad
faith. Petitioners themselves in fact described their action
as a "precipitate act."15 Petitioners were bent on
portraying respondent as a thief. In this connection, we
quote with approval the following findings of the RTC, as
adopted by the CA:
x x x There was malice or ill-will [in filing the complaint
before the City Prosecutors Office] because Atty. Ernesto
Ramas Uypitching knew or ought to have known as he is
a lawyer, that there was no probable cause at all for filing
a criminal complaint for qualified theft and fencing activity
against [respondent]. Atty. Uypitching had no personal
knowledge that [respondent] stole the motorcycle in
question. He was merely told by his bill collector ([i.e.] the
bill collector of Ramas Uypitching Sons, Inc.)[,] Wilfredo
Verao[,] that Juan Dabalan will [no longer] pay the
remaining installment(s) for the motorcycle because the
motorcycle was taken by the men of [respondent]. It must
be noted that the term used by Wilfredo Verao in
informing Atty. Ernesto Ramas Uypitching of the refusal
of Juan Dabalan to pay for the remaining installment was
[]taken[], not []unlawfully taken[] or stolen. Yet, despite
the double hearsay, Atty. Ernesto Ramas Uypitching not
only executed the [complaint-affidavit] wherein he named
[respondent] as the suspect of the stolen motorcycle but
also charged [respondent] of qualified theft and fencing
activity before the City [Prosecutors] Office of
Dumaguete. The absence of probable cause necessarily
signifies the presence of malice. What is deplorable in all
these is that Juan Dabalan, the owner of the motorcycle,
did not accuse [respondent] or the latters men of stealing
the motorcycle[,] much less bother[ed] to file a case for
qualified theft before the authorities. That Atty.
Uypitchings act in charging [respondent] with qualified
theft and fencing activity is tainted with malice is also
shown by his answer to the question of Cupid Gonzaga16
[during one of their conversations] - "why should you still
file a complaint? You have already recovered the
motorcycle"[:] "Aron motagam ang kawatan ug motor."
("To teach a lesson to the thief of motorcycle.")17
Moreover, the existence of malice, ill will or bad faith is a
factual matter. As a rule, findings of fact of the trial court,
when affirmed by the appellate court, are conclusive on
this Court. We see no compelling reason to reverse the
findings of the RTC and the CA.
Petitioners Abused Their Right of Recovery
Mortgagee(s)
Petitioners claim that they should not be held liable for
petitioner corporations exercise of its right as seller-
mortgagee to recover the mortgaged vehicle preliminary
to the enforcement of its right to foreclose on the
mortgage in case of default. They are clearly mistaken.
True, a mortgagee may take steps to recover the
mortgaged property to enable it to enforce or protect its
foreclosure right thereon. There is, however, a well-
defined procedure for the recovery of possession of
mortgaged property: if a mortgagee is unable to obtain
possession of a mortgaged property for its sale on
foreclosure, he must bring a civil action either to recover
such possession as a preliminary step to the sale, or to
obtain judicial foreclosure.18
Petitioner corporation failed to bring the proper civil action
necessary to acquire legal possession of the motorcycle.
Instead, petitioner Uypitching descended on respondents
establishment with his policemen and ordered the seizure
of the motorcycle without a search warrant or court order.
Worse, in the course of the illegal seizure of the
motorcycle, petitioner Uypitching even mouthed a
slanderous statement.
No doubt, petitioner corporation, acting through its co-
petitioner Uypitching, blatantly disregarded the lawful
procedure for the enforcement of its right, to the prejudice
of respondent. Petitioners acts violated the law as well as
public morals, and transgressed the proper norms of
human relations.
The basic principle of human relations, embodied in
Article 19 of the Civil Code, provides:
Art. 19. Every person must in the exercise of his rights
and in the performance of his duties, act with justice, give
every one his due, and observe honesty and good faith.
Article 19, also known as the "principle of abuse of right,"
prescribes that a person should not use his right unjustly
or contrary to honesty and good faith, otherwise he opens
himself to liability.19 It seeks to preclude the use of, or the
tendency to use, a legal right (or duty) as a means to
unjust ends.
There is an abuse of right when it is exercised solely to
prejudice or injure another.20 The exercise of a right must
be in accordance with the purpose for which it was
established and must not be excessive or unduly harsh;
there must be no intention to harm another.21 Otherwise,
liability for damages to the injured party will attach.
as
In this case, the manner by which the motorcycle was
taken at petitioners instance was not only attended by
bad faith but also contrary to the procedure laid down by
law. Considered in conjunction with the defamatory
statement, petitioners exercise of the right to recover the
mortgaged vehicle was utterly prejudicial and injurious to
respondent. On the other hand, the precipitate act of filing
52
an unfounded complaint could not in any way be
considered to be in accordance with the purpose for which
the right to prosecute a crime was established. Thus, the
totality of petitioners actions showed a calculated design
to embarrass, humiliate and publicly ridicule respondent.
Petitioners acted in an excessively harsh fashion to the
prejudice of respondent. Contrary to law, petitioners
willfully caused damage to respondent. Hence, they
should indemnify him.22

WHEREFORE, the petition is hereby DENIED. The July

26, 2000 decision and October 18, 2000 resolution of the
Court of Appeals in CA-G.R. CV No. 47571 are
AFFIRMED.

Triple costs against petitioners, considering that petitioner

Ernesto Ramas Uypitching is a lawyer and an officer of
the court, for his improper behavior.

SO ORDERED.

53

ERNESTO RAMAS UYPITCHING and RAMAS
UYPITCHING SONS, INC., petitioners,
vs.
ERNESTO QUIAMCO, respondent.
Honeste vivere, non alterum laedere et jus suum cuique
tribuere. To live virtuously, not to injure others and to give
everyone his due. These supreme norms of justice are the
underlying principles of law and order in society. We
reaffirm them in this petition for review on certiorari
assailing the July 26, 2000 decision1 and October 18,
2000 resolution of the Court of Appeals (CA) in CA-G.R.
CV No. 47571.
In 1982, respondent Ernesto C. Quiamco was
approached by Juan Davalan,2 Josefino Gabutero and
Raul Generoso to amicably settle the civil aspect of a
criminal case for robbery3 filed by Quiamco against them.
They surrendered to him a red Honda XL-100 motorcycle
and a photocopy of its certificate of registration.
Respondent asked for the original certificate of
registration but the three accused never came to see him
again. Meanwhile, the motorcycle was parked in an open
space inside respondents business establishment,
Avesco-AVNE Enterprises, where it was visible and
accessible to the public.
It turned out that, in October 1981, the motorcycle had
been sold on installment basis to Gabutero by petitioner
Ramas Uypitching Sons, Inc., a family-owned corporation
managed by petitioner Atty. Ernesto Ramas Uypitching.
To secure its payment, the motorcycle was mortgaged to
petitioner corporation.4
When Gabutero could no longer pay the installments,
Davalan assumed the obligation and continued the
payments. In September 1982, however, Davalan
stopped paying the remaining installments and told
petitioner corporations collector, Wilfredo Verao, that
the motorcycle had allegedly been "taken by respondents
men."
Nine years later, on January 26, 1991, petitioner
Uypitching, accompanied by policemen,5 went to Avesco-
AVNE Enterprises to recover the motorcycle. The leader
of the police team, P/Lt. Arturo Vendiola, talked to the
clerk in charge and asked for respondent. While P/Lt.
Vendiola and the clerk were talking, petitioner Uypitching
paced back and forth inside the establishment uttering
"Quiamco is a thief of a motorcycle."
On learning that respondent was not in Avesco-AVNE
Enterprises, the policemen left to look for respondent in
his residence while petitioner Uypitching stayed in the
establishment to take photographs of the motorcycle.
Unable to find respondent, the policemen went back to
Avesco-AVNE Enterprises and, on petitioner Uypitchings
instruction and over the clerks objection, took the
motorcycle.
On February 18, 1991, petitioner Uypitching filed a
criminal complaint for qualified theft and/or violation of the
Anti-Fencing Law6 against respondent in the Office of the
City Prosecutor of Dumaguete City.7 Respondent moved
for dismissal because the complaint did not charge an
offense as he had neither stolen nor bought the
motorcycle. The Office of the City Prosecutor dismissed
the complaint8 and denied petitioner Uypitchings
subsequent motion for reconsideration.
Respondent filed an action for damages against
petitioners in the RTC of Dumaguete City, Negros
Oriental, Branch 37.9 He sought to hold the petitioners
liable for the following: (1) unlawful taking of the
motorcycle; (2) utterance of a defamatory remark (that
respondent was a thief) and (3) precipitate filing of a
baseless and malicious complaint. These acts humiliated
and embarrassed the respondent and injured his
reputation and integrity.
On July 30, 1994, the trial court rendered a decision10
finding that petitioner Uypitching was motivated with
malice and ill will when he called respondent a thief, took
the motorcycle in an abusive manner and filed a baseless
complaint for qualified theft and/or violation of the Anti-
Fencing Law. Petitioners acts were found to be contrary
to Articles 1911 and 2012 of the Civil Code. Hence, the
trial court held petitioners liable to respondent for
P500,000 moral damages, P200,000 exemplary
damages and P50,000 attorneys fees plus costs.
Petitioners appealed the RTC decision but the CA
affirmed the trial courts decision with modification,
reducing the award of moral and exemplary damages to
P300,000 and P100,000, respectively.13 Petitioners
sought reconsideration but it was denied. Thus, this
petition.
In their petition and memorandum, petitioners submit that
the sole (allegedly) issue to be resolved here is whether
the filing of a complaint for qualified theft and/or violation
of the Anti-Fencing Law in the Office of the City
Prosecutor warranted the award of moral damages,
exemplary damages, attorneys fees and costs in favor of
respondent.
Petitioners suggestion is misleading. They were held
liable for damages not only for instituting a groundless
complaint against respondent but also for making a
slanderous remark and for taking the motorcycle from
respondents establishment in an abusive manner.
Correctness of the Findings of the RTC and CA
54
As they never questioned the findings of the RTC and CA
that malice and ill will attended not only the public
imputation of a crime to respondent14 but also the taking
of the motorcycle, petitioners were deemed to have
accepted the correctness of such findings. This alone was
sufficient to hold petitioners liable for damages to
respondent.
Nevertheless, to address petitioners concern, we also
find that the trial and appellate courts correctly ruled that
the filing of the complaint was tainted with malice and bad
faith. Petitioners themselves in fact described their action
as a "precipitate act."15 Petitioners were bent on
portraying respondent as a thief. In this connection, we
quote with approval the following findings of the RTC, as
adopted by the CA:
x x x There was malice or ill-will [in filing the complaint
before the City Prosecutors Office] because Atty. Ernesto
Ramas Uypitching knew or ought to have known as he is
a lawyer, that there was no probable cause at all for filing
a criminal complaint for qualified theft and fencing activity
against [respondent]. Atty. Uypitching had no personal
knowledge that [respondent] stole the motorcycle in
question. He was merely told by his bill collector ([i.e.] the
bill collector of Ramas Uypitching Sons, Inc.)[,] Wilfredo
Verao[,] that Juan Dabalan will [no longer] pay the
remaining installment(s) for the motorcycle because the
motorcycle was taken by the men of [respondent]. It must
be noted that the term used by Wilfredo Verao in
informing Atty. Ernesto Ramas Uypitching of the refusal
of Juan Dabalan to pay for the remaining installment was
[]taken[], not []unlawfully taken[] or stolen. Yet, despite
the double hearsay, Atty. Ernesto Ramas Uypitching not
only executed the [complaint-affidavit] wherein he named
[respondent] as the suspect of the stolen motorcycle but
also charged [respondent] of qualified theft and fencing
activity before the City [Prosecutors] Office of
Dumaguete. The absence of probable cause necessarily
signifies the presence of malice. What is deplorable in all
these is that Juan Dabalan, the owner of the motorcycle,
did not accuse [respondent] or the latters men of stealing
the motorcycle[,] much less bother[ed] to file a case for
qualified theft before the authorities. That Atty.
Uypitchings act in charging [respondent] with qualified
theft and fencing activity is tainted with malice is also
shown by his answer to the question of Cupid Gonzaga16
[during one of their conversations] - "why should you still
file a complaint? You have already recovered the
motorcycle"[:] "Aron motagam ang kawatan ug motor."
("To teach a lesson to the thief of motorcycle.")17
Moreover, the existence of malice, ill will or bad faith is a
factual matter. As a rule, findings of fact of the trial court,
when affirmed by the appellate court, are conclusive on
this Court. We see no compelling reason to reverse the
findings of the RTC and the CA.
Petitioners Abused Their Right of Recovery as
Mortgagee(s)
Petitioners claim that they should not be held liable for
petitioner corporations exercise of its right as seller-
mortgagee to recover the mortgaged vehicle preliminary
to the enforcement of its right to foreclose on the
mortgage in case of default. They are clearly mistaken.
True, a mortgagee may take steps to recover the
mortgaged property to enable it to enforce or protect its
foreclosure right thereon. There is, however, a well-
defined procedure for the recovery of possession of
mortgaged property: if a mortgagee is unable to obtain
possession of a mortgaged property for its sale on
foreclosure, he must bring a civil action either to recover
such possession as a preliminary step to the sale, or to
obtain judicial foreclosure.18
Petitioner corporation failed to bring the proper civil action
necessary to acquire legal possession of the motorcycle.
Instead, petitioner Uypitching descended on respondents
establishment with his policemen and ordered the seizure
of the motorcycle without a search warrant or court order.
Worse, in the course of the illegal seizure of the
motorcycle, petitioner Uypitching even mouthed a
slanderous statement.
No doubt, petitioner corporation, acting through its co-
petitioner Uypitching, blatantly disregarded the lawful
procedure for the enforcement of its right, to the prejudice
of respondent. Petitioners acts violated the law as well as
public morals, and transgressed the proper norms of
human relations.
The basic principle of human relations, embodied in
Article 19 of the Civil Code, provides:
Art. 19. Every person must in the exercise of his rights
and in the performance of his duties, act with justice, give
every one his due, and observe honesty and good faith.
Article 19, also known as the "principle of abuse of right,"
prescribes that a person should not use his right unjustly
or contrary to honesty and good faith, otherwise he opens
himself to liability.19 It seeks to preclude the use of, or the
tendency to use, a legal right (or duty) as a means to
unjust ends.
There is an abuse of right when it is exercised solely to
prejudice or injure another.20 The exercise of a right must
be in accordance with the purpose for which it was
established and must not be excessive or unduly harsh;
there must be no intention to harm another.21 Otherwise,
liability for damages to the injured party will attach.
In this case, the manner by which the motorcycle was
taken at petitioners instance was not only attended by
bad faith but also contrary to the procedure laid down by
law. Considered in conjunction with the defamatory
55
statement, petitioners exercise of the right to recover the
mortgaged vehicle was utterly prejudicial and injurious to
respondent. On the other hand, the precipitate act of filing
an unfounded complaint could not in any way be
considered to be in accordance with the purpose for which
the right to prosecute a crime was established. Thus, the
totality of petitioners actions showed a calculated design
to embarrass, humiliate and publicly ridicule respondent.
Petitioners acted in an excessively harsh fashion to the
prejudice of respondent. Contrary to law, petitioners
willfully caused damage to respondent. Hence, they
should indemnify him.22

WHEREFORE, the petition is hereby DENIED. The July

26, 2000 decision and October 18, 2000 resolution of the
Court of Appeals in CA-G.R. CV No. 47571 are
AFFIRMED.

Triple costs against petitioners, considering that petitioner

Ernesto Ramas Uypitching is a lawyer and an officer of
the court, for his improper behavior.

SO ORDERED.

56
CALATAGAN GOLF CLUB, INC. v
SIXTO CLEMENTE, JR.,
Seeking the reversal of the Decision[1] dated 1 June 2004
of the Court of Appeals in CA-G.R. SP No. 62331 and the
reinstatement of the Decision dated 15 November 2000
of the Securities and Exchange Commission (SEC) in
SEC Case No. 04-98-5954, petitioner Calatagan Golf
Club, Inc. (Calatagan) filed this Rule 45 petition against
respondent Sixto Clemente, Jr. (Clemente).
The key facts are undisputed.
Clemente applied to purchase one share of stock of
Calatagan, indicating in his application for membership
his mailing address at Phimco Industries, Inc. P.O. Box
240, MCC, complete residential address, office and
residence telephone numbers, as well as the company
(Phimco) with which he was connected, Calatagan issued
to him Certificate of Stock No. A-01295 on 2 May 1990
after paying P120,000.00 for the share.[2]
Calatagan charges monthly dues on its members to meet
expenses for general operations, as well as costs for
upkeep and improvement of the grounds and facilities.
The provision on monthly dues is incorporated in
Calatagans Articles of Incorporation and By-Laws. It is
also reproduced at the back of each certificate of stock.[3]
As reproduced in the dorsal side of Certificate of Stock
No. A-01295, the provision reads:
5. The owners of shares of stock shall be subject to the
payment of monthly dues in an amount as may be
prescribed in the by-laws or by the Board of Directors
which shall in no case be less that [sic] P50.00 to meet
the expenses for the general operations of the club, and
the maintenance and improvement of its premises and
facilities, in addition to such fees as may be charged for
the actual use of the facilities x x x
When Clemente became a member the monthly charge
stood at P400.00. He paid P3,000.00 for his monthly dues
on 21 March 1991 and another P5,400.00 on 9 December
1991. Then he ceased paying the dues. At that point, his
balance amounted to P400.00.[4]
Ten (10) months later, Calatagan made the initial step to
collect Clementes back accounts by sending a demand
letter dated 21 September 1992. It was followed by a
second letter dated 22 October 1992. Both letters were
sent to Clementes mailing address as indicated in his
membership application but were sent back to sender with
the postal note that the address had been closed.[5]
Calatagan declared Clemente delinquent for having failed
to pay his monthly dues for more than sixty (60) days,
specifically P5,600.00 as of 31 October 1992. Calatagan
also included Clementes name in the list of delinquent
members posted on the clubs bulletin board. On 1
December 1992, Calatagans board of directors adopted
a resolution authorizing the foreclosure of shares of
delinquent members, including Clementes; and the public
auction of these shares.
On 7 December 1992, Calatagan sent a third and final
letter to Clemente, this time signed by its Corporate
Secretary, Atty. Benjamin Tanedo, Jr. The letter contains
a warning that unless Clemente settles his outstanding
dues, his share would be included among the delinquent
shares to be sold at public auction on 15 January 1993.
Again, this letter was sent to Clementes mailing address
that had already been closed.[6]
On 5 January 1993, a notice of auction sale was posted
on the Clubs bulletin board, as well as on the clubs
premises. The auction sale took place as scheduled on
15 January 1993, and Clementes share sold for
P64,000.[7] According to the Certificate of Sale issued by
Calatagan after the sale, Clementes share was
purchased by a Nestor A. Virata.[8] At the time of the sale,
Clementes accrued monthly dues amounted to
P5,200.00.[9] A notice of foreclosure of Clementes share
was published in the 26 May 1993 issue of the Business
World.[10]
Clemente learned of the sale of his share only in
November of 1997.[11] He filed a claim with the Securities
and Exchange Commission (SEC) seeking the restoration
of his shareholding in Calatagan with damages.
On 15 November 2000, the SEC rendered a decision
dismissing Clementes complaint. Citing Section 69 of the
Corporation Code which provides that the sale of shares
at an auction sale can only be questioned within six (6)
months from the date of sale, the SEC concluded that
Clementes claim, filed four (4) years after the sale, had
already prescribed. The SEC further held that Calatagan
had complied with all the requirements for a valid sale of
the subject share, Clemente having failed to inform
Calatagan that the address he had earlier supplied was
no longer his address. Clemente, the SEC ruled, had
acted in bad faith in assuming as he claimed that his non-
payment of monthly dues would merely render his share
inactive.
Clemente filed a petition for review with the Court of
Appeals. On 1 June 2004, the Court of Appeals
promulgated a decision reversing the SEC. The appellate
court restored Clementes one share with a directive to
Calatagan to issue in his a new share, and awarded to
Clemente a total of P400,000.00 in damages, less the
unpaid monthly dues of P5,200.00.
In rejecting the SECs finding that the action had
prescribed, the Court of Appeals cited the SECs own
ruling in SEC Case No. 4160, Caram v. Valley Golf
Country Club, Inc., that Section 69 of the Corporation
57
Code specifically refers to unpaid subscriptions to capital
stock, and not to any other debt of stockholders. With the
insinuation that Section 69 does not apply to unpaid
membership dues in non-stock corporations, the
appellate court employed Article 1140 of the Civil Code
as the proper rule of prescription. The provision sets the
prescription period of actions to recover movables at eight
(8) years.
The Court of Appeals also pointed out that since that
Calatagans first two demand letters had been returned to
it as sender with the notation about the closure of the
mailing address, it very well knew that its third and final
demand letter also sent to the same mailing address
would not be received by Clemente. It noted the by-law
requirement that within ten (10) days after the Board has
ordered the sale at auction of a members share of stock
for indebtedness, the Corporate Secretary shall notify the
owner thereof and advise the Membership Committee of
such fact. Finally, the Court of Appeals ratiocinated that a
person who is in danger of the imminent loss of his
property has the right to be notified and be given the
chance to prevent the loss.[12]
Hence, the present appeal.
Calatagan maintains that the action of Clemente had
prescribed pursuant to Section 69 of the Corporation
Code, and that the requisite notices under both the law
and the by-laws had been rendered to Clemente.
Section 69 of the Code provides that an action to recover
delinquent stock sold must be commenced by the filing of
a complaint within six (6) months from the date of sale. As
correctly pointed out by the Court of Appeals, Section 69
is part of Title VIII of the Code entitled Stocks and
Stockholders and refers specifically to unpaid
subscriptions to capital stock, the sale of which is
governed by the immediately preceding Section 68.
The Court of Appeals debunked both Calatagans and the
SECs reliance on Section 69 by citing another SEC ruling
in the case of Caram v. Valley Golf. In connection with
Section 69, Calatagan raises a peripheral point made in
the SECs Caram ruling. In Caram, the SEC, using as
take-off Section 6 of the Corporation Code which refers to
such rights, privileges or restrictions as may be stated in
the articles of incorporation, pointed out that the Articles
of Incorporation of Valley Golf does not impose any lien,
liability or restriction on the Golf Share [of Caram], but
only its (Valley Golfs) By-Laws does. Here, Calatagan
stresses that its own Articles of Incorporation does
provide that the monthly dues assessed on owners of
shares of the corporation, along with all other obligations
of the shareholders to the club, shall constitute a first lien
on the shares and in the event of delinquency such shares
may be ordered sold by the Board of Directors in the
manner provided in the By-Laws to satisfy said dues or
other obligations of the shareholders.[13] With its illative
but incomprehensible logic, Calatagan concludes that the
prescriptive period under Section 69 should also apply to
the sale of Clementes share as the lien that Calatagan
perceives to be a restriction is stated in the articles of
incorporation and not only in the by-laws.
We remain unconvinced.
There are fundamental differences that defy equivalence
or even analogy between the sale of delinquent stock
under Section 68 and the sale that occurred in this case.
At the root of the sale of delinquent stock is the non-
payment of the subscription price for the share of stock
itself. The stockholder or subscriber has yet to fully pay
for the value of the share or shares subscribed. In this
case, Clemente had already fully paid for the share in
Calatagan and no longer had any outstanding obligation
to deprive him of full title to his share. Perhaps the analogy
could have been made if Clemente had not yet fully paid
for his share and the non-stock corporation, pursuant to
an article or by-law provision designed to address that
situation, decided to sell such share as a consequence.
But that is not the case here, and there is no purpose for
us to apply Section 69 to the case at bar.
Calatagan argues in the alternative that Clementes suit is
barred by Article 1146 of the Civil Code which establishes
four (4) years as the prescriptive period for actions based
upon injury to the rights of the plaintiff on the hypothesis
that the suit is purely for damages. As a second
alternative still, Calatagan posits that Clementes action is
governed by Article 1149 of the Civil Code which sets five
(5) years as the period of prescription for all other actions
whose prescriptive periods are not fixed in the Civil Code
or in any other law. Neither article is applicable but Article
1140 of the Civil Code which provides that an action to
recover movables shall prescribe in eight (8) years.
Calatagans action is for the recovery of a share of stock,
plus damages.
Calatagans advertence to the fact that the constitution of
a lien on the members share by virtue of the explicit
provisions in its Articles of Incorporation and By-Laws is
relevant but ultimately of no help to its cause. Calatagans
Articles of Incorporation states that the dues, together
with all other obligations of members to the club, shall
constitute a first lien on the shares, second only to any
lien in favor of the national or local government, and in the
event of delinquency such shares may be ordered sold by
the Board of Directors in the manner provided in the By-
Laws to satisfy said dues or other obligations of the
stockholders.[14] In turn, there are several provisions in
the By-laws that govern the payment of dues, the lapse
into delinquency of the member, and the constitution and
execution on the lien. We quote these provisions:
ARTICLE XII MEMBERS ACCOUNT
SEC. 31. (a) Billing Members, Posting of Delinquent
Members The Treasurer shall bill al members monthly. As
soon as possible after the end of every month, a
58
statement showing the account of bill of a member for said
month will be prepared and sent to him. If the bill of any
member remains unpaid by the 20th of the month
following that in which the bill was incurred, the Treasurer
shall notify him that if his bill is not paid in full by the end
of the succeeding month his name will be posted as
delinquent the following day at the Clubhouse bulletin
board. While posted, a member, the immediate members
of his family, and his guests, may not avail of the facilities
of the Club.
(b) Members on the delinquent list for more than 60 days
shall be reported to the Board and their shares or the
shares of the juridical entities they represent shall
thereafter be ordered sold by the Board at auction to
satisfy the claims of the Club as provided for in Section 32
hereon. A member may pay his overdue account at any
time before the auction sale.
Sec. 32. Lien on Shares; Sale of Share at Auction- The
club shall have a first lien on every share of stock to
secure debts of the members to the Club. This lien shall
be annotated on the certificates of stock and may be
enforced by the Club in the following manner:
(a) Within ten (10) days after the Board has ordered the
sale at auction of a members share of stock for
indebtedness under Section 31(b) hereof, the Secretary
shall notify the owner thereof, and shall advise the
Membership Committee of such fact.
(b) The Membership Committee shall then notify all
applicants on the Waiting List and all registered
stockholders of the availability of a share of stock for sale
at auction at a specified date, time and place, and shall
post a notice to that effect in the Club bulletin board for at
least ten (10) days prior to the auction sale.
(c) On the date and hour fixed, the Membership
Committee shall proceed with the auction by viva voce
bidding and award the sale of the share of stock to the
highest bidder.
(d) The purchase price shall be paid by the winning bidder
to the Club within twenty-four (24) hours after the bidding.
The winning bidder or the representative in the case of a
juridical entity shall become a Regular Member upon
payment of the purchase price and issuance of a new
stock certificate in his name or in the name of the juridical
entity he represents. The proceeds of the sale shall be
paid by the Club to the selling stockholder after deducting
his obligations to the Club.
(e) If no bids be received or if the winning bidder fails to
pay the amount of this bid within twenty-four (24) hours
after the bidding, the auction procedures may be repeated
from time to time at the discretion of the Membership
Committee until the share of stock be sold.
(f) If the proceeds from the sale of the share of stock are
not sufficient to pay in full the indebtedness of the
member, the member shall continue to be obligated to the
Club for the unpaid balance. If the member whose share
of stock is sold fails or refuse to surrender the stock
certificate for cancellation, cancellation shall be effected
in the books of the Club based on a record of the
proceedings. Such cancellation shall render the
unsurrendered stock certificate null and void and notice to
this effect shall be duly published.
It is plain that Calatagan had endeavored to install a
clear and comprehensive procedure to govern the
payment of monthly dues, the declaration of a member as
delinquent, and the constitution of a lien on the shares
and its eventual public sale to answer for the members
debts. Under Section 91 of the Corporation Code,
membership in a non-stock corporation shall be
terminated in the manner and for the causes provided in
the articles of incorporation or the by-laws. The By-law
provisions are elaborate in explaining the manner and the
causes for the termination of membership in Calatagan,
through the execution on the lien of the share. The Court
is satisfied that the By-Laws, as written, affords due
protection to the member by assuring that the member
should be notified by the Secretary of the looming
execution sale that would terminate membership in the
club. In addition, the By-Laws guarantees that after the
execution sale, the proceeds of the sale would be
returned to the former member after deducting the
outstanding obligations. If followed to the letter, the
termination of membership under this procedure outlined
in the By-Laws would accord with substantial justice.
Yet, did Calatagan actually comply with the by-law
provisions when it sold Clementes share? The appellate
courts finding on this point warrants our approving
citation, thus:
In accordance with this provision, Calatagan sent the third
and final demand letter to Clemente on December 7,
1992. The letter states that if the amount of delinquency
is not paid, the share will be included among the
delinquent shares to be sold at public auction. This letter
was signed by Atty. Benjamin Tanedo, Jr., Calatagan
Golfs Corporate Secretary. It was again sent to
Clementes mailing address Phimco Industries Inc., P.O.
Box 240, MCC Makati. As expected, it was returned
because the post office box had been closed.
Under the By-Laws, the Corporate Secretary is tasked to
give or cause to be given, all notices required by law or
by these By-Laws. .. and keep a record of the addresses
of all stockholders. As quoted above, Sec. 32 (a) of the
By-Laws further provides that within ten (10) days after
the Board has ordered the sale at auction of a members
share of stock for indebtedness under Section 31 (b)
hereof, the Secretary shall notify the owner thereof and
shall advise the Membership Committee of such fact., The
records do not disclose what report the Corporate
59
Secretary transmitted to the Membership Committee to
comply with Section 32(a). Obviously, the reason for this
mandatory requirement is to give the Membership
Committee the opportunity to find out, before the share is
sold, if proper notice has been made to the shareholder
member.
We presume that the Corporate Secretary, as a lawyer is
knowledgeable on the law and on the standards of good
faith and fairness that the law requires. As custodian of
corporate records, he should also have known that the
first two letters sent to Clemente were returned because
the P.O. Box had been closed. Thus, we are surprised
given his knowledge of the law and of corporate records
that he would send the third and final letter Clementes last
chance before his share is sold and his membership lost
to the same P.O. Box that had been closed.
Calatagan argues that it exercised due diligence before
the foreclosure sale and sent several notices to
Clementes specified mailing address. We do not agree;
we cannot label as due diligence Calatagans act of
sending the December 7, 1992 letter to Clementes
mailing address knowing fully well that the P.O. Box had
been closed. Due diligence or good faith imposes upon
the Corporate Secretary the chief repository of all
corporate records the obligation to check Clementes other
address which, under the By-Laws, have to be kept on file
and are in fact on file. One obvious purpose of giving the
Corporate Secretary the duty to keep the addresses of
members on file is specifically for matters of this kind,
when the member cannot be reached through his or her
mailing address. Significantly, the Corporate Secretary
does not have to do the actual verification of other
addressees on record; a mere clerk can do the very
simple task of checking the files as in fact clerks actually
undertake these tasks. In fact, one telephone call to
Clementes phone numbers on file would have alerted him
of his impending loss.
Ultimately, the petition must fail because Calatagan had
failed to duly observe both the spirit and letter of its own
by-laws. The by-law provisions was clearly conceived to
afford due notice to the delinquent member of the
impending sale, and not just to provide an intricate faade
that would facilitate Calatagans sale of the share. But
then, the bad faith on Calatagans part is palpable. As
found by the Court of Appeals, Calatagan very well knew
that Clementes postal box to which it sent its previous
letters had already been closed, yet it persisted in sending
that final letter to the same postal box. What for? Just for
the exercise, it appears, as it had known very well that the
letter would never actually reach Clemente.
It is noteworthy that Clemente in his membership
application had provided his residential address along
with his residence and office telephone numbers. Nothing
in Section 32 of Calatagans By-Laws requires that the
final notice prior to the sale be made solely through the
members mailing address. Clemente cites our aphorism-
like pronouncement in Rizal Commercial Banking
Corporation v. Court of Appeals[15] that [a] simple
telephone call and an ounce of good faith x x x could have
prevented this present controversy. That memorable
observation is quite apt in this case.
Calatagans bad faith and failure to observe its own By-
Laws had resulted not merely in the loss of Clementes
privilege to play golf at its golf course and avail of its
amenities, but also in significant pecuniary damage to
him. For that loss, the only blame that could be thrown
Clementes way was his failure to notify Calatagan of the
closure of the P.O. Box. That lapse, if we uphold
Calatagan would cost Clemente a lot. But, in the first
place, does he deserve answerability for failing to notify
the club of the closure of the postal box? Indeed, knowing
as he did that Calatagan was in possession of his home
address as well as residence and office telephone
numbers, he had every reason to assume that the club
would not be at a loss should it need to contact him. In
addition, according to Clemente, he was not even aware
of the closure of the postal box, the maintenance of which
was not his responsibility but his employer Phimcos.
The utter bad faith exhibited by Calatagan brings into
operation Articles 19, 20 and 21 of the Civil Code,[16]
under the Chapter on Human Relations. These
provisions, which the Court of Appeals did apply,
enunciate a general obligation under law for every person
to act fairly and in good faith towards one another. A non-
stock corporation like Calatagan is not exempt from that
obligation in its treatment of its members. The obligation
of a corporation to treat every person honestly and in
good faith extends even to its shareholders or members,
even if the latter find themselves contractually bound to
perform certain obligations to the corporation. A certificate
of stock cannot be a charter of dehumanization.
We turn to the matter of damages. The award of actual
damages is of course warranted since Clemente has
sustained pecuniary injury by reason of Calatagans
wrongful violation of its own By-Laws. It would not be
feasible to deliver Clementes original Certificate of Stock
because it had already been cancelled and a new one
issued in its place in the name of the purchases at the
auction who was not impleaded in this case. However, the
Court of Appeals instead directed that Calatagan to issue
to Clemente a new certificate of stock. That sufficiently
redresses the actual damages sustained by Clemente.
After all, the certificate of stock is simply the evidence of
the share.
The Court of Appeals also awarded Clemente
P200,000.00 as moral damages, P100,000.00 as
exemplary damages, and P100,000.00 as attorneys fees.
We agree that the award of such damages is warranted.
The Court of Appeals cited Calatagan for violation of
Article 32 of the Civil Code, which allows recovery of
damages from any private individual who directly or
indirectly obstructs, defeats, violates or in any manner
60
impedes or impairs the right against deprivation of
property without due process of laws. The plain letter of
the provision squarely entitles Clemente to damages from
Calatagan. Even without Article 32 itself, Calatagan will
still be bound to pay moral and exemplary damages to
Clemente. The latter was able to duly prove that he had
sustained mental anguish, serious anxiety and wounded
feelings by reason of Calatagans acts, thereby entitling
him to moral damages under Article 2217 of the Civil
Code. Moreover, it is evident that Calatagans bad faith as
exhibited in the

course of its corporate actions warrants correction for the

public good, thereby justifying exemplary damages under
Article 2229 of the Civil Code.

WHEREFORE, the petition is DENIED. The Decision of

the Court of Appeals is AFFIRMED. Costs against
petitioner.

61
JOYCE V. ARDIENTE, Petitioner, v. SPOUSES JAVIER
AND MA. THERESA PASTORFIDE, CAGAYAN DE ORO
WATER DISTRICT AND GASPAR GONZALEZ,* JR.,
Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under
Rule 45 of the Rules of Court seeking to reverse and set
aside the Decision1 and Resolution2 of the Court of
Appeals (CA), dated August 28, 2003 and December 17,
2003, respectively, in CA-G.R. CV No. 73000. The CA
Decision affirmed with modification the August 15, 2001
Decision3 of the Regional Trial Court (RTC) of Cagayan
de Oro City, Branch 24, while the CA Resolution denied
petitioner's Motion for Reconsideration.
The facts, as summarized by the CA, are as follows:
[Herein petitioner] Joyce V. Ardiente and her husband Dr.
Roberto S. Ardiente are owners of a housing unit at Emily
Homes, Balulang, Cagayan de Oro City with a lot area of
one hundred fifty-three (153) square meters and covered
by Transfer Certificate of Title No. 69905.
On June 2, 1994, Joyce Ardiente entered into a
Memorandum of Agreement (Exh. B, pp. 470-473,
Records) selling, transferring and conveying in favor of
[respondent] Ma. Theresa Pastorfide all their rights and
interests in the housing unit at Emily Homes in
consideration of P70,000.00. The Memorandum of
Agreement carries a stipulation:
4. That the water and power bill of the subject property
shall be for the account of the Second Party (Ma. Theresa
Pastorfide) effective June 1, 1994. (Records, p. 47)
vis-a-vis Ma. Theresa Pastorfide's assumption of the
payment of the mortgage loan secured by Joyce Ardiente
from the National Home Mortgage (Records, Exh. A, pp.
468-469)
For four (4) years, Ma. Theresa's use of the water
connection in the name of Joyce Ardiente was never
questioned nor perturbed (T.S.N., October 31, 2000, pp.
7-8) until on March 12, 1999, without notice, the water
connection of Ma. Theresa was cut off. Proceeding to the
office of the Cagayan de Oro Water District (COWD) to
complain, a certain Mrs. Madjos told Ma. Theresa that she
was delinquent for three (3) months corresponding to the
months of December 1998, January 1999, and February
1999. Ma. Theresa argued that the due date of her
payment was March 18, 1999 yet (T.S.N., October 31,
2000, pp. 11-12). Mrs. Madjos later told her that it was at
the instance of Joyce Ardiente that the water line was cut
off (T.S.N., February 5, 2001, p. 31).
On March 15, 1999, Ma. Theresa paid the delinquent bills
(T.S.N., October 31, 2000, p. 12). On the same date,
through her lawyer, Ma. Theresa wrote a letter to the
COWD to explain who authorized the cutting of the water
line (Records, p. 160).
On March 18, 1999, COWD, through the general
manager, [respondent] Gaspar Gonzalez, Jr., answered
the letter dated March 15, 1999 and reiterated that it was
at the instance of Joyce Ardiente that the water line was
cut off (Records, p. 161).
Aggrieved, on April 14, 1999, Ma. Theresa Pastorfide
[and her husband] filed [a] complaint for damages [against
petitioner, COWD and its manager Gaspar Gonzalez]
(Records, pp. 2-6).
In the meantime, Ma. Theresa Pastorfide's water line was
only restored and reconnected when the [trial] court
issued a writ of preliminary mandatory injunction on
December 14, 1999 (Records, p. 237).4
After trial, the RTC rendered judgment holding as follows:
xxxx
In the exercise of their rights and performance of their
duties, defendants did not act with justice, gave plaintiffs
their due and observe honesty and good faith. Before
disconnecting the water supply, defendants COWD and
Engr. Gaspar Gonzales did not even send a
disconnection notice to plaintiffs as testified to by Engr.
Bienvenido Batar, in-charge of the Commercial
Department of defendant COWD. There was one though,
but only three (3) days after the actual disconnection on
March 12, 1999. The due date for payment was yet on
March 15. Clearly, they did not act with justice. Neither did
they observe honesty.
They should not have been swayed by the prodding of
Joyce V. Ardiente. They should have investigated first as
to the present ownership of the house. For doing the act
because Ardiente told them, they were negligent.
Defendant Joyce Ardiente should have requested before
the cutting off of the water supply, plaintiffs to pay. While
she attempted to tell plaintiffs but she did not have the
patience of seeing them. She knew that it was plaintiffs
who had been using the water four (4) years ago and not
hers. She should have been very careful. x x x5
62

The dispositive portion of the trial court's Decision reads,
thus:
WHEREFORE, premises considered, judgment is hereby
rendered ordering defendants [Ardiente, COWD and
Gonzalez] to pay jointly and severally plaintiffs, the
following sums:
(a) P200,000.00 for moral damages;
(b) 200,000.00 for exemplary damages; and
(c) 50,000.00 for attorney's fee.
The cross-claim of Cagayan de Oro Water District and
Engr. Gaspar Gonzales is hereby dismissed. The Court is
not swayed that the cutting off of the water supply of
plaintiffs was because they were influenced by defendant
Joyce Ardiente. They were negligent too for which they
should be liable.
SO ORDERED.6
Petitioner, COWD and Gonzalez filed an appeal with the
CA.
On August 28, 2003, the CA promulgated its assailed
Decision disposing as follows:
IN VIEW OF ALL THE FOREGOING, the appealed
decision is AFFIRMED, with the modification that the
awarded damages is reduced to P100,000.00 each for
moral and exemplary damages, while attorney's fees is
lowered to P25,000.00. Costs against appellants.
SO ORDERED.7
The CA ruled, with respect to petitioner, that she has a
legal duty to honor the possession and use of water line
by Ma. Theresa Pastorfide pursuant to their Memorandum
of Agreement and that when [petitioner] applied for its
disconnection, she acted in bad faith causing prejudice
and [injury to] Ma. Theresa Pastorfide.8
As to COWD and Gonzalez, the CA held that they failed
to give a notice of disconnection and derelicted in
reconnecting the water line despite payment of the unpaid
bills by the [respondent spouses Pastorfide].9
Petitioner, COWD and Gonzalez filed their respective
Motions for Reconsideration, but these were denied by
the CA in its Resolution dated December 17, 2003.
COWD and Gonzalez filed a petition for review on
certiorari with this Court, which was docketed as G.R. No.
161802. However, based on technical grounds and on the
finding that the CA did not commit any reversible error in
its assailed Decision, the petition was denied via a
Resolution10 issued by this Court on March 24, 2004.
COWD and Gonzalez filed a motion for reconsideration,
but the same was denied with finality through this Court's
Resolution11 dated June 28, 2004.
Petitioner, on the other hand, timely filed the instant
petition with the following Assignment of Errors:
7.1 HONORABLE COURT OF APPEALS (ALTHOUGH IT
HAS REDUCED THE LIABILITY INTO HALF) HAS STILL
COMMITTED GRAVE AND SERIOUS ERROR WHEN IT
UPHELD THE JOINT AND SOLIDARY LIABILITY OF
PETITIONER JOYCE V. ARDIENTE WITH CAGAYAN
DE ORO WATER DISTRICT (COWD) AND ENGR.
GASPAR D. GONZALES FOR THE LATTER'S FAILURE
TO SERVE NOTICE UPON RESPONDENTS SPOUSES
PASTORFIDE PRIOR TO THE ACTUAL
DISCONNECTION DESPITE EVIDENCE ADDUCED
DURING TRIAL THAT EVEN WITHOUT PETITIONER'S
REQUEST, COWD WAS ALREADY SET TO EFFECT
DISCONNECTION OF RESPONDENTS' WATER
SUPPLY DUE TO NON-PAYMENT OF ACCOUNT FOR
THREE (3) MONTHS.
7.2 THE HONORABLE COURT OF APPEALS
COMMITTED GRAVE AND SERIOUS ERROR WHEN IT
RULED TOTALLY AGAINST PETITIONER AND FAILED
TO FIND THAT RESPONDENTS ARE GUILTY OF
CONTRIBUTORY NEGLIGENCE WHEN THEY FAILED
TO PAY THEIR WATER BILLS FOR THREE MONTHS
AND TO MOVE FOR THE TRANSFER OF THE COWD
ACCOUNT IN THEIR NAME, WHICH WAS A
VIOLATION OF THEIR MEMORANDUM OF
AGREEMENT WITH PETITIONER JOYCE V.
ARDIENTE. RESPONDENTS LIKEWISE
DELIBERATELY FAILED TO EXERCISE DILIGENCE
OF A GOOD FATHER OF THE FAMILY TO MINIMIZE
THE DAMAGE UNDER ART. 2203 OF THE NEW CIVIL
CODE.
7.3 THE HONORABLE COURT OF APPEALS
SERIOUSLY ERRED WHEN IT DISREGARDED THE
FACT THAT RESPONDENT SPOUSES PASTORFIDE
ARE LIKEWISE BOUND TO OBSERVE ARTICLE 19 OF
THE NEW CIVIL CODE, i.e., IN THE EXERCISE OF
THEIR RIGHTS AND IN THE PERFORMANCE OF
THEIR DUTIES TO ACT WITH JUSTICE, GIVE
EVERYONE HIS DUE AND OBSERVE HONESTY AND
GOOD FAITH.
7.4 THE HONORABLE COURT OF APPEALS GRAVELY
ERRED WHEN IT GRANTED AN AWARD OF MORAL
AND EXEMPLARY DAMAGES AND ATTORNEY'S
FEES AS AGAINST PETITIONER ARDIENTE.12
63
At the outset, the Court noticed that COWD and
Gonzalez, who were petitioner's co-defendants before the
RTC and her co-appellants in the CA, were impleaded as
respondents in the instant petition. This cannot be done.
Being her co-parties before the RTC and the CA,
petitioner cannot, in the instant petition for review on
certiorari, make COWD and Gonzalez, adversary parties.
It is a grave mistake on the part of petitioner's counsel to
treat COWD and Gonzalez as respondents. There is no
basis to do so, considering that, in the first place, there is
no showing that petitioner filed a cross-claim against
COWD and Gonzalez. Under Section 2, Rule 9 of the
Rules of Court, a cross-claim which is not set up shall be
barred. Thus, for failing to set up a cross-claim against
COWD and Gonzalez before the RTC, petitioner is
already barred from doing so in the present petition.
More importantly, as shown above, COWD and
Gonzalez's petition for review on certiorari filed with this
Court was already denied with finality on June 28, 2004,
making the presently assailed CA Decision final and
executory insofar as COWD and Gonzalez are
concerned. Thus, COWD and Gonzalez are already
precluded from participating in the present petition. They
cannot resurrect their lost cause by filing pleadings this
time as respondents but, nonetheless, reiterating the
same prayer in their previous pleadings filed with the RTC
and the CA.
As to the merits of the instant petition, the Court likewise
noticed that the main issues raised by petitioner are
factual and it is settled that the resolution of factual issues
is the function of lower courts, whose findings on these
matters are received with respect and considered binding
by the Supreme Court subject only to certain exceptions,
none of which is present in this instant petition.13 This is
especially true when the findings of the RTC have been
affirmed by the CA as in this case.14
In any case, a perusal of the records at hand would readily
show that the instant petition lacks merit.
Petitioner insists that she should not be held liable for the
disconnection of respondent spouses' water supply,
because she had no participation in the actual
disconnection. However, she admitted in the present
petition that it was she who requested COWD to
disconnect the Spouses Pastorfide's water supply. This
was confirmed by COWD and Gonzalez in their cross-
claim against petitioner. While it was COWD which
actually discontinued respondent spouses' water supply,
it cannot be denied that it was through the instance of
petitioner that the Spouses Pastorfide's water supply was
disconnected in the first place.
It is true that it is within petitioner's right to ask and even
require the Spouses Pastorfide to cause the transfer of
the former's account with COWD to the latter's name
pursuant to their Memorandum of Agreement. However,
the remedy to enforce such right is not to cause the
disconnection of the respondent spouses' water supply.
The exercise of a right must be in accordance with the
purpose for which it was established and must not be
excessive or unduly harsh; there must be no intention to
harm another.15 Otherwise, liability for damages to the
injured party will attach.16 In the present case, intention
to harm was evident on the part of petitioner when she
requested for the disconnection of respondent spouses
water supply without warning or informing the latter of
such request. Petitioner claims that her request for
disconnection was based on the advise of COWD
personnel and that her intention was just to compel the
Spouses Pastorfide to comply with their agreement that
petitioner's account with COWD be transferred in
respondent spouses' name. If such was petitioner's only
intention, then she should have advised respondent
spouses before or immediately after submitting her
request for disconnection, telling them that her request
was simply to force them to comply with their obligation
under their Memorandum of Agreement. But she did not.
What made matters worse is the fact that COWD
undertook the disconnection also without prior notice and
even failed to reconnect the Spouses Pastorfides water
supply despite payment of their arrears. There was clearly
an abuse of right on the part of petitioner, COWD and
Gonzalez. They are guilty of bad faith.
The principle of abuse of rights as enshrined in Article 19
of the Civil Code provides that 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.
In this regard, the Court's ruling in Yuchengco v. The
Manila Chronicle Publishing Corporation17 is instructive,
to wit:
xxxx
This provision of law sets standards which must be
observed in the exercise of ones rights as well as in the
performance of its duties, to wit: to act with justice; give
everyone his due; and observe honesty and good faith.
In Globe Mackay Cable and Radio Corporation v. Court
of Appeals, it was elucidated that while Article 19 lays
down a rule of conduct for the government of human
relations and for the maintenance of social order, it does
not provide a remedy for its violation. Generally, an action
for damages under either Article 20 or Article 21 would be
proper. The Court said:
One of the more notable innovations of the New Civil
Code is the codification of "some basic principles that are
to be observed for the rightful relationship between
human beings and for the stability of the social order."
[REPORT ON THE CODE COMMISSION ON THE
PROPOSED CIVIL CODE OF THE PHILIPPINES, p. 39].
The framers of the Code, seeking to remedy the defect of
the old Code which merely stated the effects of the law,
64
but failed to draw out its spirit, incorporated certain
fundamental precepts which were "designed to indicate
certain norms that spring from the fountain of good On the basis of the foregoing, the Court finds no cogent
conscience" and which were also meant to serve as reason to depart from the ruling of both the RTC and the
"guides for human conduct [that] should run as golden CA that petitioner, COWD and Gonzalez are solidarily
threads through society, to the end that law may approach liable.
its supreme ideal, which is the sway and dominance of
justice." (Id.) Foremost among these principles is that
pronounced in Article 19 x x x. The Spouses Pastorfide are entitled to moral damages
based on the provisions of Article 2219,19 in connection
with Articles 2020 and 2121 of the Civil Code.
xxxx

As for exemplary damages, Article 2229 provides that

This article, known to contain what is commonly referred
to as the principle of abuse of rights, sets certain
standards which must be observed not only in the
exercise of one's rights, but also in the performance of
one's duties. These standards are the following: to act
with justice; to give everyone his due; and to observe
honesty and good faith. The law, therefore, recognizes a
primordial limitation on all rights; that in their exercise, the
norms of human conduct set forth in Article 19 must be
observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is
exercised in a manner which does not conform with the
norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. But while Article 19
lays down a rule of conduct for the government of human
relations and for the maintenance of social order, it does
not provide a remedy for its violation. Generally, an action
for damages under either Article 20 or Article 21 would be
proper.
Corollarilly, Article 20 provides that every person who,
contrary to law, willfully or negligently causes damage to
another shall indemnify the latter for the same. It speaks
of the general sanctions of all other provisions of law
which do not especially provide for its own sanction.
When a right is exercised in a manner which does not
conform to the standards set forth in the said provision
and results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be responsible.
Thus, if the provision does not provide a remedy for its
violation, an action for damages under either Article 20 or
Article 21 of the Civil Code would be proper.
exemplary damages may be imposed by way of example
or correction for the public good. Nonetheless, exemplary
damages are imposed not to enrich one party or
impoverish another, but to serve as a deterrent against or
as a negative incentive to curb socially deleterious
actions.22 In the instant case, the Court agrees with the
CA in sustaining the award of exemplary damages,
although it reduced the amount granted, considering that
respondent spouses were deprived of their water supply
for more than nine (9) months, and such deprivation
would have continued were it not for the relief granted by
the RTC.
With respect to the award of attorney's fees, Article 2208
of the Civil Code provides, among others, that such fees
may be recovered when exemplary damages are
awarded, when the defendant's act or omission has
compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest, and where the
defendant acted in gross and evident bad faith in refusing
to satisfy the plaintiffs plainly valid, just and demandable
claim.
WHEREFORE, instant petition for review on certiorari is
DENIED. The Decision and Resolution of the Court of
Appeals, dated August 28, 2003 and December 17, 2003,
respectively, in CA-G.R. CV No. 73000 are AFFIRMED.

The question of whether or not the principle of abuse of

rights has been violated resulting in damages under
Article 20 or other applicable provision of law, depends on
the circumstances of each case. x x x18

To recapitulate, petitioner's acts which violated the

abovementioned provisions of law is her unjustifiable act
of having the respondent spouses' water supply
disconnected, coupled with her failure to warn or at least
notify respondent spouses of such intention. On the part
of COWD and Gonzalez, it is their failure to give prior
notice of the impending disconnection and their
subsequent neglect to reconnect respondent spouses'
water supply despite the latter's settlement of their
delinquent account.

65
RAUL H. SESBREO, vs. CA AND VISA YAN
ELECTRIC COMPANY (VECO
This case concerns the claim for damages of petitioner
Raul H. Sesbreo founded on abuse of rights. Sesbreo
accused the violation of contract (VOC) inspection team
dispatched by the Visayan Electric Company (VECO) to
check his electric meter with conducting an unreasonable
search in his residential premises. But the Regional Trial
Court (RTC), Branch 13, in Cebu City rendered judgment
on August 19, 1994 dismissing the claim;1 and the Court
of Appeals (CA) affirmed the dismissal on March 10,
2003.2
Hence, this appeal by Sesbreo.
Antecedents
At the time material to the petition, VECO was a public
utility corporation organized and existing under the laws
of the Philippines. VECO engaged in the sale and
distribution of electricity within Metropolitan Cebu.
Sesbreo was one of VECOs customers under the
metered service contract they had entered into on March
2, 1982.3 Respondent Vicente E. Garcia was VECOs
President, General Manager and Chairman of its Board of
Directors. Respondent Jose E. Garcia was VECOs Vice-
President, Treasurer and a Member of its Board of
Directors. Respondent Angelita Lhuillier was another
Member of VECOs Board of Directors. Respondent Juan
Coromina was VECOs Assistant Treasurer, while
respondent Norberto Abellana was the Head of VECOs
Billing Section whose main function was to compute back
billings of customers found to have violated their
contracts.
To ensure that its electric meters were properly
functioning, and that none of it meters had been tampered
with, VECO employed respondents Engr. Felipe
Constantino and Ronald Arcilla as violation of contract
(VOC) inspectors.4 Respondent Sgt. Demetrio Balicha,
who belonged to the 341st Constabulary Company, Cebu
Metropolitan Command, Camp Sotero Cabahug, Cebu
City, accompanied and escorted the VOC inspectors
during their inspection of the households of its customers
on May 11, 1989 pursuant to a mission order issued to
him.5
The CA summarized the antecedent facts as follows:
x x x. Reduced to its essentials, however, the facts of this
case are actually simple enough, although the voluminous
records might indicate otherwise. It all has to do with an
incident that occurred at around 4:00 oclock in the
afternoon of May 11, 1989. On that day, the Violation of
Contracts (VOC) Team of defendants-appellees
Constantino and Arcilla and their PC escort, Balicha,
conducted a routine inspection of the houses at La
Paloma Village, Labangon, Cebu City, including that of
plaintiff-appellant Sesbreo, for illegal connections, meter
tampering, seals, conduit pipes, jumpers, wiring
connections, and meter installations. After Bebe Baledio,
plaintiff-appellant Sesbreos maid, unlocked the gate,
they inspected the electric meter and found that it had
been turned upside down. Defendant-appellant Arcilla
took photographs of the upturned electric meter. With
Chuchie Garcia, Peter Sesbreo and one of the maids
present, they removed said meter and replaced it with a
new one. At that time, plaintiff-appellant Sesbreo was in
his office and no one called to inform him of the
inspection. The VOC Team then asked for and received
Chuchie Garcias permission to enter the house itself to
examine the kind and number of appliances and light
fixtures in the household and determine its electrical load.
Afterwards, Chuchie Garcia signed the Inspection
Division Report, which showed the condition of the
electric meter on May 11, 1989 when the VOC Team
inspected it, with notice that it would be subjected to a
laboratory test. She also signed a Load Survey Sheet that
showed the electrical load of plaintiff-appellant Sesbreo.
But according to plaintiff-appellant Sesbreo there was
nothing routine or proper at all with what the VOC Team
did on May 11, 1989 in his house. Their entry to his house
and the surrounding premises was effected without his
permission and over the objections of his maids. They
threatened, forced or coerced their way into his house.
They unscrewed the electric meter, turned it upside down
and took photographs thereof. They then replaced it with
a new electric meter. They searched the house and its
rooms without his permission or a search warrant. They
forced a visitor to sign two documents, making her appear
to be his representative or agent. Afterwards, he found
that some of his personal effects were missing, apparently
stolen by the VOC Team when they searched the house.6
Judgment of the RTC
On August 19, 1994, the RTC rendered judgment
dismissing the complaint.7 It did not accord credence to
the testimonies of Sesbreos witnesses, Bebe Baledio,
his housemaid, and Roberto Lopez, a part-time salesman,
due to inconsistencies on material points in their
respective testimonies. It observed that Baledio could not
make up her mind as to whether Sesbreos children were
in the house when the VOC inspection team detached
and replaced the electric meter. Likewise, it considered
unbelievable that Lopez should hear the exchanges
between Constantino, Arcilla and Balicha, on one hand,
and Baledio, on the other, considering that Lopez could
not even hear the conversation between two persons six
feet away from where he was seated during the simulation
done in court, the same distance he supposedly had from
the gate of Sesbreos house during the incident. It
pointed out that Lopezs presence at the gate during the
incident was even contradicted by his own testimony
indicating that an elderly woman had opened the gate for
the VECO personnel, because it was Baledio, a lady in
her 20s, who had repeatedly stated on her direct and
cross examinations that she had let the VECO personnel
in. It concluded that for Lopez to do nothing at all upon
66
seeing a person being threatened by another in the
manner he described was simply contrary to human
experience.
In contrast, the RTC believed the evidence of the
respondents showing that the VOC inspection team had
found the electric meter in Sesbreos residence turned
upside down to prevent the accurate registering of the
electricity consumption of the household, causing them to
detach and replace the meter. It held as unbelievable that
the team forcibly entered the house through threats and
intimidation; that they themselves turned the electric
meter upside down in order to incriminate him for theft of
electricity, because the fact that the team and Sesbreo
had not known each other before then rendered it unlikely
for the team to fabricate charges against him; and that
Sesbreos non-presentation of Chuchie Garcia left her
allegation of her being forced to sign the two documents
by the team unsubstantiated.
Decision of the CA
Sesbreo appealed, but the CA affirmed the RTC on
March 10, 2003,8 holding thusly:
x x x. plaintiff-appellant Sesbreos account is simply too
implausible or far-fetched to be believed. For one thing,
the inspection on his household was just one of many
others that the VOC Team had conducted in that
subdivision. Yet, none but plaintiff-appellant Sesbreo
complained of the alleged acts of the VOC Team.
Considering that there is no proof that they also
perpetrated the same illegal acts on other customers in
the guise of conducting a Violation of Contracts
inspection, plaintiff-appellant Sesbreo likewise failed to
show why he alone was singled out. It is also difficult to
believe that the VOC Team would be brazen enough to
want to antagonize a person such as plaintiff-appellant
Sesbreo. There is no evidence that the VOC Team
harbored any evil motive or grudge against plaintiff-
appellant Sesbreo, who is a total stranger to them. Until
he came along, they did not have any prior criminal
records to speak of, or at least, no evidence thereof was
presented. It is equally difficult to believe that their
superiors would authorize or condone their alleged illegal
acts. Especially so since there is no indication that prior
to the incident on May 11, 1989, there was already bad
blood or animosity between plaintiff-appellant Sesbreo
and defendant appellees to warrant such a malevolent
response. In fact, since availing of defendant-appellee
VECOs power services, the relationship between them
appears to have been uneventful.
It becomes all the more apparent that the charges
stemming from the May 11, 1989 incident were fabricated
when taken together with the lower courts evaluation of
the alleged theft of plaintiff-appellant Sesbreos personal
effects. It stated that on August 8, 1989, plaintiff-appellant
Sesbreo wrote the barangay captain of Punta Princesa
and accused Chuchie Garcia and Victoria Villarta alias
Victoria Rocamora of theft of some of his things that
earlier he claimed had been stolen by members of the
VOC Team. When he was confronted with these facts,
plaintiff-appellant Sesbreo further claimed that the items
allegedly stolen by Chuchie Garcia were part of the loot
taken by defendants-appellees Constantino and Arcilla.
Yet not once did plaintiff-appellant Sesbreo or any of his
witnesses mention that a conspiracy existed between
these people. Clearly, much like his other allegations, it is
nothing more than an afterthought by plaintiff-appellant
Sesbreo.
All in all, the allegations against defendants-appellees
appear to be nothing more than a put-on to save face. For
the simple truth is that the inspection exposed plaintiff-
appellant Sesbreo as a likely cheat and thief.
xxxx
Neither is this Court swayed by the testimonies of Baledio
and Lopez.1wphi1 The lower court rightly described their
testimonies as fraught by discrepancies and
inconsistencies on material points and even called Lopez
a perjured witness. On the other hand, it is odd that
plaintiff-appellant Sesbreo chose not to present the
witness whose testimony was very crucial. But even
though Chuchie Garcia never testified, her absence
speaks volumes. Whereas plaintiff-appellant Sesbreo
claimed that the VOC Team forced her to sign two
documents that made her appear to be his authorized
agent or representative, the latter claimed otherwise and
that she also gave them permission to enter and search
the house. The person most qualified to refute the VOC
Teams claim is Chuchie Garcia herself. It is axiomatic
that he who asserts a fact or claim must prove it. He
cannot transfer that burden to the person against whom
he asserts such fact or claim. When certain evidence is
suppressed, the presumption is that it will adversely affect
the cause of the party suppressing it, should it come to
light. x x x9
Upon denial of his motion for reconsideration,10
Sesbreo appealed.
Issue
Was Sesbreo entitled to recover damages for abuse of
rights?
Ruling
The appeal has no merit.
Sesbreos main contention is that the inspection of his
residence by the VOC team was an unreasonable search
67
for being carried out without a warrant and for being
allegedly done with malice or bad faith.
Before dealing with the contention, we have to note that
two distinct portions of Sesbreos residence were
inspected by the VOS team the garage where the
electric meter was installed, and the main premises where
the four bedrooms, living rooms, dining room and kitchen
were located.
Anent the inspection of the garage where the meter was
installed, the respondents assert that the VOC team had
the continuing authority from Sesbreo as the consumer
to enter his premises at all reasonable hours to conduct
an inspection of the meter without being liable for trespass
to dwelling. The authority emanated from paragraph 9 of
the metered service contract entered into between VECO
and each of its consumers, which provided as follows:
9. The CONSUMER agrees to allow properly authorized
employees or representatives of the COMPANY to enter
his premises at all reasonable hours without being liable
to trespass to dwelling for the purpose of inspecting,
installing, reading, removing, testing, replacing or
otherwise disposing of its property, and/or removing the
COMPANYS property in the event of the termination of
the contract for any cause.11
Sesbreo contends, however, that paragraph 9 did not
give Constantino, Arcilla and Balicha the blanket authority
to enter at will because the only property VECO owned in
his premises was the meter; hence, Constantino and
Arcilla should enter only the garage. He denies that they
had the right to enter the main portion of the house and
inspect the various rooms and the appliances therein
because those were not the properties of VECO. He
posits that Balicha, who was not an employee of VECO,
had no authority whatsoever to enter his house and
conduct a search. He concludes that their search was
unreasonable, and entitled him to damages in light of their
admission that they had entered and inspected his
premises without a search warrant.12
We do not accept Sesbreos conclusion.1avvphi1
Paragraph 9 clothed the entire VOC team with
unquestioned authority to enter the garage to inspect the
meter. The members of the team obviously met the
conditions imposed by paragraph 9 for an authorized
entry. Firstly, their entry had the objective of conducting
the routine inspection of the meter.13 Secondly, the entry
and inspection were confined to the garage where the
meter was installed.14 Thirdly, the entry was effected at
around 4 oclock p.m., a reasonable hour.15 And, fourthly,
the persons who inspected the meter were duly
authorized for the purpose by VECO.
Although Balicha was not himself an employee of
VECO,16 his participation was to render police assistance
to ensure the personal security of Constantino and Arcilla
during the inspection, rendering him a necessary part of
the team as an authorized representative. Under the
circumstances, he was authorized to enter considering
that paragraph 9 expressly extended such authority to
"properly authorized employees or representatives" of
VECO.
It is true, as Sesbreo urges, that paragraph 9 did not
cover the entry into the main premises of the residence.
Did this necessarily mean that any entry by the VOS team
into the main premises required a search warrant to be
first secured?
Sesbreo insists so, citing Section 2, Article III of the 1987
Constitution, the clause guaranteeing the right of every
individual against unreasonable searches and seizures,
viz:
Section 2. The right of the people to be secure in their
persons, houses, papers and effects against
unreasonable searches and seizures of whatever nature
and for any purpose shall be inviolable, and no search
warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge
after examination under oath or affirmation of the
complainant and the witnesses he may produce, and
particularly describing the place to be searched and the
persons or things to be seized.
He states that a violation of this constitutional guaranty
rendered VECO and its VOS team liable to him for
damages by virtue of Article 32 (9) of the Civil Code, which
pertinently provides:
Article 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs, defeats,
violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be
liable to the latter for damages:
xxxx
(9) The right to be secured in ones person, house,
papers, and effects against unreasonable searches and
seizures;
x x x x.
Sesbreos insistence has no legal and factual basis.
The constitutional guaranty against unlawful searches
and seizures is intended as a restraint against the
Government and its agents tasked with law enforcement.
It is to be invoked only to ensure freedom from arbitrary
68
and unreasonable exercise of State power. The Court has
made this clear in its pronouncements, including that
made in People v. Marti,17 viz:
If the search is made upon the request of law enforcers,
a warrant must generally be first secured if it is to pass the
test of constitutionality. However, if the search is made at
the behest or initiative of the proprietor of a private
establishment for its own and private purposes, as in the
case at bar, and without the intervention of police
authorities, the right against unreasonable search and
seizure cannot be invoked for only the act of private
individual, not the law enforcers, is involved. In sum, the
protection against unreasonable searches and seizures
cannot be extended to acts committed by private
individuals so as to bring it within the ambit of alleged
unlawful intrusion by the government.18
It is worth noting that the VOC inspectors decided to enter
the main premises only after finding the meter of
Sesbreo turned upside down, hanging and its disc not
rotating. Their doing so would enable them to determine
the unbilled electricity consumed by his household. The
circumstances justified their decision, and their inspection
of the main premises was a continuation of the authorized
entry. There was no question then that their ability to
determine the unbilled electricity called for them to see for
themselves the usage of electricity inside. Not being
agents of the State, they did not have to first obtain a
search warrant to do so.
Balichas presence participation in the entry did not make
the inspection a search by an agent of the State within the
ambit of the guaranty. As already mentioned, Balicha was
part of the team by virtue of his mission order authorizing
him to assist and escort the team during its routine
inspection.19 Consequently, the entry into the main
premises of the house by the VOC team did not constitute
a violation of the guaranty.
Our holding could be different had Sesbreo persuasively
demonstrated the intervention of malice or bad faith on
the part of Constantino and Arcilla during their inspection
of the main premises, or any excessiveness committed by
them in the course of the inspection. But Sesbreo did
not. On the other hand, the CA correctly observed that the
inspection did not zero in on Sesbreos residence
because the other houses within the area were similarly
subjected to the routine inspection.20 This, we think,
eliminated any notion of malice or bad faith.
Clearly, Sesbreo did not establish his claim for damages
if the respondents were not guilty of abuse of rights. To
stress, the concept of abuse of rights prescribes that a
person should not use his right unjustly or in bad faith;
otherwise, he may be liable to another who suffers injury.
The rationale for the concept is to present some basic
principles to be followed for the rightful relationship
between human beings and the stability of social order.21
Moreover, according to a commentator,22 "the exercise
of right ends when the right disappears, and it disappears
when it is abused, especially to the prejudice of others[;]
[i]t cannot be said that a person exercises a right when he
unnecessarily prejudices another." Article 19 of the Civil
Code23 sets the standards to be observed in the exercise
of ones rights and in the performance of ones duties,
namely: (a) to act with justice; (b) to give everyone his
due; and (c) to observe honesty and good faith. The law
thereby recognizes the primordial limitation on all rights
that in the exercise of the rights, the standards under
Article 19 must be observed.24
Although the act is not illegal, liability for damages may
arise should there be an abuse of rights, like when the act
is performed without prudence or in bad faith. In order that
liability may attach under the concept of abuse of rights,
the following elements must be present, to wit: (a) the
existence of a legal right or duty, (b) which is exercised in
bad faith, and (c) for the sole intent of prejudicing or
injuring another.25 There is no hard and fast rule that can
be applied to ascertain whether or not the principle of
abuse of rights is to be invoked. The resolution of the
issue depends on the circumstances of each case.
Sesbreo asserts that he did not authorize Baledio or
Chuchie Garcia to let anyone enter his residence in his
absence; and that Baledio herself confirmed that the
members of the VOC team had intimidated her into letting
them in.
The assertion of Sesbreo is improper for consideration
in this appeal.1wphi1 The RTC and the CA unanimously
found the testimonies of Sesbreos witnesses
implausible because of inconsistencies on material
points; and even declared that the non-presentation of
Garcia as a witness was odd if not suspect. Considering
that such findings related to the credibility of the witnesses
and their testimonies, the Court cannot review and undo
them now because it is not a trier of facts, and is not also
tasked to analyze or weigh evidence all over again.26
Verily, a review that may tend to supplant the findings of
the trial court that had the first-hand opportunity to
observe the demeanor of the witnesses themselves
should be undertaken by the Court with prudent
hesitation. Only when Sesbreo could make a clear
showing of abuse in their appreciation of the evidence and
records by the trial and the appellate courts should the
Court do the unusual review of the factual findings of the
trial and appellate courts.27 Alas, that showing was not
made here.
Nor should the Court hold that Sesbreo was denied due
process by the refusal of the trial judge to inhibit from the
case. Although the trial judge had issued an order for his
voluntary inhibition, he still rendered the judgment in the
end in compliance with the instruction of the Executive
Judge, whose exercise of her administrative authority on
the matter of the inhibition should be respected.28 In this
connection, we find to be apt the following observation of
the CA, to wit:
69
x x x. Both Judge Paredes and Judge Priscila Agana
serve the Regional Trial Court and are therefore of co-
equal rank. The latter has no authority to reverse or
modify the orders of Judge Paredes. But in ordering
Judge Paredes to continue hearing the case, Judge
Agana did not violate their co-equal status or unilaterally
increased her jurisdiction. It is merely part of her
administrative responsibilities as Executive Judge of the
Regional Trial Court of Cebu City, of which Judge
Paredes is also a member.29

Lastly, the Court finds nothing wrong if the writer of the

decision in the CA refused to inhibit from participating in
the resolution of the motion for reconsideration filed by
Sesbrefio. The motion for her inhibition was grounded on
suspicion of her bias and prejudice,30 but suspicion of
bias and prejudice were not enough grounds for
inhibition.31

Suffice it to say that the records are bereft of any

indication that even suggested that the Associate Justices
of the CA who participated in the promulgation of the
decision were tainted with bias against him.

WHEREFORE, the Court DENIES the pet1t1on for review

on certiorari; AFFIRMS the decision promulgated on
March 10, 2003; and DIRECTS the petitioner to pay the
costs of suit.

SO ORDERED.

70
FLORENCIO A. SALADAGA, Complainant,
vs.
ATTY. ARTURO B. ASTORGA, Respondent.
Membership in the legal profession is a high personal
privilege burdened with conditions,1 including continuing
fidelity to the law and constant possession of moral
fitness. Lawyers, as guardians of the law, play a vital role
in the preservation of society, and a consequent
obligation of lawyers is to maintain the highest standards
of ethical conduct.2 Failure to live by the standards of the
legal profession and to discharge the burden of the
privilege conferred on one as a member of the bar warrant
the suspension or revocation of that privilege.
The Factual Antecedents
Complainant Florencio A. Saladaga and respondent Atty.
Arturo B. Astorga entered into a "Deed of Sale with Right
to Repurchase" on December 2, 1981 where respondent
sold (with rightof repurchase) to complainant a parcel of
coconut land located at Barangay Bunga, Baybay, Leyte
covered by Transfer Certificate of Title (TCT) No. T-662
for P15,000.00. Under the said deed, respondent
represented that he has "the perfect right to dispose as
owner in fee simple" the subject property and that the said
property is "free from all liens and encumbrances."3 The
deed also provided that respondent, as vendor a retro,
had two years within which to repurchase the property,
and if not repurchased within the said period, "the parties
shall renew [the] instrument/agreement."4
Respondent failed to exercise his right of repurchase
within the period provided in the deed, and no renewal of
the contract was made even after complainant sent
respondent a final demand dated May 10, 1984 for the
latter to repurchase the property. Complainant remained
in peaceful possession of the property until December
1989 when he received letters from the Rural Bank of
Albuera (Leyte), Inc. (RBAI) informing him that the
property was mortgaged by respondent to RBAI, that the
bank had subsequently foreclosed on the property, and
that complainant should therefore vacate the property.5
Complainant was alarmed and made aninvestigation. He
learned the following:
(1) TCT No. T-662 was already cancelled by TCT No. T-
3211 in the name of Philippine National Bank (PNB) as
early as November 17, 1972 after foreclosure
proceedings;
(2) TCT No. T-3211 was cancelled by TCT No. T-7235 in
the names of respondent and his wife on January 4, 1982
pursuant to a deed of sale dated March 27,1979 between
PNB and respondent;
(3) Respondent mortgaged the subject property to RBAI
on March 14, 1984, RBAI foreclosed on the property, and
subsequently obtained TCT No. TP-10635 on March 27,
1991.6 Complainant was subsequently dispossessed of
the property by RBAI.7
Aggrieved, complainant instituted a criminal complaint for
estafa against respondent with the Office of the Provincial
Prosecutor of Leyte, docketed as I.S. No. 95-144. The
Provincial Prosecutor of Leyte approved the Resolution8
dated April 21, 1995 in I.S. No. 95-144 finding that "[t]he
facts of [the] case are sufficient to engender a well-
founded belief that Estafa x x x has been committed and
that respondent herein is probably guilty thereof."9
Accordingly, an Information10 dated January 8,1996 was
filed before the Municipal Trial Court (MTC) of Baybay,
Leyte, formally charging respondent with the crime of
estafa under Article 316, paragraphs 1 and 2 of the
Revised Penal Code,11 committed as follows:
On March 14, 1984, accused representing himself as the
owner of a parcel of land known as Lot No. 7661 of the
Baybay Cadastre, mortgaged the same to the Rural Bank
of Albuera, Albuera, Leyte, within the jurisdiction of this
Honorable Court, knowing fully well that the possessor
and owner at that time was private complainant Florencio
Saladaga by virtue of a Pacto de Retro Sale which
accused executed in favor of private complainant on 2nd
December, 1981, without first redeeming/repurchasing
the same. [P]rivate complainant knowing of accused[s]
unlawful act only on or about the last week of February,
1991 when the rural bank dispossessed him of the
property, the mortgage having been foreclosed, private
complainant thereby suffered damages and was
prejudiced by accused[s] unlawful transaction and
misrepresentation.
The aforementioned estafa case against respondent was
docketed as Criminal Case No. 3112-A.
Complainant likewise instituted the instant administrative
cases against respondent by filing before this Court an
Affidavit-Complaint12 dated January 28, 1997 and
Supplemental Complaint13 dated February 27, 1997,
which were docketed as A.C. No. 4697 and A.C. No.
4728, respectively. In both complaints, complainant
sought the disbarment of respondent.
The administrative cases were referred to the Integrated
Bar of the Philippines (IBP) for investigation, report and
recommendation.14
In his Consolidated Answer15 dated August 16, 2003 filed
before the IBP, respondent denied that his agreement
with complainant was a pacto de retrosale. He claimed
that it was an equitable mortgage and that, if only
complainant rendered an accounting of his benefits from
71
the produce of the land, the total amount would have
exceeded P15,000.00.
Report and Recommendation of the Investigating
Commissioner and Resolution of the IBP Board of
Governors
In a Report and Recommendation16 dated April 29, 2005,
the Investigating Commissioner of the IBPs Commission
on Bar Discipline found that respondent was in bad faith
when he dealt with complainant and executed the "Deed
of Sale with Right to Repurchase" but later on claimed that
the agreement was one of equitable mortgage.
Respondent was also guilty of deceit or fraud when he
represented in the "Deed of Sale with Right to
Repurchase" dated December 2, 1981 that the property
was covered by TCT No. T-662, even giving complainant
the owners copy of the said certificate of title, when the
said TCT had already been cancelled on November 17,
1972 by TCT No. T-3211 in the name of Philippine
National Bank (PNB). Respondent made matters even
worse, when he had TCT No. T-3211 cancelled with the
issuance of TCT No. T-7235 under his and his wifes
name on January 4,1982 without informing complainant.
This was compounded by respondents subsequent
mortgage of the property to RBAI, which led to the
acquisition of the property by RBAI and the dispossession
thereof of complainant. Thus, the Investigating
Commissioner recommended that respondent be (1)
suspended from the practice of law for one year, with
warning that a similar misdeed in the future shall be dealt
with more severity, and (2) ordered to return the sum of
P15,000.00, the amount he received as consideration for
the pacto de retrosale, with interest at the legal rate.
Considering respondents "commission of unlawful acts,
especially crimes involving moral turpitude, actsof
dishonesty, grossly immoral conduct and deceit," the IBP
Board of Governors adopted and approved the
Investigating Commissioners Report and
Recommendation with modification as follows:
respondent is(1) suspended from the practice of law for
two years, with warning that a similar misdeed in the
future shall be dealt with more severity, and (2) ordered
to return the sum of P15,000.00 received in consideration
of the pacto de retrosale, with legal interest.17
The Courts Ruling
The Court agrees with the recommendation of the IBP
Board of Governors to suspend respondent from the
practice of law for two years, but it refrains from ordering
respondent to return the P15,000.00 consideration, plus
interest.
Respondent does not deny executing the "Deed of Sale
with Right to Repurchase" dated December 2, 1981 in
favor of complainant. However, respondent insists that
the deed is not one of sale with pacto de retro, but one of
equitable mortgage. Thus, respondent argues that he still
had the legal right to mortgage the subject property to
other persons. Respondent additionally asserts that
complainant should render an accounting of the produce
the latter had collected from the said property, which
would already exceed the P15,000.00 consideration
stated in the deed.
There is no merit in respondents defense.
Regardless of whether the written contract between
respondent and complainant is actually one of sale with
pacto de retroor of equitable mortgage, respondents
actuations in his transaction with complainant, as well as
in the present administrative cases, clearly show a
disregard for the highest standards of legal proficiency,
morality, honesty, integrity, and fair dealing required from
lawyers, for which respondent should be held
administratively liable.
When respondent was admitted to the legal profession,
he took an oath where he undertook to "obey the laws,"
"do no falsehood," and "conduct [him]self as a lawyer
according to the best of [his] knowledge and
discretion."18 He gravely violated his oath.
The Investigating Commissioner correctly found, and the
IBP Board of Governors rightly agreed, that respondent
caused the ambiguity or vagueness in the "Deed of Sale
with Right to Repurchase" as he was the one who
prepared or drafted the said instrument. Respondent
could have simply denominated the instrument as a deed
of mortgage and referred to himself and complainant as
"mortgagor" and "mortgagee," respectively, rather than as
"vendor a retro" and "vendee a retro." If only respondent
had been more circumspect and careful in the drafting
and preparation of the deed, then the controversy
between him and complainant could havebeen avoided
or, at the very least, easily resolved. His imprecise and
misleading wording of the said deed on its face betrayed
lack oflegal competence on his part. He thereby fell short
of his oath to "conduct [him]self as a lawyer according to
the best of [his] knowledge and discretion."
More significantly, respondent transgressed the laws and
the fundamental tenet of human relations asembodied in
Article 19 of the Civil Code:
Art. 19. Every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
Respondent, as owner of the property, had the right to
mortgage it to complainant but, as a lawyer, he should
have seen to it that his agreement with complainant is
embodied in an instrument that clearly expresses the
intent of the contracting parties. A lawyer who drafts a
contract must see to it that the agreement faithfully and
72
clearly reflects the intention of the contracting parties.
Otherwise, the respective rights and obligations of the
contracting parties will be uncertain, which opens the door
to legal disputes between the said parties. Indeed, the
uncertainty caused by respondents poor formulation of
the "Deed of Sale with Right to Repurchase" was a
significant factor in the legal controversy between
respondent and complainant. Such poor formulation
reflects at the very least negatively on the legal
competence of respondent.
Under Section 63 of the Land Registration Act,19 the law
in effect at the time the PNB acquired the subject property
and obtained TCT No. T-3211 in its name in 1972, where
a decree in favor of a purchaser who acquires mortgaged
property in foreclosure proceedings becomes final, such
purchaser becomes entitled to the issuance of a new
certificate of title in his name and a memorandum thereof
shall be "indorsed upon the mortgagors original
certificate."20 TCT No. T-662, which respondent gave
complainant when they entered into the "Deed of Sale
with Right to Repurchase" dated December 2, 1981, does
not bearsuch memorandum but only a memorandum on
the mortgage of the property to PNB in 1963 and the
subsequent amendment of the mortgage.
Respondent dealt with complainant with bad faith,
falsehood, and deceit when he entered into the "Deed of
Sale with Right to Repurchase" dated December 2, 1981
with the latter. He made it appear that the property was
covered by TCT No. T-662 under his name, even giving
complainant the owners copy of the said certificate oftitle,
when the truth is that the said TCT had already been
cancelled some nine years earlier by TCT No. T-3211 in
the name of PNB. He did not evencare to correct the
wrong statement in the deed when he was subsequently
issued a new copy of TCT No. T-7235 on January 4,
1982,21 or barely a month after the execution of the said
deed. All told, respondent clearly committed an act of
gross dishonesty and deceit against complainant.
Canon 1 and Rule 1.01 of the Codeof Professional
Responsibility provide:
CANON 1 A lawyer shall uphold the constitution, obey
the laws of the land and promote respect for law and legal
processes.
Rule 1.01 A lawyer shall not engage in unlawful,
dishonest, immoral or deceitful conduct. Under Canon 1,
a lawyer is not only mandated to personally obey the laws
and the legal processes, he is moreover expected to
inspire respect and obedience thereto. On the other hand,
Rule 1.01 states the norm of conduct that is expected of
all lawyers.22
Any act or omission that is contrary to, prohibited or
unauthorized by, in defiance of, disobedient to, or
disregards the law is "unlawful." "Unlawful" conduct does
not necessarily imply the element of criminality although
the concept is broad enough to include such element.23
To be "dishonest" means the disposition to lie, cheat,
deceive, defraud or betray; be untrustworthy; lacking
inintegrity, honesty, probity, integrity in principle, fairness
and straightforwardness. On the other hand, conduct that
is "deceitful" means as follows:
[Having] the proclivity for fraudulent and deceptive
misrepresentation, artifice or device that is used upon
another who is ignorant of the true facts, to the prejudice
and damage of the party imposed upon. In order to be
deceitful, the person must either have knowledge of the
falsity or acted in reckless and conscious ignorance
thereof, especially if the parties are not on equal terms,
and was done with the intent that the aggrieved party act
thereon, and the latter indeed acted in reliance of the false
statement or deed in the manner contemplated to his
injury.24 The actions of respondent in connection with the
execution of the "Deed of Sale with Right to Repurchase"
clearly fall within the concept of unlawful, dishonest, and
deceitful conduct. They violate Article 19 of the Civil Code.
They show a disregard for Section 63 of the Land
Registration Act. They also reflect bad faith, dishonesty,
and deceit on respondents part. Thus, respondent
deserves to be sanctioned.
Respondents breach of his oath, violation of the laws,
lack of good faith, and dishonesty are compounded by his
gross disregard of this Courts directives, as well as the
orders of the IBPs Investigating Commissioner (who was
acting as an agent of this Court pursuant to the Courts
referral of these cases to the IBP for investigation, report
and recommendation), which caused delay in the
resolution of these administrative cases.
In particular, the Court required respondent to comment
on complainants Affidavit-Complaint in A.C. No. 4697
and Supplemental Complaint in A.C. No. 4728 on March
12, 1997 and June 25, 1997, respectively.25 While he
requested for several extensions of time within which to
submit his comment, no such comment was submitted
prompting the Court to require him in a Resolution dated
February 4,1998 to (1) show cause why he should not be
disciplinarily dealt with or held in contempt for such failure,
and (2) submit the consolidated comment.26 Respondent
neither showed cause why he should not be disciplinarily
dealt with or held in contempt for such failure, nor
submitted the consolidated comment.
When these cases were referred to the IBP and during the
proceedings before the IBPs Investigating
Commissioner, respondent was again required several
times to submit his consolidated answer. He only
complied on August 28, 2003, or more than six years after
this Court originally required him to do so. The
Investigating Commissioner also directed the parties to
submit their respective position papers. Despite having
been given several opportunities to submit the same,
respondent did not file any position paper.27
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Respondents disregard of the directives of this Court and
of the Investigating Commissioner, which caused undue
delay in these administrative cases, contravenes the
following provisions of the Code of Professional
Responsibility:
CANON 11 A lawyer shall observe and maintain the
respect due to the courts and to judicial officers and
should insist on similar conduct by others.
xxxx
CANON 12 A lawyer shall exert every effort and
consider it his duty to assist in the speedy and efficient
administration of justice.
xxxx
Rule 12.03 A lawyer shall not, after obtaining extensions
of time to file pleadings, memoranda or briefs, let the
period lapse without submitting the same or offering an
explanation for his failure to do so.
Rule 12.04 A lawyer shall not unduly delay a case,
impede the execution of a judgment or misuse court
processes.
Respondents infractions are aggravated by the fact that
he has already been imposed a disciplinary sanction
before.1wphi1 In Nuez v. Atty. Astorga,28 respondent
was held liable for conduct unbecoming an attorney for
which he was fined P2,000.00.
Given the foregoing, the suspension of respondent from
the practice of law for two years, as recommended by the
IBP Board of Governors, is proper.
The Court, however, will not adopt the recommendation
of the IBP to order respondent to return the sum of
P15,000.00 he received from complainant under the
"Deed of Sale with Right to Repurchase." This is a civil
liability best determined and awarded in a civil case rather
than the present administrative cases.
In Roa v. Moreno,29 the Court pronounced that "[i]n
disciplinary proceedings against lawyers, the only issue is
whether the officer of the court is still fit to be allowed to
continue as a member of the Bar. Our only concern is the
determination of respondents administrative liability. Our
findings have no material bearing on other judicial action
which the parties may choose to file against each
other."While the respondent lawyers wrongful actuations
may give rise at the same time to criminal, civil, and
administrative liabilities, each must be determined in the
appropriate case; and every case must be resolved in
accordance with the facts and the law applicable and the
quantum of proof required in each. Section 5,30 in relation
to Sections 131 and 2,32 Rule 133 of the Rules of Court
states that in administrative cases, such as the ones
atbar, only substantial evidence is required, not proof
beyond reasonable doubt as in criminal cases, or
preponderance of evidence asin civil cases. Substantial
evidence is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a
conclusion.33
The Court notes that based on the same factual
antecedents as the present administrative cases,
complainant instituted a criminal case for estafa against
respondent, docketed as Criminal Case No. 3112-A,
before the MTC. When a criminal action is instituted, the
civil action for the recovery of civil liability arising from the
offense charged shall be deemed instituted with the
criminal action unless the offended party waives the civil
action, reserves the right to institute it separately or
institutes the civil action prior to the criminal action.34
Unless the complainant waived the civil action, reserved
the right to institute it separately, or instituted the civil
action prior to the criminal action, then his civil action for
the recovery of civil liability arising from the estafa
committed by respondent is deemed instituted with
Criminal Case No. 3112-A. The civil liability that
complainant may recover in Criminal Case No. 3112-A
includes restitution; reparation of the damage caused him;
and/or indemnification for consequential damages,35
which may already cover the P15,000.00 consideration
complainant had paid for the subject property.
WHEREFORE, respondent is hereby found GUILTY of
the following: breach of the Lawyers Oath; unlawful,
dishonest, and deceitful conduct; and disrespect for the
Court and causing undue delay of these cases, for which
he is SUSPENDED from the practice of law for a period
of two (2) years, reckoned from receipt of this Decision,
with WARNING that a similar misconduct in the future
shall be dealt with more severely.
Let a copy of this Decision be furnished the Office of the
Bar Confidant and the Integrated Bar of the Philippines for
their information and guidance. The Court Administrator
is directed to circulate this Decision to all courts in the
country.
SO ORDERED.
In Suntay v. CA,48 we held that the most prominent index
of simulation is the complete absence of anattempt on the
part of the vendee to assert his rights of ownership over
the property in question. After the sale, the vendee should
74
have entered the land and occupied the premises. The
absence of any attempt on the part of Orion to assert its
right of dominion over the property allegedly soldto it is a
clear badge of fraud. That notwithstanding the execution
of the Dacion en Pago, Kang remained in possession of
the disputed condominium unit from the time of the
execution of the Dacion en Pagountil the propertys
subsequent transfer to Suzuki unmistakably
strengthens the fictitious nature of the Dacion en Pago.

These circumstances, aside from the glaring

inconsistencies in the documents and testimony of
Orions witness, indubitably prove the spurious nature of
the Dacion en Pago.

The fact that the Dacion en Pago

is a notarized document does not

support the conclusion that the

sale it embodies is a true

conveyance

Public instruments are evidence of the facts that gave rise

to their execution and are to be considered as containing
all the terms of the agreement.49 While a notarized
document enjoys this presumption, "the fact that a deed
is notarized is not a guarantee of the validity of its
contents."50 The presumption of regularity of notarized
documents is not absolute and may be rebutted by clear
and convincing evidence to the contrary.51

In the present case, the presumption cannot apply

because the regularity in the execution of the Dacion en
Pago and the loan documents was challenged in the
proceedings below where their prima facievalidity was
overthrown by the highly questionable circumstances
surrounding their execution.52

Effect of the PRA restriction on

the validity of Suzukis title to the property

Orion argues that the PRA restriction in CCT No. 18186

affects the conveyance to Suzuki. In particular, Orion
assails the status of Suzuki as a purchaser in good faith
in view of the express PRA restriction contained in CCT
No. 18186.53

We reject this suggested approachoutright because, to

our mind, the PRA restriction cannot affect the
conveyance in favor of Suzuki. On this particular point, we
concur withthe following findings of the CA:

75