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VOL.

18, SEPTEMBER 28, 1966

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Air France vs. Carrascoso

No. L-21438. September 28, 1966.

AIR FRANCE, petitioner, vs.. RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS,
respondents.

Common carriers; Contracts; First class tickets.A written document speaks a uniform language; the
spoken word could be notoriously unreliable. If only to achieve stability in the relations between
passenger and air carrier, adherence to the terms of a ticket is desirable.

Same; Damages; Moral damages; Trial; Bad faith in breach of contract of carriage.Where at the
start of the trial, respondent's counsel placed petitioner on guard that he intended to prove that,
while sitting in the plane in Bangkok, the respondent was ousted .by petitioner's manager, who gave
his seat to a white man, and evidence of bad faith in the fulfillment of the contract was presented
without objection on the part of the petitioner, it is therefore unnecessary to inquire as to whether
or not there is sufficient averment in the complaint to justify an award for moral damages.
Deficiency in the complaint, if any, was cured by the evidence.

Same; Exemplary damages.The New Civil Code gives the court ample power to grant exemplary
damages in contracts and quasi-contracts. The only condition is that defendant should have acted in
a wanton, fraudulent, reckless, oppressive, or malevolent manner. The manner of ejectment of
respondent Carrascoso from his first class seat fits into this legal precept.

Same; Attorney's fees.The right to attorney's fees is fully established. The grant of exemplary
damages justifies a similar judgment for attorney's fees. The least that can be said is that the courts
below felt that it is but just and equitable that attorneys fees be given. We do not intend to break
tradition that discretion well exercisedas it was hereshould not be disturbed.

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Air France vs. Carrascoso

PETITION for review by certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Lichauco, Picazo & Agcaoili for petitioner.

Bengzon, Villegas & Zarraga for respondent R. Carrascoso.

SANCHEZ, J.:

The Court of First Instance of Manila1 sentenced petitioner to' pay respondent Rafael Carrascoso
P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20 representing the
difference in fare between first class and tourist class for the portion of the trip Bangkok-Rome,
these various amounts with interest at the legal rate, from the date of the filing of the complaint
until paid; plus P3,000.00 for attorneys' fees; and the costs of suit.

On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket
from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects'', with
costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as "fully supported by the evidence of record", are:

"Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958:

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines,
Inc., issued to plaintiff a 'first class' round trip airplane ticket from Manila to Rome. From Manila to
Bangkok, plaintiff travelled in 'first class', but at Bangkok, the Manager of the defendant airline
forced plaintiff to vacate the 'first class' seat that he was occupying because, in the words of the
witness Ernesto G. Cuento, there was a 'white man', who, the Manager alleged, had a 'better right'
to the seat. When asked to vacate his 'first class' seat, the plaintiff, as was to be expected, refused,
and

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1 Civil Case No. 38810, "Rafael Carrascoso, plaintiff, vs. Air France, defendant," R.A., pp. 79-80.

2 C.A.-G.R. No. 26522-R, "Rafael Carrascoso, plaintiff-appellee, vs. Air France, defendant-appellant."

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told defendant's Manager that his seat would be taken over his dead body; a commotion ensued,
and, according to said Ernesto G, Cuento, 'many of the Filipino passengers got nervous in the tourist
class; when they found out that Mr. Carrascoso was having a hot discussion with the white man
[manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the
white man' (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his 'first class'
seat. in the plane."3

1. The trust of the relief petitioner now seeks is that we review "all the findings"4 of respondent
Court of Appeals. Petitioner charges that respondent court failed to make complete findings of fact
on all the issues properly laid before it. We are asked to consider- facts favorable to petitioner, and
then, to overturn the appellate court's decision.

Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of
record without expressing therein clearly and distinctly the facts and the law on which it is based".5
This is echoed in the statutory demand that a judgment determining the merits of the case shall
state "clearly and distinctly the facts and the law on which it is based" ;6 and that "Every decision of
the Court of Appeals shall contain complete findings of fact on all issues properly raised before it".7

A decision with absolutely nothing to support it is a nullity. It is open to direct attack.8 The law,
however, solely insists that a decision state the "essential ultimate facts" upon which the court's
conclusion is drawn,9 A court of justice is not hidebound to write in its decision every bit and piece
of evidence10 presented by one party

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3 Appendix A, petitioner's brief, pp. 146-147. See also R.A., pp. 66-67.

4 Petitioner's brief, p. 142.

5 Section 12, Article VIII, Constitution.

6 Section 1, Rule 36, Rules of Court. See also Section 2, Rule 120, in reference to judgments in
criminal cases.

7 Sec. 4, Rule 51; Sec. 33(2), Judiciary Act of 1948, as amended.

8 Edwards vs. McCoy, 22 Phil. 598, 601; Yangco vs. Court of First Instance of Manila, et al., 29 Phil.
183, 191.

9 Braga vs. Millora, 3) Phil. 458, 465.

10 Id.

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and the other upon the issues raised. Neither is it to be burdened with the obligation "to specify in
the sentence the facts" which a party "considered as proved".11 This is but a part of the mental
process from which the Court draws the essential ultimate facts. A decision is not to be so clogged
with details such that prolixity, if not confusion, may result. So long as the decision of the Court of
Appeals contains the necessary facts to warrant its conclusions, it is no error for said court to
withhold therefrom "any specific - finding of facts with respect to the evidence for the defense".
Because, as this Court well observed, "There is no law that so requires".12 Indeed, "the mere failure
to specify (in the decision) the contentions of the appellant and the reasons for refusing to believe
them is not sufficient to hold the same contrary to the requirements of the provisions of law and the
Constitution". It is in this setting. that in Manigque, it was held that the mere fact that the findings
"were based entirely on the evidence for the prosecution without taking into consideration or even
mentioning the appellant's side in the controversy as shown by his own testimony", would not
vitiate the judgment.13 If the court did not recite in the decision the testimony of each witness for,
or each item of evidence presented by, the defeated party, it does not mean that the court has
overlooked such testimony or such item of evidence.14 At any rate, the legal presumptions are that
official duty has been regularly performed, and that all the matters within an issue in a case were
laid before the court and passed upon by it.15

Findings of fact, which the Court of Appeals is required to make, maybe* defined as "the written
statement of the ultimate facts as found by the court 'x 'x 'x and essential to support the decision
and judgment rendered

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11 Aringo vs. Arena, 14 Phil. 263, 266; emphasis supplied.

12 Reyes vs. People, 71 Phil. 598, 600.

13 People vs. Manigque, 35 O.G., No. 94, pp. 1682, 1683, citing Section 133 of the Code of Civil
Procedure and Section 12, Art. VIII, Constitution, supra.

14 Badger, et al. vs. Boyd, 65 S.W. (2d), pp. 601, 610.

15 Section 5, (m) and (o), Rule 131, Rules of Court

*Editor's Note: Should read may be.

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thereon".16 They consist of the court's "conclusions" with respect to the determinative facts in
issue".17 A question of law, upon the other hand. has been declared as "one which does not call for
an examination of the probative value of the evidence presented by the parties."18

2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the
Court of Appeals.19 That judgment is conclusive as to the facts. It is not appropriately the business
of this Court to alter the facts or to review the questions of fact.20

With these guideposts, we now face the problem of whether the findings of fact of the Court of
Appeals support its judgment.

3. Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first
class ticket. But petitioner asserts that said ticket did not represent the true and complete intent and
agreement of the parties; that said respondent knew that he did not have confirmed reservations for
first class on any specific flight, although he had tourist class protection; that, accordingly, the
issuance of a first class ticket was no guarantee that he would have a first class ride, but that such
would depend upon the availability of first class seats.

These are matters which petitioner has thoroughly presented and discussed in its brief before the
Court of Appeals under its third assignment of error, which reads: "The trial court erred in finding
that plaintiff had confirmed reservations for, and a right to, first class seats on the 'definite'
segments of his journey, particularly

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16 In re Good's Estate, 266 P. (2d), pp. 719, 729.

17 Badger, et al. vs. Boyd, supra.

18 Goduco vs. Court of Appeals, et al., L-17647, February 28, 1964,

19 Section 2, Rule 45, Rules of Court, formerly Section 2, Rule 46 of the Rules of Court.

20 Medel, et al. vs. Calasanz, et al., L-14835, August 31, 1960; Astraquillo, et al. vs. Javier, et al., L-
20034, January 30, 1965.

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that from Saigon to Beirut".21

And, the Court of Appeals disposed of this contention thus:

"Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no
guarantee that the passenger to whom the same had been issued, would be accommodated in the
first-class compartment, for as in the case of plaintiff he had yet to make arrangements upon arrival
at every station for the necessary first-class reservation. We are not impressed by such a reasoning.
We cannot understand how a reputable firm like defendant airplane company could have the
indiscretion to give out tickets it never meant to honor at all. It received the corresponding amount
in payment of first-class tickets and yet it allowed the passenger to be at the mercy of its employees.
It is more in keeping with the ordinary course of business that the company should know whether or
not the tickets it issues are to be honored or not."22

Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention,
thus:

"On the fact that plaintiff paid for, and was issued a 'First class' ticket, there can be no question.
Apart from his testimony, see plaintiff's Exhibits 'A, 'A-1', 'B', 'B-1', 'B-2', 'C' and 'C-1', and
defendant's own witness. Rafael Altonaga, confirmed plaintiff's testimony and testified as follows:

Q.

In these tickets there are marks 'O.K.' From what you know, what does this O.K. mean?

A.

That the space is confirmed.

Q.
Confirmed for first class?

A,

Yes, 'first class'. (Transcript, p. 169)

x x x x

"Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that
although plaintiff paid for, and was issued a 'first class' airplane ticket, the ticket was subject to
confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses. Oral
evidence cannot prevail over written evidence. and plaintiffs Exhibits 'A', 'A-1', 'B', 'B-1' 'C' and 'C-1'
belie the testimony of said witnesses, and clearly show that the plaintiff was issued, and paid for, a
first class ticket without any reservation whatever.

Furthermore, as hereinabove shown, defendant's own wit-

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21 Petitioner's brief in the Court of Appeals, pp, 82-98.

22 Decision of the Court of Appeals, Appendix A, petitioner's brief, pp. 148-149,

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ness Rafael Altonaga testified that the reservation for a 'first class' accommodation for the plaintiff
was confirmed. The court cannot believe that after such confirmation defendant had a verbal
understanding with plaintiff that the 'first class' ticket issued to him by defendant wouild be subject
to confirmation in Hongkong."23

We have heretofore adverted to the fact that except for a slight difference of a few pesos in the
amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was affirmed by
the Court of Appeals in all other respects. We hold the view that such a judgment of affirmance has
merged the judgment of the lower court.24 Implicit in that affirmance is a determination by the
Court of Appeals that the proceeding in the Court of Firts Instance was free from prejudicial error
and "all questions raised by the assignments of error and all questions that might have been raised
are to be regarded as finally adjudicated against the appellant". So also, the judgment affirmed
"must be regarded as free from all error".25 We reached this policy construction because nothing in
the decision of the Court of Appeals on this point would suggest that its findings of fact are in any
way at war with those of the trial court. Nor was said affirmance by the Court of Appeals upon a
ground or grounds different from those which were made the basis of the conclusions of the trial
court.26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class set,
nothwithstanding the fact that seat availability in apecific flights is therein confirmed, then an air
passenger is placed in the hollow of the hands of an airline. What security then can a passenger
have? it will always be an easy matter for an airline aided by its employees, to strike out the very
stipulations in the ticket, and say that there was a verbal agreement to the contrary. What if the
passenger hada a

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23 R.A., pp. 67, 73

24 5 B C.J.S., p. 295 ; 3 Am. Jur. 678.

25 3 Am. Jur., pp. 677-678.

26 See Garcia Valdez vs. Seteraa Tuason, 40 Phil. 943, 951.

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schedule to fulfill? We have long learned that, as a rule, a written document speaks a uniform
language; that spoken word could be notoriously unreliable. If only to achieve stability in the
relations between passenger and air carrier, adherence to the ticket so issued is desirable. Such is
the case here. The lower courts refused to believe the oral evidence intended to defeat the
covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are facts upon which
the Court of Appeals predicated the finding that respondent Carrascoso had a first class ticket and
was entitled to a first class seat at Bangkok, which is a stopover in the Saigon to Beirut leg of the
flight.27 We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of
Its position", as charged by petitioner.28 Nor do we subscribe to petitioner's accusation that
respondent Carrascoso "surreptitiously took a first class seat to provoke an issue".29 And this
because, as petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to
confirm my seat and because from Saigon I) was told again to see the Manager".30 Why, then, was
he allowed to take a first class seat in the plane at Bangkok, if he had no seat? Or, if another had a
better right to the seat?

4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that
Carrascoso's action is planted upon breach of contract; that to authorize an award for moral
damages there must be

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27 Carrascosos ticket, according to petitioner (brief, pp. 7-8), shows:


Segment or leg

Carrier

Flight No.

Date of Departure

1. Manila to Hongkong

PAL

300A

March 30

2. Hongkong to Saigon

VN(Air Vietnam)

693

March 31

3. Saigon to Beirut

AF (Air France)

245

March 31

28 Petitioner's brief, p. 50; see also id., pp. 37 and 46.

29 Id., p. 103.

30 Ibid., p. 102.

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an averment of fraud or bad 'f aith ;31 and that the decision of the Court of Appeals fails to make a
finding of bad faith. The pivotal allegations in the complaint bearing on this issue are:

"3. That x x x plaintiff entered into a contract of air carriage with the Philippine Air Lines for a
valuable consideration, the latter acting as general agents for and in behalf of the defendant, under
which said contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff, First Class
passage on defendant's plane during the entire duration of plaintiff's tour of Europe with Hongkong
as starting point up to and until plaintiffs return trip to Manila, x x x.
4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok,
defendant furnished to the plaintiff First Class accommodation but only after protestations,
arguments and/or insistence were made by the plaintiff with defendant's employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff only
Tourist Class accommodations from Bangkok to Teheran and/or Casablanca, x x x the plaintiff has
been compelled by defendant's employees to leave the First Class accommodation berths at
Bangkok after he was already seated.

6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments
brought by defendant's breach of contract was forced to take a Pan American World Airways plane
on his return trip from Madrid to Manila.32

x x x x x x x x x

2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid.
plaintiff suffered inconveniences, embarrassments, and humiliations, thereby causing plaintiff
mental anguish, serious anxiety, wounded feelings, social humiliation, and the like injury, resulting in
moral damages in the amount of P30,000.00."33

x x x x

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff
a first

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31 Article 2220, Civil Code reads: "Willful injury to property may be a legal ground for awarding
moral damages if the court should find that, under the circumstances, such damages are justly due.
The same rule applies to breaches of contract where the defendant acted 'f raudulently or in bad
faith."

32 R.A., p. 2-4; italics supplied.

33 R.A., p. 5; second cause of action.

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class passage covering, amongst others, the BangkokTeheran leg; Second, That said contract was
breached when petitioner failed to furnish first class transportation at Bangkok; and Third, That
there was bad faith when petitioner's employee compelled Carrascoso to leave his first class
accommodation berth "after he was already seated" and to take a seat in the tourist class, by reason
of which he suffered inconvenience, embarrassments and humiliations, thereby causing him mental
anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is
true that there is no specific mention of the term bad faith in the complaint. But, the inference of
bad faith is there, it may be drawn from the facts and circumstances set forth therein.34 The
contract was averred to establish the relation between the parties. But the stress of the action is put
on wrongf ul expulsion.

Quite apart from the foregoing is that (a) right at the start of the trial, respondent's counsel placed
petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in
Bangkok, Carrascoso was ousted by petitioner's manager who gave his seat to a white man; 35 and
(b) evidence of bad faith' in the fulfillment of the contract was presented without objection on the
part of the petitioner. It is, therefore, unnecessary to inquire as to whether or not there is sufficient
averment in the complaint to justify an award for moral damages. Deficiency in the complaint, if any,
was cured by the evidence. An amendment thereof to conform to the evidence is not even
required.36 On the question of bad

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34 Copeland vs, Dunehoo, et al., 138 S.E., 267, 270. See also 25 C.J.S., pp. 758-759; 15 Am. Jur., pp.
766-767.

35 Statement of Attorney Villegas for respondent Carrascoso in open court, Respondent's brief, p.
33.

36 Section 5, Rule 10, Rules of Court, in part reads: ''SEC. 5. Amendment to conform to or authorize
presentation of evidence.When issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects, as if they had been raised in the
pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the
evidence and to raise these issues may be made upon motion of any party at any time, even after
judgment; but failure so to amend does not affect

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faith, the Court of Appeals declared:

"That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to
the defendant Air France while at Bangkok, and was transferred to the tourist class not only without
his consent but against his will, has been sufficiently established by plaintiff in his testimony before
the court, corroborated by the corresponding entry made by the purser of the plane in his notebook
which notation reads as follows:

'First-class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene',

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of
the plane who was asked by the manager of defendant company at Bangkok to intervene even
refused to do so. It is noteworthy that no one on behalf of defendant ever contradicted or denied
this evidence for the plaintiff. It could have been easy for defendant to present its manager at
Bangkok to testify at the trial of the case, or yet to secure his disposition; but defendant did
neither.37

The Court of Appeals further stated

"Neither is there evidence as to whether or not a prior reservation was made by the white man.
Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him when all the
seats had already been taken, surely the plaintiff should not have been picked out as the one to
suffer the consequences and to be subjected to the humiliation and indignity of being ejected from
his seat in the presence of others. Instead of explaining to the white man the improvidence
committed by defendant's employees, the manager adopted the more drastic step of ousting the
plaintiff who was then safely ensconsced in his rightful seat. We are strengthened in our belief that
this probably was what happened there, by the testimony of defendant's witness Rafael Altonaga
who, when asked to explain the meaning of the letters 'O.K.' appearing on the tickets of plaintiff,
said 'that the space is confirmed' for first class. Likewise, Zenaida Faustino, another witness for
defendant, who was the chief of the Reservation Office of defendant, testified as follows:

'Q. How does the person in the ticket-issuing office

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the result of the trial of these issues. 'x x x"; Co Tiamco vs. Diaz, etc., et al., 75 Phil. 672, 679; J.M.
Tuason ,& Co., Inc., etc. vs. Bolaos, 95 Phil. 106, 110.

37 Decision, Court of Appeals, Appendix A of petitioner's brief, pp, 147-148.

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know what reservation the passenger has arranged with you ?

A. They call us up by phone and ask for the confirmation.' (t.s.n., p. 247, June 19, 1959)

In this connection, we quote with approval what the trial Judge has said on this point:

'Why did the, using the .words of witness Ernesto G. Cuento, 'white man' have a 'better right' to the
seat occupied by Mr. Carrascoso ? The record is silent. The defendant airline did not prove 'any
better', nay, any right on the part of the 'white man' to the 'First class' seat that the plaintiff was
occupying and for which he paid and was issued a corresponding 'first class' ticket.

'lf there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant
could have easily proven it by having taken the testimony of the said Manager by deposition, but
defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if
produced [Sec. 69, par (e), Rules of Court] ; and, under the circumstances, the Court is constrained
to find, as it does find. that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his 'first class seat
because the said Manager wanted to accommodate, using the words of the witness Ernesto G.
Cuento, the 'white man'."38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use
the term "bad faith". But can it be doubted that the recital of facts therein points to bad faith ? The
manager not only prevented Carrascoso from enjoying his right to a first class seat; worse, he
imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of
having to go to the tourist class compartmentjust to give way to another passenger whose right
thereto has not been established. Certainly, this is bad faith. Unless, of course, bad faith has
assumed a meaning different from what is understood in law. For, "bad faith" contemplates a "state
of mind affirmatively operating with furtive design or with some motive of self-

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38 Decision of the Court of Appeals, Appendix A of petitioner's brief, pp. 147-151.

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interest or ill will or for ulterior purpose, "39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment
of the Court of First Instance, thus:

"The evidence shows that defendant violated its contract of transportation with plaintiff in bad faith,
with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of
threatening the plaintiff in the presence of many passengers to have him thrown out of the airplane
to give the 'first class' seat that he was occupying to, again using the words of the witness Ernesto G.
Cuento, a 'white man' whom he (defendant's Manager) wished to accommodate, and the defendant
has not proven that this 'white man' had any 'better right' to occupy the 'first class' seat that the
plaintiff was occupying, duly paid for, and for which the corresponding 'first class' ticket was issued
by the defendant to him."40

5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is
well settled in law.41 For the willful malevolent act of petitioner's manager, petitioner, his employer,
must answer. Article 21 of the Civil Code says:

"ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage."

In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the
provisions of Article 2219 (10), Civil Code, moral damages are recoverable.42
6. A contract to transport passengers is quite different in kind and degree from any other contractual
relation.43 And this, because of the relation which an air-carrier sustains with the public. Its business
is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers.
The contract of air carriage, therefore, generates a relation attended with

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39 Words ,& Phrases, Perm. Ed., Vol. 5, p. 13, citing Warfield Natural Gas Co. vs. Allen, 59 S.W. (2d)
534, 538.

40 R.A., p. 74; italics supplied.

41 Article 2180, Civil Code.

42 Philippine Refining Co. vs. Garcia, et al., L-21871 and L-21962, September 27, 1966.

43 See Section 4, Chapter 3, Title VIII, Civil Code.

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a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for an
action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carriers
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected
against personal misconduct, injurious language, indignities and abuses from such employees. So it
is, that any rule or discourteous conduct on the part of employees towards a passenger gives the
latter an action for damages against the carrier.44

Thus, "Where a steamship company45 had accepted a passenger's check, it was a breach of contract
and a tort, giving a right of action for its agent in the presence of third persons to falsely notify her
that the check was worthless and demand payment under threat of ejection, though the language
used was not insulting and she was not ejected."46 And this, because, altho the relation of
passenger and carrier is "contractual both in origin and nature" nevertheless "the act that breaks the
contract may be also a tort".47 And in another case, "Where a passenger on a railroad train, when
the conductor came to collect his fare tendered him the cash fare to a point where the train was
scheduled not to stop, and told him that as soon as the train reached such point he would pay the
cash fare from that point to destination, there was nothing in the conduct of the passenger which
justified the conductor in using insulting language to him, as by calling him a lunatic."48 and the
Supreme Court of South Carolina there held the carrier liable for the mental suffering of said
passenger.

Petitioner's contract with Carrascoso is one attended

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44 4. R.C.L., pp. 1174-1175.

45 An air carrier is a common carrier; and air transportation is similar or analogous to land and water
transportation. Mendoza vs. Philippine Air Lines, Inc., 90 Phil. 836, 841-842.

46 Austro-American S.S. Co. vs. Thomas, 248 F. 231.

47 Id., p. 233.

48 Lipman vs. Atlantic Coast Line R. Co., 93 S.E. 714, 716.

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Air France vs. Carrascoso

with public duty. The stress of Carrascoso's action as we have said, is placed upon his wrongful
expulsion. This is a violation of public duty by the petitioner air carriera case of quasi-delict.
Damages are proper.

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus

"Q.

You mentioned about an attendant. Who is that attendant and purser?

A.

When we left alreadythat was already in the tripI could not help it. So one of the flight
attendants approached me and requested 'f rom me my ticket and I said, What for? and she said,
"We will note that you transferred to the tourist class'. I said, 'Nothing of that kind. That is
tantamount to acc epting my transfer.' And I also said, 'You are not going to note anything there
because I am protesting to this transfer'.

Q.

Was she able to note it?

A.

No, because I) did not give my ticket.

Q.

About that purser ?

A.

Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I
stood up and I went to the pantry that was next to me and the purser was there. He told me, 'I have
recorded the incident in my notebook.' He read it and translated it to mebecause it was recorded
in French'First class passenger was forced to go to the tourist class against his will, and that the
captain refused to intervene.'

Mr. VALTE

'I move to strike out the last part of the testimony of the witness because the best evidence would
be the notes. Your Honor.

COURT

'I will allow that as part of his testimony."49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his
notebook reading "First class passenger was forced to go to the tourist class against his will, and that
the captain ref used to intervene is predicated upon evidence [Carrascoso's testimony above] which
is incompetent. We do not think

_______________

49 Petitioner's brief, pp. 104-105.

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SUPREME COURT REPORTS ANNOTATED

Air France vs. Carrascoso

so. The subject of inquiry is not the entry, but the ouster incident. Testimony on the entry does not
come within the proscription of the best evidence rule. Such testimony is admissible.49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of
the startling occurrence was still fresh and continued to be felt. The excitement had not as yet died
down, Statements then, in this environment, are admissible as part of the res gestae.50 For, they
grow "out of the nervous excitement and mental and physical condition of the declarant".51 The
utterance of the purser regarding his entry in the notebook was spontaneous, and related to the
circumstances of the ouster incident. Its trustworthiness has been guaranteed.52 It thus escapes the
operation of the hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It
would have been an easy matter for petitioner to have contradicted Carrascoso's testimony. If it
were really true that no such entry was made, the deposition of the purser could have cleared up
the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant
exemplary damages. in contracts and quasi-contracts. The only condition is that defendant should
have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner".53 The manner of
ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in
addition to moral damages.54

9. The right to attorney's fees is fully established. The

_______________

49a V Moran, Comments on the Rules of Court, 1963 ed., p. 76.

50 Section 36, Rule 130, Rules of Court.

51 IV Martin, Rules of Court in the Philippines/ 1963 ed., 324.

52 Ibid.

53 Article 2232, Civil Code.

54 Article 2229, Civil Code.

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171

Mercy's Inc. vs. Verde

grant of exemplary damages justifies a similar judgment for attorneys' fees. The least that can be
said is that the courts below felt that it is but just and equitable that attorneys' fees be given.55 We
do not intend to break faith with the tradition that discretion well exercisedas it was hereshould
not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the Court of
Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and
P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial court.56 The
Court of Appeals did not interfere with the same. The dictates of good sense suggest that we give
our imprimatur thereto. Because, the facts and circumstances point to the reasonableness
thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error.
We accordingly vote to affirm the same. Costs against petitioner. So ordered,

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala. Makalintal, Zaldivar and Castro. JJ. concur.

Bengzon, J.P., J., did not take part.

Decision affirmed.

Note.See Northwest Airlines, Inc. vs. Cuenca, L-22424, Aug. 31, 1965 and the annotation under
Lopez vs. Pan American World Airways, L-22415, March 30, 1966, 16 Supreme Court Reports
Annotated 431, 445. Air France vs. Carrascoso, 18 SCRA 155, No. L-21438 September 28, 1966
VOL. 330, APRIL 6, 2000

115

People vs. Bago

G.R. No. 122290. April 6, 2000.*

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. REYNALDO BAGO y MADRID, accused-appellant.


ARMANDO CAPARAS y CUENCO and RODOLFO ONGSECO y VEGO, accused.

Evidence; Witnesses; Best Evidence Rule; The best evidence rule cannot be invoked unless the
content of a writing is the subject of judicial inquiry, in which case, the best evidence is the original
writing itselfit finds no application where what is being questioned is the weight given by the trial
court to the testimony of a witness over the receipt which on its face shows that certain materials in
question were delivered.The rule cannot be invoked unless the content of a writing is the subject
of judicial inquiry, in which case, the best

_____________

* FIRST DIVISION.

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SUPREME COURT REPORTS ANNOTATED

People vs. Bago

evidence is the original writing itself. The rule pertains to the admissibility of secondary evidence to
prove the contents of a document. In the case at bar, no secondary evidence is offered to prove the
content of a document. What is being questioned by appellant is the weight given by the trial court
to the testimony of Manangan over the receipt which on its face shows that the materials in
question were delivered to Azkcons premises. Clearly, the best evidence rule finds no application on
this issue.

Same; Circumstantial Evidence; Requisites.It is well settled that before conviction can be based on
circumstantial evidence, the circumstances proved should constitute an unbroken chain of events
which leads to one fair and reasonable conclusion pointing to the defendant, to the exclusion of
others, as the author of the crime. Thus, the following requisites must be met: 1) there must be
more than one circumstance; 2) the facts from which the inferences are derived are proven; 3) the
combination of all the circumstances is such as to produce a conviction beyond reasonable doubt.

Criminal Law; Theft; Qualified Theft; Elements.Clearly, all the elements of theft were established,
to wit: (1) there was a taking of personal property; (2) the property belongs to another; (3) the
taking was without the consent of the owner; (4) the taking was done with intent to gain; and (5) the
taking was accomplished without violence or intimidation against the person or force upon things.
As the theft was committed with grave abuse of confidence, appellant is guilty of qualified theft.
Same; Qualified Theft; Penalties; The Revised Penal Code meant to say that when the penalty for
qualified theft is two degrees higher than that specified under Article 309, the judgment should
provide that the convict should not be given the benefit of the provisions of Article 27 until forty
years have elapsed, otherwise, there could be no difference at all between reclusion perpetua when
imposed as a penalty next higher in degree and when it is imposed as a penalty fixed by law.
Considering that the theft is qualified by grave abuse of confidence, the penalty is two degrees
higher than that specified under Article 309. In the case of People vs. Caales, we were confronted
with the same issue of determining how the penalty under Article 309 should be increased by two
degrees. In said case, we adopted the disquisition of the appellate court, thus: x x x But there is a
pervading divergence of opinion among commentators of

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People vs. Bago

the Revised Penal Code as to what the higher penalty referred to in Article 74 of the Revised Penal
Code should be. Some authors are of the view that the higher penalty would be reclusion perpetua
with the accessory penalties for the said penalty. But then, under Article 74 of the Revised Penal
Code, the accessory penalties under Article 40 of the Revised Penal Code should be imposed. Still
others, like former Senator Ambrosio Padilla, are of the view that the higher penalty is reclusion
perpetua with the accessory penalties of death under Article 40 of the Revised Penal Code if the
death penalty is commuted. But then, the accessory penalty under Article 40 of the Revised Penal
Code is perpetual absolute disqualification and civil interdiction during thirty (30) years following the
date of sentence, whereas, the accessory penalty of reclusion perpetua under Article 40 of the
Revised Penal Code is civil interdiction for life and perpetual absolute disqualification. As aptly
observed by former Chief Justice Ramon C. Aquino, there seems to be an absurdity under the latter
view (Aquino, Comments on the Revised Penal Code, supra). On the other hand, Justice Albert is of
the firm view that: The Code meant to say here that the judgment should provide that the convict
should not be given the benefit of the provisions of Article 27 until forty years should have elapsed;
otherwise, there could be no difference at all between reclusion perpetua when imposed as a
penalty next higher in degree and when it is imposed as the penalty fixed by law. (Albert, Comments
on the Revised Penal Code, 1932 edition, page 240). to which Justice Luis Reyes subscribes (Reyes,
Comments on the Revised Penal Code, 1981 ed., Vol. 1, page 746). Former Chief Justice Ramon C.
Aquino likewise is in accord with the opinion of Justice Albert.

APPEAL from a decision of the Regional Trial Court of Quezon City, Br. 92.

The facts are stated in the opinion of the Court.

The Solicitor General for plaintiff-appellee.

Public Attorneys Office for accused-appellant.

PUNO, J.:
Appellant REYNALDO BAGO was charged with qualified theft, while his co-accused ARMANDO
CAPARAS and RO-

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SUPREME COURT REPORTS ANNOTATED

People vs. Bago

DOLFO ONGSECO were charged with simple theft, in an Information1 which reads:

That sometime during the period from January 1992 to March 23, 1992, in Quezon City, Philippines,
REYNALDO BAGO y MADRID, being then employed as factory worker of the Azkcon Metal Industries
detailed with the Power Construction Supply Company located at No. 130 Judge Juan Luna Street,
San Francisco del Monte, this City, and as such has free access to the different departments of the
company, with grave abuse of confidence, in conspiracy with his co-accused ARMANDO CAPARAS
and RODOLFO ONGSECO y VEGO, conspiring together, confederating with and mutually helping one
another, with intent to gain and without the knowledge and consent of the owner thereof, did then
and there wilfully, unlawfully and feloniously take, steal and carry away assorted cold rolled sheets
and scraps valued in the total amount of P194,865.00, Philippine Currency, belonging to Power
Construction Supply Company, represented by WILLIAM HILO, to the damage and prejudice of the
owner thereof in the aforementioned amount.

CONTRARY TO LAW.

Appellant and his co-accused pled not guilty. Trial ensued.

Appellant was an employee of Azkcon Metal Industries (Azkcon for brevity) from 1988 to 1992. He
started working as a factory worker and later became a machine operator and a truck helper. From
1991 to 1992, he served as team leader at the cutting department under the supervision of Material
Comptroller WILLIAM HILO who kept track of all the materials coming in and going out of the
companys plant in Kalookan City.2

Azkcon has a business arrangement with Power Construction Supply Company (Power Construction)
whereby Azkcon buys cold rolled sheets from the latter. These cold rolled sheets are also cut by
Power Construction for a fee and Azkcon converts them into drums or containers. Appellants

_____________

1 Original Records, p. 1.

2 TSN, Reynaldo Bago, March 16, 1993, pp. 3-4; July 19, 1993, pp. 4 and 7.

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119
People vs. Bago

job was to go to Power Constructions establishment in Quezon City to oversee the cutting of the
cold rolled sheets and ensure their delivery to Azkcon using the trucks sent by Hilo.3

On April 21, 1992, appellant and his co-workers4 went to Power Construction and loaded two cold
rolled sheets in a truck owned by Azkcon.5 Before entering the premises of Azkcon, appellant
presented to security guard RUBEN DE LA CRUZ MANANGAN two receipts,6 both dated April 21,
1992, covering the cold rolled sheets from Power Construction. Manangan inspected the contents of
the truck. As everything was accounted for, Manangan stamped on the two receipts covering the
materials. Appellant then presented a third receipt,7 with Invoice No. 51111, dated March 23, 1992,
for stamping. Manangan likewise stamped the third receipt. As the third receipt bore a different
date, Manangan asked appellant if the materials covered by said receipt were in the truck. Appellant
replied that the materials had long been delivered. Manangan did not investigate further but later
reported the incident to the Chief of Security Department, AFLOR ONG. Ong checked the third
receipt and when he failed to find the materials listed thereon, he reported to Hilo.8

Upon receipt of the report, Hilo discreetly conducted a more in-depth investigation. He found out
that the materials covered by the third receipt, worth P192,000.00, were not delivered to Azkcon.
He checked the third receipt and the gate pass of Power Construction for March 23, 1992the date
of the questioned transactionand discovered that the truck used by appellant on said date did not
belong to Azkcon. It

_______________

3 TSN, William Hilo, August 24, 1992, pp. 18-19; TSN, Reynaldo Bago, March 16, 1993, pp. 5-8.

4 Danilo Baylosis and Candido Querobin.

5 TSN, Jun Gavaran, September 7, 1992, pp. 8-9.

6 Exhibits A and B. TSN, Ruben De La Cruz, August 18, 1992, pp. 3-4.

7 Exhibit C.

8 TSN, Ruben Manangan, August 18, 1992, pp. 3-8, 11-15; TSN, Aflor Ong, August 18, 1992, pp. 20-
27.

120

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SUPREME COURT REPORTS ANNOTATED

People vs. Bago

also turned out that the subject materials had already been paid for by Azkcon.9

Power Constructions security guard, JUN GAVARAN, confirmed that on March 23, 1992, appellant
and his companions picked up cold rolled sheets from Power Construction and loaded them in a
truck. The truck did not bear the logo of Azkcon. Gavaran noted on a ledger that the truck came at
2:15 p.m. and left at 3:35 p.m.
Hilo did not immediately report the matter to his superior. He chose to wait for appellant to commit
a similar misdemeanor and catch him red-handed. He waited in vain. He then decided to inform his
superiors about the theft in May 1992. Hilo was directed to report the theft and file a complaint with
the police authorities.

A police team, led by SPO3 ALFREDO ALFARO, investigated appellant at Azkcon. Appellant insisted
that the materials covered by the third receipt had been delivered to Azkcon. The investigation of
appellant continued at the police station. PO3 Andres Balod interrogated appellant. Appellant asked
for a lawyer and was brought to the Integrated Bar of the Philippines (IBP) where he was assisted by
Atty. Florimond C. Rous. Atty. Rous talked to him and inquired if he was willing to give a statement
to the police. The interrogation then proceeded and appellant admitted his participation in the theft.
He disclosed that his cohorts on March 23, 1992 were ARMANDO CAPARAS and RODOLFO
ONGSECO, former employees of Azkcon. He revealed that they usually loaded the stolen materials in
a truck rented by Caparas and Ongseco. He received P10,000 to P35,00010 for his participation in
the different thefts.11 Appellant affixed his signature on the written statement.12 After the
investigation, PO3 Balod referred the case to Fiscal Paragua.

_____________

9 TSN. William Hilo, August 24, 1992, pp. 3-10, 14-17.

10 TSN, Andres Balod, September 7, 1992, pp. 25-28.

11 TSN, Andres Balod, September 7, 1992, pp. 25-28.

12 Id., pp. 48-49.

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People vs. Bago

The next day, the police went to Malinta, Valenzuela and apprehended accused Caparas and
Ongseco. It was appellant who pointed out the residence of Caparas and Ongseco to the police. The
two identified a certain Chua as the alleged buyer of the stolen goods. The police invited Chua for
investigation. Inexplicably, the investigation of Chua was not reduced to writing.13

Appellant denied participation in the crime charged. He described his job as team leader at the
cutting department of Azkcon. He said that Hilo would order him to proceed to Power Construction
Supply to oversee the cutting and procurement of the materials needed by Azkcon. Hilo would then
instruct him to wait for his call and the arrival of their truck at Power Construction Supply. They
would usually use Azkcons trucks, but at other times, Hilo would rent trucks from others.14

As soon as the truck would arrive at the premises of the supplier, the driver would ask for appellant.
He would then load the materials in the truck and would show the receipts covering the materials to
the security guard of Power Construction Supply for stamping. The materials inside the truck would
be counterchecked against the quantity and quality stated in the receipts. Appellant would then
return to Azkcon usually at about 4:00 p.m. Thus, he would mainly stay at the suppliers premises to
oversee the cutting of the cold rolled sheets.15

Appellant claimed he does not know prosecution witness Jun Gavaran, the security guard of
Philippine Construction Supply. He also denied knowing accused Caparas and Ongseco. Allegedly, he
saw them for the first time at the police station. He admitted knowing prosecution witnesses
Manari-

______________

13 TSN, Alfredo Alfaro, August 10, 1992, pp. 4-6, 10-13.

14 TSN, Reynaldo Bago, March 16, 1993, pp. 5-8; July 19, 1993, pp. 36-37.

15 TSN, Reynaldo Bago, March 16, 1993, pp. 5-8; July 19, 1993, pp. 4-10, 14, 20.

122

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SUPREME COURT REPORTS ANNOTATED

People vs. Bago

gan and Ong. He acknowledged that he had no quarrel with Gavaran, Manangan and Ong.16

On May 21, 1992, four (4) policemen in civilian clothes arrested him without a warrant while
working in Azkcon. They told him that Hilo filed a complaint against him. He was detained at the La
Loma police station. Hilo came and pointed him as the one responsible for the theft but without
informing him what he stole. Upon orders of Hilo, the policemen started to beat him. They forced
him to admit the crime. They also compelled him to give a statement but he refused.17

The next day, the policemen and Hilo brought him to Valenzuela. Hilo indicated to the policemen the
residence of accused Caparas and Ongseco. That was the first time he saw his co-accused.18

Then, the policemen forced appellant to go to the IBP office in Quezon City. They gave him Atty.
Rous as counsel although he insisted on hiring his own counsel. Atty. Rous never conferred with him.
No investigation was conducted at the IBP. The police did not ask him a single question. Without
reading his prepared statement, he signed it as the police threatened to harm him. He
acknowledged his signatures on the invoices marked as Exhibits A to D,19 but claimed he could
not recall the circumstances under which he signed them.20

After seven (7) days at the La Loma police station, he was taken to the Fiscals Office in Quezon City.
The inquest fiscal did not talk to him. He was asked about the voluntariness of his signature in his
extra-judicial confession.21

_______________

16 TSN, Reynaldo Bago, July 19, 1993, pp. 14, 34-35.

17 TSN, Reynaldo Bago, March 16, 1993, pp. 9-13.


18 TSN, Reynaldo Bago, September 9, 1993, pp. 6-7.

19 Invoice Nos. 51429, 51428, 51111 (Customers Copy) and 51111 (Gate Pass), Original Records, pp.
90-93.

20 TSN, Reynaldo Bago, March 16, 1993, pp. 13-19; September 9, 1993, p. 4.

21 Exhibit K; Original Records, pp. 101-102.

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People vs. Bago

Thereafter, he was brought back to the station.22

Appellants father, PABLO BAGO, testified that on June 15, 1992, he went to the NBI to seek
protection for his son as they were receiving threats from Hilo and police officers Balod and Alfaro.
Days later, Hilo, Alfaro and Balod went to his house in Quezon City looking for appellant. Hilo warned
that appellant should admit the crime lest something untoward would happen to him.23 Again, after
his sons arraignment, a certain Col. Hernandez visited their house and insisted on taking appellant
to Azkcon. Pablo refused, arguing that the case had already been filed in court.24 On another
occasion, Col. Hernandez and his lady friend dropped by his house and convinced him and his son to
talk to Mr. King, the owner of Azkcon. During their meeting, Mr. King allegedly told Pablo that he
knew that appellant was innocent but asked him to testify against the persons responsible for the
crime. Pablo replied that they would think about the proposal.25 Mr. Kings lawyer, Atty. Capistrano,
also gave him the same advice. Atty. Capistrano requested them to go to his office where appellant
could execute a statement. Instead of going there, Pablo and the appellant proceeded to the office
of appellants lawyer.26

Allegedly, appellant was maltreated while in the custody of the police. Pablo claimed that he
reported the physical abuse to the NBI.27

Prosecutions rebuttal witness ATTY. FLORIMUND C. ROUS, free legal aid counsel of IBP, testified
that on May 22, 1992, appellant was brought to their office for the execution of his extra-judicial
confession. As a matter of procedure, he first examined the body of appellant to determine any sign
of physical abuse or maltreatment while the latter was in police custody. Finding none, he inquired
from appellant whether he

_______________

22 TSN, Reynaldo Bago, September 9, 1993, pp. 9-12.

23 TSN, Pablo Bago, September 13, 1993, pp, 5-7.

24 Id., pp. 7-9;

25 TSN, Pablo Bago, September 13, 1908, pp. 10-14.


26 Id., pp, 15, 20.

27 Id., pp. 27-28.

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SUPREME COURT REPORTS ANNOTATED

People vs. Bago

was willing to confess to the commission of the theft. Beforehand, he already informed appellant of
the consequence of his confession, i.e., that it could be used against him. Nonetheless, appellant
affirmed his willingness to execute a written confession. Thus, the policeman proceeded to take the
statement of appellant. Appellant signed his extrajudicial confession28 in his (Atty. Rous) presence.

Rebuttal witness ATTY. MELANIO CAPISTRANO testified that he was Azkcons legal counsel. He
confirmed that a conference was held at Azkcon premises in connection with the theft. Present were
appellant, Pablo Bago, Mr. King and a former employee of Azkcon. Due to the complexity of the
modus operandi, Mr. King suspected that appellant had other companions in committing the theft.
Mr. King then informed him that appellant had agreed to turn state witness. Appellant confessed
that, his supervisor William Hilo, a certain Severino Encarnacion and his co-accused Ongseco and
Caparas took part in the heist. Allegedly, Encarnacion was the brains behind the theft; Hilo took care
of the operations on the Azkcon side, while Ongseco and Caparas took care of the procurement of
the stolen goods. Atty. Capistrano expressed reservations about the involvement of Hilo as he was
the one who reported the theft to the management. After the conference, he advised appellant to
consult his own lawyer and execute a statement so he could determine if they would use appellant
as a state witness. Prior to his arraignment, appellant was told that he should decide whether he
wanted to be a state witness. In their next scheduled meeting, appellant and his lawyer, Atty.
Jambora, failed to appear.29

On sur-rebuttal, Pablo Bago insisted that on July 1992, Col. Hernandez went to Pearanda, Nueva
Ecija and took pictures of his house. Col. Hernandez invited him and appellant to go to Azkcon. They
refused as appellant had already posted bail at that time. Atty. Capistrano, on the other hand,

______________

28 Exhibit K; TSN, Atty. Florimund Rous, November 29, 1993, pp. 6-14.

29 TSN, Atty. Melanio Capistrano, April 25, 1994, pp. 7-18.

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People vs. Bago


insisted that appellant should name the other employees involved in the theft so that they could be
dismissed from the company.30

On April 26, 1995, the Regional Trial Court of Quezon City31 convicted appellant of qualified theft.
Accused Caparas and Ongseco were acquitted for insufficiency of evidence. The dispositive portion
of the decision32 reads:

WHEREFORE, in view of all the foregoing, the Court finds accused REYNALDO BAGO y MADRID
guilty beyond reasonable doubt as principal of the crime of Qualified Theft as defined and penalized
under Article 308, in relation to Article 309, paragraph 1 and Article 310 of the Revised Penal Code,
and hereby sentences said accused to an indeterminate penalty of imprisonment ranging from
Twenty (20) years and One (1) day of Reclusion Perpetua as minimum to Twenty-Eight (28) years,
Ten (10) months and One (1) day of Reclusion Perpetua as maximum, with the accessory penalties of
the law and to indemnify the complainant in the sum of P194,865.00, representing the value of the
stolen cold rolled sheets, without subsidiary imprisonment in case of insolvency, and to pay the
costs.

Accused ARMANDO CAPARAS Y CUENCO and RODOLFO ONGSECO Y VEGO are hereby ACQUITTED
for insufficiency of evidence.

SO ORDERED.

Appellant moved for reconsideration of the trial courts decision. The motion was denied for lack of
merit,33 although the dispositive portion of the trial courts decision was amended, thus:

WHEREFORE, in view of all the foregoing reasons, the Motion for Reconsideration is hereby DENIED
for lack of merit.

______________

30 TSN, Pablo Bago, August 1, 1994, pp. 4-9.

31 Branch 92.

32 Rollo, pp. 39-62. Penned by Presiding Judge Juan Q. Enriquez.

33 Order dated August 15, 1995, Original Records, pp. 291-294.

126

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SUPREME COURT REPORTS ANNOTATED

People vs. Bago

Pursuant to People vs. Conrado Lucas (240 SCRA 66), [the] dispositive portion of the decision is
hereby modified but only insofar as accused Reynaldo Bago is concerned to read as follows:

WHEREFORE, in view of all the foregoing, the Court finds accused Reynaldo Bago y Madrid GUILTY
beyond reasonable doubt as principal in the crime of Qualified Theft as defined and penalized under
Article 309, paragraph 1 and Article 310 of the Revised Penal Code, and hereby sentences said
accused to the penalty of reclusion perpetua, with the accessory penalties of the law, and to
indemnify the complainant in the sum of P194,865.00, representing the value of the stolen cold
rolled sheets, without subsidiary imprisonment in case of insolvency, with costs.

SO ORDERED.

The Appellants Brief raises two issues, to wit:

I.

THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED-APPELLANT OF THE CRIME OF QUALIFIED
THEFT BASED ON CIRCUMSTANTIAL EVIDENCE PRESENTED BY THE PROSECUTION.

II.

THE TRIAL COURT ERRED IN CONCLUDING THAT THE PROSECUTION HAS PROVEN THE GUILT OF THE
ACCUSED, REYNALDO BAGO, BEYOND REASONABLE DOUBT.

We affirm with modification.

Appellant contends that the prosecution failed to prove even by circumstantial evidence that he
asported the cold rolled sheets in question. He asserts that these materials were delivered to Azkcon
as evidenced by the receipt34 duly stamped by the guard on duty. He states:

x x x [T]he best evidence that the materials were actually delivered at Azkcon Metal Industries is
the receipt duly stamped by

____________

34 Exhibit C.

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People vs. Bago

the guard on duty. Res ipsa loquitor. To receive the testimony of the security guard, that he stamped
the receipt even without the goods because he trusted the accused, would set a precedent that will
eventually convict an innocent person. After duly stamping the receipt, it is very easy for the security
guard to claim otherwise to avoid liability.35

Appellant also contends that his task was to oversee the delivery of the materials from their supplier
to Azkcon. Allegedly, it was erroneous to conclude that he stole the materials just because they
could not be found in its premises as he was not responsible for any material lost therein.
Lastly, appellant belittles the documents showing that the truck he used in taking out the materials
from Power Construction on March 23, 1992 did not belong to Azkcon. He claims that said
documents had no bearing on his culpability.

We reject these contentions.

First. Appellant, in effect, assails the testimony of Ruben Manangan, the security guard who
stamped the receipt marked as Exhibit C, on the ground that the receipt itself shows that the
materials were delivered to Azkcon. Appellant argues that the receipt is the best evidence and
should be given more credence than Manangans testimony. Appellants argument is bereft of merit
for Manangans testimony is corroborated by another witness, William Hilo, Material Comptroller of
Azkcon who kept track of all materials coming in and going out of Azkcons plant. He testified that on
April 21, 1992, he received three (3) receipts but only two (2) materials were delivered to Azkcons
premises. The receipt marked as Exhibit C covered the missing materials. Manangans testimony is
further corroborated by two (2) pieces of documentary evidence: first, by Power Construction
Supply Co. Gatepass Invoice No. 51111 dated March 22, 199236 which shows that the materials
covered by Exhibit C were taken out by appellant from the premises of Power Construction Supply
on

_______________

35 Appellants Brief, Rollo, pp. 140-141.

36 Exhibit D.

128

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March 23, 1992, about a month before the receipt was stamped; and second, by a document from
Power Construction Supply dated March 23, 1992 containing information about the truck used in
pulling out the materials from Power Construction Supply on said date. The truck bore license plate
no. PRC-513 and was not owned by Azkcon. The truck belonged to a certain Ruel Fernando who had
no contractual relation with Azkcon and said vehicle was not to be used to take out materials from
Power Construction Supply. In view of these corroborations, we hold that the trial court did not err
in giving credence to Manangans testimony despite, the receipt.

Appellant cannot rely on the best evidence rule which states:

SEC. 3. Original document must be produced; exceptions.When the subject of inquiry is the
contents of a document, no evidence shall be admissible other than the original document itself,
except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith
on the part of the offeror;
(b) When the original is in the custody or under the control of the party against whom the evidence
is offered, and the latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined
in court without great loss of time and the fact sought to be established from them is only the
general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public
office.37

The rule cannot be invoked unless the content of a writing is the subject of judicial inquiry, in which
case, the best evidence is the original writing itself. The rule pertains to the admissibility of
secondary evidence to prove the contents of a document. In the case at bar, no secondary evidence
is offered to prove the content of a document. What is being questioned

______________

37 Rules of Court, Rule 130, Sec. 3.

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by appellant is the weight given by the trial court to the testimony of Manangan over the receipt
which on its face shows that the materials in question were delivered to Azkcons premises. Clearly,
the best evidence rule finds no application on this issue.

Second. It is well settled that before conviction can be based on circumstantial evidence, the
circumstances proved should constitute an unbroken chain of events which leads to one fair and
reasonable conclusion pointing to the defendant, to the exclusion of others, as the author of the
crime.38 Thus, the following requisites must be met: 1) there must be more than one circumstance;
2) the facts from which the inferences are derived are proven; 3) the combination of all the
circumstances is such as to produce a conviction beyond reasonable doubt.39

In the case at bar, the trial court convicted the appellant based on this chain of events:

1. Azkcon Metal Industries is engaged in metal business and for this purpose contracted a business
arrangement with Power Construction Supply whereby Azkcon purchases the cold rolled sheets from
the latter and the cold rolled sheets are cut by Power Construction Supply;

2.Accused Bago is a trusted employee of Azkcon and detailed with Power Construction Supply
Company in charge of the Cutting Department; and that as such he was authorized by Mr. William
Hilo, Controller Manager of Azkcon, to pull out from the Power Construction Supply the cut
materials and to deliver the same to Azkcon;

3. On April 21, 1992, accused Bago, together with his co-employees, Danilo Baylosis and Candido
Querobin entered the Azkcon premises with deliveries of two cold rolled sheets loaded in the truck.
Security Guard Manangan inspected the materials in the truck and after confirming that the
materials were loaded in the truck, he stamped the receipts upon request of accused Bago.
Thereafter, accused Bago brought out another receipt and requested Secu-

_____________

38 People vs. Maqueda, 242 SCRA 565 (1995); People vs. Lorenzo, 240 SCRA 624 (1995).

39 People vs. Cadevida, et al., 219 SCRA 218 (1993).

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rity Guard Manangan to likewise stamp the same. Security Guard Manangan checked the goods
covered by the third receipt and found there were no cold rolled sheets for the third receipt. The
third receipt carried a different date. Security Guard Manangan asked accused Bago as to the
whereabouts of the materials covered by the third receipt and the latter replied that they had long
been delivered. Nevertheless, Security Guard Manangan stamped this last receipt because he
trusted that accused would not do anything bad;

4. On April 21, 1992, William Hilo, the material controller of Azkcon, discovered that there were
three (3) receipts which came in, but only two materials were delivered inside the company
compound. The materials covered by the two (2) receipts were delivered but the materials covered
by the third receipt were not. Hilo conducted an inventory and asked accused Bago the whereabouts
of the materials in question. Accused Bago insisted that the materials had long been delivered. Hilo
proceeded with his investigation and was able to secure from the Power Construction Supply
Company Gatepass Invoice No. 51111 dated March 22, 1992 (Exh. D) which shows that the
materials covered by the third receipt were taken out by accused Bago from the premises of Power
Construction Supply on March 23, 1992;

5. Hilo was able to secure from Power Construction Supply a document dated March 23, 1992 (Exh.
E) which contained information on the truck used in pulling out the materials from Power
Construction Supply on March 22, 1992 (sic). The truck bears Plate No. PRC-513 and is not owned by
Azkcon. As per copy of the certificate of registration secured from the Land Transportation Office,
the truck is owned by a certain Ruel Fernando who has no contractual relations with Azkcon. Said
vehicle is likewise not authorized to pull out materials from the Power Construction Supply.

The trial court concluded that the foregoing circumstances lead to a reasonable conclusion that
appellant asported the materials covered by Exhibit C.

We agree.

Appellant cannot rely on the fact that the third receipt was duly stamped by security guard Ruben
Manangan on April 21,

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1992. Manangan explained well why he stamped the receipt. He said:40

Q:

On April 21, 1992, did you report for work as security guard at AZKCON Metal Industries?

A:

Yes, sir.

Q:

And was there any unusual incident that transpired on that day, if you recall?

A:

There was a truck which was carrying two (2) cold rolled sheets.

xxx xxx xxx

Q:

By the way, who were with (sic) the truck which carried the (2) cold rolled sheets which you
mentioned?

A:

Bago sir.

xxx xxx xxx

Q:

Now, when this truck came [in], with Reynaldo Bago with Bailosis and Querubin, carrying deliveries
of two (2) cold rolled sheets, what happened after that, if anything happened?

A:

After I inspected the two (2) cold rolled sheets, I stamped the receipts for them.

Q:

Before you stamped the receipts for these two (2) cold rolled sheets, did you make sure that the
goods were there?

A:

Yes sir.
Q:

What happened after that?

A:

After I stamped the two (2) receipts, he brought out another receipt which they asked me to stamp
also.

Q:

By the way, who asked you to stamp the two (2) receipts covering the two (2) cold rolled sheets
loaded in the truck?

A:

Bago sir.

xxx xxx xxx

COURT

xxx xxx xxx

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40 TSN, Ruben Manangan, August 18, 1992, pp. 3-5, 13-14.

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Q:

And who was the one who brought out this other receipt for stamping?

A:

Bago sir.

Q:

And what did he tell you, if he told you anything about this receipt?

A:

He said please put a stamp on this receipt.

Q:
Did you?

A:

Yes, because I trusted him.

Q:

And did you also check whether the goods covered by this 3rd receipt was (sic) in the truck
unloaded?

A:

Sir there was no cold rolled sheet for that receipt.

Q:

And why did you stamp this receipt for cold rolled sheets for that receipt? (sic)

A:

Because I trusted him that he would not do anything bad.

xxx xxx xxx

Q:

Now, in spite of the fact that your personal knowledge of the person Reynaldo Bago was in the
course of your performance of your duty, including Reynaldo Bago (sic), you would like to impress
upon us that in spite of that you trusted him?

ATTY. CAPISTRANO:

Argumentative, your Honor.

COURT:

Witness may answer.

A:

Yes sir.

Q:

In spite of the fact that the 3rd receipt according to you, when you inspected it, there was no cold
rolled sheets covering Exhibit C?

A:

No material sir.

Q:
In spite of the fact that you did not find any Cold Rolled Sheets material you still honored the receipt
by affixing you signature after you stamped it, correct?

A:

Yes sir, but when I saw the receipt it had a different date.

Q:

x x x [D]id you ask Reynaldo Bago why is it a different date and why are there no Cold Rolled
Sheets is (sic) the 3rd receipt?

A:

I asked him where these materials are and he told me that it has (sic) long been delivered.

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Q:

Now did you ask him where it was (sic) delivered and what place of AZKCON did he deposit these
Cold Rolled Sheets which are (sic) covered by this 3rd receipt?

A:

No, sir.

Q:

Now with regards (sic) to your duty as security guard, did you call the attention of the management
about this 3rd receipt with no Cold Rolled Sheets and you stamped the receipt knowing that there
was (sic) no materials inside. Did you ask the management, the president, the manager, the foreman
or whoever it is (sic) on duty at the time?

A:

I reported it to our chief Aflor Ong.

Q:

Who is this Aflor Ong?

A:

Chief.41

The fact of non-delivery of the subject materials to Azkcon was established through the testimony of
two other witnesses, namely, William Hilo and the Chief Security Officer Aflor Ong. Hilo declared:42

ATTY. CAPISTRANO
Q:

On April 21 (1992), would you please tell us what happened on that date?

A:

On April 21, the materials arrived and the guard checked it (sic) and I checked it (sic) also. We found
out that there were three (3) receipts but there were only two (2) materials inside the company.

Q:

How did you come to know this, Mr. Witness?

A:

It was reported by the OIC of the Security Guard, sir.

Q:

You spoke of three (3) receipts, did you come to see these receipts?

A:

Yes, sir.

Q:

If I will show you them again (sic), will you be able to identify the same?

A:

Yes, sir.

__________________

41 Emphasis ours.

42 TSN, William Hilo, August 24, 1992, pp. 4-8.

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Q:

I am showing to you these receipts which was (sic) previously marked as Exhibits A, B and C,
are these the three (3) receipts which you mentioned a while ago?

A:

Yes, sir.

Q:
Would you kindly take a look at these receipts and tell the Honorable Court, which particular receipt
is controversial in the sense that the goods described therein did not enter your company premises?

ATTY. HAMBON: (sic)

I will object to that, Your Honor, incompetent.

COURT:

The witness may answer.

(The witness is examining the document)

INTERPRETER:

Witness is pointing to Exhibits A and B, as the one with the materials arrived (sic) and pointed to
Exhibit C as the controversial receipt.

ATTY. CAPISTRANO:

xxx xxx xxx

Q:

For how long have you known Reynaldo Bago?

A:

Since (sic) two (2) years, sir.

Q:

What is the specific function of Reynaldo Bago in your company?

A:

Reynaldo Bago is in charge of Cutting Department.

Q:

As a Material Controller, do you have any supervision of (sic) Reynaldo Bago?

A:

Yes, sir.

Q:

By the way, at the bottom portion of Exhibits A, B and C, there appears a signature, can you go
over this (sic) and tell the Honorable Court, whose signatures stated (sic) therein?
A:

This is a signature of Reynaldo Bago.

INTERPRETER:

Witness is pointing to a signature on Exhibit A.

ATTY. CAPISTRANO:

Which I request, You Honor, to be marked as Exhibit A-2.

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COURT:

Mark it.

ATTY. CAPISTRANO:

Q:

How about in Exhibit B?

A:

The same it was the signature of Reynaldo Bago.

ATTY. CAPISTRANO:

At this juncture, Your Honor, may I request that this portion be marked as Exhibit B-2.

Q:

How about Exhibit C?

A:

The same Mr. Reynaldo Bagos signature.

ATTY. CAPISTRANO:
May I request, Your Honor, that the pointed portion of Exhibit C, be marked in evidence as Exhibit
C-2.

Q:

Why do you know that these are the signature (sic) of Reynaldo Bago?

A:

Because I am in charge of Reynaldo Bago, and I know his signature.

Q:

If Reynaldo Bago is in Court, can you point to him?

INTERPRETER:

Witness is pointing to a person who identified himself as Reynaldo Madrid Bago.

ATTY. CAPISTRANO:

Q:

You said that this matter was reported to you by the OIC of the Security Guard, (sic) when this
matter was reported to you, what step or steps did you take, if any?

A:

I conducted an actual inventory and confronted Reynaldo Bago and asked him where are (sic) the
materials which is (sic) in question.

Q:

You said that your (sic) conducted an actual inventory what was your findings in your inventory?

A:

According to my findings the materials did not reach the company.

ATTY. HAMBON: (sic)

Your Honor, may I request that [thatl portion be stricken-off the record.

COURT:

The witness may answer, place that on record.

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People vs. Bago

ATTY. CAPISTRANO:

When you said that according to your findings that (sic) the materials did not arrive, to what
particular receipt are (sic) you referring to?

This one, sir.

INTERPRETER:

Witness is pointing to Exhibit C.

Q:

You said that you confronted Reynaldo Bago, what transpired during your confrontation?

A:

He told me that the material arrived long before but when I checked it out, I found out that it didnt
arrived (sic).

Prosecution witness Aflor Ong testified as follows:43

Q:

And would you kindly inform this Honorable Court whether there is any unusual incident that
transpired on April 21, 1992 as you were then performing your duty as chief security guard.

A:

About the receipts of materials delivered, Sir.

Q:

Would you kindly elaborate on that?

A:

There were 3 receipts but only two (2) items were delivered.

Q:

And how did you come to know this?

A:

It was reported to me by the security guard on duty.

Q:

And who was this security guard who reported the matter to you?

A:
Security guard Ruben Manangan, Sir.

Q:

And when this matter was reported to you, what did you do, if you did anything?

A:

I checked it also and after I checked, I reported it to William Hilo.

Q:

What precisely did you check?

The items.

Q:

Did you find these items for the 3rd receipt?

A:

None, Sir.

xxx xxx xxx

____________

43 TSN, Aflor Ong, August 18, 1992, pp. 20-25.

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Q:

Now according to you, on April 21, 1992 you were at AZKCON Metal Industries?

A:

Yes Sir.

Q:

And your attention was invited on the first two receipts, containing the Cold Rolled Materials?

ATTY. CAPISTRANO:
Misleading your Honor.

COURT:

Three (3) Receipts.

Q:

Your attention was invited by 3 receipts.

A:

After the guard reported it to me, Sir.

Q:

Who was this guard who reports (sic) to you?

ATTY. CAPISTRANO:

Already answered your Honor.

COURT:

Witness may answer.

A:

Ruben Manangan.

Q:

What time did he make the report?

A:

Four to Five in the afternoon Sir.

Q:

And what was the report all about?

A:

About two (2) cold rolled sheets, Sir.

Q:

What is it?

A:

Only two (2) cold rolled sheets were delivered, one is (sic) missing.

Q:
And, of course, the security guard showed to you the 3rd receipt which did not cover the materials
in the cargo truck?

ATTY. CAPISTRANO:

Misleading again, your Honor.

COURT:

Witness may answer.

A:

Witness may answer (sic).

Q:

You are, of course, referring to Exhibit C?

A:

Yes, Sir.

Q:

At the time the report was shown to you, did you inspect the truck?

A:

Yes, Sir.

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Q:

And you did not find actually the materials?

A:

I did not find the material covering this Exhibit C.

Q:

Covering the 3rd receipt?

A:

Yes, Sir.
Q:

After you inspected, what action did you take, because it was reported to you by the security guard?

A:

I reported it to Mr. William Hilo, the one in-charge of the materials.44

The trial court correctly found that appellant was a trusted employee of Azkcon. He was in-charge of
overseeing the cutting of the materials at Power Construction and ensuring their delivery to Azkcon.
Due to this trust, he succeeded in withdrawing from the said supplier the cold rolled sheets covered
by Exhibits A and B dated April 21, 1992 and Exhibit C (Invoice No. 51111), dated March 23,
1992. Appellant signed these receipts to signify that he obtained the materials from the supplier.
However, only the materials covered by Exhibits A and B were delivered to Azkcon on April 21,
1992. Those covered by Exhibit C were not delivered. Significantly, the materials procured on April
21, 1992 were delivered that same day, as shown by the stamp marks on Exhibits A and B. In
contrast, the materials he took from the supplier on March 23, 1992 could not be found in the
premises of Azkcon and there was no evidence that he delivered them on said date or on any other
day thereafter. Inexplicably, appellant presented the third receipt (Invoice No. 51111) dated March
23, 1992 for stamping only on April 21, 1992. The reasonable conclusion is that he asported the
materials covered by Exhibit C.

Clearly, all the elements of theft were established, to wit: (1) there was a taking of personal
property; (2) the property belongs to another; (3) the taking was without the consent of the owner;
(4) the taking was done with intent to gain; and (5) the taking was accomplished without violence or
intimidation

______________

44 Emphasis ours.

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against the person or force upon things.45 As the theft was committed with grave abuse of
confidence, appellant is guilty of qualified theft.

Third. We now come to the correctness of the penalty imposed on appellant.

The trial court sentenced the appellant to suffer the penalty of reclusion perpetua. In its Comment,
the Office of the Solicitor General opined that the penalty was erroneous. It noted that:

The present case falls under Article 308, in relation to Article 309, paragraph one (1) and Article 310
of the Revised Penal Code, for the purpose of determining the penalty to be imposed on appellant, x
x x.
Since the lower court found that the value of the thing stolen was P194,865.00, the penalty
prescribed in this case, had it been a case of simple theft, is imprisonment of 20 years corresponding
to reclusion temporal. Since the offense was committed with grave abuse of confidence, then the
prescribed penalty for qualified theft proven in this case is death, which is the penalty next higher by
two degrees than the given penalty for simple theft above mentioned. In which event, this case is
subject further to the rules provided in Article 74, in relation to Article 40 of the Revised Penal Code.
They provide:

ART. 74. Penalty higher than reclusion perpetua in certain cases.In cases in which the law
prescribes a penalty higher than another given penalty, without specifically designating the name of
the former, if such higher penalty should be that of death, the same penalty and the accessory
penalties of article 40, shall be considered as the next higher penalty.

xxx xxx xxx

ART. 40. DeathIts accessory penaltiesThe death penalty, when it is not executed by reason of
commutation or pardon, shall carry with it that of perpetual absolute disqualification and that of civil
interdiction during the thirty years fol-

______________

45 Article 308, Revised Penal Code. Theft is committed by any person who, with intent to gain but
without violence against or intimidation of persons nor force upon things, shall take personal
property of another without the latters consent.

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lowing the date of the sentence, unless such accessory penalties have been expressly remitted in the
pardon.

Consequently, the penalty actually prescribed in this case for the crime of qualified theft is twenty
(20) years of reclusion temporal, together with the accessory penalties of perpetual absolute
disqualification and that of civil interdiction during thirty (30) years following the date of the
sentence.

Since this case is subject to the Indeterminate Sentence Law, the determination of the maximum
and minimum ranges of the sentence is governed by rules contained in the analogous case of People
v. Pabalan, to wit:

Applying the mandate of the Indeterminate Sentence Law, the maximum penalty shall therefore be
taken from the maximum period of said basic penalty in Article 315 as augmented by the additional
years of imprisonment, while the minimum term of the indeterminate sentence shall be within the
range of the penalty next lower in degree to that provided by law, without considering the
incremental penalty for the amounts in excess of P22,000.00. x x x
Based on the foregoing considerations, the penalty imposed on appellant should fall within the
minimum range of prision correccional in its medium and maximum periods, with a duration of two
(2) years, four (4) months and (1) day to six (6) years, and twenty (20) years of reclusion temporal
with the accessory penalties of death, as maximum. It is respectfully recommended that appellant
be sentenced to the penalty of six (6) years of prision correccional as minimum, to twenty (20) years
of reclusion temporal with the accessory penalties of death as maximum.

We disagree.

Article 309 of the Revised Penal Code provides the penalty for simple theft. It reads:

1. The penalty of prision mayor in its minimum and medium periods, if the value of the thing stolen
is more than 12,000 pesos but does not exceed 22,000 pesos; but if the value of the thing stolen
exceed the latter amount, the penalty shall be the maximum period of the one prescribed in this
paragraph, and one year for each additional ten thousand pesos, but the total of the penalty which
may be imposed shall not exceed twenty years. In such cases, and in connection with the accessory
penalties which may be imposed and for the

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People vs. Bago

purpose of the other provisions of this Code, the penalty shall be termed prision mayor or reclusion
temporal, as the case may be.

The value of the property stolen by appellant was P194,448.00. Under Article 309, the basic penalty
is prision mayor in its minimum and medium periods to be imposed in the maximum period since
the value of the stolen goods exceeded P22,000.00. To determine the additional years of
imprisonment prescribed in Article 309 (1), we have to deduct the amount of P22,000.00, thus
leaving the amount of P172,448.00. Next, the net amount should be divided by P10,000.00,
disregarding any amount below P10,000.00. Thus, seventeen (17) years must be added to the basic
penalty of the maximum period of prision mayor minimum and medium periods.46 The penalty of
prision mayor in its minimum and medium periods has a range of six years (6) and one (1) day to ten
(10) years. Its maximum period is eight (8) years, eight (8) months and one (1) day to ten (10) years,
and the incremental penalty is seventeen (17) years. Had appellant committed simple theft, the
penalty should have been twenty years of reclusion temporal, the maximum penalty allowable
under Article 309, subject to the Indeterminate Sentence Law.

Considering that the theft is qualified by grave abuse of confidence, the penalty is two degrees
higher than that specified under Article 309.47 In the case of People vs. Caales,48 we were
confronted with the same issue of determining how the penalty under Article 309 should be
increased by two degrees. In said case, we adopted the disquisition of the appellate court, thus:

x x x. Under Article 25 of the Revised Penal Code, two degrees higher than reclusion temporal is
death. This is likewise conformable with Article 74 of the Revised Penal Code, which provides that:

________________
46 Cf. People vs. Pabalan, 262 SCRA 574, 591 (1996).

47 Article 310, Revised Penal Code provides: Qualified Theft.The crime of theft shall be punished
by the penalties next higher by two degrees than those respectively specified in the next preceding
article, if committed . . . with grave abuse of confidence . . .

48 297 SCRA 667, 676-678 (1998).

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ART. 74. Penalty higher than reclusion perpetua in certain cases.In cases in which the law
prescribes a penalty higher than another given penalty, without specifically designating the name of
the former, if such higher penalty should be that of death, the same penalty and the accessory
penalties of Article 40, shall be considered as the next higher penalty. x x x.

The provision however, proscribes the imposition of the death penalty resulting from the
graduation of the penalty. It bears stressing that Article 74 of the Revised Penal Code was based on
Article 93 of the old Penal Code which provided that if the penalty is reclusion perpetua, the next
higher penalty would be the same penalty but the convict in such cases cannot be pardoned until
forty years had elapsed (Aquino, Comments on the Revised Penal Code, 1987 ed., Volume 1, page
709).

But there is a pervading divergence of opinion among commentators of the Revised Penal Code as to
what the higher penalty referred to in Article 74 of the Revised Penal Code should be. Some authors
are of the view that the higher penalty would be reclusion perpetua with the accessory penalties for
the said penalty. But then, under Article 74 of the Revised Penal Code, the accessory penalties under
Article 40 of the Revised Penal Code should be imposed. Still others, like former Senator Ambrosio
Padilla, are of the view that the higher penalty is reclusion perpetua with the accessory penalties of
death under Article 40 of the Revised Penal Code if the death penalty is commuted. But then, the
accessory penalty under Article 40 of the Revised Penal Code is perpetual absolute disqualification
and civil interdiction during thirty (30) years following the date of sentence, whereas, the accessory
penalty of reclusion perpetua under Article 41 of the Revised Penal Code is civil interdiction for life
and perpetual absolute disqualification. As aptly observed by former Chief Justice Ramon C. Aquino,
there seems to be an absurdity under the latter view (Aquino, Comments on the Revised Penal Code,
supra). On the other hand, Justice Albert is of the firm view that:

The Code meant to say here that the judgment should provide that the convict should not be given
the benefit of the provisions of Article 27 until forty years should have elapsed; otherwise, there
could be no difference at all between reclusion perpetua when imposed as a penalty next higher in
degree and when it is imposed as the penalty fixed by law. (Albert, Comments on the Revised Penal
Code, 1932 edition, page 240).

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People vs. Bago

to which Justice Luis Reyes subscribes (Reyes, Comments on the Revised Penal Code, 1981 ed., Vol.
1, page 746). Former Chief Justice Ramon C. Aquino likewise is in accord with the opinion of Justice
Albert.

x x x.

Justice Albert believes that the penalty higher than reclusion perpetua is reclusion perpetua for
forty years with the accessory penalties of death under Art. 40. Otherwise, as he said there could be
no difference at all between reclusion perpetua, when imposed as the penalty next higher in degree
and when it is imposed as the penalty fixed by law. This opinion is supported by Art. 93 of the old
Penal Code from which Art. 74 was taken. Art. 93 provides that if the given penalty is cadena
perpetua or reclusion perpetua, the next higher penalty shall be these same penalties but the
convict in such case cannot be pardoned until forty years have elapsed. (Aquino, Comments on the
Revised Penal Code, 1987 ed., Volume 1, pages 708-709).

We are likewise in accord with the opinion of Justice Albert as a logical explanation of Article 74 of
the Revised Penal Code. Consequently, Caales should be meted the penalty of Reclusion Perpetua
for Forty Years with the accessory penalties of death under Article 40 of the Revised Penal Code. In
fine, Caales is not entitled to pardon before the lapse of the forty-year period (Reyes, Comments on
the Revised Penal Code, 1977 ed., Volume 1, page 747).

This reiterated our ruling in People vs. Reyes,49 where we held:

In the crime of theft, if the value of the thing stolen exceeds P22,000.00, the penalty shall be prision
mayor in its maximum period and one year for each additional P10,000.00, but the total penalty
shall not exceed twenty years or reclusion temporal. However, if that crime of theft is attended by
any of the qualifying circumstances which convert the taking into qualified theft, the penalty next
higher by two degrees shall be imposed, that is, at least, reclusion perpetua.50

_______________

49 People vs. Reyes, 212 SCRA 402, 411-412 (1992).

50 Emphasis ours.

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In accord with the foregoing, we hold that appellant was correctly meted the penalty of reclusion
perpetua, with the accessory penalties of death under Article 40 of the Revised Penal Code.

Fourth. As regards the grant of actual damages, the rule is that actual damages cannot be allowed
unless supported by evidence in the record.51 William Hilo testified that the value of the missing
cold rolled sheets was P192,000.00 and the incurred cutting cost was P2,448.00, for a total value of
P194,448.00.52 Thus, the award for actual damages must be reduced by P417.00.

IN VIEW WHEREOF, the April 26, 1995 Decision of the Regional Trial Court of Quezon City (Branch
92), in Criminal Case No. Q-92-30833, as amended by the Order dated August 15, 1995, is AFFIRMED
subject to the modification that the actual damages is reduced to P194,448.00.

SO ORDERED.

Davide, Jr. (C.J., Chairman), Kapunan, Pardo and Ynares-Santiago, JJ., concur.

Judgment affirmed with modification.

Notes.A secondary evidence can only be admitted if it is shown that the original has been lost or
destroyed or cannot be produced in court or that it is in the custody of the adverse party. (People vs.
Dismuke, 234 SCRA 51 [1994])

The recovery of the stolen property does not mean that the crime of qualified theft was not
consummated. (People vs. Canales, 297 SCRA 667 [1998])

What makes the theft of mail matter qualified is the fact that the subject thereof is mail matter,
regardless of whether the offender is a postal employee or a private individual. (Marcelo vs.
Sandiganbayan, 302 SCRA 102 [1999])

o0o

_______________

51 People vs. Nialda, 289 SCRA 521 (1998).

52 TSN, William Hilo, August 24, 1992, p. 17. People vs. Bago, 330 SCRA 115, G.R. No. 122290 April 6,
2000

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Estrada vs. Desierto

G.R. Nos. 146710-15. April 3, 2001.*

JOSEPH E. ESTRADA, petitioner, vs. ANIANO DESIERTO, in his capacity as Ombudsman, RAMON
GONZALES, VOLUNTEERS AGAINST CRIME AND CORRUPTION, GRAFT FREE PHILIPPINES
FOUNDATION, INC., LEONARD DE VERA, DENNIS FUNA, ROMEO CAPULONG and ERNESTO B.
FRANCISCO, JR., respondents.

G.R. No. 146738. April 3, 2001.*

JOSEPH E. ESTRADA, petitioner, vs. GLORIA MACAPAGAL-ARROYO, respondent.

Presidency; Resignation; Evidence; Hearsay Evidence; Newspapers; The Supreme Court used the
totality test to arrive at the conclusion that the

______________

* EN BANC.

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former President has resigned, and the reference by the Court to certain newspapers reporting the
events as they happened does not make them inadmissible evidence for being hearsay as the merely
buttressed known facts to the court.Petitioner insists he is the victim of prejudicial publicity.
Among others, he assails the Decision for adverting to newspaper accounts of the events and
occurrences to reach the conclusion that he has resigned. In our Decision, we used the totality test
to arrive at the conclusion that petitioner has resigned. We referred to and analyzed events that
were prior, contemporaneous and posterior to the oath-taking of respondent Arroyo as president.
All these events are facts which are well-established and cannot be refuted. Thus, we adverted to
prior events that built up the irresistable pressure for the petitioner to resign, x x x All these prior
events are facts which are within judicial notice by this Court. There was no need to cite their news
accounts. The reference by the Court to certain newspapers reporting them as they happened does
not make them inadmissible evidence for being hearsay. The news account only buttressed these
facts as facts. For all his loud protestations, petitioner has not singled out any of these facts as false.

Same; Same; Same; Same; The Court used the Angara Diary to decipher the intent to resign on the
part of the former presidentit is not unusual for courts to distill a persons subjective intent from
the evidence before them.We now come to some events of January 20, 2001 contemporaneous to
the oath taking of respondent Arroyo. We used the Angara Diary to decipher the intent to resign on
the part of the petitioner. Let it be emphasized that it is not unusual for courts to distill a persons
subjective intent from the evidence before them. Everyday, courts ascertain intent in criminal cases,
in civil law cases involving last wills and testaments, in commercial cases involving contracts and in
other similar cases. As will be discussed below, the use of the Angara Diary is not prohibited by the
hearsay rule. Petitioner may disagree with some of the inferences arrived at by the Court from the
facts narrated in the Diary but that does not make the Diary inadmissible as evidence.

Same; Same; Same; While pressure was exerted for the former president to resign, it is difficult to
believe that the pressure completely vitiated the voluntariness of his resignation.To be sure,
pressure was exerted for the petitioner to resign. But it is difficult to believe that the pressure
completely vitiated the voluntariness of the petitioners resignation. The Malacaang ground was
then fully protected by the Presidential Security Guard armed with tanks and high-powered
weapons. The then Chief of Staff, General Angelo Reyes, and other military officers were in
Malacaang to assure that no harm would befall the petitioner as he left the

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Palace. Indeed, no harm, not even a scratch, was suffered by the petitioner, the members of his
family and his Cabinet who stuck it out with him in his last hours. Petitioners entourage was even
able to detour safely to the Municipal Hall of San Juan and bade goodbye to his followers before
finally going to his residence in Polk Street, Greenhills. The only incident before the petitioner left
the Palace was the stone throwing between a small group of pro and anti Erap rallyists which
resulted in minor injuries to a few of them. Certainly, there were no tanks that rumbled through the
Palace, no attack planes that flew over the presidential residence, no shooting, no large scale
violence, except verbal violence, to justify the conclusion that petitioner was coerced to resign.

Same; Same; Same; The Angara Diary is not an out of court statementit is part of the pleadings in
the cases at bar.To begin with, the Angara Diary is not an out of court statement. The Angara Diary
is part of the pleadings in the cases at bar. Petitioner cannot complain he was not furnished a copy
of the Angara Diary. Nor can he feign surprise on its use. To be sure, the said Diary was frequently
referred to by the parties in their pleadings. The three parts of the Diary published in the PDI from
February 4-6, 2001 were attached as Annexes A-C, respectively, of the Memorandum of private
respondents Romeo T. Capulong, et al., dated February 20, 2001. The second and third parts of the
Diary were earlier also attached as Annexes 12 and 13 of the Comment of private respondents
Capulong, et al., dated February 12, 2001. In fact, petitioner even cited in his Second Supplemental
Reply Memorandum both the second part of the diary, published on February 5, 2001, and the third
part, published on February 6, 2001. It was also extensively used by Secretary of Justice Hernando
Perez in his oral arguments. Thus, petitioner had all the opportunity to contest the use of the Diary
but unfortunately failed to do so.

Same; Same; Same; Hearsay Evidence; Words and Phrases; Evidence is called hearsay when its
probative force depends, in whole or in part, on the competency and credibility of some persons
other than the witness by whom it is sought to produce it; Not all hearsay evidence is inadmissible as
evidenceover the years, a huge body of hearsay evidence has been admitted by courts due to their
relevance, trustworthiness and necessity.Even assuming arguendo that the Angara Diary was an
out of court statement, still its use is not covered by the hearsay rule. Evidence is called hearsay
when its probative force depends, in whole or in part, on the competency and credibility of some
persons other than the witness by whom it is sought to produce it. There are three reasons for
excluding hearsay evidence: (1) absence of cross examination; (2) absence of demeanor evidence,

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and (3) absence of the oath. Not all hearsay evidence, however, is inadmissible as evidence. Over the
years, a huge body of hearsay evidence has been admitted by courts due to their relevance,
trustworthiness and necessity.

Same; Same; Same; Same; A more circumspect examination of our rules of exclusion will show that
they do not cover admissions of a party and the Angara Diary belongs to this class.A complete
analysis of any hearsay problem requires that we further determine whether the hearsay evidence is
one exempted from the rules of exclusion. A more circumspect examination of our rules of exclusion
will show that they do not cover admissions of a party and the Angara Diary belongs to this class.
Section 26 of Rule 130 provides that the act, declaration or omission of a party as to a relevant fact
may be given in evidence against him. It has long been settled that these admissions are admissible
even if they are hearsay.

Same; Same; Same; Same; The Angara Diary contains direct statements of the former president
which can be categorized as admissions of a party.The Angara Diary contains direct statements of
petitioner which can be categorized as admissions of a party: his proposal for a snap presidential
election where he would not be a candidate; his statement that he only wanted the five-day period
promised by Chief of Staff Angelo Reyes; his statements that he would leave by Monday if the
second envelope would be opened by Monday and Pagod na pagod na ako. Ayoko na, masyado
nang masakit. Pagod na ako sa red tape, bureaucracy, intriga. (I am very tired. I dont want any more
of thisits too painful. Im tired of the red tape, the bureaucracy, the intrigue). I just want to clear
my name, then I will go. We noted that days before, petitioner had repeatedly declared that he
would not resign despite the growing clamor for his resignation. The reason for the meltdown is
obvious - - - his will not to resign has wilted.

Same; Same; Same; Same; Words and Phrases; Doctrine of Adoptive Admission; An adoptive
admission is a partys reaction as an admission of something stated or implied by the other
person.It is, however, argued that the Angara Diary is not the diary of the petitioner, hence, non-
binding on him. The argument overlooks the doctrine of adoptive admission. An adoptive admission
is a partys reaction to a statement or action by another person when it is reasonable to treat the
partys reaction as an admission of something stated or implied by the other person. Jones explains
that the basis for admissibility of admissions made vicariously is that arising from the ratification or
adoption by the party of the statements which the other person had made. To use the blunt
language of

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Mueller and Kirkpatrick, this process of attribution is not mumbo jumbo but common sense. In the
Angara Diary, the options of the petitioner started to dwindle when the armed forces withdrew its
support from him as President and commander-in-chief. Thus, Executive Secretary Angara had to ask
Senate President Pimentel to advise petitioner to consider the option of dignified exit or
resignation. Petitioner did not object to the suggested option but simply said he could never leave
the country. Petitioners silence on this and other related suggestions can be taken as an admission
by him.

Same; Same; Same; Same; Res Inter Alios Acta Rule; One of the exceptions to the res inter alios acta
rule is with respect to admissions by a copartner or agent, and Executive Secretary Angara as such
was an alter ego of the former presidenthe was the Little Presidentas, indeed, he was
authorized by the former president to act for him in the critical hours and days before he abandoned
Malacaang Palace.Again, petitioner errs in his contention. The res inter alios acta rule has several
exceptions. One of them is provided in section 29 of Rule 130 with respect to admissions by a co-
partner or agent. Executive Secretary Angara as such was an alter ego of the petitioner. He was the
Little President. Indeed, he was authorized by the petitioner to act for him in the critical hours and
days before he abandoned Malacaang Palace. Thus, according to the Angara Diary, the petitioner
told Secretary Angara: Mula umpisa pa lang ng kampanya, Ed, ikaw na lang pinakikinggan ko. At
hanggang sa huli, ikaw pa rin. (Since the start of the campaign, Ed, you have been the only one Ive
listened to. And now at the end, you still are.) This statement of full trust was made by the
petitioner after Secretary Angara briefed him about the progress of the first negotiation. True to this
trust, the petitioner had to ask Secretary Angara if he would already leave Malacaang after taking
their final lunch on January 20, 2001 at about 1:00 p.m. The Angara Diary quotes the petitioner as
saying to Secretary Angara: Ed, kailangan ko na bang umalis? (Do I have to leave now?) Secretary
Angara told him to go and he did. Petitioner cannot deny that Secretary Angara headed his team of
negotiators that met with the team of the respondent Arroyo to discuss the peaceful and orderly
transfer of power after his relinquishment of the powers of the presidency. The Diary shows that
petitioner was always briefed by Secretary Angara on the progress of their negotiations. Secretary
Angara acted for and in behalf of the petitioner in the crucial days before respondent Arroyo took
her oath as President. Consequently, petitioner is bound by the acts and declarations of Secretary
Angara.

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Same; Same; Same; Same; Same; Under our rules of evidence, admissions of an agent (Executive
Secretary) are binding on the principal (former president).Under our rules of evidence, admissions
of an agent (Secretary Angara) are binding on the principal (petitioner). Jones very well explains the
reasons for the rule, viz.: What is done, by agent, is done by the principal through him, as through a
mere instrument. So, whatever is said by an agent, either in making a contract for his principal, or at
the time and accompanying the performance of any act within the scope of his authority, having
relation to, and connected with, and in the course of the particular contract or transaction in which
he is then engaged, or in the language of the old writers, dum fervet opus is, in legal effect, said by
his principal and admissible in evidence against such principal.

Same; Same; Same; Same; The ban on hearsay evidence does not cover independently relevant
statementsthose statements which are relevant independently of whether they are true or not.
Moreover, the ban on hearsay evidence does not cover independently relevant statements. These
are statements which are relevant independently of whether they are true or not. They belong to
two (2) classes: (1) those statements which are the very facts in issue, and (2) those statements
which are circumstantial evidence of the facts in issue. The second class includes the following: a.
Statement of a person showing his state of mind, that is, his mental condition, knowledge, belief,
intention, ill will and other emotions; b. Statements of a person which show his physical condition,
as illness and the like; c. Statements of a person from which an inference may be made as to the
state of mind of another, that is, the knowledge, belief, motive, good or bad faith, etc. of the latter;
d. Statements which may identity the date, place and person in question; and e. Statements showing
the lack of credibility of a witness.

Same; Same; Same; Best Evidence Rule; Production of the original may be dispensed with, in the trial
courts discretion, whenever in the case in hand the opponent does not bonafide dispute the
contents of the document and no other useful purpose will be served by requiring production.It is
true that the Court relied not upon the original but only a copy of the Angary Diary as published in
the Philippine Daily Inquirer on February 4-6, 2001. In doing so, the Court, did not, however, violate
the best evidence rule. Wigmore, in his book on evidence, states that: Production of the original
may be dispensed with, in the trial courts discretion, whenever in the case in hand the opponent
does not bona fide dispute the contents of the document and no other useful purpose will be
served by requiring production.

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Same; Same; Same; Authentication of Private Writings; A party who does not deny the genuineness
of a proffered instrument may not object that it was not properly identified before it was admitted
in evidence.On the rule of authentication of private writings, Francisco states that: A proper
foundation must be laid for the admission of documentary evidence; that is, the identity and
authenticity of the document must be reasonably established as a pre-requisite to its admission.
(Rouw v. Arts, 174 Ark. 79, 294 S.W. 993, 52 A.L.R. 1263, and others) However, a party who does not
deny the genuineness of a proffered instrument may not object that it was not properly identified
before it was admitted in evidence. (Strand v. Halverson, 220 Iowa 1276, 264 N.W. 266, 103 A.L.R.
835).

Same; Same; Same; Same; Where the former president was given an opportunity to inspect the
Angara Diary but did not object to its admissibility, it is already too late in the day to raise his
objections in an Omnibus Motion, after the Angara Diary has been used as evidence and a decision
rendered partly on the basis thereofPetitioner cites the case of State Prosecutors v. Muro, which
frowned on reliance by courts on newspaper accounts. In that case, Judge Muro was dismissed from
the service for relying on a newspaper account in dismissing eleven (11) cases against Mrs. Imelda
Romualdez Marcos. There is a significant difference, however, between the Muro case and the cases
at bar. In the Muro case, Judge Muro dismissed the cases against Mrs. Marcos on the basis of a
newspaper account without affording the prosecution the basic opportunity to be heard on the
matter by way of a written comment or on oral argument. . . (this is) not only a blatant denial of
elementary due process to the Government but is palpably indicative of bad faith and partiality. In
the instant cases, however, the petitioner had an opportunity to object to the admissibility of the
Angara Diary when he filed his Memorandum dated February 20, 2001, Reply Memorandum dated
February 22, 2001, Supplemental Memorandum dated February 23, 2001, and Second Supplemental
Memorandum dated February 24, 2001. He was therefore not denied due process. In the words of
Wigmore, supra, petitioner had been given an opportunity to inspect the Angara Diary but did not
object to its admissibility. It is already too late in the day to raise his objections in an Omnibus
Motion, after the Angara Diary has been used as evidence and a decision rendered partly on the
basis thereof.

Same; Congress; Presidential Incapacity; Presidential Succession; Separation of Powers; Political


Questions; If the former president now feels aggrieved by the manner Congress exercised its power
in determining whether the President was incapable of performing his functions, it is incumbent
upon him to seek redress from Congress itself; The recognition of

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the former presidents successor as de jure president made by Congress is unquestionably a political
judgment, and this political judgment may be right or wrong but Congress is answerable only to the
people for its judgment; The doctrine of separation of powers constitutes an insuperable bar against
the Supreme Courts interposition of its power of judicial review to review the judgment of Congress
rejecting the former presidents claim that he is still the President, albeit on leave and that his
successor is merely an acting President.We cannot sustain the petitioner. Lest petitioner forgets,
he himself made the submission in G.R. No. 146738 that Congress has the ultimate authority under
the Constitution to determine whether the President is incapable of performing his functions in the
manner provided for in section 11 of Article VII. We sustained this submission and held that by its
many acts, Congress has already determined and dismissed the claim of alleged temporary inability
to govern proffered by petitioner. If petitioner now feels aggrieved by the manner Congress
exercised its power, it is incumbent upon him to seek redress from Congress itself. The power is
conceded by the petitioner to be with Congress and its alleged erroneous exercise cannot be
corrected by this Court. The recognition of respondent Arroyo as our de jure president made by
Congress is unquestionably a political judgment. It is significant that House Resolution No. 176 cited
as the bases of its judgment such factors as the peoples loss of confidence on the ability of former
President Joseph Ejercito Estrada to effectively govern and the members of the international
community had extended their recognition of Her Excellency, Gloria Macapagal-Arroyo as President
of the Republic of the Philippines and it has a constitutional duty of fealty to the supreme will of
the people x x x. This political judgment may be right or wrong but Congress is answerable only to
the people for its judgment. Its wisdom is fit to be debated before the tribunal of the people and not
before a court of justice. Needles to state, the doctrine of separation of power constitutes an
insuperable bar against this Courts interposition of its power of judicial review to review the
judgment of Congress rejecting petitioners claim that he is still the President, albeit on leave and
that respondent Arroyo is merely an acting President.
Same; Same; Same; Same; There is nothing in Section 11 of Article VII of the Constitution which
states that the declaration by Congress of the Presidents inability must always be a priori or before
the Vice-President assumes the presidency.There is nothing in section 11 of Article VII of the
Constitution which states that the declaration by Congress of the Presidents inability must always
be a priori or before the Vice-President assumes the presidency. In the cases at bar, special
consideration should be given to the fact that the events which led to the resignation of the
petitioner happened at express speed and culminated on a Saturday.

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Congress was then not in session and had no reasonable opportunity to act a priori on petitioners
letter claiming inability to govern.

Same; Impeachment; Presidential Immunity; Section 3(7) of Article XI of the Constitution conveys
two uncomplicated ideasfirst, it tells us that judgment in impeachment cases has a limited reach,
i.e., it cannot extend further than removal from office and disqualification to hold any office under
the Republic of the Philippines, and second, it tells us the consequence of the limited reach of a
judgment in impeachment proceedings considering its nature, i.e., that the party convicted shall still
be liable and subject to prosecution, trial and punishment according to law.Petitioner reiterates
the argument that he must be first convicted in the impeachment proceedings before he could be
criminally prosecuted. A plain reading of the provision will not yield this conclusion. The provision
conveys two uncomplicated ideas: first, it tells us that judgment in impeachment cases has a limited
reach . . . i.e., it cannot extend further than removal from office and disqualification to hold any
office under the Republic of the Philippines, and second, it tells us the consequence of the limited
reach of a judgment in impeachment proceedings considering its nature, i.e., that the party
convicted shall still be liable and subject to prosecution, trial and punishment according to law. No
amount of manipulation will justify petitioners non sequitor submission that the provision requires
that his conviction in the impeachment proceedings is a condition sine qua non to his prosecution,
trial and punishment for the offenses he is now facing before the respondent Ombudsman.

Same; Same; Double Jeopardy; Requisites.Prescinding from these facts, petitioner cannot invoke
double jeopardy. Double jeopardy attaches only: (1) upon a valid complaint; (2) before a competent
court; (3) after arraignment; (4) when a valid plea has been entered; and (5) when the defendant
was acquitted or convicted or the case was dismissed or otherwise terminated without the express
consent of the accused. Assuming arguendo that the first four requisites of double jeopardy were
complied with, petitioner failed to satisfy the fifth requisite for he was not acquitted nor was the
impeachment proceeding dismissed without his express consent. Petitioners claim of double
jeopardy cannot be predicated on prior conviction for he was not convicted by the impeachment
court. At best, his claim of previous acquittal may be scrutinized in light of a violation of his right to
speedy trial, which amounts to a failure to prosecute. As Bernas points out, a failure to prosecute,
which is what happens when the accused is not given a speedy trial, means failure of the
prosecution to prove the case. Hence, dismissal on such grounds is a dismissal on the merits.

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Same; Same; Speedy Trial; While the Court accords due importance to an accuseds right to a speedy
trial and adheres to a policy of speedy administration of justice, this right cannot be invoked
looselyunjustified postponements which prolong the trial for an unreasonable length of time are
what offend the right of the accused to speedy trial.Petitioner did not move for the dismissal of
the impeachment case against him. Even assuming arguendo that there was a move for its
dismissal, not every invocation of an accuseds right to speedy trial is meritorious. While the Court
accords due importance to an accuseds right to a speedy trial and adheres to a policy of speedy
administration of justice, this right cannot be invoked loosely. Unjustified postponements which
prolong the trial for an unreasonable length of time are what offend the right of the accused to
speedy trial.

Same; Same; Same; An impeachment proceeding without a panel of prosecutors is a mockery of the
impeachment process; By no stretch of the imagination can the four-day period from the time the
impeachment proceeding was suspended to the day petitioner resigned, constitute an unreasonable
period of delay violative of the right of the accused to speedy trial.Petitioner therefore failed to
show that the postponement of the impeachment proceedings was unjustified, much less that it was
for an unreasonable length of time. Recalling the facts, on January 17, 2001, the impeachment
proceeding was suspended until the House of Representatives shall have resolved the issue on the
resignation of the public prosecutors. This was justified and understandable for an impeachment
proceeding without a panel of prosecutors is a mockery of the impeachment process. However,
three (3) days from the suspension or January 20, 2001, petitioners resignation supervened. With
the sudden turn of events, the impeachment court became functus officio and the proceedings
were therefore terminated. By no stretch of the imagination can the four-day period from the time
the impeachment proceeding was suspended to the day petitioner resigned, constitute an
unreasonable period of delay violative of the right of the accused to speedy trial.

Same; Same; Resignation; By resigning from the presidency, the former president more than
consented to the termination of the impeachment case against him, for he brought about the
termination of the impeachment proceedings.Nor can the claim of double jeopardy be grounded
on the dismissal or termination of the case without the express consent of the accused. We reiterate
that the impeachment proceeding was closed only after the petitioner had resigned from the
presidency, thereby rendering the impeachment court functus officio. By resigning from the
presidency, petitioner more than consented to the termination of the impeachment

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case against him, for he brought about the termination of the impeachment proceedings. We have
consistently ruled that when the dismissal or termination of the case is made at the instance of the
accused, there is no double jeopardy.

Same; Presidential Immunity; Administrative Law; Words and Phrases; Term and Tenure,
Distinguished; The intent of the framers is clear that the immunity of the president from suit is
concurrent only with his tenure and not his term.Petitioner, however, fails to distinguish between
term and tenure. The term means the time during which the officer may claim to hold the office as
of right, and fixes the interval after which the several incumbents shall succeed one another. The
tenure represents the term during which the incumbent actually holds office. The tenure may be
shorter than the term for reasons within or beyond the power of the incumbent. From the
deliberations, the intent of the framers is clear that the immunity of the president from suit is
concurrent only with his tenure and not his term.

Same; Res Ipsa Loquitur Rule; Words and Phrases; Under the res ipsa loquitur rale in its broad sense,
the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit an
inference or raise a presumption of negligence, or make out a plaintiffs prima facie case, and
present a question of fact for defendant to meet with an explanationit is not a rule of substantive
law but more a procedural rule.Petitioner pleads that we apply the doctrine of res ipsa loquitur
(the thing or the transaction speaks for itself) to support his argument. Under the res ipsa loquitur
rule in its broad sense, the fact of the occurrence of an injury, taken with the surrounding
circumstances, may permit an inference or raise a presumption of negligence, or make out a
plaintiffs prima facie case, and present a question of fact for defendant to meet with an explanation.
It is not a rule of substantive law but more a procedural rule. Its mere invocation does not exempt
the plaintiff with the requirement of proof to prove negligence. It merely allows the plaintiff to
present along with the proof of the accident, enough of the attending circumstances to invoke the
doctrine, creating an inference or presumption of negligence and to thereby place on the defendant
the burden of going forward with the proof.

Same; Same; Prejudicial Publicity; There is no court in the whole world that has applied the res ipsa
loquitur rule to resolve the issue of prejudicial publicity.We hold that it is inappropriate to apply
the rule on res ipsa loquitur, a rule usually applied only in tort cases, to the cases at bar. Indeed,
there is no court in the whole world that has applied the res

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ipsa loquitur rule to resolve the issue of prejudicial publicity. We again stress that the issue before us
is whether the alleged pervasive publicity of the cases against the petitioner has prejudiced the
minds of the members of the panel of investigators.

Same; Same; Same; It is not enough for a defendant to conjure possibility of prejudice but must
prove actual prejudice on the part of his investigation for the Court to sustain his plea.Petitioner
keeps on pounding on the adverse publicity against him but fails to prove how the impartiality of the
panel of investigators from the Office of the Ombudsman has been infected by it. As we held before
and we hold it again, petitioner has completely failed to adduce any proof of actual prejudice
developed by the members of the Panel of Investigators. This fact must be established by clear and
convincing evidence and cannot be left to loose surmises and conjectures. In fact, petitioner did not
even identify the members of the Panel of Investigators. We cannot replace this test of actual
prejudice with the rule of res ipsa loquitur as suggested by the petitioner. The latter rule assumes
that an injury (i.e., prejudicial publicity) has been suffered and then shifts the burden to the panel of
investigators to prove that the impartiality of its members has been affected by said publicity. Such a
rule will overturn our case law that pervasive publicity is not per se prejudicial to the right of an
accused to fair trial. The cases are not wanting where an accused has been acquitted despite
pervasive publicity. For this reason, we continue to hold that it is not enough for petitioner to
conjure possibility of prejudice but must prove actual prejudice on the part of his investigators for
the Court to sustain his plea. It is plain that petitioner has failed to do so.

Same; Supreme Court; Inhibition and Disqualification of Members of the Court; There is no ground
to inhibit the twelve (12) members of the Court who merely accepted the invitation of the former
presidents successor to attend her oath takingas mere spectators of a historic event, said
members did not prejudge the legal basis of the claim of said successor to the presidency at the time
of her oath.We hold that the prayer lacks merit. There is no ground to inhibit the twelve (12)
members of the Court who merely accepted the invitation of the respondent Arroyo to attend her
oath taking. As mere spectators of a historic event, said members of the Court did not prejudge the
legal basis of the claim of respondent Arroyo to the presidency at the time she look her oath.
Indeed, the Court in its en banc resolution on January 22, 2001, the first working day after
respondent Arroyo took her oath as President, held in Administrative Matter No. 01-1-05 SC, to wit:
A.M. No. 01-1-05-SCIn re: Request for Vice President Gloria Macapagal-Arroyo to Take Her Oath
of Office as President of the

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Republic of the Philippines before the Chief JusticeActing on the urgent request of Vice President
Gloria Macapagal-Arroyo to be sworn in as President of the Republic of the Philippines, addressed to
the Chief Justice and confirmed by a letter to the Court, dated January 20, 2001, which request was
treated as an administrative matter, the court Resolved unanimously to confirm the authority given
by the twelve (12) members of the Court then present to the Chief Justice on January 20, 2001 to
administer the oath of office to Vice President Gloria Macapagal-Arroyo as President of the
Philippines, at noon of January 20, 2001. This resolution is without prejudice to the disposition of
any justiciable case that may be filed by a proper party.

Same; Same; Same; To disqualify any of the members of the Supreme Court, particularly a majority
of them, is nothing short of pro tanto depriving the Court itself of its jurisdiction as established by
the fundamental law.Moreover, to disqualify any of the members of the Court, particularly a
majority of them, is nothing short of pro tanto depriving the Court itself of its jurisdiction as
established by the fundamental law. Disqualification of a judge is a deprivation of his judicial power.
And if that judge is the one designated by the Constitution to exercise the jurisdiction of his court, as
is the case with the Justices of this Court, the deprivation of his or their judicial power is equivalent
to the deprivation of the judicial power of the court itself. It affects the very heart of judicial
independence. The proposed mass disqualification, if sanctioned and ordered, would leave the Court
no alternative but to abandon a duty which it cannot lawfully discharge if shorn of the participation
of its entire membership of Justices.

VITUG, J., Separate Concurring Opinion:

Presidency; Presidential Succession; If, as Mr. Estrada would so have it, the takeover of the
Presidency could not be constitutionally justified, then, unavoidably, one would have to hold that
the Arroyo government, already and firmly in control then and now, would be nothing else but
revolutionary.If, as Mr. Estrada would so have it, the takeover of the Presidency could not be
constitutionally justified, then, unavoidably, one would have to hold that the Arroyo government,
already and firmly in control then and now, would be nothing else but revolutionary. And, if it were,
the principal points brought up in the petitions for and in behalf of Mr. Estrada, predicated on
constitutional grounds, would then be left bare as there would, in the first place, be no Constitution
to speak of. The invocation alone of the jurisdiction of this Court would itself be without solid
foundation absent its charter.

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MENDOZA, J., Concurring:

Presidency; Impeachment; Where the impeachment proceedings did not result in the former
presidents conviction, there can be no objection to his subsequent trial and conviction in a criminal
casethe rule that an impeachable officer cannot be criminally prosecuted for the same offenses
which constitute grounds for impeachment presupposes his continuance in office.In the second
place, the proviso that an impeached and convicted public official would nevertheless be subject
to criminal prosecution serves to qualify the clause that judgment in cases of impeachment shall
not extend further than removal from office and disqualification to hold any office under the
Republic of the Philippines. In other words, the public official convicted in an impeachment trial is
nevertheless subject to criminal prosecution because the penalty which can be meted out on him
cannot exceed removal from office and disqualification to hold office in the future. Consequently,
where, as in this case, the impeachment proceedings did not result in petitioners conviction, there
can be no objection to his subsequent trial and conviction in a criminal case. The rule that an
impeachable officer cannot be criminally prosecuted for the same offenses which constitute grounds
for impeachment presupposes his continuance in office. As Professor Tribe has written: . . . [I]t
should also be possible for an official to be acquitted by the Senate in an impeachment trial but
subsequently convicted of the same underlying acts in a federal court. The Senates acquittal, after
all, could well represent a determination merely that the charged offenses were not impeachable, or
that the nation would be harmed more than protected by pronouncing the official guilty.
MOTIONS FOR RECONSIDERATION of a decision of the Supreme Court.

The facts are stated in the resolution of the Court.

Pacifico A. Agabin for petitioner in G.R. Nos. 146710-15.

R.A.V. Saguisag for petitioner in G.R. No. 146738.

The Solicitor General for respondents.

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RESOLUTION

PUNO, J.:

For resolution are petitioners Motion for Reconsideration in G.R. Nos. 146710-15 and Omnibus
Motion in G.R. No. 146738 of the Courts Decision of March 2, 2001.

In G.R. Nos. 146710-15, petitioner raises the following grounds:

I. IT DISREGARDED THE CLEAR AND EXPLICIT PROVISIONS OF ART. XI. SECTION 3 (7) OF THE
CONSTITUTION AND THE SETTLED JURISPRUDENCE THEREON.

II. IT HELD THAT PETITIONER CAN BE PROSECUTED NOW, FOR THIS RULING WOULD VIOLATE THE
DOUBLE JEOPARDY CLAUSE OF THE CONSTITUTION, CONSIDERING THAT PETITIONER WAS
ACQUITTED IN THE IMPEACHMENT PROCEEDINGS.

III. IT HELD THAT PETITIONER IS NO LONGER ENTITLED TO ABSOLUTE IMMUNITY FROM SUIT.

IV. IT HELD THAT PETITIONERS DUE PROCESS RIGHTS TO A FAIR TRIAL HAVE NOT BEEN PREJUDICED
BY PRE-TRIAL PUBLICITY.

V. IT HELD THAT THERE IS NOT ENOUGH EVIDENCE TO WARRANT THE COURT TO ENJOIN THE
PRELIMINARY INVESTIGATION OF THE INCUMBENT OMBUDSMAN, PETITIONER HAVING FAILED TO
PROVE THE IMPAIRED CAPACITY OF THE OMBUDSMAN TO RENDER A BIASED FREE DECISION.

In G.R. No. 146738, petitioner raises and argues the following issues:

1. WHETHER PETITIONER RESIGNED OR SHOULD BE CONSIDERED RESIGNED AS OF JANUARY 20,


2001;

2. WHETHER THE ANGARA DIARY IS INADMISSIBLE FOR BEING VIOLATIVE OF THE FOLLOWING RULES
ON EVIDENCE: HEARSAY, BEST EVIDENCE, AUTHENTICATION, ADMISSIONS AND RES INTER ALIOS
ACTA;
3. WHETHER RELIANCE ON NEWSPAPER ACOUNTS IS VIOLATIVE OF THE HEARSAY RULE;

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4. WHETHER CONGRESS POST FACTO CAN DECIDE PETITIONERS INABILITY TO GOVERN


CONSIDERING SECTION 11, ARTICLE VII OF THE CONSTITUTION; and

5. WHETHER PREJUDICIAL PUBLICITY HAS AFFECTED PETITIONERS RIGHT TO FAIR TRIAL.

We find the contentions of petitioner bereft of merit.

I Prejudicial Publicity on the Court

Petitioner insists he is the victim of prejudicial publicity. Among others, he assails the Decision for
adverting to newspaper accounts of the events and occurrences to reach the conclusion that he has
resigned. In our Decision, we used the totality test to arrive at the conclusion that petitioner has
resigned. We referred to and analyzed events that were prior, contemporaneous and posterior to
the oath-taking of respondent Arroyo as president. All these events are facts which are well-
established and cannot be refuted. Thus, we adverted to prior events that built up the irresistable
pressure for the petitioner to resign. These are: (1) the expos of Governor Luis Chavit Singson on
October 4, 2000; (2) the I accuse speech of then Senator Teofisto Guingona in the Senate; (3) the
joint investigation of the speech of Senator Guingona by the Blue Ribbon Committee and the
Committee on Justice; (4) the investigation of the Singson expos by the House Committee on Public
Order and Security; (5) the move to impeach the petitioner in the House of Representatives; (6) the
Pastoral Letter of Archbishop Jaime Cardinal Sin demanding petitioners resignation; (7) a similar
demand by the Catholic Bishops Conference; (8) the similar demands for petitioners resignation by
former Presidents Corazon C. Aquino and Fidel V. Ramos; (9) the resignation of respondent Arroyo as
Secretary of the DSWD and her call for petitioner to resign; (10) the resignation of the members of
petitioners Council of Senior Economic Advisers and of Secretary Mar Roxas III from the Department
of Trade and Industry; (11) the defection of then Senate President Franklin Drilon and then Speaker
of the House of Representatives Manuel Villar and forty seven (47) representatives from petitioners
Lapiang Masang Pilipino; (12) the transmission of the

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Articles of Impeachment by Speaker Villar to the Senate; (13) the unseating of Senator Drilon as
Senate President and of Representative Villar as Speaker of the House; (14) the impeachment trial of
the petitioner; (15) the testimonies of Clarissa Ocampo and former Finance Secretary Edgardo
Espiritu in the impeachment trial; (16) the 11-10 vote of the senator-judges denying the prosecutors
motion to open the 2nd envelope which allegedly contained evidence showing that petitioner held a
P3.3 billion deposit in a secret bank account under the name Jose Velarde; (17) the prosecutors
walkout and resignation; (18) the indefinite postponement of the impeachment proceedings to give
a chance to the House of Representatives to resolve the issue of resignation of their prosecutors;
(19) the rally in the EDSA Shrine and its intensification in various parts of the country; (20) the
withdrawal of support of then Secretary of National Defense Orlando Mercado and the then Chief of
Staff, General Angelo Reyes, together with the chiefs of all the armed services; (21) the same
withdrawal of support made by the then Director General of the PNP, General Panfilo Lacson, and
the major service commanders; (22) the stream of resignations by Cabinet secretaries,
undersecretaries, assistant secretaries and bureau chiefs; (23) petitioners agreement to hold a snap
election and opening of the controversial second envelope. All these prior events are facts which are
within judicial notice by this Court. There was no need to cite their news accounts. The reference by
the Court to certain newspapers reporting them as they happened does not make them inadmissible
evidence for being hearsay The news account only buttressed these facts as facts. For all his loud
protestations, petitioner has not singled out any of these facts as false.

We now come to some events of January 20, 2001 contemporaneous to the oath taking of
respondent Arroyo. We used the Angara Diary to decipher the intent to resign on the part of the
petitioner. Let it be emphasized that it is not unusual for courts to distill a persons subjective intent
from the evidence before them. Everyday, courts ascertain intent in criminal cases, in civil law cases
involving last wills and testaments, in commercial cases involving contracts and in other similar
cases. As will be discussed below, the use of the Angara Diary is not prohibited by the hearsay rule.
Petitioner may disagree with some of the inferences arrived at by the

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Court from the facts narrated in the Diary but that does not make the Diary inadmissible as
evidence.

We did not stop with the contemporaneous events but proceeded to examine some events
posterior to the oath-taking of respondent Arroyo. Specifically, we analyzed the all important press
release of the petitioner containing his final statement which was issued after the oath-taking of
respondent Arroyo as president. After analyzing its content, we ruled that petitioners issuance of
the press release and his abandonment of Malacaang Palace confirmed his resignation.1 These are
overt acts which leave, no doubt to the Court that the petitioner has resigned.

In light of this finding that petitioner has resigned before 12 oclock noon of January 20, 2001, the
claim that the office of the President was not vacant when respondent Arroyo look her oath of office
at half past noon of the same day has no leg to stand on. We also reject the contention that
petitioners resignation was due to duress and an involuntary resignation is no resignation at all.

x x x [I]t has been said that, in determining whether a given resignation is voluntarily tendered, the
clement of voluntariness is vitiated only when the resignation is submitted under duress brought on
by government action. The three-part test for such duress has been stated as involving the following
elements: (1) whether one side involuntarily accepted the others terms; (2) whether circumstances
permitted no other alternative; and (3) whether such circumstances were the result of coercive acts
of the opposite side. The view has also been expressed that a resignation may be found involuntary
if on the totality of the circumstances it appears that the employers conduct in requesting
resignation effectively deprived the employer of free choice in the matter. Factors to be considered,
under this test, are: (1) whether the employee was given some alternative to resignation; (2)
whether the employee understood the nature of the choice he or she was given; (3) whether the
employee was given a reasonable time in which to choose; and (4) whether he or she was permitted
to select the effective date of resignation. In applying this totality of the circumstances test, the
assessment whether real alternatives were offered must be gauged by an objective standard rather
than by the em-

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1 Decision, p. 35.

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ployees purely subjective evaluation; that the employee may perceive his or her only option to be
resignationfor example, because of concerns about his or her reputationis irrelevant. Similarly,
the mere fact that the choice is between comparably unpleasant alternativesfor example,
resignation or facing disciplinary chargesdoes not of itself establish that a resignation was induced
by duress or coercion, and was therefore involuntary. This is so even where the only alternative to
resignation is facing possible termination for cause, unless the employer actually lacked good cause
to believe that grounds for termination existed. In this regard it has also been said that a resignation
resulting from a choice between resigning or facing proceedings for dismissal is not tantamount to
discharge by coercion without procedural view, if the employee is given sufficient time and
opportunity for deliberation of the choice posed. Furthermore, a resignation by an officer charged
with misconduct is not given under duress, though the appropriate authority has already determined
that the officers alternative is termination, where such authority has the legal authority to
terminate the officers employment under the particular circumstances, since it is not duress to
threaten to do what one has the legal right to do, or to threaten to take any measure authorized by
law and the circumstances of the case.2

In the cases at bar, petitioner had several options available to him other than resignation. He
proposed to the holding of snap elections. He transmitted to the Congress a written declaration of
temporary inability. He could not claim he was forced to resign because immediately before he left
Malacaang, he asked Secretary Angara: Ed, aalis na ba ako? which implies that he still had a
choice of whether or not to leave.

To be sure, pressure was exerted for the petitioner to resign. But it is difficult to believe that the
pressure completely vitiated the voluntariness of the petitioners resignation. The Malacaang
ground was then fully protected by the Presidential Security Guard armed with tanks and high-
powered weapons. The then Chief of Staff, General Angelo Reyes, and other military officers were in
Malacaang to assure that no harm would befall the petitioner as he left the Palace. Indeed, no
harm, not even a scratch, was suffered by the petitioner, the members of his family and his Cabinet
who stuck it out with him in his last hours. Petitioners entourage was even able to

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2 63 C Am Jur 2d Public Officers and Employees, section 158.

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detour safely to the Municipal Hall of San Juan and bade goodbye to his followers before finally
going to his residence in Polk Street, Greenhills. The only incident before the petitioner left the
Palace was the stone throwing between a small group of pro and anti Erap rallyists which resulted in
minor injuries to a few of them. Certainly, there were no tanks that rumbled through the Palace, no
attack planes that flew over the presidential residence, no shooting, no large scale violence, except
verbal violence, to justify the conclusion that petitioner was coerced to resign.

II Evidentiary Issues

Petitioner devotes a large part of his arguments on the alleged improper use by this Court of the
Angara Diary. It is urged that the use of the Angara Diary to determine the state of mind of the
petitioner on the issue of his resignation violates the rule against the admission of hearsay evidence.

We are unpersuaded. To begin with, the Angara Diary is not an out of court statement. The Angara
Diary is part of the pleadings in the cases at bar. Petitioner cannot complain he was not furnished a
copy of the Angara Diary. Nor can he feign surprise on its use. To be sure, the said Diary was
frequently referred to by the parties in their pleadings.3 The three parts of the Diary published in the
PDI from February 4-6, 2001 were attached as Annexes A-C, respectively, of the Memorandum of
private respondents Romeo T. Capulong, et al., dated February 20, 2001. The second and third parts
of the Diary were earlier also attached as Annexes 12 and 13 of the Comment of private respondents
Capulong, et al., dated February 12, 2001. In fact, petitioner even cited in his Second Supplemental
Reply Memorandum both the second part of the diary, published on February 5, 2001,4 and the
third part, published on

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3 See e.g., Comment of respondents de Vera, Funa and Capulong, p. 26; Rollo, Vol. II, p. 204;
Memorandum of respondent Capulong, Rollo, Vol. III, pp. 661, et seq.

4 See paragraph 6.1 on p. 5 of petitioners Second Supplemental Reply Memorandum.

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February 6, 2001.5 It was also extensively used by Secretary of Justice Hernando Perez in his oral
arguments. Thus, petitioner had all the opportunity to contest the use of the Diary but unfortunately
failed to do so.

Even assuming arguendo that the Angara Diary was an out of court statement, still its use is not
covered by the hearsay rule.6 Evidence is called hearsay when its probative force depends, in whole
or in part, on the competency and credibility of some persons other than the witness by whom it is
sought to produce it.7 There are three reasons for excluding hearsay evidence: (1) absence of cross
examination; (2) absence of demeanor evidence, and (3) absence of the oath.8 Not all hearsay
evidence, however, is inadmissible as evidence. Over the years, a huge body of hearsay evidence has
been admitted by courts due to their relevance, trustworthiness and necessity.9 The emergence of
these exceptions and their wide spread acceptance is well-explained by Weinstein, Mansfield,
Abrams and Berger as follows:

x x x

On the other hand, we all make decisions in our everyday lives on the basis of other persons
accounts of what happened, and verdicts are usually sustained and affirmed even if they are based
on hearsay erroneously admitted, or admitted because no objection was made. See Shepp v.
Uehlinger, 775 F 2d 452, 454-455 (1st Cir. 1985) (hearsay evidence alone can support a verdict).
Although volumes have been written suggesting ways to revise the hearsay rule, no one advocates a
rule that would bar all

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5 Id., see paragraph 7 on pp. 7-8.

6 The myth of hearsay is that no one understands it, and students and practicing lawyers always
make mistakes about it. Best, Evidence, 59 (3rd ed., p. 59, 1999).

7 Francisco, Evidence, 513 citing 31 CJS 919.

8 Mueller and Kirkpatrick, Evidence under the Rules 116-117 (2nd ed., 1993); McCormick, Evidence
93-94.

9 See, generally, Swift, One Hundred Years of Evidence Law Reform: Thayers Triumph, 88 Cal. L. Rev.
page ? (2000) No. 6? Swifts thesis is that the view of Thayer and other major twentieth century
reformers advocating increased discretion of trial judges to admit or exclude evidence has prevailed.

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hearsay evidence. Indeed, the decided historical trend has been to exclude categories of highly
probative statements from the definition of hearsay (sections 2 and 3, infra), and to develop more
class exceptions to the hearsay rule (sections 4-11, infra). Furthermore, many states have added to
their rules the residual, or catch-all, exceptions first pioneered by the Federal Rules which authorize
the admission of hearsay that does not satisfy a class exception, provided it is adequately
trustworthy and probative (section 12, infra).

Moreover, some commentators believe that the hearsay rule should be abolished altogether instead
of being loosened. See, e.g., Note, The Theoretical Foundation of the Hearsay Rules, 93 Harv.L.Rev.
1786, 1804-1805, 1815 (1980) (footnotes omitted):

The Federal Rules of Evidence provide that [a]lthough relevant, evidence may be excluded if its
probative value is substantially outweighed by the danger of unfair prejudice. Under this structure,
exclusion is justified by fears of how the jury will be influenced by the evidence. However, it is not
traditional to think of hearsay as merely a subdivision of this structure, and the Federal Rules do not
conceive of hearsay in that manner. Prejudice refers to the jurys use of evidence for inferences
other than those for which the evidence is legally relevant; by contrast, the rule against hearsay
questions the jurys ability to evaluate the strength of a legitimate inference to be drawn from the
evidence. For example, were a judge to exclude testimony because a witness was particularly
smooth or convincing, there would be no doubt as to the usurpation of the jurys function. Thus,
unlike prejudices recognized by the evidence rules, such as those stemming from racial or religious
biases or from the introduction of photographs of a victims final state, the exclusion of hearsay on
the basis of misperception strikes at the root of the jurys function by usurping its power to process
quite ordinary evidence, the type of information routinely encountered by jurors in their everyday
lives.

...

Since virtually all criteria seeking to distinguish between good and bad hearsay are either
incoherent, inconsistent, or indeterminate, the only alternative to a general rule of admission would
be an absolute rule of exclusion, which is surely inferior. More important, the assumptions necessary
to justify a rule against hearsay . . . seem insupportable and, in any event, are inconsistent with
accepted notions of the function of the jury. Therefore, the hearsay rules should be abolished.

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Some support for this view can be found in the limited empirical research now availablewhich is,
however, derived from simulationsthat suggests that admitting hearsay has little effect on trial
outcomes because jurors discount the value of hearsay evidence. See Rakos & Landsman,
Researching the Hearsay Rule: Emerging Findings, General Issues, and Future Directions, 76
Minn.L.Rev. 655 (1992); Miene, Park, & Borgidas, Jury Decision Making and the Evaluation of
Hearsay Evidence, 76 Minn.L.Rev. 683 (1992); Kovera, Park, & Penrod, Jurors Perceptions of
Eyewitness and Hearsay Evidence, 76 Minn.L.Rev. 703 (1992); Landsman & Rakos, Research Essay: A
Preliminary Empirical Enquiry Concerning the prohibition of Hearsay Evidence in American Courts, 15
Law & Psychol. Rev. 65 (1991).

Others, even if they concede that restrictions on hearsay have some utility, question whether the
benefits outweigh the cost:

The cost of maintaining the rule is not just a function of its contribution to justice. It also includes the
time spent on litigating the rule. And of course this is not just a cost voluntarily borne by the parties,
for in our system virtually all the cost of the courtsalaries, administrative costs, and capital costs
are borne by the public. As expensive as litigation is for the parties, it is supported by an enormous
public subsidy. Each time a hearsay question is litigated, the public pays. The rule imposes other
costs as well. Enormous time is spent teaching and writing about the hearsay rule, which are both
costly enterprises. In sonic law schools, students spend over half their time in evidence classes
learning the intricacies of the hearsay rule, and . . . enormous academic resources are expended on
the rule.

Allen, Commentary on Professor Friendmans Article: The Evolution of the Hearsay Rule to a Rule of
Admission, 76 Minn.L.Rev. 797, 800 [1992] (but would abolish rule only in civil cases). See also
Friedman, Toward a Partial Economic, GameTheoretic Analysis of Hearsay, 76 Minn.L.Rev. 723
(1992).10

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10 Evidence, Cases and Materials 473-474 (9th ed.). As well put by author Best, supra, p. 87, the
supreme irony of the hearsay doctrine is that a vast amount of hearsay is admissible at common law
and under the Federal Rules. Our hearsay rules are American in origin.

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A complete analysis of any hearsay problem requires that we further determine whether the
hearsay evidence is one exempted from the rules of exclusion. A more circumspect examination of
our rules of exclusion will show that they do not cover admissions of a party and the Angara Diary
belongs to this class. Section 26 of Rule 130 provides that the act, declaration or omission of a
party as to a relevant fact may be given in evidence against him.11 It has long been settled that
these admissions are admissible even if they are hearsay. Retired Justice Oscar Herrera of the Court
of Appeals

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11 Admissions of a party should not be confused with declarations against interest, judicial
admission and confessions.
Admission distinguished from declaration against interest.An admission is distinguishable from a
declaration against interest in several respects. The admission is primary evidence and is receivable,
although the declarant is available as a witness; it is competent only when the declarant, or
someone identified in legal interest with him, is a party to the action; and need not have been
considered by the declarant as opposed to his interest at the time when it was made. The
declaration against interest is in the nature of secondary evidence, receivable only when the
declarant is unavailable as a witness; it is competent in any action to which it is relevant, although
the declarant is not a party to, or in privity with, any party to the action; and it must have been,
when made, to the knowledge of the declarant, against his obvious and real interest. (VIII Francisco,
Evidence, 304 [1997 ed.])

Admission distinguished from confession.The term admission is distinguished from that of


confession. The former is applied to civil transactions and to matters of fact in criminal cases not
involving criminal intent, the latter to acknowledgments of guilt in criminal cases, (id., p. 303)

Judicial and extra-judicial admission defined.A judicial admission is one so made in pleadings filed
or in the progress of a trial as to dispense with the introduction of evidence otherwise necessary to
dispense with some rules of practice necessary to be observed and complied with. Extra-judicial
admission is one made out of court.

The most important distinction between judicial and other admissions, is that strictly, judicial
admissions are conclusive upon the party making them, while other admissions are, as a rule and
where the elements of estoppel are not present, disputable, (id., p. 90)

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cites the various authorities who explain why admissions are not covered by the hearsay rule:12

Wigmore, after pointing out that the partys declaration has generally the probative value of any
other persons assertion, argued that it had a special value when offered against the party. In that
circumstance, the admission discredits the partys statement with the present claim asserted in
pleadings and testimony, much like a witness impeached by contradictory statements. Moreover, he
continued, admissions pass the gauntlet of the hearsay rule, which requires that extrajudicial
assertions be excluded if there was no opportunity for the opponent to cross-examine because it is
the opponents own declaration, and he does not need to cross examine himself. Wigmore then
added that the Hearsay Rule is satisfied since the party now as opponent has the full opportunity to
put himself on the stand and explain his former assertion. (Wigmore on Evidence, Sec. 1048
[Chadbourn Rev. 1972], cited in Sec. 154, McCormick)

According to Morgan: The admissibility of an admission made by the party himself rests not upon
any notion that the circumstances in which it was made furnish the trier means of evaluating it fairly,
but upon the adversary theory of litigation. A party can hardly object that he had no opportunity to
cross-examine himself or that he is unworthy of credence save when speaking under sanction of an
oath.
A mans acts, conduct, and declaration, wherever made, if voluntary, are admissible against him, for
the reason that it is fair to presume that they correspond with the truth, and it is his fault if they do
not. (U.S. vs. Ching Po, 23 Phil. 578, 583).

The Angara Diary contains direct statements of petitioner which can be categorized as admissions of
a party: his proposal for a snap presidential election where he would not be a candidate; his
statement that he only wanted the five-day period promised by Chief of Staff Angelo Reyes; his
statements that he would leave by Monday if the second envelope would be opened by Monday and
Pagod na pagod na ako. Ayoko na, masyado nang masakit. Pagod na ako sa red tape, bureaucracy,
intriga. (I am very tired. I dont want any more of thisits too painful. Im tired of the red tape, the
bureaucracy, the intrigue). I just want to clear my name, then I will go. We noted that days before,
petitioner had repeatedly declared that

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12 Herrera, Evidence, 315-316.

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he would not resign despite the growing clamor for his resignation. The reason for the meltdown is
obvious - - - his will not to resign has wilted.

It is, however, argued that the Angara Diary is not the diary of the petitioner, hence, non-binding on
him. The argument overlooks the doctrine of adoptive admission. An adoptive admission is a partys
reaction to a statement or action by another person when it is reasonable to treat the partys
reaction as an admission of something stated or implied by the other person.13 Jones explains that
the basis for admissibility of admissions made vicariously is that arising from the ratification or
adoption by the party of the statements which the other person had made.14 To use the blunt
language of Mueller and Kirkpatrick, this process of attribution is not mumbo jumbo but common
sense.15 In the Angara Diary, the options of the petitioner started to dwindle when the armed
forces withdrew its support from him as President and commander-in-chief. Thus, Executive
Secretary Angara had to ask Senate President Pimentel to advise petitioner to consider the option of
dignified exit or resignation. Petitioner did not object to the suggested option but simply said he
could never leave the country. Petitioners silence on this and other related suggestions can be
taken as an admission by him.16

Petitioner further contends that the use of the Angara Diary against him violated the rule on res
inter alios acta. The rule is expressed in section 28 of Rule 130 of the Rules of Court, viz.: The rights
of a party cannot be prejudiced by an act, declaration, or omission of another, except as hereinafter
provided.

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13 Best, op cit., p. 90.

14 Herrera, op cit., p. 371, citing 2 Jones, Secs. 13-28.

15 Evidence Under the Rules, 216 (2nd ed., 1993).

16 Section 32, Rule 130 provides: An act or declaration made in the presence and within the
hearing or observation of a party who does or says nothing when the act or declaration is such as
naturally to call for action or comment if not true, and when proper and possible for him to do so,
may be given in evidence against him.

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Again, petitioner errs in his contention. The res inter alios acta rule has several exceptions. One of
them is provided in section 29 of Rule 130 with respect to admissions by a co-partner or agent.

Executive Secretary Angara as such was an alter ego of the petitioner. He was the Little President.
Indeed, he was authorized by the petitioner to act for him in the critical hours and days before he
abandoned Malacaang Palace. Thus, according to the Angara Diary, the petitioner told Secretary
Angara: Mula umpisa pa lang ng kampanya, Ed, ikaw na lang pinakikinggan ko. At hanggang sa huli,
ikaw pa rin. (Since the start of the campaign, Ed, you have been the only one Ive listened to. And
now at the end, you still are.)17 This statement of full trust was made by the petitioner after
Secretary Angara briefed him about the progress of the first negotiation. True to this trust, the
petitioner had to ask Secretary Angara if he would already leave Malacaang after taking their final
lunch on January 20, 2001 at about 1:00 p.m. The Angara Diary quotes the petitioner as saying to
Secretary Angara: Ed, kailangan ko na bang umalis? (Do I have to leave now?)18 Secretary Angara
told him to go and he did. Petitioner cannot deny that Secretary Angara headed his team of
negotiators that met with the team of the respondent Arroyo to discuss the peaceful and orderly
transfer of power after his relinquishment of the powers of the presidency. The Diary shows that
petitioner was always briefed by Secretary Angara on the progress of their negotiations. Secretary
Angara acted for and in behalf of the petitioner in the crucial days before respondent Arroyo took
her oath as President. Consequently, petitioner is bound by the acts and declarations of Secretary
Angara.

Under our rules of evidence, admissions of an agent (Secretary Angara) are binding on the principal
(petitioner).19 Jones very well

_______________

17 Phil. Daily Inquirer, February 5, 2001, p. A6.

18 Id., February 6, 2001, p. 1; Rollo, Vol. II, p. 250.

19 Section 29, Rule 130 states: The act or declaration of a partner or agent of the party within the
scope of his authority and during the existence of the partnership or agency, may be given in
evidence against such party after the partnership or agency is shown by evidence other than such
act or declaration. The same rule applies to the act or declaration of a joint owner, joint debtor, or
other person jointly interested with the party.

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explains the reasons for the rule, viz.: What is done, by agent, is done by the principal through him,
as through a mere instrument. So, whatever is said by an agent, either in making a contract for his
principal, or at the time and accompanying the performance of any act within the scope of his
authority, having relation to, and connected with, and in the course of the particular contract or
transaction in which he is then engaged, or in the language of the old writers, dum fervet opus is, in
legal effect, said by his principal and admissible in evidence against such principal.20

Moreover, the ban on hearsay evidence does not cover independently relevant statements. These
are statements which are relevant independently of whether they are true or not. They belong to
two (2) classes: (1) those statements which are the very facts in issue, and (2) those statements
which are circumstantial evidence of the facts in issue. The second class includes the following:21

a.Statement of a person showing his state of mind, that is, his mental condition, knowledge, belief,
intention, ill will and other emotions;

b. Statements of a person which show his physical condition, as illness and the like;

c.Statements of a person from which an inference may be made as to the state of mind of another,
that is, the knowledge, belief, motive, good or bad faith, etc. of the latter;

d. Statements which may identify the date, place and person in question; and

e. Statements showing the lack of credibility of a witness.

Again, Jones tells us why these independently relevant statements are not covered by the
prohibition against hearsay evidence:22

1088. Mental State or ConditionProof of Knowledge.There are a number of common issues,


forming a general class, in proof of which hearsay is so obviously necessary that it is not customary
to refer to its admissibility as by virtue of any exception to the general exclusionary

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20 Jones on Evidence, S. 944, p. 1741.

21 Moran, Evidence, 298.

22 Jones, op cit, S. 1088, p. 2010.

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rule. Admissibility, in such cases, is as of course. For example, where any mental state or condition is
in issue, such as motive, malice, knowledge, intent, assent or dissent, unless direct testimony of the
particular person is to be taken as conclusive of his state of mind, the only method of proof available
is testimony of others to the acts or statements of such person. Where his acts or statements are
against his interest, they are plainly admissible within the rules hereinabove announced as to
admissions against interest. And even where not against interest, if they are so closely connected
with the event or transaction in issue as to constitute one of the very facts in controversy, they
become admissible of necessity.

As aforediscussed, the Angara Diary contains statements of the petitioner which reflect his state of
mind and are circumstantial evidence of his intent to resign. It also contains statements of Secretary
Angara from which we can reasonably deduce petitioners intent to resign. They are admissible and
they are not covered by the rule on hearsay. This has long been a quiet area of our law on evidence
and petitioners attempt to foment a belated tempest cannot receive our imprimatur.

Petitioner also contends that the rules on authentication of private writings and best evidence were
violated in our Decision, viz.:

The use of the Angara diary palpably breached several hornbook rules of evidence, such as the rule
on authentication of private writings . . .

xxx

A. Rule on Proof of Private Writings Violated The rule governing private documents as evidence was
violated. The law provides that before any private writing offered as authentic is received in
evidence, its due execution and authenticity must be proved either: a) by anyone who saw the
document executed or written, or b) by evidence of the genuineness of the signature or handwriting
of the maker.

xxx

B. Best Evidence Rule Infringed Clearly, the newspaper reproduction is not the best evidence of the
Angara diary. It is secondary evidence, of dubious authenticity. It was however used by this
Honorable Court without proof of the unavailability of the original or duplicate original of the diary.
The Best Evidence Rule should have been applied since the contents of the diary are the subject of
inquiry.

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The rule is that, except in four (4) specific instances, [w]hen the subject of inquiry is the contents of
a document, no evidence shall be admissible other than the original document itself.23

Petitioners contention is without merit. In regard to the Best Evidence rule, the Rules of Court
provides in sections 2 to 4 of Rule 130, as follows:

Sec. 2. Documentary evidence.Documents as evidence consist of writings or any material


containing letters, words, numbers, figures or other modes of written expressions offered as proof
of their contents.

Sec. 3. Original document must be produced; exceptions.When the subject of inquiry is the
contents of a document, no evidence shall be admissible other than the original document itself,
except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith
on the part of the offeror;

(b) When the original is in the custody or under the control of the party against whom the evidence
is offered, and the latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined
in court without great loss of time and the fact sought to be established from them is only the
general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public
office. Sec. 4. Original of document.(a) The original of a document is one the contents of which are
the subject of inquiry.

(b) When a document is in two or more copies executed at or about the same time, with identical
contents, all such copies are equally regarded as originals.

(c) When an entry is repealed in the regular course of business, one being copied from another at or
near the time of the transaction, all the entries are likewise equally regarded as originals.

It is true that the Court relied not upon the original but only a copy of the Angara Diary as published
in the Philippine Daily In-

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23 Omnibus Motion, pp. 24-25, footnotes omitted.

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quirer on February 4-6, 2001. In doing so, the Court, did not, however, violate the best evidence
rule. Wigmore, in his book on evidence, states that:
Production of the original may be dispensed with, in the trial courts discretion, whenever in the
case in hand the opponent does not bona fide dispute the contents of the document and no other
useful purpose will be served by requiring production.24

xxx

In several Canadian provinces, the principle of unavailability has been abandoned, for certain
documents in which ordinarily no real dispute arised. This measure is a sensible and progressive one
and deserves universal adoption (post, see. 1233). Its essential feature is that a copy may be used
unconditionally, if the opponent has been given an opportunity to inspect it. (emphasis supplied)

Franciscos opinion is of the same tenor, viz.:

Generally speaking, an objection by the party against whom secondary evidence is sought to be
introduced is essential to bring the best evidence rule into application; and frequently, where
secondary evidence has been admitted, the rule of exclusion ought have successfully been invoked if
proper and timely objection had been taken. No general rule as to the form or mode of objecting to
the admission of secondary evidence is set forth. Suffice it to say here that the objection should be
made in proper seasonthat is, whenever it appears that there is better evidence than that which is
offered and before the secondary evidence has been admitted, the objection itself should be
sufficiently definite to present a tangible question for the courts consideration.25

He adds:

Secondary evidence of the content of the writing will be received in evidence if no objection is
made to its reception.26

_______________

24 Wigmore on Evidence, sec. 1191, p. 334.

25 Francisco, The Revised Rules of Court in the Philippines: Evidence 139 (1999), citing 1 Jones on
Evidence, 390-391.

26 Id., citing People v. Stuckrath, 64 Cal. App. 84, 220, p. 433; see also Suddayao, et al. v. Agatep, et
al., 46 Off. Gaz. 1119.

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In regard to the authentication of private writings, the Rules of Court provides in section 20 of Rule
132, viz.:

Sec. 20. Proof of private document.Before any private document offered as authentic is received
in evidence, its due execution and authenticity must be proved either:

(a) By anyone who saw the document executed or written; or


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

Any other private document need only be identified as that which it is claimed to be.

On the rule of authentication of private writings, Francisco states that:

A proper foundation must be laid for the admission of documentary evidence; that is, the identity
and authenticity of the document must be reasonably established as a pre-requisite to its admission.
(Rouw v. Arts, 174 Ark. 79, 294 S.W. 993, 52 A.L.R. 1263, and others) However, a party who does not
deny the genuineness of a proffered instrument may not object that it was not properly identified
before it was admitted in evidence. (Strand v. Halverson, 220 Iowa 1276, 264 N.W. 266, 103 A.L.R.
835). 27

Petitioner cites the case of State Prosecutors v. Muro,28 which frowned on reliance by courts on
newspaper accounts. In that case, Judge Muro was dismissed from the service for relying on a
newspaper account in dismissing eleven (11) cases against Mrs. Imelda Romualdez Marcos. There is
a significant difference, however, between the Muro case and the cases at bar. In the Muro case,
Judge Muro dismissed the cases against Mrs. Marcos on the basis of a newspaper account without
affording the prosecution the basic opportunity to be heard on the matter by way of a written
comment or on oral argument . . . (this is) not only a blatant denial of elementary due process to the
Government but is palpably indicative of bad faith and partiality. In the instant cases, however, the
petitioner had an opportunity to object to the admissibility of the An-

_______________

27 Francisco, supra, p. 129.

28 236 SCRA 505 (1994).

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gara Diary when he filed his Memorandum dated February 20, 2001, Reply Memorandum dated
February 22, 2001, Supplemental Memorandum dated February 23, 2001, and Second Supplemental
Memorandum dated February 24, 2001. He was therefore not denied due process. In the words of
Wigmore, supra, petitioner had been given an opportunity to inspect the Angara Diary but did not
object to its admissibility. It is already too late in the day to raise his objections in an Omnibus
Motion, after the Angara Diary has been used as evidence and a decision rendered partly on the
basis thereof.

III Temporary Inability

Petitioner argues that the Court misinterpreted the meaning of section 11, Article VII, of the
Constitution in that Congress can only decide the issue of inability when there is a variance of
opinion between a majority of the Cabinet and the President. The situation presents itself when
majority of the Cabinet determines that the President is unable to govern; later, the President
informs Congress that his inability has ceased but is contradicted by a majority of the members of
the Cabinet. It is also urged that the Presidents judgment that he is unable to govern temporarily
which is thereafter communicated to the Speaker of the House and the President of the Senate is
the political question which this Court cannot review.

We cannot sustain the petitioner. Lest petitioner forgets, he himself made the submission in G.R. No.
146738 that Congress has the ultimate authority under the Constitution to determine whether the
President is incapable of performing his functions in the manner provided for in section 11 of Article
VII.29 We sustained this submission and held that by its many acts, Congress has already
determined and dismissed the claim of alleged temporary inability to govern proffered by petitioner.
If petitioner now feels aggrieved by the manner Congress exercised its power, it is incumbent upon
him to seek redress from Congress itself. The power is conceded by the

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29 See Decision, p. 41.

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petitioner to be with Congress and its alleged erroneous exercise cannot be corrected by this Court.
The recognition of respondent Arroyo as our de jure president made by Congress is unquestionably a
political judgment. It is significant that House Resolution No. 176 cited as the bases of its judgment
such factors as the peoples loss of confidence on the ability of former President Joseph Ejercito
Estrada to effectively govern and the members of the international community had extended their
recognition of Her Excel-lency, Gloria Macapagal-Arroyo as President of the Republic of the
Philippines and it has a constitutional duty of fealty to the supreme will of the people x x x. This
political judgment may be right or wrong but Congress is answerable only to the people for its
judgment. Its wisdom is fit to be debated before the tribunal of the people and not before a court of
justice. Needles to state, the doctrine of separation of power constitutes an insuperable bar against
this Courts interposition of its power of judicial review to review the judgment of Congress rejecting
petitioners claim that he is still the President, albeit on leave and that respondent Arroyo is merely
an acting President.

Petitioner attempts to extricate himself from his submission that Congress has the ultimate
authority to determine his inability to govern, and whose determination is a political question by
now arguing that whether one is a dejure or de facto President is a judicial question. Petitioners
change of theory, ill disguised as it is, does not at all impress. The cases at bar do not present the
general issue of whether the respondent Arroyo is the de jure or a de facto President. Specific issues
were raised to the Court for resolution and we ruled on an issue by issue basis. On the issue of
resignation under section 8, Article VII of the Constitution, we held that the issue is legal and ruled
that petitioner has resigned from office before respondent Arroyo took her oath as President. On
the issue of inability to govern under section 11, Article VII of the Constitution, we held that
Congress has the ultimate authority to determine the question as opined by the petitioner himself
and that the determination of Congress is a political judgment which this Court cannot review.
Petitioner cannot blur these specific rulings by the generalization that whether one is a dejure or de
facto President is a judicial question.

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Petitioner now appears to fault Congress for its various acts expressed thru resolutions which
brushed off his temporary inability to govern and President-on-leave argument. He asserts that
these acts of Congress should not be accorded any legal significance because: (1) they are post facto
and (2) a declaration of presidential incapacity cannot be implied.

We disagree. There is nothing in section 11 of Article VII of the Constitution which states that the
declaration by Congress of the Presidents inability must always be a priori or before the Vice-
President assumes the presidency. In the cases at bar, special consideration should be given to the
fact that the events which led to the resignation of the petitioner happened at express speed and
culminated on a Saturday. Congress was then not in session and had no reasonable opportunity to
act a priori on petitioners letter claiming inability to govern. To be sure, however, the petitioner
cannot strictly maintain that the President of the Senate, the Honorable Aquilino Pimentel, Jr., and
the then Speaker of the House of Representatives, the Honorable Arnulfo P. Fuentebella, recognized
respondent Arroyo as the constitutional successor to the presidency post facto. Petitioner himself
states that his letter alleging his inability to govern was received by the Office of the Speaker on
January 20, 2001 at 8:30 AM. and the Office of the Senate at 9 P.M. of the same day.30 Respondent
took her oath of office a few minutes past 12 oclock in the afternoon of January 20. Before the
oath-taking, Senate President Pimentel, Jr. and Speaker Fuentebella had prepared a Joint Statement
which stales:31

Joint Statement of Support

and Recognition from the

Senate President and the Speaker

of the House of Representatives

We, the elected leaders of the Senate and the House of Representatives, are called upon to address
the constitutional crisis affecting the

_______________

30 See Petition in G.R. No. 146738, p. 7, further stating that no one apparently was around or
willing to receive the letter to the Senate president earlier.

31 See Annex A-1, Petition in G.R. No. 146738.


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authority of the President to effectively govern our distressed nation. We understand that the
Supreme Court at that time is issuing an en banc resolution recognizing this political reality. While
we may differ on the means to effect a change of leadership, we however, cannot be indifferent and
must act resolutely. Thus, in line with our sworn duty to represent our people and in pursuit of our
goals for peace and prosperity to all, we, the Senate President and the Speaker of the House of
Representatives, hereby declare our support and recognition to the constitutional successor to the
Presidency. We similarly call on all sectors to close ranks despite our political differences. May God
bless our nation in this period of new beginnings.

Mabuhay ang Pilipinas at ang mamamayang Pilipino.

(Sgd.) AQUILINO PIMENTEL, JR.

Senate President

(Sgd.) ARNULFO P. FUENTEBELLA

Speaker of the House of Representatives

This a priori recognition by the President of the Senate and the Speaker of the House of
Representatives of respondent Arroyo as the constitutional successor to the presidency was
followed post facto by various resolutions of the Senate and the House, in effect, confirming this
recognition. Thus, Resolution No. 176 expressed x x x the support of the House of Representatives
to the assumption into office by Vice-President Gloria Macapagal-Arroyo as President of the
Republic of the Philippines, extending its congratulations and expressing its support for her
administration as a partner in the attainment of the nations goal under the Constitution.32
Resolution No. 82 of the Senate and Resolution No. 178 of the House of Representatives both
confirmed the nomination of then Senator Teofisto Guingona, Jr., as Vice-President.33 It also passed
Resolution No. 83 declaring the impeachment court functus officio34 Both Houses sent bills to
respondent Arroyo to be signed by her into law as President of the Philippines.35 These acts of
Congress, a priori and post facto, cannot be dismissed as merely im-

_______________

32 Decision, p. 12.

33 Decision, p. 13.

34 Ibid.
35 Decision, p. 12.

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plied recognitions of respondent Arroyo, as the President of the Republic. Petitioners insistence that
respondent Arroyo is just a de facto President because said acts of Congress x x x are mere
circumstances of acquiescence calculated to induce people to submit to respondents exercise of the
powers of the presidency36 is a guesswork far divorced from reality to deserve further discussion.

Similarly way off the mark is petitioners point that while the Constitution has made Congress the
national board of canvassers for presidential and vice-presidential elections, this Honorable Court
nonetheless remains the sole judge in presidential and vice presidential contests.37 He thus
postulates that such constitutional provision38 is indicative of the desire of the sovereign people to
keep out of the hands of Congress questions as to the legality of a persons claim to the presidential
office.39 Suffice to state that the inference is illogical. Indeed, there is no room to resort to
inference. The Constitution clearly sets out the structure on how vacancies and election contest in
the office of the President shall be decided. Thus, section 7 of Article VII covers the instance when
(a) the President-elect fails to qualify, (b) if a President shall not have been chosen, and (c) if at the
beginning of the term of the President, the President-elect shall have died or shall have become
permanently disabled. Section 8 of Article VII covers the situation of the death, permanent disability,
removal from office or resignation of the President. Section 11 of Article VII covers the case where
the President transmits to the President of the Senate and the Speaker of the House of
Representatives his written declaration that he is unable to discharge the powers and duties of his
office. In each case, the Constitution specifies the body that will resolve the issues that may arise
from the contingency. In case of election contest, section 4, Article VII provides that the contests
shall be resolved by this Court sitting en banc. In case of resignation of the President, it

_______________

36 Omnibus Motion, p. 37.

37 Id., pp. 38-39.

38 Id., p. 39.

39 Section 4, Article VII of the Constitution states in part: The Supreme Court sitting en banc, shall be
the sole judge of all contests relating to the election, returns, and qualifications of the President or
Vice-President, and may promulgate its rules for the purpose.

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is not disputed that this Court has jurisdiction to decide the issue. In case of inability to govern,
section 11 of Article VII gives the Congress the power to adjudge the issue and petitioner himself
submitted this thesis which was shared by this Court. In light of these clear provisions of the
Constitution, it is inappropriate, to say the least, for petitioner to make inferences that simply distort
their meanings.

IV Impeachment and Absolute Immunity

Petitioner contends that this Court disregarded section 3 (7) of Article XI of the Constitution which
provides:

(7) Judgment in cases of impeachment shall not extend further than removal from office and
disqualification to hold any office under the Republic of the Philippines, but the party convicted
should nevertheless be liable and subject to prosecution, trial and punishment according to law.

Petitioner reiterates the argument that he must be first convicted in the impeachment proceedings
before he could be criminally prosecuted. A plain reading of the provision will not yield this
conclusion. The provision conveys two uncomplicated ideas: first, it tells us that judgment in
impeachment cases has a limited reach . . . i.e., it cannot extend further than removal from office
and disqualification to hold any office under the Republic of the Philippines, and second, it tells us
the consequence of the limited reach of a judgment in impeachment proceedings considering its
nature, i.e., that the party convicted shall still be liable and subject to prosecution, trial and
punishment according to law. No amount of manipulation will justify petitioners non sequitor
submission that the provision requires that his conviction in the impeachment proceedings is a
condition sine qua non to his prosecution, trial and punishment for the offenses he is now facing
before the respondent Ombudsman.

Petitioner contends that the private and public prosecutors walk out from the impeachment
proceedings should be considered failure to prosecute on the part of the public and private
prosecutors,

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and the termination of the case by the Senate is equivalent to acquittal.40 He explains failure to
prosecute as the failure of the prosecution td prove the case, hence dismissal on such grounds is a
dismissal on the merits.41 He then concludes that dismissal of a case for failure to prosecute
amounts to an acquittal for purposes of applying the rule against double jeopardy. 42

Without ruling on the nature of impeachment proceedings, we reject petitioners submission.

The records will show that the prosecutors walked out in the January 16, 2001 hearing of the
impeachment cases when by a vote of 11-10, the Senator-judges refused to open the second
envelope allegedly containing the P3.3 billion deposit of the petitioner in a secret bank account
under the name Jose Velarde. The next day, January 17, the public prosecutors submitted a letter
to the Speaker of the House tendering their resignation. They also filed their Manifestation of
Withdrawal of Appearance with the impeachment tribunal. Senator Raul Roco immediately moved
for the indefinite suspension of the impeachment proceedings until the House of Representatives
shall have resolved the resignation of the public prosecutors. The Roco motion was then granted by
Chief Justice Davide, Jr. Before the House could resolve the issue of resignation of its prosecutors or
on January 20, 2001, petitioner relinquished the presidency and respondent Arroyo took her oath as
President of the Republic. Thus, On February 7, 2001, the Senate passed Resolution No. 83 declaring
that the impeachment court is functus officio.

Prescinding from these facts, petitioner cannot invoke double jeopardy. Double jeopardy attaches
only: (1) upon a valid complaint; (2) before a competent court; (3) after arraignment; (4) when a
valid plea has been entered; and (5) when the defendant was acquitted or convicted or the case was
dismissed or otherwise ter-

____________

40 Motion for Reconsideration, p. 5.

41 Id., p. 5, citing Bernas, The 1987 Constitution of the Philippines: A Commentary, 1996, p. 532.

42 Id., p. 5, citing People v. Diaz, 94 Phil. 714 and People v. Robles, 105 Phil. 1061.

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minated without the express consent of the accused.43 Assuming arguendo that the first four
requisites of double jeopardy were complied with, petitioner failed to satisfy the fifth requisite for
he was not acquitted nor was the impeachment proceeding dismissed without his express consent.
Petitioners claim of double jeopardy cannot be predicated on prior conviction for he was not
convicted by the impeachment court. At best, his claim of previous acquittal may be scrutinized in
light of a violation of his right to speedy trial, which amounts to a failure to prosecute. As Bernas
points out, a failure to prosecute, which is what happens when the accused is not given a speedy
trial, means failure of the prosecution to prove the case. Hence, dismissal on such grounds is a
dismissal on the merits.44

This Court held in Esmea v. Pogoy, 45 viz.:

If the defendant wants to exercise his constitutional right to a speedy trial, he should ask, not for
the dismissal, but for the trial of the case. After the prosecutions motion for postponement of the
trial is denied and upon order of the court the fiscal does not or cannot produce his evidence and,
consequently fails to prove the defendants guilt, the court upon defendants motion shall dismiss
the case, such dismissal amounting to an acquittal of the defendant.
In a more recent case, this Court held:

It is true that in an unbroken line of cases, we have held that the dismissal of cases on the ground of
failure to prosecute is equivalent to an acquittal that would bar further prosecution of the accused
for the same offense. It must be stressed, however, that these dismissals were predicated on the
clear right of the accused to speedy trial. These cases are not applicable to the petition at bench
considering that the right of the private respondents to speedy trial has not been violated by the
State. For this

_______________

43 Tecson v. Sandiganbayan, 318 SCRA 80 (1999).

44 Bernas, The Constitution of the Republic of the Philippines: A Commentary, 1987, p. 470.

45 102 SCRA 861 (1981), citing 4 Morans Comments on the Rules of Court, 1980 Ed., p. 202, citing
Gandicela v. Lutero, 88 Phil. 299, 307 and People v. Diaz, 94 Phil. 714, 717.

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reason, private respondents cannot invoke their right against double jeopardy.46

Petitioner did not move for the dismissal of the impeachment case against him. Even assuming
arguendo that there was a move for its dismissal, not every invocation of an accuseds right to
speedy trial is meritorious. While the Court accords due importance to an accuseds right to a speedy
trial and adheres to a policy of speedy administration of justice, this right cannot be invoked loosely.
Unjustified postponements which prolong the trial for an unreasonable length of time are what
offend the right of the accused to speedy trial.47 The following provisions of the Revised Rules of
Criminal Procedure are apropos:

Rule 115, Section l(h). Rights of accused at the trial.In all criminal prosecutions, the accused shall
be entitled to the following rights:

(h) To have speedy, impartial and public trial.

Rule 119, Section 2. Continuous trial until terminated; postponements.Trial once commenced
shall continue from day to day as far as practicable until terminated. It may be postponed for a
reasonable length of time for good cause.

The court shall, after consultation with the prosecutor and defense counsel, set the case for
continuous trial on a weekly or other short-term trial calendar at the earliest possible time so as to
ensure speedy trial. In no case shall the entire trial period exceed one hundred eighty (180) days
from the first day of trial, except as otherwise authorized by the Supreme Court.

Petitioner therefore failed to show that the postponement of the impeachment proceedings was
unjustified, much less that it was for an unreasonable length of time. Recalling the facts, on January
17, 2001, the impeachment proceeding was suspended until the House of Representatives shall have
resolved the issue on the resignation of the public prosecutors. This was justified and
understandable for an impeachment proceeding without a panel of prosecutors is a mockery of the
impeachment process. However, three (3)

________________

46 People v. Leviste, 255 SCRA 238 (1996), citing people v. Tampal 244 SCRA 202(1995).

47 Tai Lim v. Court of Appeals, 317 SCRA 521 (1999).

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days from the suspension or January 20, 2001, petitioners resignation supervened. With the sudden
turn of events, the impeachment court became functus officio and the proceedings were therefore
terminated. By no stretch of the imagination can the four-day period from the time the
impeachment proceeding was suspended to the day petitioner resigned, constitute an unreasonable
period of delay violative of the right of the accused to speedy trial.

Nor can the claim of double jeopardy be grounded on the dismissal or termination of the case
without the express consent of the accused. We reiterate that the impeachment proceeding was
closed only after the petitioner had resigned from the presidency, thereby rendering the
impeachment court functus officio. By resigning from the presidency, petitioner more than
consented to the termination of the impeachment case against him, for he brought about the
termination of the impeachment proceedings. We have consistently ruled that when the dismissal or
termination of the case is made at the instance of the accused, there is no double jeopardy.48

Petitioner stubbornly clings to the contention that he is entitled to absolute immunity from suit. His
arguments are merely recycled and we need not prolong the longevity of the debate on the subject.
In our Decision, we exhaustively traced the origin of executive immunity in our jurisdiction and its
bends and turns up to the present time. We held that given the intent of the 1987 Constitution to
breathe life to the policy that a public office is a public trust, the petitioner, as a non-sitting
President, cannot claim executive immunity for his alleged criminal acts committed while a sitting
President. Petitioners rehashed arguments including their thinly disguised new spins are based on
the rejected contention that he is still President, albeit, a President on leave. His stance that his
immunity covers his entire term of office or until June 30, 2004 disregards the reality that he has
relinquished the presidency and there is now a new de jure President.

Petitioner goes a step further and avers that even a non-sitting President enjoys immunity from suit
during his term of office. He

________________
48 People v. Quizada, 160 SCRA 516; Sta. Rita v. Court of Appeals, 247 SCRA 484; People v. Leviste,
supra.

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buttresses his position with the deliberations of the Constitutional Commission, viz.:

Mr. Suarez. Thank you.

The last question is with reference to the Committees omitting in the draft proposal the
immunity provision for the President. I agree with Commissioner Nolledo that the Committee did
very well in striking out this second sentence, at the very least, of the original provision on immunity
from suit under the 1973 Constitution. But would the Committee members not agree to a
restoration of at least the first sentence that the President shall be immune from suit during his
tenure, considering that if we do not provide him that kind of an immunity, he might be spending all
his time facing litigations, as the President-in-exile in Hawaii is now facing litigations almost daily?

Fr. Bernas: The reason for the omission is that we consider it understood in present jurisprudence
that during his tenure he is immune from suit.

Mr. Suarez: So there is no need to express it here.

Fr. Bernas: There is no need. It was that way before. The only innovation made by the 1973
Constitution was to make that explicit and to add other things.

Mr. Suarez: On the understanding, I will not press for any more query, madam President.

I thank the Commissioner for the clarification.49

Petitioner, however, fails to distinguish between term and tenure. The term means the time during
which the officer may claim to hold the office as of right, and fixes the interval after which the
several incumbents shall succeed one another. The tenure represents the term during which the
incumbent actually holds office. The tenure may be shorter than the term for reasons within or
beyond the power of the incumbent.50 From the deliberations, the intent of the framers is clear that
the immunity of the president from suit is concurrent only with his tenure and not his term.

________________

49 Motion for Reconsideration, G.R. Nos. 146710-15, p. 17.

50 Topacio Nueno, et al. vs. Angeles, et al., 76 Phil. 12, 21-22.

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Indeed, petitioners stubborn stance cannot but bolster the belief that the cases at bar were filed
not really for petitioner to reclaim the presidency but just to take advantage of the immunity
attached to the presidency and thus, derail the investigation of the criminal cases pending against
him in the Office of the Ombudsman.

V Prejudicial Publicity on the Ombudsman

Petitioner hangs tough on his submission that his due process rights to a fair trial have been
prejudiced by pre-trial publicity. In our Decision, we held that there is not enough evidence to
sustain petitioners claim of prejudicial publicity. Unconvinced, petitioner alleges that the vivid
narration of events in our Decision itself proves the pervasiveness of the prejudicial publicity. He
then posits the thesis that doubtless, the national fixation with the probable guilt of petitioner
fueled by the hate campaign launched by some high circulation newspaper and by the bully pulpit of
priests and bishops left indelible impression on all sectors of the citizenry and all regions, so harsh
and so pervasive that the prosecution and the judiciary can no longer assure petitioner a sporting
chance.51 To be sure, petitioner engages in exaggeration when he alleges that all sectors of the
citizenry and all regions have been irrevocably influenced by this barrage of prejudicial publicity.
This exaggeration collides with petitioners claim that he still enjoys the support of the majority of
our people, especially the masses.

Petitioner pleads that we apply the doctrine of res ipsa loquitur (the thing or the transaction speaks
for itself) to support his argument. Under the res ipsa loquitur rule in its broad sense, the fact of the
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise
a presumption of negligence, or make out a plaintiffs prima facie case, and present a question of fact
for defendant to meet with an explanation.52 It is not a rule of substantive law but more a
procedural rule. Its mere invocation does not exempt the plaintiff with the requirement of

________________

51 Motion for Reconsideration, p. 27.

52 57B Am Jur 2d 493 (1989).

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proof to prove negligence. It merely allows the plaintiff to present along with the proof of the
accident, enough of the attending circumstances to invoke the doctrine, creating an inference or
presumption of negligence and to thereby place on the defendant the burden of going forward with
the proof.53
We hold that it is inappropriate to apply the rule on res ipsa loquitur, a rule usually applied only in
tort cases, to the cases at bar. Indeed, there is no court in the whole world that has applied the res
ipsa loquitur rule to resolve the issue of prejudicial publicity. We again stress that the issue before us
is whether the alleged pervasive publicity of the cases against the petitioner has prejudiced the
minds of the members of the panel of investigators. We reiterate the test we laid down in People v.
Teehankee,54 to resolve this issue, viz.:

We cannot sustain appellants claim that he was denied the right to impartial trial due to prejudicial
publicity. It is true that the print and broadcast media gave the case at bar pervasive publicity, just
like all high profile and high stake criminal trials. Then and now, we rule that the right of an accused
to a fair trial is not incompatible to a free press. To be sure, responsible reporting enhances an
accuseds right to a fair trial for, as well pointed out, a responsible press has always been regarded
as the handmaiden of effective judicial administration, especially in the criminal field x x x. The press
does not simply publish information about trials but guards against the miscarriage of justice by
subjecting the police, prosecutors, and judicial processes to extensive public scrutiny and criticism.

Pervasive publicity is not per se prejudicial to the right of an accused to fair trial. The mere fact that
the trial of appellant was given a day-to-day, gavel-to-gavel coverage does not by itself prove that
the publicity so permeated the mind of the trial judge and impaired his impartiality. For one, it is
impossible to seal the minds of members of the bench from pre-trial and other off-court publicity of
sensational criminal cases. The state of the art of our communication system brings news as they
happen straight to our breakfast tables and right to our bedrooms. These news form part of our
everyday menu of the facts and fictions of life. For an-

________________

53 Ibid., pp. 502-503.

54 249 SCRA 54 (1995); see Martelino, et al. v. Alejandro, et al., 32 SCRA 106 (1970); Webb v. de
Leon, etc., 247 SCRA 652 (1995); Larranaga v. CA, et al., 289 SCRA 581 (1998).

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other, our idea of a fair and impartial judge is not that of a hermit who is out of touch with the
world. We have not installed the jury system whose members are overly protected from publicity
lest they lost their impartiality, x x x x x x x x x. Our judges are learned in the law and trained to
disregard off-court evidence and on-camera performances of parties to a litigation. Their mere
exposure to publications and publicity stunts does not per se fatally infect their impartiality.

At best, appellant can only conjure possibility of prejudice on the part of the trial judge due to the
barrage of publicity that characterized the investigation and trial of the case. In Martelino, et al. v.
Alejandro, et al., we rejected this standard of possibility of prejudice and adopted the test of actual
prejudice as we ruled that to warrant a finding of prejudicial publicity, there must be allegation and
proof that the judges have been unduly influenced, not simply that they might be, by the barrage of
publicity. In the case at bar, the records do not show that the trial judge developed actual bias
against appellant as a consequence of the extensive media coverage of the pre-trial and trial of his
case. The totality of circumstances of the case does not prove that the trial judge acquired a fixed
opinion as a result of prejudicial publicity which is incapable of change even by evidence presented
during the trial. Appellant has the burden to prove this actual bias and he has not discharged the
burden.

Petitioner keeps on pounding on the adverse publicity against him but fails to prove how the
impartiality of the panel of investigators from the Office of the Ombudsman has been infected by it.
As we held before and we hold it again, petitioner has completely failed to adduce any proof of
actual prejudice developed by the members of the Panel of Investigators. This fact must be
established by clear and convincing evidence and cannot be left to loose surmises and conjectures.
In fact, petitioner did not even identify the members of the Panel of Investigators. We cannot
replace this test of actual prejudice with the rule of res ipsa loquitur as suggested by the petitioner.
The latter rule assumes that an injury (i.e., prejudicial publicity) has been suffered and then shifts
the burden to the panel of investigators to prove that the impartiality of its members has been
affected by said publicity. Such a rule will overturn our case law that pervasive publicity is not per se
prejudicial to the right of an accused to fair trial. The cases are not wanting where an accused has
been acquitted despite pervasive public-

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ity.55 For this reason, we continue to hold that it is not enough for petitioner to conjure possibility
of prejudice but must prove actual prejudice on the part of his investigators for the Court to sustain
his plea. It is plain that petitioner has failed to do so.

Petitioner again suggests that the Court should order a 2-month cooling off period to allow passions
to subside and hopefully the alleged prejudicial publicity against him would die down. We regret not
to acquiesce to the proposal. There is no assurance that the so called 2-month cooling off period will
achieve its purpose. The investigation of the petitioner is a natural media event. It is the first time in
our history that a President will be investigated by the Office of the Ombudsman for alleged
commission of heinous crimes while a sitting President. His investigation will even be monitored by
the foreign press all over the world in view of its legal and historic significance. In other words,
petitioner cannot avoid the kleiglight of publicity. But what is important for the petitioner is that his
constitutional rights are not violated in the process of investigation. For this reason, we have warned
the respondent Ombudsman in our Decision to conduct petitioners preliminary investigation in a
circus-free atmosphere. Petitioner is represented by brilliant legal minds who can protect his rights
as an accused.

VI Recusation

Finally, petitioner prays that the members of this Honorable Court who went to EDSA put on record
who they were and consider recusing or inhibiting themselves, particularly those who had ex-parte
contacts with those exerting pressure on this Honorable Court, as mentioned in our Motion of
March 9, 2001, given the need for the cold neutrality of impartial judges.56

We hold that the prayer lacks merit. There is no ground to inhibit the twelve (12) members of the
Court who merely accepted the invitation of the respondent Arroyo to attend her oath taking. As
mere spectators of a historic event, said members of the Court did

________________

55 People v. Ritter, 194 SCRA 690 (1991).

56 Omnibus Motion, p. 55

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not prejudge the legal basis of the claim of respondent Arroyo to the presidency at the time she took
her oath. Indeed, the Court in its en banc resolution on January 22, 2001, the first working day after
respondent Arroyo took her oath as President, held in Administrative Matter No. 01-1-05 SC, to wit:

A.M. No. 01-1-05-SCIn re: Request for Vice President Gloria Macapagal-Arroyo to Take Her Oath
of Office as President of the Republic of the Philippines before the Chief JusticeActing on the
urgent request of Vice President Gloria Macapagal-Arroyo to be sworn in as President of the
Republic of the Philippines, addressed to the Chief Justice and confirmed by a letter to the Court,
dated January 20, 2001, which request was treated as an administrative matter, the court Resolved
unanimously to confirm the authority given by the twelve (12) members of the Court then present to
the Chief Justice on January 20, 2001 to administer the oath of office to Vice President Gloria
Macapagal-Arroyo as President of the Philippines, at noon of January 20, 2001.

This resolution is without prejudice to the disposition of any justiciable case that may be filed by a
proper party.

The above resolution was unanimously passed by the 15 members of the Court. It should be clear
from the resolution that the Court did not treat the letter of respondent Arroyo to be administered
the oath by Chief Justice Davide, Jr. as a case but as an administrative matter. If it were considered
as a case, then petitioner has reason to fear that the Court has predetermined the legitimacy of the
claim of respondent Arroyo to the presidency. To dispel the erroneous notion, the Court precisely
treated the letter as an administrative matter and emphasized that it was without prejudice to the
disposition of any justiciable case that may be filed by a proper party. In further clarification, the
Court on February 20, 2001 issued another resolution to inform the parties and the public that it x x
x did not issue a resolution on January 20, 2001 declaring the office of the President vacant and that
neither did the Chief Justice issue a press statement justifying the alleged resolution. Thus, there is
no reason for petitioner to request for the said twelve (12) justices to recuse themselves. To be sure,
a motion to inhibit filed by a party after losing his case is suspect and is regarded with general
disfavor.
Moreover, to disqualify any of the members of the Court, particularly a majority of them, is nothing
short of pro tanto depriving

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the Court itself of its jurisdiction as established by the fundamental law. Disqualification of a judge is
a deprivation of his judicial power. And if that judge is the one designated by the Constitution to
exercise the jurisdiction of his court, as is the case with the Justices of this Court, the deprivation of
his or their judicial power is equivalent to the deprivation of the judicial power of the court itself. It
affects the very heart of judicial independence.57 The proposed mass disqualification, if sanctioned
and ordered, would leave the Court no alternative but to abandon a duty which it cannot lawfully
discharge if shorn of the participation of its entire membership of Justices.58

IN VIEW WHEREOF, petitioners Motion for Reconsideration in G.R. Nos. 146710-15 and his Omnibus
Motion in G.R. No. 146738 are DENIED for lack of merit.

SO ORDERED.

Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes, and De Leon, Jr., JJ., concur.

Davide, Jr. (C.J.), No part for reason given in open court and in the extended explanation.

Vitug, J., Pls. see Separate Concurring Opinion.

Kapunan, J., I concur in the result but strongly reiterate my separate opinion in the main case.

Mendoza, J., Please see Concurring Opinion.

Panganiban, J., No part, per my Extended Explanation of Inhibition prom. on March 8, 2001.

Ynares-Santiago, J., Concur in the result but maintain my Separate Opinion in the main Decision.

Sandoval-Gutierrez, J., I concur in the result subject to my Separate Opinion in the main Decision.

________________

57 Vargas v. Rilloraza, et al., 80 Phil. 297 (1948).

58 Abbas, et al. v. Senate Electoral Tribunal, 166 SCRA 651 (1988).

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SEPARATE CONCURRING OPINION

VITUG, J.:

By a vote of 13-0, the Supreme Court, in its decision promulgated on 02 March 2001, confirmed the
legitimacy of the Arroyo government.

The motion for reconsideration submitted by Mr. Joseph E. Estrada seeks to have a more
circumspect statement of the facts and conclusions given by the Court on the ascendancy of Mme.
Gloria Macapagal-Arroyo to the highest post of the land. It is basically argued that minute details
and hairline distinctions would show that the departure from Malacaang of the former President
could not have possibly fallen under any of the circumstances of vacancy enumerated in the
Constitution so as to legally allow the takeover of the office by the now incumbent. All the other
material allegations really wrangle on this point.

There, truly, might never be a definitive consensus, let alone unanimity, on the fine and valid issues
heretofore submitted by petitioner. To dissect the events into miniscule parts for microscopic
scrutiny, however could in the end be just begging the question. The varying versions of the events
and their differing interpretations notwithstanding, one circumstance still remained clear, and it was
that a convergence and confluence of events, sparked by a civilian dissent which set into motion a
domino effect on the government itself, plagued the presidency. The things that occurred were no
longer to be yet in dispute but were matters of fact. Contra factum non valet argumentum.

At little past noon on 20 January 2001, then incumbent Vice-President Gloria Macapagal-Arroyo
would take her oath of office to become the 14th President of the Republic of the Philippines. She
would take over the reins of government for the remaining tenure of her predecessor, President
Joseph Ejercito Estrada, still then the incumbent. Mr. Estrada had by then practically lost effective
control of the government. Within hours after a controversial Senate decision that ended abruptly
the impeachment proceedings against Mr. Estrada, an irate people came in force to the site of the
previous uprising in 1986EDSA that toppled the 20-year rule of for-

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mer President Ferdinand E. Marcos-and this time demanded the immediate ouster of Mr. Estrada.
Shortly thereafter, civic leaders and government personalities, including most of the cabinet
members, and still later the military establishment and the national police, joined cause with the
mass of people.

When the formal oath-taking finally came, Mme. Gloria Macapagal-Arroyo officially assumed the
Office of the President, and Mr. Estrada forthwith ceased to govern. The alarming unrest and turmoil
ended with the assumption of the new leadership. The tenor of the oath actually taken by Mme.
Macapagal-Arroyo and the farewell message of Mr. Estrada to the nation upon his leaving the seat
of power rested the reality. Intentio mea imponet nomen operi meo.
The primordial question that emerged was no longer whether the transfer of power had, in fact,
occurredit didor whether it was ideal or bereft of equanimity but whether the change was
within Constitutional parametersthe 1987 Constitution its letter, intent and spiritor was
revolutionary in character. To be sure, the debate will persist on end. For, indeed, the events were
such that it could have well been one or the other. It was a critical close call. The indications would
seem that much also depended, by good margin, on how the power-holders would have wanted it to
be at the time. The circumstances that prevailed would have likely allowed them to declare a
revolutionary government, to dismantle the old, and to have a new one installed, thereby effectively
abrogating the Constitution until yet another if minded. Respondent could have, so enjoying a show
of overwhelming civilian and military support as she did, forever silenced any legal challenge to her
leadership by choosing a previously-tested path trodden by then President Corazon C. Aquino fifteen
years beforedeclaring a revolutionary government, doing away with the constitution and
railroading all extant democratic institutions and, once ensconced in power, rule by decree. The
large group of people, already then impatient after a four-day vigil at EDSA and later at Mendiola,
could have given in to the popular passions and impulses that prevailed, stormed Malacaang gates,
bodily removed petitioner from office and, in his place, sworn in respondent, or any other person or
group not so dictated by the Charter as the successor.

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It was fortunate that the play of events had it otherwise, more likely by design than not, and the
Constitution was saved, personas transposed. The succession by Mme. Macapagal-Arroyo resulted
neither in the rupture nor in the abrogation of the legal order. The ascension to power was by the
duly-elected Vice-President of the Republic. The Armed Forces of the Philippines and the Philippine
National Police felt that they were so acting only in obedience to their mandate as the protector of
the people. The constitutionally-established government structure, embracing various offices under
the executive branch, the judiciary, the legislature, the constitutional commissions and still other
entities, including the local governments, remained intact and functioning. Immediate stability was
achieved, violence was averted, and the country was spared from possible catastrophe.

If, as Mr. Estrada would so have it, the takeover of the Presidency could not be constitutionally
justified, then, unavoidably, one would have to hold that the Arroyo government, already and firmly
in control then and now, would be nothing else but revolutionary. And, if it were, the principal
points brought up in the petitions for and in behalf of Mr. Estrada, predicated on constitutional
grounds, would then be left bare as there would, in the first place, be no Constitution to speak of.
The invocation alone of the jurisdiction of this Court would itself be without solid foundation absent
its charter.

To go back then to the basic question, in either way it is addressed, whether affirmatively or
negatively, the dismissal of the subject petitions, earlier decreed by the Court, will have to be
sustained.

But the EDSA II phenomenon must not end there. We might ask ourselveshave we, as a people,
really shown to the world enough political maturity? Or have we now found ourselves trapped and
strangled in an epidemic of political instability? Or, is perhaps our culture or psyche, as a nation,
after all, incompatible with the kind of democracy we have plucked from Western soil? EDSA II will
be more than just an exercise of people prerogative; it will also be a time for reflection and re-
examination of values and commitments. It is frightening to think that the sensitive cord of the social
fiber

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Estrada vs. Desierto

that binds us all as one people might so unwittingly be struck and severed. Such a damage would be
irreparable.

MENDOZA, J., concurring:

For the reasons given in my concurring opinion in these cases, I am of the opinion that, having lost
the public trust and the support of his own cabinet, the military and the national police, petitioner
Joseph Ejercito Estrada became permanently disabled from continuing as President of the
Philippines and that respondent Gloria Macapagal-Arroyo, being then the Vice-President, legally
succeeded to the presidency pursuant to Art. VII, 8 of the Constitution.

My concern in this separate opinion is with petitioners claim in G.R. Nos. 146710-15 that he must be
deemed acquitted of the charges against him because the Senate impeachment proceedings against
him were terminated not at his instance, and, consequently, he cannot be prosecuted again for the
same offense(s) without violating his right not to be placed in double jeopardy. Petitioner cites Art.
XI, 3(7) of the Constitution which provides that

Judgment in cases of impeachment shall not extend further than removal from office and
disqualification to hold any office under the Republic of the Philippines, but the party convicted shall
nevertheless be liable and subject to prosecution, trial and punishment according to law.

Petitioner argues that the purpose of the provision allowing subsequent prosecution and trial of a
party convicted in an impeachment trial is precisely to preclude a plea of double jeopardy by the
accused in the event he is convicted in the impeachment trial.

Petitioners contention cannot be sustained. In the first place, the impeachment proceedings against
petitioner were terminated for being functus officio, since the primary purpose of impeachment is
the removal of the respondent therein from office and his disqualification to hold any other office
under the government.

In the second place, the proviso that an impeached and convicted public official would
nevertheless be subject to criminal prosecution serves to qualify the clause that judgment in
cases of im-

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peachment shall not extend further than removal from office and disqualification to hold any office
under the Republic of the Philippines. In other words, the public official convicted in an
impeachment trial is nevertheless subject to criminal prosecution because the penalty which can be
meted out on him cannot exceed removal from office and disqualification to hold office in the
future. Consequently, where, as in this case, the impeachment proceedings did not result in
petitioners conviction, there can be no objection to his subsequent trial and conviction in a criminal
case. The rule that an impeachable officer cannot be criminally prosecuted for the same offenses
which constitute grounds for impeachment presupposes his continuance in office.1 As Professor
Tribe has written:

. . . [I]t should also be possible for an official to be acquitted by the Senate in an impeachment trial
but subsequently convicted of the same underlying acts in a federal court. The Senates acquittal,
after all, could well represent a determination merely that the charged offenses were not
impeachable, or that the nation would be harmed more than protected by pronouncing the official
guilty.2

Hence, the moment he is no longer in office because of his removal, resignation, or permanent
disability, there can be no bar to his criminal prosecution in the courts.

Indeed, tested by the ordinary rules of criminal procedure, since petitioner was neither convicted
nor acquitted in the impeachment proceedings, nor the case against him dismissed without his
consent, his prosecution in the Sandiganbayan for the same offense for which he was impeached
cannot be barred.3

For these reasons, I concur in the denial of the motions for reconsideration filed on behalf of
petitioner in these cases.

Motion for Reconsideration and Omnibus Motion denied.

________________

1 Lecaroz v. Sandiganbayan, 128 SCRA 324 (1984); Jarque v. Desierto, 250 SCRA xi (1995).

2 1 LAURENCE H. TRIBE, AMERICAN CONSTITUTIONAL LAW 160 (3rd ed. 2000).

3 RULE 117, 7.

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Agulan, Jr. vs. Fernandez


Notes.Where a situation is created which precludes the substitution of any Senator sitting in the
Tribunal by any of his other colleagues in the Senate without inviting the same objections to the
substitutes competence, the proposed mass disqualification, if sanctioned and ordered, would leave
the Tribunal no alternative but to abandon a duty that no other court or body can perform, but
which it cannot lawfully discharge if shorn of the participation of its entire membership of Senators.
(Abbas vs. Senate Electoral Tribunal, 166 SCRA 651 [1988])

Newspaper articles amount to hearsay evidence, twice removed and are therefore not only
inadmissible but without any probative value at all whether objected to or not, unless offered for a
purpose other than proving the truth of the matter asserted. (Feria vs. Court of Appeals, 325 SCRA
525 [2000])

Newspaper reports are merely hearsay evidence and have no probative value at allthe authors of
newspaper reports have no personal knowledge of the identity of the perpetrators of the crime.
(People vs. Carugal, 341 SCRA 319 [2000])

Newspaper reports are incompetent and inadmissible for being hearsay. (People vs. Garalde, 348
SCRA 38 [2000]) Estrada vs. Desierto, 356 SCRA 108, G.R. Nos. 146710-15, G.R. No. 146738 April 3,
2001

[No. 11889. January 10, 1918]

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant and appellee, vs. CARMEN MARTINEZ and
DOLORES MARTINEZ, claimants and appellants. JULIO SALVADOR, claimant and appellee.

1.EVIDENCE; PRIMARY AND SECONDARY.While it is true that the record of any document in a
public registry is a public document, yet before the record or a certified copy of the recital made in a
public registry of the contents of a deed of sale, may be admitted as evidence of the contents of said
deed, it is indispensable to establish first that said deed really existed, was duly executed and was
lost; for while it may be true that said document was really presented to the registry, as stated in the
entry or the books of the registry, yet the document actually presented may have been falsified or
simulated, and may not have really been executed by the parties appearing thereon to have signed
the same. And if it really existed, it should be presented unless it is proven to have been lost, in
which case, and only then, secondary evidence may be introduced.

2.ID.; ID.; PUBLIC RECORD; CERTIFIED COPY.The entry in a public registry of a document presented
therein for registration is a public writing, and a certified copy of said entry is admissible evidence of
the contents of said entry, but said certified copy will not have the effect of proving the contents of
the deed of sale said to have been presented in the registry, when the parties said to have executed
the document in question testify denying said execution, and do not appear to have taken part in
the presentation of the said deed of sale to the registrar of deeds.

APPEAL from a judgment of the Court of First Instance of Iloilo. Mariano, J.

The facts are stated in the opinion of the court.

C. Lozano for appellants.

Montinola & Montinola for appellee Salvador.


No appearance for the Government.

818

81

8PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez

ARAULLO, J.:

In the cadastral proceedings instituted in the Court of Land Registration for the settlement of titles
to lands in the municipality of Iloilo, Province of Iloilo, Dolores and Carmen Martinez on May 11,
1914, appeared claiming to be the owners of lots Nos. 873 and 450. They alleged in effect, after
describing said lots, that they were in possession thereof for about twenty-five years, having
acquired them by donation from Maria Sarlabus, and that their predecessors in interest had had
possession of the same for at least three years prior to said donation.

When the case came up for trial, Julio Salvador, through his attorney, entered his appearance and
claimed title to said lots, alleging that he was in actual possession thereof, and that his predecessors
in interest had been in possession before him for at least fourteen years.

Trial having been held and the parties having adduced their evidence, judgment was rendered by the
Court of First Instance of Iloilo, which took the place of the Court of Land Registration, denying the
claim of Carmen and Dolores Martinez and adjudicating said lots to Julio Salvador, on the ground
that, in the opinion of the court, it was proved that the Martinez sisters had sold said land to one
named Domenech and that the latter, in turn, sold it to Julio Salvador, who could, therefore, be
considered owner of the disputed lots.

Dolores and Carmen Martinez excepted to said judgment and filed a bill of exceptions after their
motion for new trial had been overruled, and they had excepted to the order overruling said motion.
They now allege that the trial court erred:

1. In admitting the copy of the record of a supposed document of sale, presented by the oppositor
Julio Salvador, in support of his claim of title without the disappearance or loss of the original
document having been previously proved;

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VOL. 44, JANUARY 10, 1918

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Government of the Philippine Islands vs. Martinez

2. In not considering the evidence of the appelants as to his acts of possession and ownership on the
lot in question; and,

3. In adjudicating and decreeing the registration of said lot in favor of said oppositor.
According to the testimony of Tiburcio Saez, witness of Julio Salvador, he was acquainted with the
latter for about twelve or fourteen years; Julio Salvador acquired said lots from Antonio Domenech,
as appeared in the document exhibited to him at the trial, dated March 14, 1912, and signed by him
(the witness) in the name, and at the request, of the vendor Domenech because the latter had a
trembling hand and a poor eyesight; the notary and two witnesses were present at the time of
signing; said lots, according to the document, consisted of three pieces, to wit, one acquired by
Domenech from Anastasio Montes and the other two from Dolores and Carmen Martinez who,
because of certain difficulties he had been in, sold them in a document acknowledged before the
notary public, Mr. Yulo; he was not present when the transaction was effected, having only learned
of it from the plaintiffs; he did not know of any other possessor of said land but Domenech, during
his lifetime, and Julio Salvador; after Domenech's death Dolores Martinez told him that the lands did
not belong to the former but to them, and finally, Julio Salvador took possession of said lands at the
time of the sale, a fact which he afterwards knew from Salvador himself, for he was not personally
present when the possession was taken.

Juan Madrenas Soler, attorney in fact of Julio Salvador, who was away in Spain during the trial,
testified: That Julio Salvador gave him certain papers referring to the land in question and that he
looked among them for the document of sale executed by the Martinez sisters in favor of Antonio
Domenech but did not find it; that he made investigations concerning said document, having
interviewed Mr. Yulo, because he remembered that when Sal819

820

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PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez

vador left for Spain he told the witness that the documents concerning the case had been in Yulo's
possession, who informed him that the Martinez sisters had been looking for the same documents
having asked him about them, to which he answered that he remembered having returned those
papers to Domenech and that he did not have them, not having found them, when he had looked for
them, but that, according to Mr. Yulo himself, a copy of them was in some archive in Manila.

As the claimants Martinez denied having sold the aforesaid two lots to Antonio Domenech, as stated
by the witness Saez, and having executed a document of sale of said lots in favor of Domenech, the
attorney for Julio Salvador, besides the document of sale of said lots executed by Antonio Domenech
in favor of Julio Salvador on March 14, 1912 (Exhibit 1), presented also a certified copy issued by the
acting registrar of deeds of Iloilo and dated May 13, 1914 (Exhibit 2). In referring to the registration
of the property consisting of the two lots in question, after mentioning the acquisition of said lots by
Carmen and Dolores Martinez by virtue of a donation inter vivos made to them of one of said lots by
Maria Sarlabus and of a grant of the other in their favor by Anastasio Montes, respectively, on
September 19, 1889, and April 24, 1893, said certified copy stated that said Martinez sold the same
lots, that is, the property in the city, to Antonio Domenech de Toldra for the sum of one hundred
fifty pesos, and that the vendors acknowledged having received the price from the purchaser before
the execution of the contract. Said copy also contained all that was stated in the document of sale
executed on January 9, 1900, before the notary public, Don Gregorio Yulo y Regalado, and presented
in that registry at 9:30 a. m. on April 23, 1900, according to entry No. 2, vol. 1 of the daybook. It
further stated that in the same entry there was a marginal note which read: "This property was sold
to Mr. Julio Salvador y Miralles, as appears from record No. 2 of this property No. * * *

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VOL. 44, JANUARY 10, 1918

821

Government of the Philippine Islands vs. Martinez

page * * * of vol. 6 of this book." And said acting registrar, Roman Lacson, having appeared at the
trial, indicated said registration in the book mentioned in said certificate, and also stated that Exhibit
2 was a true and exact copy thereof.

Said entry, that is, the certified copy already referred to (Exhibit 2), having been presented as
evidence, as already stated, the attorney of the Martinez claimants objected, alleging that it has not
been satisfactorily proved that the document of sale said to have been executed by them in favor of
Antonio Domenech was lost; that Julio Salvador did not say, nor was there any statement, made by
him or his attorney in fact, that the document was in his possession, and, finally, that the previous
existence of such document has not been proved nor had anybody seen it before its supposed loss.
The court, however, on the ground that Julio Salvador's counsel did all he could possibly do when he
f ound himself obliged to present said document, admitted said certified copy (Exhibit 2), the
attorney for the appellants having excepted to this ruling.

The oppositor or claimant Julio Salvador was under the obligation to present, as evidence of his
supposed title to the lots in question, the document of sale of the said two lots, which, according to
the witness Saez, was executed by the Martinez sisters in favor of Antonio Domenech; for to prove
said title it was not sufficient for them to present, as they did, the document of sale of said lots
executed by said Domenech on March 14, 1912, in favor of Julio Salvador, in the execution of which,
according to the declaration of the same witness, Saez, he took part, signing in the name, and at the
request, of the vendor Domenech; but said certified copy of the record in the registry, Exhibit 2, in
which mention is made of the document, was presented by said oppositor, in view of the fact that
he did not have said document in his possession. Nevertheless Julio Salvador ought first to have
proved the loss of said original document and that the same was duly signed and only then

822

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PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez

could he have proved the contents thereof by means of the certified copy of the record, Exhibit 2, or
by the statement therein contained of that sale, according to the provisions of section 321 of the
Code of Civil Procedure.

The knowledge of the witness Juan Madrenas Soler, attorney in fact of Salvador, concerning said
document of sale was obtained from Mr. Yulo who, according to said witness, had told him that the
documents referring to the land in question were again delivered by him to Mr. Domenech. Said
witness also testified that before the search for said document, he had no occasion to see it as he
was not interested; that he did not attempt to look for it after making the declaration he made in
the municipal building; that Julio Salvador himself, before leaving for Spain, had not instructed him
to look for said papers; and finally, that when Salvador gave him power to represent him in all his
business he only recommended that the name of Antonio Domenech be changed with that of his
own.

As already stated, Tiburcio Saez only said that he knew that due to certain inf ormations, Dolores
and Carmen Martinez had executed a document of sale in favor of Domenech before the notary
public Mr. Yulo, but that he did not see its execution, learning thereof only through statements
made by the Martinez sisters, which the latter denied while testifying at the trial.

The oppositor Julio Salvador did not present as a witness the notary public, Mr. Yulo, before whom,
according to the witness Saez, Domenech executed said document of sale, in order that he might
testify on this point and corroborate the references made to him by the witnesses Madrenas and
Saez and especially by the first, with respect to the whereabouts of the document. No attempt
appears to have been made to present as witnesses said notary and those persons who must have
seen the signing of the document, nor was it shown that said document had been lost. Finally, it
does not appear that Julio Salvador or his lawyer or his attorney in fact, Madrenas, had made any
effort to

823

VOL. 44, JANUARY 10, 1918

823

Government of the Philippine Islands vs. Martinez

in the City of Manila, where, according to the lawyer himself, it could be secured. He, however,
promised, after the introduction of evidence, to present it after looking for it in the archives, which
promise was made good, although the court said that he would limit himself to the evidence
therefore introduced, for the trial having terminated on May 15, 1914, and the court having
rendered judgment on December 15, 1915, that is, one and one-half years afterwards, he had had
sufficient time within which to look for said document and ask f or the admission thereof, in case it
should be found, before the final judgment appealed from was rendered.

The loss of said document of sale which, it is said, had been executed by the Martinez sisters in favor
of Domenech not having been proved and no proof having been offered that said document was
duly executed and signed, all of this being due to an obvious lack of diligence on the part of the
oppositor himself, his lawyer and attorney in fact, the presentation of the certified copy of
registration, Exhibit 2, and its admission by the court as secondary and supplementary evidence of
said document, was improper and cannot serve as a basis for us to hold it proven, as the lower court
did hold, that the Martinez sisters had sold the land in question to Antonio Domenech and that
having acquired it from the latter, Julio Salvador, the oppositor, could be adjudged to be the owner
of said disputed lots.

The appellee, however, invoking section 299 of the Code of Civil Procedure, maintains that said
certified copy, Exhibit 2, issued by the acting registrar of deeds of Iloilo, was properly admitted as
evidence in the same manner that the original deed of sale of said lots said to have been executed
by the Martinez sisters in favor of Antonio Domenech, which, copy being a public document, had the
same effects as the original.

Section 299 of the Code of Civil Procedure provides: "The written acts or record of the acts of the
sovereign

824

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PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez

authority, of official bodies and tribunals and of public officers, legislative, judicial, and executive of
the Philippine Islands, or of the United States, or of any States of the United States or of a foreign
country, and public records kept in the Philippine Islands of private writings are public writings. A
copy of a public writing, duly certified to be a true copy thereof, is admissible evidence in like cases
and in like effect as the original writing." The appellee understands that as the copy of a public
writing duly certified to be a true copy has the same effects as the original, according to section 299,
such a copy, as a public writing, is included in the exception of section 321 of the same Code, which
provides that secondary evidence of the contents of a document cannot be admitted without the
requirement of said section having been complied with, as already explained in the preceding
paragraphs.

The first observation that may be made against said argument, is that the certified copy issued by
the acting registrar of deeds of Iloilo, Exhibit 2, is not a true copy of the document of sale which is
said to have been executed by the Martinez sisters in favor of Antonio Domenech, but of the recital
appearing in the books of said registry with respect to the urban property, consisting of those two
lots, which recital is to the effect that there was presented in the office of the registrar at 9:30 a. m.
on April 23, 1900, a document of sale, executed on January 9 of said year by Carmen and Dolores
Martinez before the notary, D. Gregorio Yulo y Regalado, in favor of Antonio Domenech, of said
property or lot composed of two parts, one acquired by said Martinez from Doa Maria Victoria
Sarlabus by donation inter vivos, according to the document of September 19, 1889, ratified before
a notary of that province, D. Andres Pastor Santana, and the other by a grant from D. Anastasio
Montes, as evidenced by a private document executed on April 24, 1893. On the margin of said entry
it is stated that said lot was sold to Julio Salvador. In short, the effect of the certified copy as
evidence is that

825

VOL. 44, JANUARY 10, 1918

825

Government of the Philippine Islands vs. Martinez

said document, in which the facts already stated appear, was presented to the registrar of deeds on
April 23, 1900. So that all that was certified to by the registrar of deeds in the document, Exhibit 2, is
that said recital, referring to the document, appears in the books of the registry. For this reason it is
evident that as said certified copy was not a copy of the original document it could not, unlike the
original ginal i writing be properly admitted as evidence in the present cl f on the ground that it was
a public document accord ng to section 299. Neither could said copy produce the same legal effect
as the original. Such certification has the character of a public document and is such indeed
according to said section 299 of the Code of Civil Procedure, but its only effect is to show that said
document was presented at the office of the registrar of deeds of Iloilo, where the aforesaid
statements appear. It does not, however, prove that said lots had in fact been sold by the Martinez
sisters to Antonio Domenech, or that the document presented was true, duly executed or ratified
before the notary, D. Gregorio Yulo, for the simple reason that said document presented to the
registrar might have been false and simulated, and the signatures appearing thereon might not have
been the authentic and legitimate signatures of the vendors, or of the notary before whom it was
ratified, or of the witnesses who appear in said document as eyewitnesses to the signing thereof by
the vendors.

It is true that section 299 already cited includes among public documents the public records of
private writings existing in the Philippine Islands; and this may very well give rise to the
interpretation, which the appellee seems to give it, that the entry in the books of the registry of
Iloilo as to the presentation of said document of conveyance executed by the Martinez sisters in
favor of Domenech is a public record of the same writing, and therefore the recital of said entry is a
public writing. But in the first place it must be taken into account that the entry made in the registry
and mentioned in Exhibit 2 ref ers only to the pres-

826

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PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez

entation of said writing at the office of the registrar; and as the Martinez sisters denied at the trial
having executed said document in favor of Domenech and sold the property therein described, and
the document itself not being literally transcribed in said entry or registry, and as it is neither proved
that in the filing of said document with the registrar the Martinez sisters took any part, said certified
copy cannot have the effect of proving that said sale took place, even considering said document as
a public writing. It was therefore necessary for the claimant Julio Salvador, in order to f ully and
sufficiently prove his alleged title to that real property, to present the original document of sale said
to have been executed by the Martinez sisters in favor of Domenech, or a literal copy of the same, or
a recital thereof appearing in some authentic document. If he could not do so he should have proved
its contents by means of the recollection that a witness might have had thereof.

The recital in the entry in the registry, a certified copy of which has been presented as Exhibit 2, by
counsel of Julio Salvador, cannot be held to have the effect of proving the contents of the document
referred to, for the reason that the Martinez claimants have questioned and denied the authenticity
of said document which, according to the entry in the registry, was presented to the registrar on
April 23, 1900. And, as already stated with respect to the recollection that a witness may have of
said document, none of the witnesses who testified for the oppositor, Salvador, affirmed having
seen such document, said witnesses having learned of it only by reference, as he himself stated,
from the Martinez claimants themselves, who denied even this fact

But whether said entry in the registry be considered as a recital of said document in an authentic
writing, or whether it be held that some witness had some recollection of said document, this
secondary evidence of said document should not have been admitted by the court for the reason
that the oppositor, Julio Salvador, had not first complied

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VOL. 44, JANUARY 10, 1918

827

Government of the Philippine Islands vs. Martinez

with the provisions of section 321 of the Code of Civil Procedure.

"The best obtainable evidence should be adduced to prove every disputed fact, and a failure to
produce it, but an attempt instead to sustain the issue by inferior evidence, will authorize the
inference that the party does not furnish the best-evidence because it would tend to defeat instead
of sustaining, the issue on his part. In requiring the production of the best evidence applicable to to
each particu ar fact, it is meant that no evidence shall be received which is merely substitutionary in
its nature, so long as the original evidence can be had." (Ruling Case Law, vol. 10, p 903, par. 54, and
cases therein cited.)

"Undoubtedly the best evidence of the contents of a written instrument consists in the actual
production of the instrument itself, and the general rule is that secondary evidence of its contents
cannot be admitted until the nonproduction of the original has been satisfactorily accounted for."
(Ruling Case Law, vol. 10, p. 903, par. 55, and cases therein cited.)

"Secondary evidence of the contents of writings is admitted on the theory that the original cannot
be produced by the party by whom the evidence is offered, within a reasonable time by the exercise
of reasonable diligence. And ordinarily secondary evidence is not admissible until the nonproduction
of the primary evidence has been sufficiently accounted for." (Ruling Case Law, vol. 10, p. 911, par.
66, and cases therein cited.)

"Under the earlier English decisions no degrees of Secondary evidence are recognized. The American
courts, however, have asserted that secondary evidence, to be admissible, must be the best legal
evidence obtainable under the circumstances. * * * It is a rule of evidence, too ancient and too well
understood to require proof of its existence, that the original instrument is better evidence than a
copy. Again, whenever a copy of a record or document is itself made original or primary evidence, -
the rule is clear

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PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez


and well settled that it must be a copy made directly from or compared with the original. If the first
copy be lost, or in the hands of the opposite party, so long as another may be obtained from the
same source, no ground can be laid for resorting to evidence of an inferior or secondary character."
(Ruling Case Law, vol. 10, p. 912, par. 68, and cases therein cited.) cited.)

"Preliminary to the introduction of secondary evidence under the principle herein referred to, the
proponent must establish the f ormer existence of the primary evidence, and its loss or destruction
as the case may be. * * * It has been held that the existence of a deed is sufficiently proved where
there is a preponderance of proof in its favor." (Ruling Case Law, vol. 10, p. 917, par. 75, and cases
therein cited.)

"The contents of a lost instrument cannot be proved unless it appears that reasonable search has
been made in the place where the paper was last known to have been, and if not found there, that
inquiry has been made of the person last known to have had its custody." (Ruling Case Law, vol. 10,
p. 917, par. 76, and cases therein cited.)

"In accordance with the rule set forth in the next preceding paragraph parol evidence of the
contents of a will is inadmissible, unless it is first shown that diligent and unavailing search has been
made for the original, by or at the request of the party interested, and in the place where it is most
likely to be found. * * * But to justify admission of secondary evidence of a deed, it is not necessary
to prove its loss beyond all possibility of mistake. A reasonable probability of its loss is sufficient;;
and this may be shown by a bona fide and diligent search, fruitlessly made for it in places where it is
likely to be found." (Ruling Case Law, vol. 10, p. 918, par. 77, and cases therein cited.)

As the failure of the oppositor to present the original document in question was not accounted for;
as it is not proper to suppose that the original could not have been

829

VOL. 44, JANUARY 10, 1918

829

Government of the Philippine Islands vs. Martinez

presented within a reasonable time if he had exercised due diligence for he or his counsel had the
means, opportunity and time to find the original if it really existed; as no proof was adduced that
said document had been lost, or destroyed, or that proper search therefor was made in the general
files of notarial documents in the City of Manila, or that an attempt was made to secure a copy
thereof if it existed in said files; as the notary, Gregorio Yulo, a person well known in Iloilo, was not
asked directly and clearly as to the whereabouts of said document or some particular or data about
it in order to obtain from him some conclusive and categorical answer; as said notary has not been
presented at the trial to be examined on these points; and, lastly, as it was not shown that the party
interested in the presentation of said document, who is Julio Salvador, had made a diligent and
proper, but fruitless, search for said document in any place where it could probably be found
therefore the secondary evidence presented by the oppositor, consisting of the testimony of the
witnesses, Saez and Madrenas, and the certified copy issued by the registrar of deeds of Iloilo,
Exhibit 2, is of no value f or the purposes intended and such evidence was improperly considered by
the court in reaching the conclusion that said Julio Salvador was the owner of the lots in question.
But not only thisas stated in said certified copy of the registry, Exhibit 2, Carmen and Dolores
Martinez acquired said lots, one by donation inter vivos from Maria Sarlabus, made in a public
document, and the other by grant from Anastasio Montes, evidenced by a private document. These
documents being a part of the title deeds of 'the lots, they ought to have been delivered by the
Martinez sisters to Domenech; and when the registration of said sale in the registry was asked, these
documents should have been presented by the latter, together with the deed of sale which is said to
have been executed by the Martinez sisters in his favor before the notary Yulo on January 9,

830

830

PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez

1900; and when they were returned to Domenech or to any other, the registrar ought to have made
at the foot of said documents, a note stating the fact of their presentation, together with the
document of April 23, 1900, as well as of the fact that they were properly noted in the registry; and,
finally, said documents ought to be in the possession of Domenech, and afterwards, when the, lots
were sold to Julio Salvador, those documents should have been delivered by Domenech to the latter.

Yet said documents were not in the possession of Julio Salvador, or his attorney in fact, but of
Dolores and Carmen Martinez, who presented them at the trial and were there marked as Exhibits A
and B, for the purpose of proving their title to said lots, and there appears no note whatever of the
registrar to the effect that they had 'been presented in the registry and that they had been noted in
said office. This is evident proof that really they were not presented to the registrar when the
document of sale alleged to have been executed on January 9, 1900, by the Martinez sisters in favor
of Domenech, and ratified before the notary public, Mr. Yulo, was presented by Domenech or his
representative. Said document of donation, Exhibit B, and that of grant, Exhibit A, being among the
title deeds of said lots, it is strange that in registering said sale they should have presented the said
document only, the existence and execution of which were denied by the Martinez sisters. There are
therefore sufficient grounds to hold it not proved that the latter sold said lots to Antonio Domenech,
and, consequently, they could not have transferred any title thereto to Julio Salvador.

On the other hand, the title of Carmen and Dolores Martinez to said lots, Nos. 873 and 450, which
constitute the property described in their claim and that of Julio Salvador, respectively, is recognized
by the latter, when he attempted to prove that they were sold by the former to Antonio Domenech,
as well as by the witness of said oppositor, Tiburcio Saez, when he stated that they were sold

831

VOL. 44, JANUARY 10, 1918

831

Government of the Philippine Islands vs. Martinez

by said two sisters to Domenech; and this title has been confirmed by the documents already
mentioned, Exhibits A and B. The first of said documents states that on April 24, 1893, Anastasio
Montes gratuitously ceded a lot 9.20 meters wide and 11.80 meters long, bordering on Calle San
Rafael, and bounded on the north by the lot of Don Leon Yorac, while the document, Exhibit B,
which is a public document executed on September 29, 1869, and ratified before the notary public
of Iloilo, Don Andres Pastor Santana, states that Maria Victoria Sarlabus, in order to show affection
to her intimate friends Carmen and Dolores Martinez, gave them by way of a perfect and irrevocable
donation inter vivos a lot belonging to her, situated on said Calle San Rafael, Iloilo, being 6 brazas
wide and 7 brazas long, and bounded on the right by the lot of Mateo Catalva, on the left by that of
Nicolas Batingui, and on the rear by that of Anastasio Montes. These lots are numbered as 450 and
873 in the cadastral plans of the municipality of Iloilo and constitute the lot now in question.

It appears from the evidence that the lot in question was not fenced and there was no building at all
on it, the witness Tiburcio Saez having declared that he knew that Domenech was in possession
thereof and after him Julio Salvador, which statement was contradicted by Dolores Martinez and her
witness Manuel Zerrudo. Dolores Martinez stated that during all the time that they were in
possession of the land, Julio Salvador never laid any claim to them until lately, that is, about two or
three years ago; that during the lifetime of Domenech they paid the real estate taxes of the land,
giving the sum of P6 to him every year, and that they had no receipts because Domenech had a lot
adjacent to theirs and he included it in the receipt of the lot in question for they took their receipts
at the same time; and that even after Domenech's death, Julio Salvador paid for the taxes, and they
did not attempt to pay for them because Domenech had already talked to Mr. Campos, who told
him that he paid for said

832

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PHILIPPINE REPORTS ANNOTATED

Government of the Philippine Islands vs. Martinez

taxes; that it seemed that lately Salvador was in possession of the land; that during the lifetime of
Domenech they had filled it and that it was not true that Campos or Salvador had paid for the filling
of the land. The witness Manuel Zerrudo declared that he knew the land for about twenty years;
that since he knew it, it has been in the possession of Carmen and Dolores Martinez and at the date
of the trial was still in their possession; that Julio Salvador at no time possessed it; that he did not
see Salvador fence it; and that he knew of the possession of the Martinez sisters for he lived on Calle
Del Rosario and the lot was next to that of his teacher, Mr. Anastasio Montes; and, finally, he
indicated, as an act of possession of the claimants, the fact that they had put it in their name.

The attorney for the Bishop of Jaro, Jose Maria Arroyo, witness for the claimants, Martinez, stated
that the bishop, having attempted to acquire the lot in question, as it adjoins a lot of his, Domenech
took him to the land, stating that he wanted to sell it, but that the bishop did not put the sale
through, because he suspected that it belonged to the Martinez sisters; that he could not tell whose
property it was; that he did not know whether Domenech possessed it; that he did not know who
collected the fruits of the land, but he had information that it belonged to the Martinez sisters,
although he had not seen the title deeds, documents, or anything. He furthermore insisted that the
purchase was not effected because of the doubts that existed about the ownership of the land.

Lastly, according to Dolores Martinez, a woman who like her sister Carmen, was already in the
sixties, Antonio Domenech lived in their house before the bombardment of the city (which must
have taken place in 1898) until 1912, when he died; that although Domenech had been a supervisor
of laborers, he no longer had that occupation when he came to live in their house; that during the
first years he paid the corresponding rent, but after the bom-

833

VOL. 44, JANUARY 10, 1918

833

Government of the Philippine Islands vs. Martinez

bardment he ceased to pay rent and for his subsistence, which was given him by them. Dolores
Martinez and her sister also denied having sold the two lots of land in question to Domenech or that
they had received any sum from him in payment of said lot, or that they had executed the document
already referred to. The former further stated that she did not make any statement whatever to the
witness Saez on the occasions referred to by him to the effect that they had sold said lot to
Domenech. She also declared that she had not received any sum of money from him for, on the
contrary, they had to support him.

As the title of the claimants Dolores and Carmen Martinez to the lots in question was proved, as it
was not proved that they had sold them to Antonio Domenech, and as Julio Salvador could not have
acquired said property from Antonio Domenech, these lots still belong to the Martinez sisters; and,
on the other hand, as it was established that they had been in possession of said lots since the
acquisition thereof; and as the possession which Julio Salvador might have exercised during the last
years (admitting the statements in the record to this effect) is not based upon any valid or legitimate
title, it is evident that the two sisters are entitled to have their rights to the lots in question
confirmed and to have them registered in their name. It is, therefore, clear that the trial court erred
in not so holding in the judgment appealed from.

The judgment appealed from is therefore reversed and the claim of Julio Salvador is denied; and we
declare that the two lots Nos. 873 and 450 should be adjudicated to the appellants Carmen and
Dolores Martinez and be registered in their name. No special pronouncement is made as to costs. So
ordered.

Arellano, C. J., Johnson, Street, and Malcolm, JJ.: concur.

Carson, J., dissents.

Judgment reversed.

VOL. 465, JULY 29, 2005

117

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.
11

THE CONSOLIDATED BANK AND TRUST CORPORATION (SOLIDBANK), petitioner, vs. DEL MONTE
MOTOR WORKS, INC., NARCISO G. MORALES,1 AND SPOUSE, respondents.

Actions; Pleadings and Practice; Specific Denials; To deny the genuineness and due execution of an
actionable document, the defendant must declare under oath that he did not sign the document or
that it is otherwise false or fabricated.In the case of Permanent Savings and Loan Bank v. Mariano
Velarde, this Court held that. . . Respondent also denied any liability on the promissory note as he
allegedly did not receive the amount stated therein, and the loan documents do not express the true
intention of the parties. Respondent reiterated these allegations in his denial under oath, stating
that the promissory note sued upon, assuming that it exists and bears the genuine signature of
herein defendant, the same does not

_______________

* SECOND DIVISION.

1 Narciso O. Morales in the Decision of the Court of Appeals.

118

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

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

Same; Same; Evidence; Best Evidence Rule; The best evidence rule, according to Professor Thayer,
first appeared in the year 1699-1700 when in one case involving a goldsmith, Holt, C.J., was quoted
as stating that they should take into consideration the usages of trade and that the best proof that
the nature of the thing will afford is only required.The best evidence rule, according to
Professor Thayer, first appeared in the year 1699-1700 when in one case involving a goldsmith, Holt,
C.J., was quoted as stating that they should take into consideration the usages of trade and that the
best proof that the nature of the thing will afford is only required. Over the years, the phrase was
used to describe rules which were already existing such as the rule that the terms of a document
must be proved by the production of the document itself, in preference to evidence about the
document; it was also utilized to designate the hearsay rule or the rule excluding assertions made
out of court and not subject to the rigors of cross-examination; and the phrase was likewise used to
designate the group of rules by which testimony of particular classes of witnesses was preferred to
that of others.

Same; Same; Same; Same; Rationale; According to McCormick, an authority on the rules of evidence,
the only actual rule that the best evidence phrase denotes today is the rule requiring the
production of the original writing; In light of the dangers of mistransmission, accompanying the use
of written copies or of recollection, largely avoided through proving the terms by presenting the
writing itself, the preference for the original writing is justified.According to McCormick, an
authority on the rules of evidence, the only actual

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

rule that the best evidence phrase denotes today is the rule requiring the production of the original
writing the rationale being: (1) that precision in presenting to the court the exact words of the
writing is of more than average importance, particularly as respects operative or dispositive
instruments, such as deeds, wills and contracts, since a slight variation in words may mean a great
difference in rights, (2) that there is a substantial hazard of inaccuracy in the human process of
making a copy by handwriting or typewriting, and (3) as respects oral testimony purporting to give
from memory the terms of a writing, there is a special risk of error, greater than in the case of
attempts at describing other situations generally. In the light of these dangers of mistransmission,
accompanying the use of written copies or of recollection, largely avoided through proving the terms
by presenting the writing itself, the preference for the original writing is justified.

Same; Same; Same; Denials; Where defendant fails to deny specifically the execution of the
promissory note, there is no need for the plaintiff to present the original of the promissory note
when the defendant fails to deny specifically and under oath the due execution and genuineness of a
document copied in a complaint, the plaintiff need not prove that fact as it is considered admitted
by the defendant.Respondents failed to deny specifically the execution of the promissory note.
This being the case, there was no need for petitioner to present the original of the promissory note
in question. Their judicial admission with respect to the genuineness and execution of the
promissory note sufficiently established their liability to petitioner regardless of the fact that
petitioner failed to present the original of said note. Indeed, when the defendant fails to deny
specifically and under oath the due execution and genuineness of a document copied in a complaint,
the plaintiff need not prove that fact as it is considered admitted by the defendant.

Same; Courts; Judges; Bias and Partiality; In order for the Supreme Court to sustain a charge of
partiality and prejudice brought against a judge, there must be convincing proof to show that he or
she is, indeed, biased and partial.In order for this Court to sustain a charge of partiality and
prejudice brought against a judge, there must be convincing proof to show that he or she is, indeed,
biased and partial. Bare allegations are not enough. Bias and prejudice are serious charges which
cannot be presumed particularly if weighed

120
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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

against a judges sacred obligation under his oath of office to administer justice without respect to
person and do equal right to the poor and the rich. There must be a showing of bias and prejudice
stemming from an extrajudicial source resulting in an opinion in the merits on some basis other than
what the judge learned from his participation in the case.

Same; Demurrer to Evidence; Words and Phrases; A demurrer to evidence abbreviated judicial
proceedings, it being an instrument for the expeditious termination of an action; If the defendants
motion for judgment on demurrer to evidence is granted and the order is subsequently reversed on
appeal, judgment is rendered in favor of the adverse party because the movant loses his right to
present evidencethe reviewing court cannot remand the case for further proceeding but render
judgment on the basis of the evidence presented by the plaintiff.A demurrer to evidence
abbreviates judicial proceedings, it being an instrument for the expeditious termination of an action.
Caution, however, must be exercised by the party seeking the dismissal of a case upon this ground as
under the rules, if the movants plea for the dismissal on demurrer to evidence is granted and the
order of dismissal is reversed on appeal, he loses his right to adduce evidence. If the defendants
motion for judgment on demurrer to evidence is granted and the order is subsequently reversed on
appeal, judgment is rendered in favor of the adverse party because the movant loses his right to
present evidence. The reviewing court cannot remand the case for further proceedings; rather, it
should render judgment on the basis of the evidence presented by the plaintiff.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Delos Reyes, Banaga, Briones & Associates for petitioner.

Eduardo E. Francisco for Narciso Morales.

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

CHICO-NAZARIO, J.:

This is a petition for review on certiorari of the Decision2 of the Court of Appeals in CA-G.R. CV No.
16886 entitled, The Consolidated Bank & Trust Corporation (SOLIDBANK) v. Del Monte Motor
Works, Inc., Narciso O. Morales and Spouse promulgated on 25 November 1999 and of the
Resolution of the appellate court dated 11 May 2000 denying petitioners motion for
reconsideration. Said decision and resolution affirmed the order dated 28 December 1987 of the
Regional Trial Court (RTC), Branch 27, Manila.

The facts of the case are as follows:

On 13 June 1984, petitioner filed before the RTC of Manila a complaint3 for recovery of sum of
money against respondents, impleading the spouse of respondent Narciso O. Morales (respondent
Morales) in order to bind their conjugal partnership of gains. Petitioner, a domestic banking and
trust corporation, alleges therein that on 23 April 1982, it extended in favor of respondents a loan in
the amount of One Million Pesos (P1,000,000.00) as evidenced by a promissory note executed by
respondents on the same date. Under the promissory note, respondents Del Monte Motor Works,
Inc. (respondent corporation) and Morales bound themselves jointly and severally to pay petitioner
the full amount of the loan through twenty-five monthly installments of P40,000.00 a month with
interest pegged at 23% per annum. The note was to be paid in full by 23 May 1984. As respondents
defaulted on their monthly installments, the full amount of the loan became due and demandable
pursuant to the terms of the promissory note. Petitioner likewise alleges that it made oral and
written demands upon respondents to settle their obligation but notwithstanding these demands,
respondents still failed to pay

_______________

2 Penned by Associate Justice Mercedes Gozo-Dadole with Associate Justices Ramon A. Barcelona
and Demetrio G. Demetria concurring; Rollo, pp. 9-26.

3 Records, pp. 1-6.

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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

their indebtedness which, as of 09 March 1984, stood at P1,332,474.55. Petitioner attached to its
complaint as Annexes A, B, and C, respectively, a photocopy of the promissory note
supposedly executed by respondents, a copy of the demand letter it sent respondents dated 20
January 1983, and statement of account pertaining to respondents loan.

On 31 October 1984, petitioner filed an Ex-Parte Motion to Declare the Defendants in Default which
was opposed by the defendants upon the ground that they were never served with copies of the
summons and of petitioners complaint.

On 23 November 1984, respondent corporation filed before the trial court a manifestation attaching
thereto its answer to petitioners complaint which states the following:

2- That it denies generally and specifically the allegations contained in paragraphs 3, 4, 5, 6, 7 and 8
thereof for lack of knowledge and information sufficient to form a belief as to the truth of the
matters therein alleged, the truth being those alleged in the Special and Affirmative Defenses
hereinbelow contained;
3- ANSWERING FURTHER, and by way of a first special and affirmative defense, defendant herein
states that the promissory note in question is void for want of valid consideration and/or there was
no valuable consideration involved as defendant herein did not receive any consideration at all;

4- ANSWERING FURTHER, and by way of a second special affirmative defense, defendant herein
alleges that no demand has ever been sent to nor received by herein defendant and if ever demands
were made, denies any liability as averred therein.

5- ANSWERING FURTHER, and by way of a third special and affirmative defense, defendant herein
avers that the complaint states no cause of action and has no basis either in fact or in law; . . .

VERIFICATION

I, JEANETTE D. TOLENTINO, of legal age, after having been duly sworn to in accordance with law,
depose and state:

That I am the Controller of Del Monte Motor Works, Inc., one of the defendants in this case.

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

That for and in behalf of the defendant corporation, I caused the preparation of the above-narrated
answer.

That I have read the contents thereof and they are true of my own knowledge.

(SGD.) JEANNETTE D. TOLENTINO4

On 06 December 1984, respondent Morales filed his manifestation together with his answer wherein
he likewise renounced any liability on the promissory note, thus:

1. He ADMIT[S] paragraphs 1, 2, and 3 of the complaint with a qualification in paragraph 3 thereof


that he has long been separated from his wife and the system governing their property relations is
that of complete separation of property and not that of conjugal partnership of gain[s];

2. He [DENIES], generally and specifically, the allegations contained in paragraphs 4, 5, 6, 7, and 8


thereof, for lack of knowledge and information sufficient to form a belief and as to the truth of the
matter therein averred, the truth being those alleged in the Special And Affirmative Defenses
hereinbelow pleaded;

...

SPECIAL AND AFFIRMATIVE DEFENSES

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

6. That even admitting, argumenti gratia, the validity and execution of the questioned promissory
note, still, defendant herein cannot be bound personally and individually to the said obligations as
banking procedures requires, it being a standard operating procedure of all known banking
institution, that to hold a borrower jointly and severally liable in his official as well as personal
capacity, the borrower must sign a Suretyship Agreement or at least, a continuing guaranty with that
of the corporation he represent(s) but which in this case is wanting;

_______________

4 Records, pp. 20-21.

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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

7. That transaction/obligation in question did not, in any way, redound/inure to the benefit of the
conjugal partnership of gain, as there is no conjugal partnership of gain to speak with, defendant
having long been separated from his wife and their property relation is governed by the system of
complete separation of property, and more importantly, he has never signed the said promissory
note in his personal and individual capacity as such;

...

VERIFICATION

That I, NARCISO MORALES, after having been duly sworn to in accordance with law, hereby depose
and declare that: I am one of the named defendant[s] in the above-entitled case; I have cause[d] the
preparation of the foregoing Answer upon facts and figures supplied by me to my retained counsel;
have read each and every allegations contained therein and hereby certify that the same are true
and correct of my own knowledge and information.

(SGD.) NARCISO MORALES

Affiant5

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

During the trial on the merits of this case, petitioner presented as its sole witness, Liberato A.
Lavarino (Lavarino), then the manager of its Collection Department. Substantially, Lavarino stated
that respondents obtained the loan, subject of this case, from petitioner and due to respondents
failure to pay a single monthly installment on this loan, petitioner was constrained to send a demand
letter to respondents; that as a result of this demand letter, Jeannette Tolentino (Tolentino),
respondent corporations controller, wrote a letter to petitioner requesting for some consideration
because of the unfavorable business atmosphere then buffeting their business

_______________

5 Records, pp. 26-27.

6 Records, p. 34.

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operation; that Tolentino enclosed to said letter a check with a face value of P220,020.00 to be
discounted by petitioner with the proceeds being applied as partial payment to their companys
obligation to petitioner; that after receipt of this partial payment, respondents obligation again
became stagnant prompting petitioner to serve respondents with another demand letter which,
unfortunately, was unheeded by respondents. Lavarino also identified the following exhibits for
petitioner: photocopy of the duplicate original of the promissory note attached to the complaint as
Exhibit A;7 petitioners 20 January 1983 demand letter marked as Exhibit B;8 Tolentinos letter
to petitioner dated 10 February 1983 and marked as Exhibit C;9 and the 09 March 1984 statement
of account sent to respondents marked as Exhibit D.10

On 26 September 1985, petitioner made its formal offer of evidence. However, as the original copy
of Exhibit A could no longer be found, petitioner instead sought the admission of the duplicate
original of the promissory note which was identified and marked as Exhibit E.

The trial court initially admitted into evidence Exhibit E and granted respondents motion that they
be allowed to amend their respective answers to conform with this new evidence.11

On 30 September 1985, respondent corporation filed a manifestation and motion for


reconsideration12 of the trial courts order admitting into evidence petitioners Exhibit E.
Respondent corporation claims that Exhibit E should not have been admitted as it was immaterial,
irrelevant, was not properly identified and hearsay evidence. Respondent corporation insists that
Exhibit E was not properly identified by

_______________

7 Records, p. 72.

8 Records, p. 73.

9 Records, p. 75.

10 Records, p. 76.

11 Records, p. 79.
12 Records, pp. 80-83.

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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

Lavarino who testified that he had nothing to do in the preparation and execution of petitioners
exhibits, one of which was Exhibit E. Further, as there were markings in Exhibit A which were not
contained in Exhibit E, the latter could not possibly be considered an original copy of Exhibit A.
Lastly, respondent corporation claims that the exhibit in question had no bearing on the complaint
as Lavarino admitted that Exhibit E was not the original of Exhibit A which was the foundation of
the complaint and upon which respondent corporation based its own answer.

Respondent Morales similarly filed a manifestation with motion to reconsider order admitting as
evidence Exhibit E13 which, other than insisting that the due execution and genuineness of the
promissory note were not established as far as he was concerned, essentially raised the same
arguments contained in respondent corporations manifestation with motion for reconsideration
referred to above.

On 06 December 1985, the trial court granted respondents motions for reconsideration.14
Petitioner moved for the reconsideration of this order which was denied by the court a quo on 20
December 1985.15

On 26 December 1985, respondents separately filed their motions to dismiss on the similar ground
that with the exclusion of Exhibits A and E, petitioner no longer possessed any proof of
respondents alleged indebtedness.16

On 08 April 1986, petitioner filed a motion17 praying that the presiding judge, Judge Ricardo D. Diaz,
of the court a quo inhibit himself from this case maintaining that the latter rushed into resolving its
motion for reconsideration of the trial courts order of 06 December 1985 thereby depriving it

_______________

13 Records, pp. 84-90.

14 Records, p. 118.

15 Records, p. 148.

16 Records, pp. 150-165.

17 Records, pp. 195-200.

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

the opportunity of presenting proof that the original of Exhibit A was delivered to respondents as
early as 02 April 1983. Such haste on the part of the presiding judge, according to petitioner, cast
doubt on his objectivity and fairness. This motion to inhibit was denied by the trial court on 06
August 1987.18

In an order dated 28 December 1987,19 the case before the trial court was dismissed, the dispositive
portion of which reads:

WHEREFORE, the instant case against defendants Del Monte Motor Works, Inc. and Narciso O.
Morales and spouse, is hereby DISMISSED, with costs against the plaintiff.

The trial courts finding was affirmed by the Court of Appeals in the assailed decision now before us.
The dispositive portion of the appellate courts decision reads:

WHEREFORE, PREMISES CONSIDERED, the decision of the Regional Trial Court, Manila, Branch 27,
dated December 28, 1987 dismissing plaintiff-appellant[s] complaint is hereby AFFIRMED. Cost
against the plaintiff-appellant.20

Petitioner thereafter filed a motion for reconsideration dated 14 December 1999 which was denied
for lack of merit in a resolution of the Court of Appeals promulgated on 11 May 2000.21

Aggrieved by the appellate courts ruling, petitioner now seeks redress from this Court imputing the
following errors on the Court of Appeals:

_______________

18 Records, pp. 233-238.

19 Records, pp. 244-252.

20 Rollo, p. 25.

21 Rollo, p. 28.

128

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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND THAT PRIVATE
RESPONDENTS DENIED THE MATERIAL ALLEGATIONS OF PETITIONER SOLIDBANKS COMPLAINT,
DESPITE THE PRESENCE OF INDUBITABLE FACTS CLEARLY POINTING TO THE FACT THAT SAID PRIVATE
RESPONDENTS ADMITTED THE GENUINENESS AND DUE EXECUTION OF THE SUBJECT PROMISSORY
NOTE.

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT UPHELD THE EXCLUSION OF EXHIBIT
E, THE SECOND ORIGINAL OF THE PROMISSORY NOTE, DESPITE THE FACT THAT THE ORIGINAL OF
EXHIBIT A (XEROX COPY OF THE DUPLICATE ORIGINAL OF THE PROMISSORY NOTE) WAS ACTUALLY
IN THE POSSESSION OF PRIVATE RESPONDENTS, THUS WARRANTING THE ADMISSION OF
SECONDARY EVIDENCE.

III

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE TRIAL JUDGE
SHOULD HAVE INHIBITED HIMSELF FROM TAKING COGNIZANCE OF AND FROM TRYING AND
DECIDING THE INSTANT CASE CONSIDERING HIS PERCEIVED AND MANIFEST BIAS AND PARTIALITY IN
FAVOR OF THE PRIVATE RESPONDENTS TO THE GRAVE PREJUDICE OF PETITIONER SOLIDBANK.22

The petition is meritorious.

In resolving the case against petitioner, the appellate court held that contrary to petitioners stance,
respondents were able to generally and specifically deny under oath the genuineness and due
execution of the promissory note, thus:

There can be no dispute to the fact that the allegations in the answer (Record, p. 20, 26-27), of both
defendants, they denied gener-

_______________

22 Rollo, p. 42.

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

ally and specifically under oath the genuineness and due execution of the promissory note and by
way of special and affirmative defenses herein states that he (MORALES) never signed the
promissory note attached to the complaint (Exh. A) in his personal and/or individual capacity.
Moreover, what appears in the record (Record, p. 20) was an admission of paragraphs 1 & 2 but they
deny generally and specifically the rest of the allegations. It would be considered that there is a
sufficient compliance of the requirement of the law for specific denial.23

We hold otherwise.

The pertinent portion of the Rules of Court on the matter provides:


SEC. 8. How to contest such documents.When an action or defense is founded upon a written
instrument, copied in or attached to the corresponding pleading as provided in the preceding
section, the genuineness and due execution of the instrument shall be deemed admitted unless the
adverse party, under oath, specifically denies them and sets forth what he claims to be the facts; but
the requirement of an oath does not apply when the adverse party does not appear to be a party to
the instrument or when compliance with an order for an inspection of the original instrument is
refused.24

In the case of Permanent Savings and Loan Bank v. Mariano Velarde,25 this Court held that

. . . Respondent also denied any liability on the promissory note as he allegedly did not receive the
amount stated therein, and the loan documents do not express the true intention of the parties.
Respondent reiterated these allegations in his denial under oath, stating that the promissory note
sued upon, assuming that it exists and bears the genuine signature of herein defendant, the same
does not bind him and that it did not truly express the real intention of the parties as stated in the
defenses . . .

_______________

23 Rollo, p. 18.

24 Rule 8, Section 8, Revised Rules of Civil Procedure.

25 G.R. No. 140608, 23 September 2004, 439 SCRA 1.

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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

Respondents denials do not constitute an effective specific denial as contemplated by law. In the
early case of Songco vs. Sellner,26 the Court expounded on how to deny the genuineness and due
execution of an actionable document, viz.:

. . . This means that the defendant must declare under oath that he did not sign the document or
that it is otherwise false or fabricated. Neither does the statement of the answer to the effect that
the instrument was procured by fraudulent representation raise any issue as to its genuineness or
due execution. On the contrary such a plea is an admission both of the genuineness and due
execution thereof, since it seeks to avoid the instrument upon a ground not affecting either.27

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

The appellate court likewise sustained the ruling of the trial court that the best evidence rule or
primary evidence must be applied as the purpose of the proof is to establish the terms of the
writingmeaning the alleged promissory note as it is the basis of the recovery of the money
allegedly loaned to the defendants (respondents herein).28

The best evidence rule is encapsulated in Rule 130, Section 3, of the Revised Rules of Civil
Procedure which provides:

Sec. 3. Original document must be produced; exceptions.When the subject of inquiry is the
contents of a document, no evidence shall be admissible other than the original document itself,
except in the following cases:

_______________

26 G.R. No. 11513, 04 December 1917, 37 Phil. 254.

27 Supra, note 25, pp. 8-9.

28 Records, p. 250.

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith
on the part of the offeror;

(b) When the original is in the custody or under the control of the party against whom the evidence
is offered, and the latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined
in court without great loss of time and the fact sought to be established from them is only the
general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public
office.

The best evidence rule, according to Professor Thayer, first appeared in the year 1699-1700 when
in one case involving a goldsmith, Holt, C.J., was quoted as stating that they should take into
consideration the usages of trade and that the best proof that the nature of the thing will afford is
only required.29 Over the years, the phrase was used to describe rules which were already existing
such as the rule that the terms of a document must be proved by the production of the document
itself, in preference to evidence about the document; it was also utilized to designate the hearsay
rule or the rule excluding assertions made out of court and not subject to the rigors of cross-
examination; and the phrase was likewise used to designate the group of rules by which testimony
of particular classes of witnesses was preferred to that of others.30

According to McCormick, an authority on the rules of evidence, the only actual rule that the best
evidence phrase denotes today is the rule requiring the production of the original writing31 the
rationale being:
_______________

29 IV Evidence in Trials at Common Law, John Henry Wigmore, p. 399 (1972 Ed.).

30 Id., at p. 400.

31 Handbook of the Law of Evidence, Charles T. McCormick, p. 409 (1954 Ed.).

132

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Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

(1) that precision in presenting to the court the exact words of the writing is of more than average
importance, particularly as respects operative or dispositive instruments, such as deeds, wills and
contracts, since a slight variation in words may mean a great difference in rights, (2) that there is a
substantial hazard of inaccuracy in the human process of making a copy by handwriting or
typewriting, and (3) as respects oral testimony purporting to give from memory the terms of a
writing, there is a special risk of error, greater than in the case of attempts at describing other
situations generally. In the light of these dangers of mistransmission, accompanying the use of
written copies or of recollection, largely avoided through proving the terms by presenting the
writing itself, the preference for the original writing is justified.32

Bearing in mind that the risk of mistransmission of the contents of a writing is the justification for
the best evidence rule, we declare that this rule finds no application to this case. It should be
noted that respondents never disputed the terms and conditions of the promissory note thus leaving
us to conclude that as far as the parties herein are concerned, the wording or content of said note is
clear enough and leaves no room for disagreement. In their responsive pleadings, respondents
principal defense rests on the alleged lack of consideration of the promissory note. In addition,
respondent Morales also claims that he did not sign the note in his personal capacity. These
contentions clearly do not question the precise wording33 of the promissory note which should
have paved the way for the application of the best evidence rule. It was, therefore, an error for the
Court of Appeals to sustain the decision of the trial court on this point.

Besides, the best evidence rule as stated in our Revised Rules of Civil Procedure is not absolute. As
quoted earlier, the rule accepts of exceptions one of which is when the original of the subject
document is in the possession of the adverse party. As pointed out by petitioner in its motion to
inhibit, had it

_______________

32 Id., at p. 410.

33 Evidence, Edward W. Cleary, p. 416 (4th Ed.).

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been given the opportunity by the court a quo, it would have sufficiently established that the
original of Exhibit A was in the possession of respondents which would have called into application
one of the exceptions to the best evidence rule.

Significantly, and as discussed earlier, respondents failed to deny specifically the execution of the
promissory note. This being the case, there was no need for petitioner to present the original of the
promissory note in question. Their judicial admission with respect to the genuineness and execution
of the promissory note sufficiently established their liability to petitioner regardless of the fact that
petitioner failed to present the original of said note.34

Indeed, when the defendant fails to deny specifically and under oath the due execution and
genuineness of a document copied in a complaint, the plaintiff need not prove that fact as it is
considered admitted by the defendant.35 In the case of Asia Banking Corporation v. Walter E. Olsen
& Co.,36 this Court held that

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

_______________

34 Supra, note 25 at p. 10; Hornales v. The National Labor Relations Commission, et al., G.R. No.
118943, 10 September 2001, 364 SCRA 778; SCC Chemicals Corporation v. The Honorable Court of
Appeals, et al., G.R. No. 128538, 28 February 2001, 353 SCRA 70.

35 VII The Revised Rules of Court in the Philippines (Evidence), Vicente J. Francisco, p. 9 (1997 Ed.)

36 G.R. No. 24488, 28 December 1925, 48 Phil. 529.

134

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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

sider, without the introduction of evidence, the facts admitted by the parties.37
Anent petitioners allegation that the presiding judge of the court a quo should have inhibited
himself from this case, we resolve this issue against petitioner.

In order for this Court to sustain a charge of partiality and prejudice brought against a judge, there
must be convincing proof to show that he or she is, indeed, biased and partial. Bare allegations are
not enough. Bias and prejudice are serious charges which cannot be presumed particularly if
weighed against a judges sacred obligation under his oath of office to administer justice without
respect to person and do equal right to the poor and the rich.38 There must be a showing of bias
and prejudice stemming from an extrajudicial source resulting in an opinion in the merits on some
basis other than what the judge learned from his participation in the case.39

In this case, as petitioner failed to proffer any evidence indicating that Judge Diaz was guilty of bias
and prejudice, we affirm the Court of Appeals holding that there was no cogent reason for him to
disqualify himself from this case.

Finally, Rule 33, Section 1, of the Revised Rules of Civil Procedure states the rule on the effect of
judgment on demurrer to evidence. It reads:

SECTION 1. Demurrer to evidence.After the plaintiff has completed the presentation of his
evidence, the defendant may move for dismissal on the ground that upon the facts and the law the
plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present
evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be
deemed to have waived the right to present evidence.

_______________

37 Id., at p. 532.

38 People v. Court of Appeals, et al., G.R. No. 129120, 02 July 1999, 309 SCRA 705.

39 Soriano v. Angeles, G.R. No. 109920, 31 August 2000, 339 SCRA 366.

135

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135

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

A demurrer to evidence abbreviates judicial proceedings, it being an instrument for the expeditious
termination of an action. Caution, however, must be exercised by the party seeking the dismissal of
a case upon this ground as under the rules, if the movants plea for the dismissal on demurrer to
evidence is granted and the order of dismissal is reversed on appeal, he loses his right to adduce
evidence. If the defendants motion for judgment on demurrer to evidence is granted and the order
is subsequently reversed on appeal, judgment is rendered in favor of the adverse party because the
movant loses his right to present evidence.40 The reviewing court cannot remand the case for
further proceedings; rather, it should render judgment on the basis of the evidence presented by the
plaintiff.41
Under the promissory note executed by respondents in this case, they are obligated to petitioner in
the amount of One Million Pesos, this being the amount of loan they obtained on 23 April 1982. In
addition, they also bound themselves to pay the 23% interest per annum on the loan; and a penalty
charge of 3% per annum on the amount due until fully paid. Respondents likewise agreed to pay
attorneys fees equivalent to 10% of the total amount due, but in no case less than P200.00, plus
costs of suit with both these amounts bearing a 1% interest per month until paid. Costs against
respondents.

WHEREFORE, premises considered, the Court of Appeals decision dated 25 November 1999 as well
as its Resolution of 11 May 2000, affirming the order of the Regional Trial Court, Manila, Branch 27,
dated 28 December 1987, are hereby REVERSED and SET ASIDE. Respondents are ordered to pay
One Million Pesos (P1,000,000.00) plus 23% interest per annum, penalty charge of 3% interest per
annum, and 10% of

_______________

40 Quebral v. Court of Appeals, G.R. No. 101941, 25 January 1996, 252 SCRA 353.

41 Radiowealth Finance Company v. Del Rosario, G.R. No. 138739, 06 July 2000, 335 SCRA 288.

136

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SUPREME COURT REPORTS ANNOTATED

Consolidated Bank and Trust Corporation (SOLIDBANK) vs. Del Monte Motor Works, Inc.

the amount due as attorneys fees together with a 1% interest per month until fully paid. The sum of
P220,020.00 which was the value of the postdated check given by respondents to petitioner as
partial payment should be deducted from the amount due from respondents.

SO ORDERED.

Puno (Chairman), Austria-Martinez, Callejo, Sr. and Tinga, JJ., concur.

Judgment and resolution reversed and set aside.

Notes.A secondary evidence can only be admitted if it is shown that the original has been lost or
destroyed or cannot be produced in court or that it is in the custody of the adverse party. (People vs.
Dismuke, 234 SCRA 51 [1994])

Where the answer does not contain any specific denial under oath of the letters of credit, sight
drafts, trust receipts and comprehensive surety agreement upon which the complaint is based, the
same gives rise to the implied admission of the genuineness and due execution of said documents,
which documents are also admissible in evidence despite absence of documentary stamps thereon.
(Filipinas Textile Mills, Inc. vs. Court of Appeals, 415 SCRA 635 [2003])

o0o
662

SUPREME COURT REPORTS ANNOTATED

Lee vs. People

G.R. No. 159288. October 19, 2004.*

JOHNSON LEE, petitioner, vs. PEOPLE OF THE PHILIPPINES and NEUGENE MARKETING, INC.,
respondents.

Remedial Law; Certiorari; A petition for certiorari or prohibition to be granted, it must set out and
demonstrate, plainly and distinctly, all the facts essential to establish a right to a writ. The petitioner
must allege in his petition and establish facts to show that any other existing remedy is not speedy
or adequate and that (a) the writ is directed against a tribunal, board or officer exercising judicial or
quasi-judicial functions; (b) such tribunal, board or officer has acted without or in excess of
jurisdiction, or with grave abuse of discretion amounting to excess or lack of jurisdiction; and, (c)
there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.In
People v. Court of Appeals, we held that for a petition for certiorari or prohibition to be granted, it
must set out and demonstrate, plainly and distinctly, all the facts essential to establish a right to a
writ. The petitioner must allege in his petition and establish facts to show that any other existing
remedy is not speedy or adequate and that (a) the writ is directed against a tribunal, board or officer
exercising judicial or quasi-judicial functions; (b) such tribunal, board or officer has acted without or
in excess of jurisdiction, or with grave abuse of discretion amounting to excess or lack of jurisdiction;
and, (c) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.

_______________

* SECOND DIVISION.

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Lee vs. People

Same; Same; The existence and the availability of the right to appeal are antithetical to the
availment of the special civil action for certiorarithese two remedies are mutually exclusive.The
trial court acts without jurisdiction if it does not have the legal power to determine the case; there is
excess of jurisdiction where the respondent, being clothed with the power to determine the case,
oversteps its authority as determined by law. There is grave abuse of discretion where the public
respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of its
judgment as to be said to be equivalent to lack of jurisdiction. Mere abuse of discretion is not
enough. A remedy is plain, speedy and adequate if it will promptly relieve the petitioner from the
injurious effects of that judgment and the acts of the tribunal or inferior court. A petition for
certiorari cannot co-exist with an appeal or any other adequate remedy. The existence and the
availability of the right to appeal are antithetical to the availment of the special civil action for
certiorari. These two remedies are mutually exclusive.

Same; Same; Certiorari will issue only to correct errors of jurisdictionit is not a remedy to correct
errors of judgmentCertiorari will not be issued to cure errors made by the trial courts in its
appreciation of the evidence of the parties, its conclusions anchored on the said findings and its
conclusions of law thereon.In a petition for certiorari, the jurisdiction of the court is narrow in
scope. It is limited to resolving only errors of jurisdiction. It is not to stray at will and resolve
questions or issues beyond its competence such as errors of judgment. Errors of judgment of the
trial court are to be resolved by the appellate court in the appeal by and of error or via a petition for
review on certiorari under Rule 45 of the Rules of Court, as amended. Certiorari will issue only to
correct errors of jurisdiction. It is not a remedy to correct errors of judgment. An error of judgment is
one in which the court may commit in the exercise of its jurisdiction, and which error is reversible
only by an appeal. Error of jurisdiction is one where the act complained of was issued by the court
without or in excess of jurisdiction and which error is correctible only by the extraordinary writ of
certiorari. Certiorari will not be issued to cure errors made by the trial court in its appreciation of the
evidence of the parties, its conclusions anchored on the said findings and its conclusions of law
thereon. As long as the court acts within its jurisdiction, any alleged errors committed in the exercise
of its discretion will amount to nothing more than mere errors of judgment, correct-

664

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SUPREME COURT REPORTS ANNOTATED

Lee vs. People

ible by an appeal if the aggrieved party raised factual and legal issues; or a petition for review under
Rule 45 of the Rules of Court if only questions of law are involved.

Same; Same; The Order admitting in evidence the photocopies of the charge invoices and checks
was issued by the RTC in the exercise of its jurisdictioneven if erroneous, the same is a mere error
of judgment and not of jurisdiction.In this case, there is no dispute that the RTC had jurisdiction
over the cases filed by the public respondent against the petitioner for estafa. The Order admitting
in evidence the photocopies of the charge invoices and checks was issued by the RTC in the exercise
of its jurisdiction. Even if erroneous, the same is a mere error of judgment and not of jurisdiction.
Additionally, the admission of secondary evidence in lieu of the original copies predicated on proof
of the offeror of the conditions sine qua non to the admission of the said evidence is a factual issue
addressed to the sound discretion of the trial court. Unless grave abuse of discretion amounting to
excess or lack of jurisdiction is shown to have been committed by the trial court, the resolution of
the trial court admitting secondary evidence must be sustained. The remedy of the petitioner, after
the admission of the photocopies of the charge invoices and the checks, was to adduce his evidence,
and if after trial, he is convicted, to appeal the decision to the appropriate appellate court.
Moreover, under Rule 45 of the Rules of Court, as amended, only questions of law may be properly
raised.

Same; Evidence; Best Evidence Rule; The importance of the precise terms of writings in the world of
legal relations, the fallibility of the human memory as reliable evidence of the terms, and the
hazards of inaccurate or incomplete duplicate are the concerns addressed by the best evidence
rule.Before the onset of liberal rules of discovery, and modern technique of electronic copying,
the best evidence rule was designed to guard against incomplete or fraudulent proof and the
introduction of altered copies and the withholding of the originals. But the modern justification for
the rule has expanded from the prevention of fraud to a recognition that writings occupy a central
position in the law. The importance of the precise terms of writings in the world of legal relations,
the fallibility of the human memory as reliable evidence of the terms, and the hazards of inaccurate
or incomplete duplicate are the concerns addressed by the best evidence rule.

665

VOL. 440, OCTOBER 19, 2004

665

Lee vs. People

Same; Same; Secondary Evidence; The offeror of secondary evidence is burdened to prove the
predicates thereof.The offeror of secondary evidence is burdened to prove the predicates thereof:
(a) the loss or destruction of the original without bad faith on the part of the proponent/offeror
which can be shown by circumstantial evidence of routine practices of destruction of documents; (b)
the proponent must prove by a fair preponderance of evidence as to raise a reasonable inference of
the loss or destruction of the original copy; and (c) it must be shown that a diligent and bona fide but
unsuccessful search has been made for the document in the proper place or places. It has been held
that where the missing document is the foundation of the action, more strictness in proof is required
than where the document is only collaterally involved.

Same; Same; Same; If the document is one in which other persons has been placed in the hands of a
custodian for safekeeping, the custodian must be required to make a search and the fruitlessness of
such search must be shown, before secondary evidence can be admitted.If the document is one in
which other persons are also interested, and which has been placed in the hands of a custodian for
safekeeping, the custodian must be required to make a search and the fruitlessness of such search
must be shown, before secondary evidence can be admitted. The certificate of the custody of the
document is incompetent to prove the loss or destruction thereof. Such fact must be proved by
some person who has knowledge of such loss.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Joselito T. Bayatan for petitioner.

The Solicitor General for the People.

CALLEJO, SR., J.:

NEUGENE Marketing, Inc. (NMI) was incorporated on January 27, 1978 with funds provided by the
Uy Family. It had an authorized capital stock of P3 million divided into

666
SUPREME COURT REPORTS ANNOTATED

666

Lee vs. People

30,000 shares with a par value of P100 per share. The original incorporators, with their
corresponding number of shares and the amounts thereof, are as follows:

Johnson Lee

600

P 60,000.00

Lok Chun Suen

1,200

120,000.00

Charles O. Sy

1,800

180,000.00

Eugenio Flores, Jr.

2,100

210,000.00

Arsenio Yang, Jr.

300

30,000.00

TOTAL

6,000

P600,000.00

There were two stock dividend declarations, one on June 7, 1980 in the amount of P60,000.00 and
another on May 2, 1981 for P40,000.00. On May 15, 1986 Eugenio Flores, Jr. assigned/divested
himself of his shares in favor of Sonny Moreno, 1,050 shares; Arsenio Yang, Jr., 700 shares and
Charles O. Sy, 700 shares.1

On June 11, 1987, the NMI sold and delivered to the Victorias Milling Company, Inc. (VMCI), in
Victorias, Negros Occidental, 77,500 pieces of empty white bags for the price of P565,750.00. NMI
issued Charge Invoice No. 08092 dated June 11, 1987 to VMCI covering said sale. On June 18, 1987,
VMCI purchased 100,000 pieces of empty white bags from NMI for P730,000.00 for which NMI
issued Charge Invoice No. 0810.3 On June 25, 1987, VMCI again purchased 28,000 pieces of empty
white bags from NMI for the price of P204,400.00 and the latter issued Charge Invoice No. 08114
dated June 25, 1987. In payment of said purchases from NMI, VMCI drew and issued two Bank of the
Philippine Islands (BPI) Checks: Check No. 068706 dated August 3, 1987 in the

_______________

1 Annex B, CA Decision, p. 2.

2 Exhibit G.

3 Exhibit H.

4 Exhibit I.

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VOL. 440, OCTOBER 19, 2004

667

Lee vs. People

amount of P565,750.005 and Check No. 068993 dated August 19, 1987 in the amount of
P934,400.00.6 Both checks were payable to the order of NMI.

On October 13, 1987, stockholders owning two-thirds (2/3) of the subscribed capital stock of NMI
voted to call a stockholders meeting. One of the items in the agenda was the dissolution of the
corporation.

Pursuant thereto, a special stockholders meeting was held on October 24, 1987 in Bacolod City. The
following stockholders, who were also directors, were present and voted to dissolve the corporation:

Name of Stockholders

Number of Shares

Arsenio Yang, Jr.

1,050

Charles Sy

2,800

Lok Chun Suen

1,400

Total

5,250

Accordingly, notices were again sent to all stockholders of record, all of whom properly
acknowledged the said notices, that a meeting was to be held on November 30, 1987 to consider the
dissolution of the corporation. Again the stockholders who attended the October 24, 1987 meeting
were present. Upon motion duly seconded, the dissolution was approved. Per Resolution of the
Board of Directors, the law firm of Reyes, Treyes & Fudolin Law Office was appointed as trustee to
collect all the receivables of the corporation.

At the time of the approval of the dissolution of the corporation on November 30, 1987, the shares
of each stockholder were as follows:

_______________

5 Exhibit K.

6 Exhibit L.

668

668

SUPREME COURT REPORTS ANNOTATED

Lee vs. People

Name of Stockholders

Total as of Nov. 30.

Johnson Lee, 600 (subscription);

60 (June 7, 1980 stock dividend);

40 (May 2, 1981 stock dividend) ----------------

700 shares

Lok Chun Suen, 1,200 (subscription);

120 (June 7, 1980 stock dividend);

80 (May 2, 1981 stock dividend) ----------------

1,400 shares

Charles O. Sy, 1800 (subscription);

180 (June 7, 1980 stock dividend);

120 (May 2, 1981 stock dividend);

700 (acquisition from Eugenio Flores ---------

2,800 shares

Arsenio Yang, Jr., 300 (subscription);

30 (June 7, 1980 stock dividend);

20 (May 2, 1981 stock dividend);

700 (acquisition from Eugenio Flores) --------


1,050 shares

Sonny Moreno, 1,050 (acquisition

From Eugenio Flores)

1,050 shares

Total --------------------------------------

7,000 shares

Pursuant to Section 11 of the Corporation Code, the Securities and Exchange Commission approved
the dissolution of the corporation on March 1, 1988 subject to compliance of the requirements, such
as the sending of notices to stockholders and publication thereof in a newspaper of general
circulation, among others.

On March 22, 1988, Johnson Lee, Sonny Moreno, Leoncio Tan and Nicanor Martin filed a petition
with the Securities and Investigation Clearing Department (SICD) of the Commission praying, among
other things, for the annulment or nullification of the Certification of Filing of Resolution of
Voluntary Dissolution of NMI for being contrary to law and its by-laws.

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669

Lee vs. People

In the meantime, the trustee wrote the petitioner, Johnson Lee, on March 8, 1988 requesting him to
turn over to it the P1,500,150.00 he received in payment of the empty bags sold by NMI to VCMI.
However, he failed to do so.7

A verified complaint for three (3) counts of estafa was filed against the petitioner and Sonny Moreno
with the City Prosecutors Office. Appended to the complaint were photocopies of Charge Invoice
Nos. 0809, 0810, and 0811, issued by NMI to VMCI.

During the requisite preliminary investigation, the petitioner and Moreno submitted their counter-
affidavits. The counter-affidavit of the petitioner consisted of five pages.8 After the investigation,
two (2) Amended Informations were filed against the petitioner and Moreno, with the Regional Trial
Court (RTC) of Negros Occidental. Except as to the particulars of the checks, the accusatory portions
of the two Informations are identical, thus:

That sometime in the month of August 1987, in the City of Bacolod, Philippines, and within the
jurisdiction of this Honorable Court, the herein accused, Johnson Lee, being then the President and
Sonny Moreno, the General Manager of Neugene Marketing, Inc., with the duty and responsibility to
collect, turn over and deliver their collections to the herein offended party, Neugene Marketing, Inc.,
a corporation organized and existing by and under the laws of the Philippines, represented herein by
its Trustees, Roger Reyes, Ernesto Treyes, and Eutiquio Fudolin, the said accused conspiring,
confederating, and acting in concert far from complying with the aforementioned obligation having
collected the amount of P565,750.00 covered by BPI Check No. 068766 (sic) dated August 3, 1987 as
payment of Victorias Milling Company, a customer of the herein offended party, with intent of gain,
and with unfaithfulness or abuse of confidence failed and refused to deliver the aforementioned
amount to the herein offended party, up to the present, in spite of proper demands, but instead,
did, then and there willfully,

_______________

7 Exhibit J.

8 CA Rollo, pp. 145-149.

670

670

SUPREME COURT REPORTS ANNOTATED

Lee vs. People

unlawfully and feloniously convert[ed] and/or misappropriated the same to their personal use and
benefit to the damage and prejudice of the herein offended party in the aforementioned amount of
FIVE HUNDRED SIXTY-FIVE THOUSAND SEVEN HUNDRED FIFTY (P565,750.00) PESOS, Philippine
Currency.

Act contrary to law.9

The cases were docketed as Criminal Cases Nos. 10010 and 10011.

During the trial, the original copies of Charge Invoice Nos. 0809, 0810 and 0811, and of BPI Check
Nos. 068766 and 068993 were not in the custody of the prosecution.

To prove the loss, destruction or non-availability of the original copies of the charge invoices and
checks, as well as the authenticity and due execution thereof, the prosecution presented Ban Hua
Flores, who testified that she saw the two checks in the office of the petitioner at the Singson
Building, Plaza Moraga, Sta. Cruz, Manila. Sometime in 1987, she went to the office of the VMCI and
inquired if it still had copies of the two checks and the clerk thereat informed her that it would be
difficult to locate the checks as they were stored in the bodega, where many other checks were
kept.10 Flores also testified that the signatures at the dorsal portion of the checks were those of the
petitioner, the President of NMI, with whom she had been working, and that he indorsed and
deposited the same on September 4, 1987 with the Solidbank, instead of the BPI Plaza Cervantes
branch in Manila, the official depository bank of NMI. According to Flores, she was able to secure
microfilm copies of the checks from Solidbank, and was sure that the copies of the checks and
invoices were faithful reproductions of the original copies thereof.11

Testifying for the prosecution in obedience to a subpoena issued by the court, Merlita Bayaban,
Manager for Corporate

_______________

9 Id., p. 252.
10 TSN, 27 July 2001, pp. 36-66.

11 Id., pp. 64-67.

671

VOL. 440, OCTOBER 19, 2004

671

Lee vs. People

Affairs of VMCI, declared that the records section of VMCI, which had custody of all checks and other
corporate records, was near her office. She testified that the checks, including their other records,
were lost during the flood in 1985.12 She also testified on the Certification13 issued by Carolina
Diaz, the Comptroller of VMCI, confirming the loss of the two checks. She, however, admitted that
she did not see the original copies of the checks14 and that she was not a signatory thereto.15

Thereafter, the prosecution formally offered in evidence the counter-affidavit of the petitioner
during the preliminary investigation, as well as the charge invoices and checks, viz.:

NMI Charge Invoice No. 0809 dated June 11,1987

To prove that Victorias Milling Co., Inc. (VMC) ordered 77,500 pieces of empty bags from NMI on
June 11, 1987 and that these bags were delivered to VMC.

NMI Charge Invoice No. 0810 dated June 18, 1987

To prove that VMC ordered 100,000 pieces of empty bags from NMI on June 18, 1987 and that these
bags were delivered to VMC.

NMI Charge Invoice No. 0811 dated June 25, 1987

To prove that VMC ordered 28,000 pieces of empty bags from NMI on June 25, 1987 and that these
bags were delivered to VMC.

Demand letter dated March 8, 1988 signed by Atty. Roger Z. Reyes

To prove that in 1988, NMI made a demand upon the accused for the delivery of the amount of of
P1,500,150.00 representing VMCs payment for the delivery of the empty bags mentioned in Exhibits

_______________

12 Id., pp. 25-27.

13 Exhibit Z.
14 TSN, 7 February 2002, p. 53.

15 Id., pp. 63-64.

672

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SUPREME COURT REPORTS ANNOTATED

Lee vs. People

G, H and I.

J-1

Signature appearing above the typewritten name Roger Z. Reyes duly identified by the prosecution
witness, Mrs. Ban Hua Flores as the signature of Atty. Roger Z. Reyes

To prove the genuineness, authenticity and due execution of Exhibit J.

Bank of the Philippine Islands (BPI) Legaspi Village Extension Check No. 068706 dated August 3, 1987
in the amount of P565,750.00

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

K-1

Signature found on the dorsal side of Exhibit K which Mrs. Flores identif ied as the signature of
accused Johnson Lee

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

K-2

Rubberstamp showing the name of Solidbank appearing on the dorsal side of Exhibit K

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

BPI Legaspi Village Extension Check No. 068993 dated Aug. 19, 1987 in the amount of P934,400.00

To prove that VMC made a check payable to NMI in the amount of P934,400, as payment to NMI for
the delivery of the empty bags mentioned in Exhibits G, H and I.

673
VOL. 440, OCTOBER 19, 2004

673

Lee vs. People

L-1

Signature found on the dorsal side of Exhibit L which Mrs. Flores identif ied as the signature of
accused Lee

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

L-2

Rubberstamp showing the name of Solidbank appearing on dorsal side of Exh. L

To prove that Exhibit L was deposited by accused Lee in the Solidbank which is not the official
depository bank of NMI, the official NMI depository bank being the BPI Plaza Cervantes Branch.16

The prosecution also offered in evidence the counter-affidavit of the petitioner during the
preliminary investigation, as follows:

Counter-Affidavit dated September 9, 1988 signed and submitted by Johnson Lee in B.C.-I.S. No. 88-
347, consisting of 5 pages

To prove that the proceeds of Exhibit K and L in the total amount of P1,500,150 are in the
possession and control of the acc used and that both refused to deliver the same to NMI despite
demand

O-1

Signature found on page 5 of Exhibit O above the typewritten name Johnson Lee

To prove the genuineness, due execution and authenticity of Exhibit O, which both of the accused
also admitted.

O-2

Paragraph 6 of Exhibit O found on page 2 thereof.17

Same purpose as in Exhibit O.

_______________

16 CA Rollo, pp. 255-257.

17 Folder of Exhibits, pp. 4-5.

674
674

SUPREME COURT REPORTS ANNOTATED

Lee vs. People

The accused objected to the admission of the photocopies of the checks and charge invoices on the
ground that the best evidence were the original copies thereof. On April 12, 2002, the trial court
issued an Order admitting the counter-affidavit of the petitioner, as well as the photocopies of the
checks and charge invoices, on the ground that the prosecution had adduced preponderant evidence
that the original copies of the said charges and checks were lost, destroyed or non-available.18 The
accused filed a motion for reconsideration of the order, claiming that the prosecution failed to prove
the authenticity and due execution of the offered documents, a prerequisite to the admission
thereof as secondary evidence. They also filed a Motion for Leave to File a Demurrer to Evidence.
The trial court denied both motions.

In a petition for certiorari under Rule 65 of the Rules of Court filed with the Court of Appeals, the
petitioner alleged that

Respondent judge committed grave abuse of discretion equivalent to lack or excess of jurisdiction,
in admitting in evidence the Peoples documentary evidence, consisting of mere unauthenticated
photocopies, in flagrant violation of the Best Evidence Rule (Secs. 3, 4, 5 and 6, Rule 130), despite
the repeated vehement objections of the petitioner, thereby wantonly refusing to exclude such
clearly inadmissible evidence, which actuation as embodied in his two (2) assailed Orders, is
capricious, whimsical and patently erroneous, as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in contemplation of law, and the remedy
of ordinary appeal would not afford petitioner adequate and expeditious relief, for while available
eventually, such remedy is cumbersome for it requires petitioner to undergo a useless and time-
consuming trial, and thus becomes an oppressive exercise of judicial authority; hence, the
imperative necessity for the issuance of a temporary restraining order or preliminary injunction
requiring respondent judge to refrain from further proceeding with Crim.

_______________

18 Id., pp. 37-38.

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VOL. 440, OCTOBER 19, 2004

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Lee vs. People

Cases Nos. 10010 and 10011 until the Petition shall have been disposed of, otherwise, failure of
justice is sure to ensue.19

On March 14, 2003, the Court of Appeals rendered judgment dismissing the petition for lack of
merit.20
The Court of Appeals ruled that the charge invoices and the checks were not the best evidence to
prove receipt by the accused of the amounts allegedly misappropriated; hence, the best evidence
rule does not apply. It also held that even if the contents of the checks were the subject of inquiry,
based on the proofs adduced by the prosecution, such checks are admissible in evidence. The Court
of Appeals declared that, in any event, the prosecution proved the loss or destruction or non-
availability of the checks and charge invoices. The petitioners motion for reconsideration of the
decision suffered the same fate.

The petitioner then sought relief from this Court, in a petition for review on certiorari, and raises the
following issues:

1. CAN (sic) PRIVATE DOCUMENT OFFERED AS AUTHENTIC BE RECEIVED IN EVIDENCE WITHOUT


PROOF OF ITS DUE EXECUTION AND AUTHENTICITY?

2. CAN SECONDARY EVIDENCE BE ADMITTED WITHOUT PROOF OF ITS LOSS OR UNAVAILABILITY AND
EXECUTION OF THE ORIGINAL?

3. DID THE COURT OF APPEALS ERR WHEN IT RULED THAT THE FAILURE TO PRODUCE THE ORIGINAL
OF A DOCUMENTARY EVIDENCE, CONSISTING OF PRIVATE INSTRUMENTS DOES NOT VIOLATE THE
BEST EVIDENCE RULE, INASMUCH AS RECEIPT BY THE PETITIONER OF THE AMOUNT ALLEGEDLY
MISAPPROPRIATED MAY BE PROVED BY EVIDENCE OTHER THAN THE ORIGINAL OF THE SAID
PRIVATE DOCUMENTS?

_______________

19 CA Rollo, pp. 9-10.

20 Penned by Associate Justice Jose Sabio, Jr. with Associate Justices Portia Alio Hormachuelos and
Amelita G. Tolentino, concurring.

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4. IS THE FINDING OF THE COURT OF APPEALS THAT THE FACT OF LOSS OR DESTRUCTION OF THE
CHECKS AND THE CHARGE INVOICES HAS BEEN ESTABLISHED BY OTHER EVIDENCE, DEVOID OF
SUPPORT BY THE EVIDENCE ON RECORD AND IS, THEREFORE, A BARE CONCLUSION OR A FINDING
BASED ON SURMISE AND CONJECTURES?

5. IS ANOTHER FINDING, IN THE FORM OF ASSUMPTION, OF THE COURT OF APPEALS THAT SINCE
THE WITNESSES FOR THE PROSECUTION ARE OFFICERS WITH AUTHORITY TO KEEP THE QUESTIONED
DOCUMENTS, THEY NECESSARILY TOOK AND CONDUCTED A THOROUGH SEARCH FOR THE MISSING
DOCUMENTS, A MERE CONJECTURE OR SURMISE OR A FINDING GROUNDED ENTIRELY ON
SPECULATION?

6. DID THE COURT OF APPEALS VIOLATE THE DICTUM OF THE COLD NEUTRALITY OF AN IMPARTIAL
JUDGE WHEN IT DENIED PETITIONERS MOTION FOR INHIBITION GROUNDED ON ITS DISPLAY OF
UNDUE INTERESTS AND WHEN A MEMBER THEREOF HAS SEEN IT FIT AND APPROPRIATE TO RECUSE
HERSELF?21

The petitioner avers that the prosecution failed to prove the loss, destruction or non-availability of
the original copies of the checks and charge invoices; that diligent efforts were undertaken to locate
the original copies of the checks and invoices; and that said efforts were futile. He asserts that the
witness competent to prove the loss or destruction of the original of the checks would be the
records custodian of VMCI. Bayaban was not a competent witness thereon, considering that she
merely testified that the clerk of the VMCI failed to locate the original copies of the checks because
the latter was lazy to search for the same. The petitioner posits that the prosecution failed to prove
the due execution and authenticity of the charge invoices and the two checks through the
testimonies of Flores and Bayaban. He contends that Bayaban even admitted that she was not privy
to and

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21 Rollo, pp. 25-26.

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had no knowledge of the execution of the said checks and of the signatories of the checks. The
petitioner further avers that, although the appellate court held that the photocopies of the checks
were admissible in evidence based on other proofs adduced by the prosecution, it failed to specify
the other proofs adverted to by it.

In its Comment on the petition, the Office of the Solicitor General asserts that through the testimony
of Bayaban, the due execution and authenticity of the checks were proved by the prosecution as
well as the admissions of the petitioner in his counter-affidavit during the preliminary investigation.
It further averred that through the testimonies of Bayaban and Flores, it proved, with reasonable
certainty, the loss or destruction of the original copies of the checks and the charge invoices.

The issues for resolution are as follows: (a) whether or not the petition at bar is the proper remedy
of the petitioner; and (b) whether or not the trial court committed a grave abuse of its discretion
amounting to excess or lack of jurisdiction in admitting in evidence the photocopies of the checks
and charge invoices in lieu of the original copies thereof.

The Ruling of the Court

In People v. Court of Appeals,22 we held that for a petition for certiorari or prohibition to be
granted, it must set out and demonstrate, plainly and distinctly, all the facts essential to establish a
right to a writ.23 The petitioner must allege in his petition and establish facts to show that any other
existing remedy is not speedy or adequate24 and that (a) the writ is directed against a tribunal,
board or officer exercising judicial or quasi-judicial functions; (b) such tribunal, board or officer
_______________

22 G.R. No. 144332, June 10, 2004, 431 SCRA 610.

23 Heung v. Frista, 559 So. 2d 434.

24 Alabama Power Co. v. City of Fort Wayne, 187 S.W. 2d 632 (1939).

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has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to excess
or lack of jurisdiction; and, (c) there is no appeal or any plain, speedy and adequate remedy in the
ordinary course of law.25

The trial court acts without jurisdiction if it does not have the legal power to determine the case;
there is excess of jurisdiction where the respondent, being clothed with the power to determine the
case, oversteps its authority as determined by law. There is grave abuse of discretion where the
public respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of its
judgment as to be said to be equivalent to lack of jurisdiction.26 Mere abuse of discretion is not
enough. A remedy is plain, speedy and adequate if it will promptly relieve the petitioner from the
injurious effects of that judgment and the acts of the tribunal or inferior court.27 A petition for
certiorari cannot co-exist with an appeal or any other adequate remedy. The existence and the
availability of the right to appeal are antithetical to the availment of the special civil action for
certiorari. These two remedies are mutually exclusive.28

In a petition for certiorari, the jurisdiction of the court is narrow in scope. It is limited to resolving
only errors of jurisdiction. It is not to stray at will and resolve questions or issues beyond its
competence such as errors of judgment. Errors of judgment of the trial court are to be resolved by
the appellate court in the appeal by and of error or via a petition for review on certiorari under Rule
45 of the Rules of Court, as amended. Certiorari will issue only to correct errors of

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25 Sanchez v. Court of Appeals, 279 SCRA 647 (1997).

26 Condo Suite Club Travel, Inc. v. National Labor Relations Commission, 323 SCRA 679 (2000).

27 Pioneer Insurance & Surety Corp. v. Hontanosas, 78 SCRA 447 (1977).

28 Ley Construction & Development Corporation v. Hyatt Industrial Manufacturing Corporation, 339
SCRA 223 (2000).

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jurisdiction. It is not a remedy to correct errors of judgment.29 An error of judgment is one in which
the court may commit in the exercise of its jurisdiction, and which error is reversible only by an
appeal. Error of jurisdiction is one where the act complained of was issued by the court without or in
excess of jurisdiction and which error is correctible only by the extraordinary writ of certiorari.30
Certiorari will not be issued to cure errors made by the trial court in its appreciation of the evidence
of the parties, its conclusions anchored on the said findings and its conclusions of law thereon.31 As
long as the court acts within its jurisdiction, any alleged errors committed in the exercise of its
discretion will amount to nothing more than mere errors of judgment, correctible by an appeal if the
aggrieved party raised factual and legal issues; or a petition for review under Rule 45 of the Rules of
Court if only questions of law are involved.32

In this case, there is no dispute that the RTC had jurisdiction over the cases filed by the public
respondent against the petitioner for estafa. The Order admitting in evidence the photocopies of the
charge invoices and checks was issued by the RTC in the exercise of its jurisdiction. Even if
erroneous, the same is a mere error of judgment and not of jurisdiction. Additionally, the admission
of secondary evidence in lieu of the original copies predicated on proof of the offeror of the
conditions sine qua non to the admission of the said evidence is a factual issue addressed to the
sound discretion of the trial court.33 Unless grave abuse of discretion amounting to excess or lack of
jurisdiction is shown to have been committed by the trial court, the resolution of the trial court
admitting secondary evidence must be sustained. The remedy of the peti-

_______________

29 People v. Court of Appeals, 308 SCRA 687 (1999).

30 Toh v. Court of Appeals, 344 SCRA 831 (2000).

31 Tensorex Industrial Corporation v. Court of Appeals, 316 SCRA 471 (1999).

32 People v. Court of Appeals, supra.

33 United States v. Shoels, 685 F. 2d. 379 (1982).

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tioner, after the admission of the photocopies of the charge invoices and the checks, was to adduce
his evidence, and if after trial, he is convicted, to appeal the decision to the appropriate appellate
court. Moreover, under Rule 45 of the Rules of Court, as amended, only questions of law may be
properly raised.
In the final analysis, the threshold issue in this case is whether or not the prosecution adduced
evidence, testimonial and documentary, to prove the predication to the admission of the
photocopies of the charge invoices34 and of the checks.35 The petitioner posits that the prosecution
failed to discharge its burden, in contrast to the claim of the prosecution that it succeeded in doing
so. In resolving the petition at bar, the court will have to delve into and calibrate the testimonial and
documentary evidence adduced by the parties in the trial court, which the court is proscribed to do
under Rule 45 of the Rules of Court. This was the ruling of the Court in Johnson Lee v. People:36

In other words, certiorari will issue only to correct errors of jurisdiction and not to correct errors of
procedure or mistakes in the courts findings and conclusions. An interlocutory order may be
assailed by certiorari or prohibition only when it is shown that the court acted without or in excess
of jurisdiction or with grave abuse of discretion. However, this Court generally frowns upon this
remedial measure as regards interlocutory orders. To tolerate the practice of allowing interlocutory
orders to be the subject of review by certiorari will not only delay the administration of justice but
will also unduly burden the courts.

We find that the allegations of the petitioners are not sufficient grounds to qualify as abuse of
discretion warranting the issuance of a writ of certiorari. The petitioners present factual contentions
to absolve them from the criminal charge of estafa. The criminal cases concern corporate funds
petitioners allegedly received as

_______________

34 Exhibits G, H and I.

35 Exhibits K and L.

36 393 SCRA 397 (2002).

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payment for plastic bought by Victorias Milling Corporation from NMI. They refused to turn over the
money to the trustee after NMIs dissolution on the ground that they were keeping the money for
the protection of the corporation itself. Thus, the elements of misappropriation and damage are
absent. They argue that there is no proof that, as officers of the corporation, they converted the said
amount for their own personal benefit. They likewise claim that they already turned the money over
to the majority stockholder of the defunct corporation.

Clearly, the said allegations are defenses that must be presented as evidence in the hearing of the
criminal cases. They are inappropriate for consideration in a petition for certiorari before the
appellate court inasmuch as they do not affect the jurisdiction of the trial court hearing the said
criminal cases but instead are defenses that might absolve them from criminal liability. A petition for
certiorari must be based on jurisdictional grounds because, as long as the respondent court acted
with jurisdiction, any error committed by it in the exercise thereof will amount to nothing more than
an error of judgment which can be reviewed or corrected on appeal.

Moreover, the petition for certiorari before the Court of Appeals was premature for the reason that
there were other plain and adequate remedies at law available to the petitioners. Under Section 3(a)
of Rule 117 of the Revised Rules of Criminal Procedure, the accused can move to quash the
information on the ground that the facts do not constitute an offense. There is no showing that the
petitioners, as the accused in the criminal cases, ever filed motions to quash the subject
informations or that the same were denied. It cannot then be said that the lower court acted
without or in excess of jurisdiction or with grave abuse of discretion to justify recourse to the
extraordinary remedy of certiorari or prohibition.

But it must be stressed that, even if petitioners did file motions to quash, the denial thereof would
not have automatically given rise to a cause of action under Rule 65 of the Rules of Court. The
general rule is that, where a motion to quash is denied, the remedy is not certiorari but to go to trial
without prejudice to reiterating the special defenses involved in said motion, and if, after trial on the
merits an adverse decision is rendered, to appeal therefrom in the manner authorized by law. And,
even in the exceptional case where such denial may be the subject of a special civil action for
certiorari, a motion for reconsideration must first be filed to give the

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trial court an opportunity to correct its error. Finally, even if a motion for reconsideration was filed
and denied, the remedy under Rule 65 would still be unavailable absent any showing of the grounds
provided for in Section 1 thereof. The petition before the Court of Appeals, subject of this appeal,
did not allege any of such grounds.

Furthermore, a petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure
before this Court only allows questions of law. Inasmuch as petitioners defenses alleging
circumstances that negate misappropriation definitely require appreciation of facts, i.e., testimonial
and documentary evidence, this Court cannot assess the merit of the said claims.37

Moreover, the factual findings of the Court of Appeals are conclusive on the Court unless the
petitioner is able to establish that the findings of facts of the appellate court are not supported by or
are contrary to the evidence; or if the appellate court ignored, misconstrued or misinterpreted vital
facts and circumstances, which, if considered, could change or even reverse the outcome of the
case. In this, the petitioner failed.

Rule 130, Section 3 of the Revised Rules of Court reads:

Original document must be produced; exceptions.When the subject of inquiry is the contents of a
document, no evidence shall be admissible other than the original document itself, except in the
following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court without bad faith
on the part of the offeror;
(b) When the original is in the custody or under the control of the party against whom the evidence
is offered, and the latter fails to produce it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined
in court without great loss of time and the fact sought to be established from them is only the
general result of the whole;

(d) When the original is a public record in the custody of a public officer or is recorded in a public
office.

_______________

37 Id., pp. 402-404.

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Before the onset of liberal rules of discovery, and modern technique of electronic copying, the best
evidence rule was designed to guard against incomplete or fraudulent proof and the introduction of
altered copies and the withholding of the originals. But the modern justification for the rule has
expanded from the prevention of fraud to a recognition that writings occupy a central position in the
law. The importance of the precise terms of writings in the world of legal relations, the fallibility of
the human memory as reliable evidence of the terms, and the hazards of inaccurate or incomplete
duplicate are the concerns addressed by the best evidence rule.38

The rule does not apply to proof of facts collateral to the issues such as the nature, appearance or
condition of physical objects or to evidence relating to a matter which does not come from the
foundation of the cause of action or defense; or when a party uses a document to prove the
existence of an independent fact, as to which the writing is merely collated or incidental.39

The offeror of secondary evidence is burdened to prove the predicates thereof: (a) the loss or
destruction of the original without bad faith on the part of the proponent/offeror which can be
shown by circumstantial evidence of routine practices of destruction of documents;40 (b) the
proponent must prove by a fair preponderance of evidence as to raise a reasonable inference of the
loss or destruction of the original copy; and (c) it must be shown that a diligent and bona fide but
unsuccessful search has been made for the document in the proper place or places.41 It has been
held that where the missing document is the foundation of the action, more strictness in proof is re-

_______________

38 Seller v. Lucas Films Ltd., 808 F. 2d 1316 (1989).

39 United States v. Gonzales-Benitez, 537 F. 1051.

40 United States v. Balzano, 687 Fed. 6; Wright v. Farmers Coop, 681 F. 2d. 549.
41 32 Corpus Juris Secundum, Id., at p. 773.

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Lee vs. People

quired than where the document is only collaterally involved.42

If the document is one in which other persons are also interested, and which has been placed in the
hands of a custodian for safekeeping, the custodian must be required to make a search and the
fruitlessness of such search must be shown, before secondary evidence can be admitted.43 The
certificate of the custody of the document is incompetent to prove the loss or destruction thereof.
Such fact must be proved by some person who has knowledge of such loss.44

The proponent is also burdened to prove the due execution or existence of the original as provided
in Rule 130, Section 5 of the Revised Rules of Court:

When the original document is unavailable.When the original document has been lost or
destroyed, or cannot be produced in court, the offerer, upon proof of its execution or existence and
the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a
recital of its contents in some authentic document, or by the testimony of witnesses in the order
stated.

Rule 132, Section 20 of the Revised Rules of Court provides the procedure on how the authenticity
and due execution of a private document which is offered as authentic may be proved:

Proof of private document.Before any private document offered as authentic is received in


evidence, its due execution and authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

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

_______________

42 Serirner v. American Car and Foundry Co., 50 SW 1001.

43 32 Corpus Juris Secundum, Evidence, p. 776.

44 Ibid.

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Any other private document need only be identified as that which it is claimed to be.

The testimony of an eyewitness as to the execution of a private document must be positive. He must
state that the document was actually executed by the person whose name is subscribed thereto.45
The admission of that party against whom the document is offered, of the authenticity and due
execution thereof, is admissible in evidence to prove the existence, authenticity and due execution
of such document.

In this case, there is no dispute that the original copies of the checks were returned to VMCI after
the same were negotiated and honored by the drawee bank. The originals of the charge invoices
were kept by VMCI. There is also no dispute that the prosecution offered the photocopies of the
invoices in evidence to prove the contents thereof, namely that: (a) VMCI purchased 203,500 empty
bags from NMI for the total price of P1,500,150.00; (b) VMCI received the said goods in good order
and condition; and (c) NMI charged VMCI for the purchase price of said goods. The prosecution
offered the checks to prove the contents thereof as well as the following: (a) VMCI drew and
delivered the checks to the NMI; (b) the said checks were endorsed by the petitioner; and (c) the
said checks were deposited by the petitioner with the Solidbank which was not the official
depository of NMI. Thus, the prosecution was burdened to prove the loss, destruction or its inability
to produce in court without bad faith on its part of the original copies of the said invoices and checks
without bad faith on its part.

We agree with the petitioner that the Certification signed by Carolina Diaz was inadmissible in
evidence against him because of the failure of the prosecution to present her as witness and to
testify on said certification.

_______________

45 Nolan v. Salas, 7 Phil. 1 (1906).

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However, the records show that, in obedience to the subpoena duces tecum and ad testificandum
issued by the trial court directing the VMCI to produce the originals of the checks and the charge
invoices, Bayaban, the Manager for Corporate Affairs of VMCI, testified that all its records, including
the charge invoices and checks, were destroyed seven years ago in a flash flood which occurred on
November 28, 1995, and that such loss/destruction was known to all the employees of VMCI,
including herself:

FISCAL ESQUILLA:

Please inform this Honorable Court how were you able to appear this afternoon in connection with
this case?
...

The Legal Department, through the instruction of our Chief Operating Officer, inquired from our
Accounting through our comptroller, Carolina S. Diaz to produce the original copies of the two (2)
checks which was mentioned in the subpoena issued by Prosecutor Esquilla. And then, through my
direct Boss, the Chief Accountant, Mrs. Melanie Roa, instructed me to look into the two (2) checks.
And since the record is under my Department, I immediately asked my subordinate to look for it.
And, in fact, she was also under my supervision when we looked for the document. And I have
already knowledge during the November 28, 1995 due to flash flood, we lost our rec ords. And in
fact, we have declaration to the Bureau of Internal Revenue (BIR). And we also exhausted some
means to look for the documents, but we really cannot produce the original copies of the checks,
even the Xerox, no more copies of the checks as requested.

...

Madam Witness, when you said that you instructed your subordinate to look for the record,
specifically, the records being asked in the subpoena, the original copies of the checks, these two (2)
checks, will you please inform this Honorable Court where these records in 1995 including these
checks, of course, have been kept by your office?

It is kept at the Records Section Office just near my table. It is just over there. It is just over there.
The dis

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tance is very near. We have the vault power cards and all old records were kept are downstairs and
the new ones are kept upstairs. So, we dont anticipate the flood and because that was the first time
that we were hit by that flash flood.

...

So, you want to impress this Honorable Court that those records which were kept downstairs your
office were carried or destroyed by this flash flood which occurred in 1995 is that correct or is that
what you mean?

Yes, Your Honor.


...

And can you say that if these two (2) checks, subject of this case now, were there downstairs and
was destroyed by the 1995 flash flood, can you say that before this Honorable Court?

Yes, Your Honor.

...

Aside from these checks downstairs which were destroyed by this flash flood, what were the other
records that were kept there that were lost also?

All our Bank Vouchers, some of our General Ledgers. Actually, I cannot memorize it, but in our
declaration to the Bureau of Internal Revenue (BIR) we have listings of those documents which were
damaged by flash flood.

...

Alright, Madam Witness. So, when this sub-poena/subpoena (sic) duces tecum was received by
Victorias Milling Company, addressed to the Chief Operating Officer, do I get from you that this was
referred to the Legal Affairs of VICMICO?

Yes, Your Honor.

COURT:

Slowly, the stenographer may not be able to catch up with you.

FISCAL ESQUILLA:

I see. Sorry, Your Honor. And from the Legal Affairs, where did it proceed, this subpoena or this was
referred to by the Legal Affairs to whom?

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Lee vs. People


WITNESS:

To Mrs. Carolina Diaz, the Comptroller.

FISCAL ESQUILLA:

You mentioned that she is your immediate Boss?

I have also, next to her, Mrs. Melanie Roa, and I am next to her.

And you are holding office there at VICMICO together with the Comptroller, Carolina Diaz?

We are in the same building.

And does she has a cubicle of her own?

Yes, Your Honor.

And your table up to her cubicle, how far is your table from her cubicle?

They are very near. I can see from my place her office and I can see anytime she went in and out of
the room. Maybe from here up to that next room.

COURT:

About 25 to 30 meters, more or less.

FISCAL ESQUILLA:

And, Madam Witness, may I know from you that who requested you to testify because this
Certification bears the signature of Mrs. Diaz?

...

Ah, Mrs. Diaz, in fact, ahthere is a Memo from the Legal Affairs that we will submit the
Certification to the Honorable Court and the Memo was addressed to Mrs. Diaz. And there was a
note from Mrs. Diaz to my direct Boss, the Chief Accountant, and then I was tasked by my immediate
Boss to attend to this.

How were you able to secure a Certification?

A Certification was issued also upon our recommendation to the Chief Accountant that we cannot
produce anymore the original copies of the said document.

Who gave you that Certification so that you can bring that today in Court?

Marie Melanie G. Roa.

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Do you have with you now the Certification?

Yes, Your Honor.

And you are showing the original copy of the Certification?

Yes, Your Honor.

I show to you the Certification dated December 6, 2001 issued by Carolina Diaz, Comptroller. Do you
know whose signature is this?

That is the signature of Mrs. Carolina S. Diaz.

How do you know that this is her signature?

A
Im very much familiar with her signature because in our day to day undertakings in the office, I can
see this in the checks she signed, and in the Office Memorandum. And, in fact, I also prepare some
of the communications for her signature.

For the record, Madam Witness, will you please read the first paragraph of that Certification issued
by Carolina Diaz?

Victorias Milling Co., Inc. Certification. This is to certify that Victorias Milling Co., Inc. no longer have
the original copies of the BPI, Legaspi Village, Extension Office, Legaspi St., Makati, Metro Manila,
Check No. 068766 dated August 3, 1987 and Check No. 068993 dated August 19, 1987 as the same
were destroyed by flash flood that hit the province of Negros Occidental particularly the City of
Victorias on November 28, 1995.

FISCAL ESQUILLA:

Your Honor, may I request that this Certification be marked as our Exhibit X temporarily.

COURT:

Mark it.

FISCAL ESQUILLA:

And then the signature as identified by this witness, of her immediate Boss, be encircled and marked
as Exhibit X-1.

COURT:

Mark it.

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COURT INTERPRETER:

Your last Exhibit is Exhibit Y.

FISCAL ESQUILLA:
I will change my Exhibit from Exhibits X and X-1 to Z and Z-1. No further, Your Honor.

COURT:

Do you want to cross?

ATTY. MAGDAMIT:

Yes, Your Honor.

COURT:

Alright, cross for the accused Moreno. We will give the Manila lawyer the first shot.

CROSS-EXAMINATION OF THE WITNESS

MERLITA T. BAYABAN CONDUCTED BY

ATTY. SIMEON M. MAGDAMIT.

...

ATTY. MAGDAMIT

Madam Witness, when you received the subpoena, it contained a photocopy of the checks that were
being requested, is that correct?(At this juncture, there is no answer from the witness)

ATTY. MAGDAMIT: (Follow-up question)

Did it already contain a copy of the photocopy?

Ah. Attached to the subpoena.

Have you seen this photocopy when you received the subpoena? You did not see?

Ah, actually, the subpoena was directed to the Legal.

You did not see. You did not see the photocopy? May I know the point of Compaero, Your Honor.
WITNESS: (Answers before Atty. Magdamit)

I remember it was presented to me by Mrs. Diaz.

ATTY. MAGDAMIT

Mrs. Diaz. So, let me just clear this up. The subpoena did not immediately go to the Legal, it was
presented to you by Mrs. Diaz?

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No, it was presented by the Legal to our Comptroller. Then . . .

...

COURT:

And then to?

And then to me.

There is an initial, MGR. Do you know who is that?

That is Mrs. Melanie G. Roa, our Chief Accountant.

And from then, when it reached you, you were the ones who sorted through the files, were you the
one?

Ah, my subordinate.

Ah, you were not the one?


A

No, Your Honor.

Now, but you were certainI withdraw that question. When you received the subpoena with the
attached document, were you already aware that the records, the original, were destroyed or you
were not yet aware?

Very much aware that the records were destroyed by the flash flood because it was not only in that
case that we were tasked to look for the documents. There were also Examiners from the Bureau of
Internal Revenue who asked for the documents prior to 1995 and thats our reason, we cannot
produce the documents.

Now, wait. Were you the only one who was aware that this file was destroyed or was it a matter that
was known in your company?

It was known to everybody.

It was known?

Yeah.

So, can you conclude that just upon receiving the sub-poena and looking at the photocopy of the
checks, you would immediately know that this was among the files that was destroyed by the flood?

Yes, because of the date, 1995.

So, despite that knowledge, it still went through the process and you still looked for it, is that
correct?

Yes, Your Honor.

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Lee vs. People

So, despite of your knowledge that it was destroyed, you still looked for it?

Yeah, we still looked for it because there might be some files to prove that it was really our check
issuance. So even our files, even our Bank Recon, we cannot produce it.46

Contrary to the claim of the petitioner, the prosecution adduced preponderant evidence to prove
the existence, the due execution and the authenticity of the said checks and charge invoices
consisting of the admission of no less than the petitioner in his counter-affidavit. The petitioner
admitted therein that he received the total amount of P1,500,150.00 from VMCI in full payment of
the delivery and sale of the empty bags by NMI to VMCI and that the said amount was in the custody
of the said corporation, thus:

6. That the collection by the Corporation of the amount of P1,500,150.00 is a valid act of the
corporation; that it is the full and complete and just payment for the three deliveries of plastic
materials by the Neugene Marketing, Inc to Victorias Milling Company on June 11, 1987, June 18,
1987 and June 25, 1987 when I was and I am still the President and Mr. Sonny Moreno, General
Manager of the Neugene Marketing, Inc. and that the said Victorias Milling Company paid in full and
payments were made to the Corporation and it is only a legitimate act of the Neugene Marketing,
Inc. in the regular course of business to receive payment for the obligations of its customers to the
Corporation;

7. That with respect to the demand letter addressed to me to turn over aforesaid P1,500,150.00,
the said amount is money of the Neugene Marketing, Inc. and the corporation is the legitimate
possessor thereof and that Reyes, Treyes, and Fudolin Law Firm has no right or authority to make
the demand letter; and that it is the corporation that holds the money and that personally, neither I
nor Sonny Moreno can just take the money to give to Reyes, Treyes and Fudolin Law Firm which
cannot be trusted and which is an unauthorized entity to receive, hold and possess said funds or to
file this case;

_______________

46 TSN, 7 February 2002, pp. 21-42.

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VOL. 440, OCTOBER 19, 2004

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Lee vs. People

8. That the amount of P1,500,150.00 the corporate funds of the Neugene Marketing, Inc. unless
authorized by the members of the Board of Directors, neither I nor Sonny Moreno can dispose of the
said sum of money and it is the corporation that is holding the said amount and holding it to answer
for corporation expenses on its business operations and to answer for obligations to its creditors
including the claims of Sonny Moreno and myself for unpaid compensation, salaries, fringe benefits,
allowances and shares in the profits of the Corporation; and that therefore, it is beyond our
authority or power to refuse the turn over or to turn over the aforesaid amount; and that if there is
evidence of the malicious and criminal intent to appropriate the same for personal benefit that is
more applicable to Reyes, Treyes and Fudolin who apparently without any legal authority and
illegally posing as a trustee when as a matter of fact, they have never been appointed or designated
a[s] trustee by the Neugene Marketing, Inc.; and therefore, complainants should be the one held
criminally responsible for the illegal dissolution of the Neugene Marketing, Inc., and for which they
will be charged with the corresponding action for falsification and perjury for having been able to
secure a Certification of Dissolution from the Securities and Exchange Commission by means of false
pretenses and representations;47

It bears stressing that the counter-affidavit of the petitioner was adduced in evidence by the
prosecution precisely to prove the existence, authenticity and due execution of the original of the
said charge invoices and checks and the trial court admitted the same for the said purpose.

By his counter-affidavit, the petitioner, in effect, admitted the allegations of the affidavit-complaint
of the trustee of NMI:

a. Sometime on June 11, 1987, June 18, 1987 and June 25, 1987, respectively, NEUGENE
MARKETING, INC. made three (3) deliveries of plastic materials to Victorias Milling Company,
Victorias, Negros Occidental totalling P1,500,150.00 covered by Charge invoices . . .

_______________

47 Annex 4, CA Rollo, pp. 146-147.

694

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SUPREME COURT REPORTS ANNOTATED

Lee vs. People

b. Aforesaid charge invoices were subsequently paid by Victorias Milling Company in full and
payments delivered to Johnson Lee and/or Sonny Moreno, as President and General Manager of
Neugene Marketing, Inc.

c. As Trustee of Neugene Marketing, Inc., the Reyes, Treyes & Fudolin Law Firm sent a demand
letter addressed to Johnson Lee to turn over aforesaid P1,500,150.00 . . . .

d. As of the date of this Affidavit-Complaint, Johnson Lee and/or Sonny Moreno have failed to
deliver aforesaid sum to the herein trustee contrary to law.

4. Johnson Lee and/or Sonny Moreno have no authority whatsoever to withhold aforesaid sum of
P1,500,150.00 and their refusal to turn over aforesaid amount is evidence of a malicious and
criminal intent to appropriate the same for their own personal benefit.48
With the admissions of the petitioner in his counter-affidavit, the prosecution even no longer
needed to adduce evidence aliunde to prove the existence, due execution and the authenticity of
the charge invoices and the checks.

All told then, the prosecution mustered the requisite quantum of evidence to prove the predicates
to the admission of the photocopies of the charge invoices and checks.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The assailed decision of the Court of
Appeals is AFFIRMED. No costs.

SO ORDERED.

Puno (Chairman), Austria-Martinez and Tinga, JJ., concur.

Chico-Nazario, J., On Leave.

Petition denied, assailed decision affirmed.

Note.Production of the original may be dispensed with, in the trial courts discretion, whenever in
the case in hand

_______________

48 Id., at pp. 131-132.

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695

Senoja vs. People

the opponent does not bona fide dispute the contents of the document and no other useful
purpose will be served by requiring production. (Estrada vs. Desierto, 356 SCRA 108 [2001])

o0o Lee vs. People, 440 SCRA 662, G.R. No. 159288 October 19, 2004

VOL. 239, DECEMBER 20, 1994

341

Ong Ching Po vs. Court of Appeals

G.R. Nos. 113472-73. December 20, 1994.*

ONG CHING PO, YU SIOK LIAN, DAVID ONG and JIMMY ONG, petitioners, vs. COURT OF APPEALS and
SOLEDAD PARIAN, respondents.

Constitutional Law; Natural Resources; Land Titles; Nationalization Laws; Aliens; Aliens are
disqualified from acquiring lands in the Philippines.The capacity to acquire private land is made
dependent upon the capacity to acquire or hold lands of the public domain. Private land may be
transferred or conveyed only to individuals or entities qualified to acquire lands of the public
domain (II Bernas, The Constitution of the Philippines, 439-440 [1988 ed.]). The 1935 Constitution
reserved the right to participate in the disposition, exploitation, development and utilization of all
lands of the public domain and other natural resources of the Philippines for Filipino citizens or
corporations at least sixty percent of the capital of which was owned by Filipinos. Aliens, whether
individuals or corporations, have been disqualified from acquiring public lands; hence, they have also
been disqualified from acquiring private lands.

Same; Same; Same; Same; Same; A deed of sale for a piece of land in favor of an alien is null and void
for being contrary to law.Petitioner Ong Ching Po was a Chinese citizen; therefore, he was
disqualified from acquiring and owning real property. Assuming that the genuineness and due
execution of the deed of sale (Exhibit B) has been established, the same is null and void, it being
contrary to law.

Property; Possession; Sales; Possession is transferred to the vendee by virtue of the notarized deed
of conveyance.It is not correct to say that private respondent never took possession of the
property. Under the law, possession is transferred to the vendee by virtue of the notarized deed of
conveyance. Under Article 1498 of the Civil Code of the Philippines, when the sale is made through
a public instrument, the execution thereof shall be equivalent to the delivery of the object of the
contract, if from the deed the contrary does not appear or cannot clearly be inferred. If what
petitioners meant was that private respondent never lived in the building constructed on said land,
it was because her family had settled in Iloilo.

______________

* FIRST DIVISION.

342

342

SUPREME COURT REPORTS ANNOTATED

Ong Ching Po vs. Court of Appeals

Evidence; Trusts; No express trust concerning an immovable or any interest therein may be proved
by parole evidence.There is no document showing the establishment of an express trust by
petitioner Ong Ching Po as trustor and private respondent as trustee. Not even Exhibit B can be
considered as such a document because private respondent, the registered owner of the property
subject of said deed of sale, was not a party thereto. The oral testimony to prove the existence of
the express trust will not suffice. Under Article 1443 of the Civil Code of the Philippines, No express
trust concerning an immovable or any interest therein may be proved by parole evidence.

Same; Same; While an implied trust may be proved orally, the evidence to prove it must be
trustworthy and received by the courts with extreme caution, and should not be made to rest on
loose, equivocal or indefinite declarations.Undaunted, petitioners argue that if they cannot prove
an express trust in writing, they can prove an implied trust orally. While an implied trust may be
proved orally (Civil Code of the Philippines, Art. 1457), the evidence must be trustworthy and
received by the courts with extreme caution, because such kind of evidence may be easily fabricated
(Salao v. Salao, 70 SCRA 65 [1976]). It cannot be made to rest on vague and uncertain evidence or on
loose, equivocal or indefinite declarations (Cf. De Leon v. Molo-Peckson, et al., 116 Phil. 1267
[1962]). Petitioners do not claim that Ong Yee was not in a financial position to acquire the land and
to introduce the improvements thereon. On the other hand, Yu Siok Lian, the wife of petitioner Ong
Ching Po, admitted in her testimony in court that Ong Yee was a stockholder of Lam Sing
Corporation and was engaged in business.

Same; Documentary Evidence; Secondary Evidence; Order of Proof of Secondary Evidence.


Secondary evidence is admissible when the original documents were actually lost or destroyed. But
prior to the introduction of such secondary evidence, the proponent must establish the former
existence of the document. The correct order of proof is as follows: existence; execution; loss;
contents. This order may be changed if necessary in the discretion of the court (De Vera v. Aguilar,
218 SCRA 602 [1993]).

Same; Same; Same; Witnesses; Persons who may testify as to the due execution of a document.
The due execution of the document may be established by the person or persons who executed it;
by the person before whom its execution was acknowledged; or by any person who was present and
saw it executed or who after its execution, saw it and recognized the signatures; or by a person to
whom the parties to the

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VOL. 239, DECEMBER 20, 1994

343

Ong Ching Po vs. Court of Appeals

instrument had previously confessed the execution thereof (De Vera v. Aguilar, supra).

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Bautista, Salva, Arrieta, Salva for petitioners.

Arthem Maceda Potian for private respondent.

QUIASON, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court of the Decision
of the Court of Appeals dated July 15, 1993, which dismissed the petition for certiorari in CA-G.R. CV
Nos. 28391-92.

On July 23, 1947, Ong Joi Jong sold a parcel of land located at Fundidor Street, San Nicolas to private
respondent Soledad Parian, the wife of Ong Yee. The latter, the brother of petitioner Ong Ching Po,
died in January 1983; while petitioner Ong Ching Po died in October 1986. The said sale was
evidenced by a notarized Deed of Sale written in English. Subsequently, the document was
registered with the Register of Deeds of Manila, which issued Transfer Certificate of Title No. 9260
dated September 2, 1947 in the name of private respondent.

According to private respondent, she entrusted the administration of the lot and building to
petitioner Ong Ching Po when she and her husband settled in Iloilo. When her husband died, she
demanded that the lot be vacated because she was going to sell it. Unfortunately, petitioners
refused to vacate the said premises.

On March 19, 1984, private respondent filed a case for unlawful detainer against petitioner Ong
Ching Po before the Metropolitan Trial Court of Manila, Branch 26. The inferior court dismissed her
case. The dismissal was affirmed by the Regional Trial Court, Branch 10, Manila. The decision of the
Regional Trial Court was, in turn, affirmed by the Court of Appeals, which dismissed the

344

344

SUPREME COURT REPORTS ANNOTATED

Ong Ching Po vs. Court of Appeals

petition. The decision of the Court of Appeals became final and executory.

Petitioners, on the other hand, claimed that on July 23, 1946, petitioner Ong Ching Po bought the
said parcel of land from Ong Joi Jong. The sale was evidenced by a photo copy of a Deed of Sale
written in Chinese with the letter head Sincere Trading Co. (Exh. B). An English translation of said
document (Exh. C) reads as follows:

Deed of Sale

I, Ong Joi Jong, a party to this Deed of Sale hereby sell in absolutely (sic) manner a lot located on No.
4 Fundidor Street, San Nicolas an (sic) area consisting 213 square meters including a one-storey
house erected thereon unto Mr. Ong Ching Po for the sum of P6,000.00 the receipt of which is
hereby acknowledged by me and consequently I have executed and signed the government
registered title (sic) the said lot inclusive of the house erected thereon, now belong (sic) to Mr. Ong
Ching Po unequivocally. And the purpose of this document is to precisely serve as proof of the sale.

Addendum: I have acceded to the request of Mr. Ong Ching Po into signing another document in
favor of Soledad Parian (She is the Filipino wife of Ong Yee, brother of Ong Ching Po) for the purpose
of facilitating the issuance of the new title by the City Register of Deeds and for the reason that he is
not yet a Filipino. I certify to the truthfulness of this fact.

Lot Seller: Ong Joi Jong

(Exhibits for the plaintiff, p. 4)

On December 6, 1983, petitioner Ong Ching Po executed a Deed of Absolute Sale conveying to his
children, petitioners Jimmy and David Ong, the same property sold by Ong Joi Jong to private
respondent in 1947. On December 12, 1985, petitioners Ong Ching Po, Jimmy Ong and David Ong
filed an action for reconveyance and damages against private respondent in the Regional Trial Court,
Branch 53, Manila, docketed as Case No. 85-33962.

On July 26, 1986, private respondent filed an action for quieting of title against petitioners Ong Ching
Po and his wife, petitioner Yu Siok Lian, in the Regional Trial Court, Branch 58,

345

VOL. 239, DECEMBER 20, 1994

345

Ong Ching Po vs. Court of Appeals

Manila, docketed as Civil Case No. 86-36818. Upon her motion, the case was consolidated with Civil
Case No. 85-33962. On May 30, 1990, the trial court rendered a decision in favor of private
respondent. On appeal by petitioners to the Court of Appeals, the said court affirmed the decision of
the Regional Trial Court.

Hence, this petition.

II

According to petitioners, the Court of Appeals erred:

(1) When it gave full faith and credit to the Deed of Sale (Exh. A) in favor of private respondent,
instead of the Deed of Sale (Exh. B and its translation, Exh. C) in favor of petitioner Ong Ching Po.

(2) When it concluded that the acts of petitioners were not acts of ownership; and

(3) When it ruled that no express nor implied trust existed between petitioners and private
respondent (Rollo, pp. 17-18).

As stated by petitioners themselves, what is in dispute x x x is not so much as to which between


Exhibit A and Exhibit B is more weighty, but whether this document is what it purports to be
(i.e., a deed of conveyance in favor of Soledad Parian [private respondent]) or it was only resorted to
or executed as a subterfuge because the real buyer (Ong Ching Po) was an alien and it was agreed
upon between Ong Ching Po and his brother (Ong Yee, Soledad Parians husband) that the land be
registered in the name of Soledad Parian in order to avoid legal complications and to facilitate
registration and transfer and that the said title would be transferred by Soledad to Ong Ching Po or
his successors-in-interest and that she would be holding the title in trust for him (Rollo, pp. 19-20).

We cannot go along with the claim that petitioner Ong Ching Po merely used private respondent as a
dummy to have the title over the parcel of land registered in her name because being an alien he
was disqualified to own real property in the Philippines. To sustain such an outrageous contention
would be giving a high premium to a violation of our nationalization laws.

Assuming that Exhibit B is in existence and that it was duly executed, still petitioners cannot claim
ownership of the disputed lot by virtue thereof.

346
346

SUPREME COURT REPORTS ANNOTATED

Ong Ching Po vs. Court of Appeals

Section 5, Article XIII of the 1935 Constitution provides, as follows:

Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned
except to individuals, corporations, or associations qualified to acquire or hold lands of the public
domain in the Philippines.

Section 14, Article XIV of the 1973 Constitution provides, as follows:

Save in cases of hereditary succession, no private land shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands in the public domain.

Section 7, Article XII of the 1987 Constitution provides:

Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands in the public domain.

The capacity to acquire private land is made dependent upon the capacity to acquire or hold lands of
the public domain. Private land may be transferred or conveyed only to individuals or entities
qualified to acquire lands of the public domain (II Bernas, The Constitution of the Philippines 439-
440 [1988 ed.]).

The 1935 Constitution reserved the right to participate in the disposition, exploitation,
development and utilization of all lands of the public domain and other natural resources of the
Philippines for Filipino citizens or corporations at least sixty percent of the capital of which was
owned by Filipinos. Aliens, whether individuals or corporations, have been disqualified from
acquiring public lands; hence, they have also been disqualified from acquiring private lands.

Petitioner Ong Ching Po was a Chinese citizen; therefore, he was disqualified from acquiring and
owning real property. Assuming that the genuineness and due execution of Exhibit B has been
established, the same is null and void, it being contrary to law.

On the other end of the legal spectrum, the deed of sale executed by Ong Joi Jong in favor of private
respondent (Exh.

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VOL. 239, DECEMBER 20, 1994

347

Ong Ching Po vs. Court of Appeals

A) is a notarized document.

To remove the mantle of validity bestowed by law on said document, petitioners claim that private
respondent admitted that she did not pay anything as consideration for the purported sale in her
favor. In the same breath, petitioners said that private respondent implied in her deposition that it
was her husband who paid for the property. It appears, therefore, that the sale was financed out of
conjugal funds and that it was her husband who handled the transaction for the purchase of the
property. Such transaction is a common practice in Filipino-family affairs.

It is not correct to say that private respondent never took possession of the property. Under the law,
possession is transferred to the vendee by virtue of the notarized deed of conveyance. Under Article
1498 of the Civil Code of the Philippines, when the sale is made through a public instrument, the
execution thereof shall be equivalent to the delivery of the object of the contract, if from the deed
the contrary does not appear or cannot clearly be inferred. If what petitioners meant was that
private respondent never lived in the building constructed on said land, it was because her family
had settled in Iloilo.

There is no document showing the establishment of an express trust by petitioner Ong Ching Po as
trustor and private respondent as trustee. Not even Exhibit B can be considered as such a
document because private respondent, the registered owner of the property subject of said deed
of sale, was not a party thereto. The oral testimony to prove the existence of the express trust will
not suffice. Under Article 1443 of the Civil Code of the Philippines, No express trust concerning an
immovable or any interest therein may be proved by parole evidence.

Undaunted, petitioners argue that if they cannot prove an express trust in writing, they can prove an
implied trust orally. While an implied trust may be proved orally (Civil Code of the Philippines, Art.
1457), the evidence must be trustworthy and received by the courts with extreme caution, because
such kind of evidence may be easily fabricated (Salao v. Salao, 70 SCRA 65 [1976]). It cannot be made
to rest on vague and uncertain evidence or on loose, equivocal or indefinite declarations (Cf. De
Leon v. Molo-Peckson, et al., 116 Phil. 1267 [1962]). Petitioners do not claim that Ong Yee was not in
a financial position to acquire the land and to introduce the improvements thereon. On

348

348

SUPREME COURT REPORTS ANNOTATED

Ong Ching Po vs. Court of Appeals

the other hand, Yu Siok Lian, the wife of petitioner Ong Ching Po, admitted in her testimony in court
that Ong Yee was a stock-holder of Lam Sing Corporation and was engaged in business.

The Court of Appeals did not give any credence to Exhibit B and its translation, Exhibit C,
because these documents had not been properly authenticated.

Under Section 4, Rule 130 of the Revised Rules of Court:

Secondary Evidence when Original is lost or destroyed. When the original writing has been lost or
destroyed, or cannot be produced in court, upon proof of its execution and lost or destruction, or
unavailability, its contents may be proved by a copy, or by a recital of its contents in some authentic
document, or by the recollection of the witnesses.

Secondary evidence is admissible when the original documents were actually lost or destroyed. But
prior to the introduction of such secondary evidence, the proponent must establish the former
existence of the document. The correct order of proof is as follows: existence; execution; loss;
contents. This order may be changed if necessary in the discretion of the court (De Vera v. Aguilar,
218 SCRA 602 [1993]).
Petitioners failed to adduce evidence as to the genuineness and due execution of the deed of sale,
Exhibit B.

The due execution of the document may be established by the person or persons who executed it;
by the person before whom its execution was acknowledged; or by any person who was present and
saw it executed or who after its execution, saw it and recognized the signatures; or by a person to
whom the parties to the instrument had previously confessed the execution thereof (De Vera v.
Aguilar, supra).

Petitioner Yu Siok Lian testified that she was present when said document was executed, but the
trial court rejected her claim and held:

If it is true that she was present, why did she not sign said document, even merely as a witness? Her
oral testimony is easy to concoct or fabricate. Furthermore, she was married only on September 6,
1946 to the plaintiff, Ong Ching Po, in Baguio City where she apparently resided, or after the deed of
sale was executed. The Court does not believe that she was present during the execution and signing
of the deed of sale involved therein, notwithstanding her pretensions to

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VOL. 239, DECEMBER 20, 1994

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Ong Ching Po vs. Court of Appeals

the contrary (Decision p. 6, Records p. 414).

As to the contention of petitioners that all the tax receipts, tax declaration, rental receipts, deed of
sale (Exh. B) and transfer certificate of title were in their possession, private respondent explained
that she and her husband entrusted said lot and building to petitioners when they moved to Iloilo.

As observed by the Court of Appeals:

We find, however, that these acts, even if true, are not necessarily reflective of dominion, as even a
mere administrator or manager may lawfully perform them pursuant to his appointment or
employment (Rollo, p. 10).

It is markworthy that all the tax receipts were in the name of private respondent and her husband.
The rental receipts were also in the name of her husband.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

Padilla (Chairman), Davide, Jr., Bellosillo and Kapunan, JJ., concur.

Petition dismissed.

Notes.The correct rule is that alienable public land held by a possessor, personally or through his
predecessors-in-interest, openly, continuously and exclusively for the prescribed statutory period
(30 years under The Public Land Act, as amended) is converted to private property by the mere lapse
or completion of said period, ipso jure. (Director of Lands vs. Intermediate Appellate Court, 146
SCRA 509 [1986])
Express trusts are created by the intention of the trustor or of the parties while implied trusts come
into being by operation of law. (Philippine National Bank vs. Court of Appeals, 217 SCRA 347 [1993])

o0o Ong Ching Po vs. Court of Appeals, 239 SCRA 341, G.R. Nos. 113472-73 December 20,
1994

98

SUPREME COURT REPORTS ANNOTATED

Santiago vs. Court of Appeals

G.R. No. 103959. August 21, 1997.*

SPOUSES REGALADO SANTIAGO and ROSITA PALABYAB, JOSEFINA ARCEGA, petitioners, vs. THE
HON. COURT OF APPEALS; THE HON. CAMILO C. MONTESA, JR., Presiding Judge of the RTC of
Malolos, Bulacan, Branch 19, and QUIRICO ARCEGA, respondents.

Civil Law; Sales; The failure of petitioners to take exclusive possession of the property allegedly sold
to them, or in the alternative, to collect rentals from the alleged vendee Paula Arcega is contrary to
the principle of ownership and a clear badge of simulation that renders the whole transaction void
and without force and effect.If, indeed, the transaction entered into by the petitioners and the
late Paula Arcega on July 18, 1971 was a veritable deed of absolute sale, as it was purported to be,
then Ms. Arcega had no business whatsoever remaining in the property and, worse, to still occupy
the big masters bedroom with all its amenities until her death on April 10, 1985. Definitely, any
legitimate vendee of real property who paid for the property with good money will not accede to an
arrangement whereby the vendor continues occupying the most favored room in the house while he
or she, as new owner, endures the disgrace and absurdity of having to sleep in a small bedroom
without bath and toilet as if he or she is a guest or a tenant in the house. In any case, if petitioners
really stood as legitimate owners of the property, they would have collected rentals from Paula
Arcega for the use and occupation of the masters bedroom as she would then be a mere lessee of
the property in question. However, not a single piece of evidence was presented to show that this
was the case. All told, the failure of petitioners to take exclusive possession of the property allegedly
sold to them, or in the alternative, to collect rentals from the alleged vendee Paula Arcega, is
contrary to the principle of ownership and a clear badge of simulation that renders the whole
transaction void and without force and effect, pursuant to Article 1409 of the New Civil Code.

Same; Same; Though the notarization of the deed of sale in question vests in its favor the
presumption of regularity, it is not the intention nor the function of the notary public to validate and
make

____________

* FIRST DIVISION.

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VOL. 278, AUGUST 21, 1997

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Santiago vs. Court of Appeals

binding an instrument never, in the first place, intended to have any binding legal effect upon the
parties thereto.The conceded fact that subject deed of absolute sale executed by Paula Arcega in
favor of petitioners is a notarized document does not justify the petitioners desired conclusion that
said sale is undoubtedly a true conveyance to which the parties thereto are irrevocably and
undeniably bound. To be considered with great significance is the fact that Atty. Luis Cuvin who
notarized the deed disclaimed the truthfulness of the document when he testified that NO MONEY
WAS INVOLVED IN THE TRANSACTION. Furthermore, though the notarization of the deed of sale in
question vests in its favor the presumption of regularity, it is not the intention nor the function of
the notary public to validate and make binding an instrument never, in the first place, intended to
have any binding legal effect upon the parties thereto. The intention of the parties still is and always
will be the primary consideration in determining the true nature of a contract. Here, the parties to
the Kasulatan ng Bilihang Tuluyan ng Lupa, as shown by the evidence and accompanying
circumstances, never intended to convey the property thereto from one party to the other for
valuable consideration. Rather, the transaction was merely used to facilitate a loan with the SSS with
petitioners-mortgagors using the property in question, the title to which they were able to register
in their names through the simulated sale, as collateral.

Same; Same; Where one does not have any rightful claim over a real property, the Torrens system of
registration can confirm or record nothing.The fact that petitioners were able to secure a title in
their names, TCT No. 148989, did not operate to vest upon petitioners ownership over Paula
Arcegas property. That act has never been recognized as a mode of acquiring ownership. As a
matter of fact, even the original registration of immovable property does not vest title thereto. The
Torrens system does not create or vest title. It only confirms and records title already existing and
vested. It does not protect a usurper from the true owner. It cannot be a shield for the commission
of fraud. It does not permit one to enrich himself at the expense of another. Where one does not
have any rightful claim over a real property, the Torrens system of registration can confirm or record
nothing.

Same; Same; Prescription; The action or defense for the declaration of the inexistence of a contract
does not prescribe.Petitioners argue that private respondents complaint filed before the trial
court

100

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SUPREME COURT REPORTS ANNOTATED

Santiago vs. Court of Appeals

on October 24, 1985 is already barred by the statute of limitations and laches considering that the
deed of absolute sale was executed in their favor by the deceased Paula Arcega on July 20, 1971.
Indeed, more than fourteen (14) years had elapsed from the time his cause of action accrued to the
time that the complaint was filed. x x x This submission is utterly without merit, the pertinent
provision being Article 1410 of the New Civil Code which provides unequivocably that [T]he action
or defense for the declaration of the inexistence of a contract does not prescribe.

Same; Same; Same; Laches; The question of laches is addressed to the sound discretion of the court,
and since laches is an equitable doctrine, its application is controlled by equitable considerations.
As for laches, its essence is the failure or neglect, for an unreasonable and unexplained length of
time to do that which, by exercising due diligence, could or should have been done earlier; it is the
negligence or omission to assert a right within a reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it. But there is, to be sure, no
absolute rule as to what constitutes laches or staleness of demand; each case is to be determined
according to its particular circumstances. The question of laches is addressed to the sound discretion
of the court, and since laches is an equitable doctrine, its application is controlled by equitable
considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice.

Same; Same; Same; Same; It is the better rule that courts, under the principle of equity, will not be
guided or bound strictly by the statute of limitations or the doctrine of laches when to do so,
manifest wrong or injustice would result.In the case under consideration, it would not only be
impractical but well-nigh unjust and patently inequitous to apply laches against private respondent
and vest ownership over a valuable piece of real property in favor of petitioners by virtue of an
absolutely simulated deed of sale never, in the first place, meant to convey any right over the
subject property. It is the better rule that courts, under the principle of equity, will not be guided or
bound strictly by the statute of limitations or the doctrine of laches when to do so, manifest wrong
or injustice would result.

Remedial Law; Civil Procedure; Parol Evidence; The court cannot disregard evidence which would
ordinarily be incompetent under the rules but has been rendered admissible by the failure of a party
to

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VOL. 278, AUGUST 21, 1997

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Santiago vs. Court of Appeals

object thereto.Moreover, the parol evidence rule may be waived by failure to invoke it, as by
failure to object to the introduction of parol evidence. And, where a party who is entitled to the
benefit of the rule waives the benefit thereof by allowing such evidence to be received without
objection and without any effort to have it stricken from the minutes or disregarded by the trial
court, he cannot, after the trial has closed and the case has been decided against him, invoke the
rule in order to secure a reversal of the judgment by an appellate court. Here, the records are devoid
of any indication that petitioners ever objected to the admissibility of parole evidence introduced by
the private respondent in open court. The court cannot disregard evidence which would ordinarily
be incompetent under the rules but has been rendered admissible by the failure of a party to object
thereto. Petitioners have no one to blame but themselves in this regard.

PETITION for review on certiorari of a decision of the Court of Appeals.


The facts are stated in the opinion of the Court.

Peoples Law Office for petitioners.

Arturo F.B. Goce for private respondent.

HERMOSISIMA, JR., J.:

Assailed in this petition for review under Rule 45 is the November 8, 1991 Decision of respondent
Court of Appeals in CA-G.R. CV No. 25069. It affirmed in toto the judgment of Branch 19, Regional
Trial Court of Malolos, Bulacan, in Civil Case No. 8470-M. The action therein sought to declare null
and void the Kasulatan Ng Bilihang Tuluyan Ng Lupa executed on July 18, 1971 by the late Paula
Arcega, sister of private respondent, in favor of herein petitioners over a parcel of land consisting of
927 square meters, situated in Barangay Tabing Ilog, Marilao, Bulacan.

Paula Arcega was the registered owner of that certain parcel of land covered by Transfer Certificate
of Title No. T-115510. Her residential house stood there until 1970 when it was destroyed by a
strong typhoon.

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On December 9, 1970, Paula Arcega executed what purported to be a deed of conditional sale over
the land in favor of Josefina Arcega and the spouses Regalado Santiago and Rosita Palabyab, the
petitioners herein, for and in consideration of P20,000.00. The vendees were supposed to pay
P7,000.00 as downpayment. It was expressly provided that the vendor would execute and deliver to
the vendees an absolute deed of sale upon full payment by the vendees of the unpaid balance of the
purchase price of P13,000.00.

Subsequently, on July 18, 1971, supposedly upon payment of the remaining balance, Paula Arcega
executed a deed of absolute sale of the same parcel of land in favor of petitioners. Thereupon, on
July 20, 1971, TCT No. T-115510, in the name of Paula Arcega, was cancelled and a new title, TCT No.
T-148989 was issued in the name of petitioners.

On April 10, 1985, Paula Arcega died single and without issue, leaving as heirs his two brothers,
Narciso Arcega1 and private respondent Quirico Arcega.

Incidentally, before Paula Arcega died, a house of four bedrooms with a total floor area of 225
square meters was built over the parcel of land in question. Significantly, the masters bedroom,
with toilet and bath, was occupied by Paula Arcega until her death despite the execution of the
alleged deed of absolute sale. The three other bedrooms, smaller than the masters bedroom, were
occupied by the petitioners who were the supposed vendees in the sale.

Private respondent Quirico Arcega, as heir of his deceased sister, filed on October 24, 1985 Civil Case
No. 8470-M before the RTC of Malolos, Bulacan, seeking to declare null and void the deed of sale
executed by his sister during her lifetime in favor of the petitioners on the ground that said deed was
fictitious since the purported consideration therefor of P20,000.00 was not actually paid by the
vendees to his sister.

________________

1 Disauthorized his inclusion as party-plaintiff in Civil Case No. 8470-M.

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Answering the complaint before the RTC, petitioner spouses averred that private respondents cause
of action was already barred by the statute of limitations considering that the disputed deed of
absolute sale was executed in their favor on July 18, 1971, by which TCT No. 148989 was issued on
July 20, 1971, while private respondents complaint was filed in court only on October 24, 1985 or
more than fourteen (14) years from the time the cause of action accrued. Petitioners also deny that
the sale was fictitious. They maintain that the purchase price was actually paid to Paula Arcega and
that said amount was spent by the deceased in the construction of her three-door apartment on the
parcel of land in question.

Josefina Arcega, the other petitioner, was declared in default for failure to file her answer within the
reglementary period.

After trial, the RTC rendered judgment in favor of private respondent Quirico Arcega, viz.:

(a) Declaring as null and void and without legal force and effect the Kasulatan Ng Bilihang Tuluyan
Ng Lupa dated July 18, 1971 executed by the deceased Paula Arcega covering a parcel of land
embraced under TCT No. T-115510 in favor of the defendants;

(b) Declaring TCT No. T-148989 issued and registered in the names of defendants Josefina Arcega
and spouses Regalado Santiago and Rosita Palabyab as null and void;

(c) Ordering the reconveyance of the property including all improvements thereon covered by TCT
No. T-115510, now TCT No. T-148989, to the plaintiff, subject to real estate mortgage with the Social
Security System; and

(d) To pay jointly and severally the amount of P10,000.00 as attorneys fees.

On the counterclaim, the same is hereby dismissed for lack of legal and/or factual basis (p. 6,
decision, pp. 295-300, rec.).2

In ruling for private respondent, the trial court, as affirmed in toto by the public respondent Court of
Appeals, found that:

_____________

2 Rollo, pp. 20-21.


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On the basis of the evidence adduced, it appears that plaintiff Quirico Arcega and his brother
Narciso Arcega are the only surviving heirs of the deceased Paula Arcega who on April 10, 1985 died
single and without issue. Sometime in 1970, a strong typhoon destroyed the house of Paula Arcega
and the latter together with the defendants decided to construct a new house. All the defendants3
being members of the SSS, Paula Arcega deemed it wise to lend her title to them for purposes of
loan with the SSS. She executed a deed of sale to effect the transfer of the property in the name of
defendants and thereafter the latter mortgaged the same for P30,000.00 but the amount actually
released was only P25,000.00. Paula Arcega spent the initial amount of P30,000.00 out of her
savings for the construction of the house sometime in 1971 and after the same and the proceeds of
the loan were exhausted, the same was not as yet completed. Paula Arcega and her brothers sold
the property which they inherited for P45,000.00 and the same all went to the additional
construction of the house, however, the said amount is not sufficient. Thereafter, Paula Arcega and
her brothers sold another property which they inherited for P805,950.00 and one-third (1/3) thereof
went to Paula Arcega which she spent a portion of which for the finishing touches of the house. The
house as finally finished in 1983 is worth more than P100,000.00 with a floor area of 225 square
meters consisting of four bedrooms. A big masters bedroom complete with a bath and toilet was
occupied by Paula Arcega up to the time of her death on April 10, 1985 and the other three smaller
bedrooms are occupied by spouses, defendants Regalado Santiago and Rosita Palabyab, and Josefina
Arcega. After the death of Paula Arcega defendant Josefina Arcega and Narciso Arcega constructed
their own house at back portion of the lot in question.

There is a clear indication that the deed of sale which is unconscionably low for 937 square meters in
favor of the defendants sometime on July 18, 1971, who are all members of the SSS, is merely
designed as an accommodation for purposes of loan with the SSS. Paula Arcega cognizant of the
shortage of funds in her possession in the amount of P30,000.00, deemed it wise to augment her
funds for construction purposes by way of a mortgage with the SSS which only defendants could
possibly effect they being members of the SSS. Since the SSS requires the collateral to be in the
name of the mortgagors, Paula Arcega executed a simulated deed of sale (Kasulatan ng

_____________

3 Petitioners herein.

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Bilihang Tuluyan ng Lupa) for P20,000.00 dated July 18, 1971 in favor of the defendants and the
same was notarized by Atty. Luis Cuvin who emphatically claimed that no money was involved in the
transaction as the parties have other agreement. The allegations of the defendants that the property
was given to them (Kaloob) by the deceased has no evidentiary value. While it is true that Rosita
Palabyab stayed with the deceased since childhood, the same cannot be said with respect to
defendant Josefina Arcega, distant relative and a niece of the wife of Narciso Arcega, who stayed
with the deceased sometime in 1966 at the age of 19 years and already working as a saleslady in
Manila. Did the deceased indeed give defendant Josefina Arcega half of her property out of love and
gratitude? Such circumstance appears illogical if not highly improbable. As a matter of fact
defendant Josefina Arcega in her unguarded moment unwittingly told the truth that the couple
(Regalado Santiago and Rosita Palabyab) had indeed borrowed the title and then mortgaged the
same with the SSS as shown in her direct testimony which reads:

Atty. Villanueva:

Why did you say that the house is owned by the spouses Santiago but the lot is bought by you and
Rosita?

Because at that time, the couple4 borrowed the title and then mortgaged the property with the SSS.
There is only one title but both of us owned it. (TSN dtd. 19 Oct. 88, p.5)5

On appeal, the public respondent Court of Appeals dismissed the same, affirming in all respects the
RTC judgment.

Hence, this petition.

The petition is unmeritorious.

Verily, this case is on all fours with Suntay v. Court of Appeals.6 There, a certain Federico Suntay was
the registered owner of a parcel of land in Sto. Nio, Hagonoy, Bulacan. A rice miller, Federico
applied on September 30, 1960 as a miller-contractor of the then National Rice and Corn
Corporation (NARIC), but his application was disapproved because he

__________________

4 Spouses Regalado Santiago and Rosita Palabyab.

5 Rollo, pp. 22-24.

6 251 SCRA 430 [1995].

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Santiago vs. Court of Appeals


was tied up with several unpaid loans. For purposes of circumvention, he thought of allowing his
nephew-lawyer, Rafael Suntay, to make the application for him. To achieve this, Rafael prepared a
notarized Absolute Deed of Sale whereby Federico, for and in consideration of P20,000.00, conveyed
to Rafael said parcel of land with all its existing structures. Upon the execution and registration of
said deed, Certificate of Title No. 0-2015 in the name of Federico was cancelled and, in lieu thereof,
TCT No. T-36714 was issued in the name of Rafael. Sometime in the months of June to August,
1969,7 Federico requested Rafael to deliver back to him the owners duplicate of the transfer
certificate of title over the properties in question for he intended to use the property as collateral in
securing a bank loan to finance the expansion of his rice mill. Rafael, however, without just cause,
refused to deliver the title insisting that said property was absolutely sold and conveyed [to him] x x
x for a consideration of P20,000.00, Philippine currency, and for other valuable consideration. We
therein ruled in favor of Federico Suntay and found that the deed of sale in question was merely an
absolutely simulated contract for the purpose of accommodation and therefore void. In retrospect,
we observed in that case:

Indeed the most protuberant index of simulation is the complete absence of an attempt in any
manner on the part of the late Rafael to assert his rights of ownership over the land and rice mill in
question. After the sale, he should have entered the land and occupied the premises thereof. He did
not even attempt to. If he stood as owner, he would have collected rentals from Federico for the use
and occupation of the land and its improvements. All that the late Rafael had was a title in his name.

xxx xxx xxx

x x x The fact that, notwithstanding the title transfer, Federico remained in actual possession,
cultivation and occupation of the disputed lot from the time the deed of sale was executed until the
present, is a circumstance which is unmistakably added proof of the

_____________

7 Id., at 437.

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fictitiousness of the said transfer, the same being contrary to the principle of ownership.8

In the case before us, while petitioners were able to occupy the property in question, they were
relegated to a small bedroom without bath and toilet,9 while Paula Arcega remained virtually in full
possession of the completed house and lot using the big masters bedroom with bath and toilet up
to the time of her death on April 10, 1985.10 If, indeed, the transaction entered into by the
petitioners and the late Paula Arcega on July 18, 1971 was a veritable deed of absolute sale, as it was
purported to be, then Ms. Arcega had no business whatsoever remaining in the property and, worse,
to still occupy the big masters bedroom with all its amenities until her death on April 10, 1985.
Definitely, any legitimate vendee of real property who paid for the property with good money will
not accede to an arrangement whereby the vendor continues occupying the most favored room in
the house while he or she, as new owner, endures the disgrace and absurdity of having to sleep in a
small bedroom without bath and toilet as if he or she is a guest or a tenant in the house. In any case,
if petitioners really stood as legitimate owners of the property, they would have collected rentals
from Paula Arcega for the use and occupation of the masters bedroom as she would then be a mere
lessee of the property in question. However, not a single piece of evidence was presented to show
that this was the case. All told, the failure of petitioners to take exclusive possession of the property
allegedly sold to them, or in the alternative, to collect rentals from the alleged vendee Paula Arcega,
is contrary to the principle of ownership and a clear badge of simulation that renders the whole
transaction void and without force and effect, pursuant to Article 1409 of the New Civil Code:

______________

8 Id., at 450-451.

9 Rollo, p. 25.

10 Rollo, p. 22.

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Santiago vs. Court of Appeals

The following contracts are inexistent and void from the beginning:

xxx xxx xxx

(2) Those which are absolutely simulated or fictitious;

xxx xxx x x x.

The conceded fact that subject deed of absolute sale executed by Paula Arcega in favor of
petitioners is a notarized document does not justify the petitioners desired conclusion that said sale
is undoubtedly a true conveyance to which the parties thereto are irrevocably and undeniably
bound. To be considered with great significance is the fact that Atty. Luis Cuvin who notarized the
deed disclaimed the truthfulness of the document when he testified that NO MONEY WAS
INVOLVED IN THE TRANSACTION.11 Furthermore, though the notarization of the deed of sale in
question vests in its favor the presumption of regularity, it is not the intention nor the function of
the notary public to validate and make binding an instrument never, in the first place, intended to
have any binding legal effect upon the parties thereto. The intention of the parties still is and always
will be the primary consideration in determining the true nature of a contract. Here, the parties to
the Kasulatan ng Bilihang Tuluyan ng Lupa, as shown by the evidence and accompanying
circumstances, never intended to convey the property thereto from one party to the other for
valuable consideration. Rather, the transaction was merely used to facilitate a loan with the SSS with
petitioners-mortgagors using the property in question, the title to which they were able to register
in their names through the simulated sale, as collateral.
The fact that petitioners were able to secure a title in their names, TCT No. 148989, did not operate
to vest upon petitioners ownership over Paula Arcegas property. That act has never been
recognized as a mode of acquiring ownership. As a matter of fact, even the original registration of
immovable

_________________

11 Rollo, p. 23.

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property does not vest title thereto.12 The Torrens system does not create or vest title. It only
confirms and records title already existing and vested. It does not protect a usurper from the true
owner. It cannot be a shield for the commission of fraud. It does not permit one to enrich himself at
the expense of another.13 Where one does not have any rightful claim over a real property, the
Torrens system of registration can confirm or record nothing.

Petitioners, nevertheless, insist that both the trial court and the respondent court should have
followed the Parole Evidence Rule and prevented evidence, like the testimony of Notary Public, Atty.
Luis Cuvin, private respondent Quirico Arcega, among others, which impugned the two notarized
deeds of sale.

The rule on parole evidence under Section 9, Rule 130 is qualified by the following exceptions:

However, a party may present evidence to modify, explain or add to the terms of the written
agreement if he puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the parties
thereto;

(c)The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after the
execution of the written agreement.

The term agreement includes wills.

__________________

12 Suntay v. Court of Appeals, supra, p. 450, citing Berico v. CA, 225 SCRA 469 [1993].
13 Noblejas, Antonio H. & Noblejas, Edilberto H., Registration of Land Titles and Deeds, 1992 rev.
ed., p. 47, citing Angeles v. Samia, 66 Phil. 4444 [1938]; Ayroso, et al. v. Padiernos, CA-G.R. No.
17044-R, May 11, 1959; Danes, et al., No. 27258-R, August 31, 1964, 62 O.G., No. 14, p. 2272.

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Santiago vs. Court of Appeals

In this case, private respondent Quirico Arcega was able to put in issue in his complaint before the
Regional Trial Court the validity of the subject deeds of sale for being a simulated transaction:

6. That in 1971, the defendants, who by then were already employed in private firms and had
become members of the Social Security System by virtue of their respective employments, decided
among themselves to build a new house on the property of PAULA ARCEGA above described and to
borrow money from the Social Security System to finance the proposed construction.

7. That in order to secure the loan from the Social Security System it was necessary that the lot on
which the proposed house would be erected should be registered and titled in the names of the
defendants.

xxx xxx xxx

9. That in conformity with the above plans and schemes of the defendants, they made PAULA
ARCEGA execute and sign a fictitious, hence null and void KASULATAN NG BILIHANG TULUYAN NG
LUPA on July 18, 1971, before Notary Public LUIS CUVIN, of Bulacan and entered in his register as
Doc. No. 253, Page No. 52, Book No. XIX, Series of 1971, by which PAULA ARCEGA purportedly
convyed[sic] in favor of the defendants JOSEFINA ARCEGA and the spouses REGALADO SANTIAGO
and ROSITA PALABYAB, the whole parcel of land above described for the sum of TWENTY
THOUSAND (P20,000.00), as consideration which was not actually, then or thereafter paid either
wholly or partially. A copy of said document is hereto attached as Annex B and made integral part
hereof.

10. That defendants pursuing their unlawful scheme registered the said void and inexistent
KASULATAN NG BILIHANG TULUYAN NG LUPA with the office of the Register of Deeds of Bulacan,
procured the cancellation of Transfer Certificate of Title No. 115510, in the name of PAULA ARCEGA
and the issuance of Transfer Certificate of Title No. 148989, in their names, a xeroxed copy of which
is hereto attached as Annex C and made integral part hereof.

11. That still in furtherance of their unjust and unlawful schemes, defendants secured a loan from
the Social Security System in the amount of P30,000.00, securing the payment thereof with a Real
Estate Mortgage on the above-described property then already

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titled in their names as aforestated (pp. 2-3, complaint, pp. 1-5, rec.).14

Moreover, the parol evidence rule may be waived by failure to invoke it, as by failure to object to the
introduction of parol evidence. And, where a party who is entitled to the benefit of the rule waives
the benefit thereof by allowing such evidence to be received without objection and without any
effort to have it stricken from the minutes or disregarded by the trial court, he cannot, after the trial
has closed and the case has been decided against him, invoke the rule in order to secure a reversal
of the judgment by an appellate court.15 Here, the records are devoid of any indication that
petitioners ever objected to the admissibility of parole evidence introduced by the private
respondent in open court. The court cannot disregard evidence which would ordinarily be
incompetent under the rules but has been rendered admissible by the failure of a party to object
thereto.16 Petitioners have no one to blame but themselves in this regard.

Finally, petitioners argue that private respondents complaint filed before the trial court on October
24, 1985 is already barred by the statute of limitations and laches considering that the deed of
absolute sale was executed in their favor by the deceased Paula Arcega on July 20, 1971. Indeed,
more than fourteen (14) years had elapsed from the time his cause of action accrued to the time
that the complaint was filed. Articles 1144 and 1391 of the New Civil Code provide:

ART. 1144. The following actions must be brought within ten years from the time the right of action
accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

__________________

14 Rollo, pp. 27-29.

15 Francisco, Ricardo J., Evidence, Rules 128-134, 1993 ed., p. 88, citing 32 C.J.S. 796.

16 Cruz v. Court of Appeals, 192 SCRA 209, 220 [1990].

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Santiago vs. Court of Appeals

ART. 1391. The action for annulment shall be brought within four years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.

In cases of mistake or fraud, from the time of the discovery of the same.
And when the action refers to contracts entered into by minors or other incapacitated persons, from
the time the guardianship ceases.

This submission is utterly without merit, the pertinent provision being Article 1410 of the New Civil
Code which provides unequivocably that [T]he action or defense for the declaration of the
inexistence of a contract does not prescribe.17

As for laches, its essence is the failure or neglect, for an unreasonable and unexplained length of
time to do that which, by exercising due diligence, could or should have been done earlier; it is the
negligence or omission to assert a right within a reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it.18 But there is, to be sure,
no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined
according to its particular circumstances. The question of laches is addressed to the sound discretion
of the court, and since laches is an equitable doctrine, its application is controlled by equitable
considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice.19 In the
case under consideration, it would not only be impractical but well-nigh unjust and patently
inequitous to apply laches

______________

17 Private Development Corporation of the Philippines v. Intermediate Appellate Court, 213 SCRA
282, 288 [1992]; Ortega v. Tan, 181 SCRA 350, 358 [1990].

18 Felix v. Buenaseda, 240 SCRA 139, 152 [1995], citing Cristobal v. Melchor, 78 SCRA 175, 182
[1977].

19 Jimenez v. Fernandez, 184 SCRA 190, 197 [1990].

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against private respondent and vest ownership over a valuable piece of real property in favor of
petitioners by virtue of an absolutely simulated deed of sale never, in the first place, meant to
convey any right over the subject property. It is the better rule that courts, under the principle of
equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches
when to do so, manifest wrong or injustice would result.20

WHEREFORE, premises considered, the petition is hereby DENIED with costs against petitioners.

SO ORDERED.

Padilla (Chairman), Bellosillo, Vitug and Kapunan, JJ., concur.

Petition denied.

Note.In determining the real character of the contract, the title given to it by the parties is not as
much significant as its substance. (Romero vs. Court of Appeals, 250 SCRA 223 [1995])
o0o Santiago vs. Court of Appeals, 278 SCRA 98, G.R. No. 103959 August 21, 1997