G.R. No. 87434 August 5, 1992
2 and 3 of the
PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC. and TAGUM
PLASTICS, INC., petitioners,
vs.
SWEET LINES, INC., DAVAO VETERANS ARRASTRE AND PORT
SERVICES, INC. and HON. COURT OF APPEALS, respondents.
De Lara, De Lunas & Rosales for petitioners.
Carlo L. Aquino for Sweet Lines, Inc.
REGALADO, J.:
A maritime suit 1 was commenced on May 12, 1978 by herein Petitioner
Philippine American General Insurance Co., Inc. (Philamgen) and Tagum
Plastics, Inc. (TPI) against private respondents Sweet Lines, Inc. (SLI) and
Davao Veterans Arrastre and Port Services, Inc. (DVAPSI), along with S.C.I. Line
(The Shipping Corporation of India Limited) and F.E. Zuellig, Inc., as co-
defendants in the court a quo, seeking recovery of the cost of lost or damaged
shipment plus exemplary damages, attorney's fees and costs allegedly due to
defendants' negligence, with the following factual backdrop yielded by the
findings of the court below and adopted by respondent court:
It would appear that in or about March 1977, the vessel SS
"VISHVA YASH" belonging to or operated by the foreign
common carrier, took on board at Baton Rouge, LA, two (2)
consignments of cargoes for shipment to Manila and later for
transhipment to Davao City, consisting of 600 bags Low
Density Polyethylene 631 and another 6,400 bags Low Density
Polyethylene 647, both consigned to the order of Far East
Bank and Trust Company of Manila, with arrival notice to
Tagum Plastics, Inc., Madaum, Tagum, Davao City. Said
cargoes were covered, respectively, by Bills of Lading Nos. 6
and 7 issued by the foreign common carrier (Exhs. E and F).
The necessary packing or Weight List (Exhs. A and B), as well
as the Commercial Invoices (Exhs. C and D) accompanied the
shipment. The cargoes were likewise insured by the Tagum
Plastics Inc. with plaintiff Philippine American General
Insurance Co., Inc., (Exh. G).
In the course of time, the said vessel arrived at Manila and
discharged its cargoes in the Port of Manila for transhipment to
Davao City. For this purpose, the foreign carrier awaited and
made use of the services of the vessel called M/V "Sweet
Love" owned and operated by defendant interisland carrier.
Subject cargoes were loaded in Holds Nos.
interisland carrier. These were commingled with similar
cargoes belonging to Evergreen Plantation and also Standfilco.
On May 15, 1977, the shipment(s) were discharged from the
interisland carrier into the custody of the consignee. A later
survey conducted on July 8, 1977, upon the instance of the
plaintiff, shows the following:
Of the cargo covered by Bill of Lading No. 25 or (2)6,
supposed to contain 6,400 bags of Low Density Polyethylene
647 originally inside 160 pallets, there were delivered to the
consignee 5,413 bags in good order condition. The survey
shows shortages, damages and losses to be as follows:
Undelivered/Damaged bags as tallied during
discharge from vessel-173 bags; undelivered
and damaged as noted and observed whilst
stored at the pier-699 bags; and
shortlanded-110 bags (Exhs. P and P-1).
Of the 600 bags of Low Density Polyethylene 631, the survey
conducted on the same day shows an actual delivery to the
consignee of only 507 bags in good order condition. Likewise
noted were the following losses, damages and shortages, to
wit:
Undelivered/damaged bags and tally sheets
during discharge from vessel-17 bags.
Undelivered and damaged as noted and
observed whilst stored at the pier-66 bags;
Shortlanded-10 bags.
Therefore, of said shipment totalling 7,000 bags, originally
contained in 175 pallets, only a total of 5,820 bags were
delivered to the consignee in good order condition, leaving a
balance of 1,080 bags. Such loss from this particular shipment
is what any or all defendants may be answerable to (sic).
As already stated, some bags were either shortlanded or were
missing, and some of the 1,080 bags were torn, the contents
thereof partly spilled or were fully/partially emptied, but, worse,
the contents thereof contaminated with foreign matters and
therefore could no longer serve their intended purpose. The
position taken by the consignee was that even those bags
which still had some contents were considered as total losses
 as the remaining contents were contaminated with foreign
matters and therefore did not (sic) longer serve the intended
purpose of the material. Each bag was valued, taking into
account the customs duties and other taxes paid as well as
charges and the conversion value then of a dollar to the peso,
at P110.28 per bag (see Exhs. L and L-1 M and O). 2
Before trial, a compromise agreement was entered into between petitioners, as
plaintiffs, and defendants S.C.I. Line and F.E. Zuellig, upon the latter's payment
of P532.65 in settlement of the claim against them. Whereupon, the trial court in
its order of August 12, 1981 3 granted plaintiffs' motion to dismiss grounded on
said amicable settlement and the case as to S.C.I. Line and F.E. Zuellig was
consequently "dismissed with prejudice and without pronouncement as to costs."
The trial court thereafter rendered judgment in favor of herein petitioners on this
dispositive portion:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff Philippine General American Insurance Company Inc.
and against the remaining defendants, Sweet Lines Inc. and
Davao Veterans Arrastre Inc. as follows:
Defendant Sweet Lines, Inc. is ordered to pay said plaintiff the
sum of P34,902.00, with legal interest thereon from date of
extrajudicial demand on April 28, 1978 (Exh. M) until fully paid;
Defendant Sweet Lines Inc. and Davao Veterans Arrastre and
(Port) Services Inc. are directed to pay jointly and severally,
the plaintiff the sum of P49,747.55, with legal interest thereon
from April 28, 1978 until fully paid;
Each of said defendants are ordered to pay the plaintiffs the
additional sum of P5,000 is reimbursable attorney's fees and
other litigation expenses;
Each of said defendants shall pay one-fourth (1/4) costs. 4
Due to the reversal on appeal by respondent court of the trial court's decision on
the ground of prescription, 5 in effect dismissing the complaint of herein
petitioners, and the denial of their motion for reconsideration, 6 petitioners filed
the instant petition for review on certiorari, faulting respondent appellate court
with the following errors: (1) in upholding, without proof, the existence of the so-
called prescriptive period; (2) granting arguendo that the said prescriptive period
does exist, in not finding the same to be null and void; and (3)
assuming arguendo that the said prescriptive period is valid and legal, in failing to
conclude that petitioners substantially complied therewith. 7
Parenthetically, we observe that herein petitioners are jointly pursuing this case,
considering their common interest in the shipment subject of the present
controversy, to obviate any question as to who the real party in interest is and to
protect their respective rights as insurer and insured. In any case, there is no
impediment to the legal standing of Petitioner Philamgen, even if it alone were to
sue herein private respondents in its own capacity as insurer, it having been
subrogated to all rights of recovery for loss of or damage to the shipment insured
under its Marine Risk Note No. 438734 dated March 31, 1977 8 in view of the full
settlement of the claim thereunder as evidenced by the subrogation
receipt 9 issued in its favor by Far East Bank and Trust Co., Davao Branch, for
the account of petitioner TPI.
Upon payment of the loss covered by the policy, the insurer's entitlement to
subrogation pro tanto, being of the highest equity, equips it with a cause of action
against a third party in case of contractual breach. 10 Further, the insurer's
subrogatory right to sue for recovery under the bill of lading in case of loss of or
damage to the cargo is jurisprudentially upheld. 11 However, if an insurer, in the
exercise of its subrogatory right, may proceed against the erring carrier and for
all intents and purposes stands in the place and in substitution of the
consignee, a fortiori such insurer is presumed to know and is just as bound by
the contractual terms under the bill of lading as the insured.
On the first issue, petitioners contend that it was error for the Court of Appeals to
reverse the appealed decision on the supposed ground of prescription when SLI
failed to adduce any evidence in support thereof and that the bills of lading said
to contain the shortened periods for filing a claim and for instituting a court action
against the carrier were never offered in evidence. Considering that the existence
and tenor of this stipulation on the aforesaid periods have allegedly not been
established, petitioners maintain that it is inconceivable how they can possibly
comply therewith. 12 In refutation, SLI avers that it is standard practice in its
operations to issue bills of lading for shipments entrusted to it for carriage and
that it in fact issued bills of lading numbered MD-25 and MD-26 therefor with
proof of their existence manifest in the records of the case. 13 For its part,
DVAPSI insists on the propriety of the dismissal of the complaint as to it due to
petitioners' failure to prove its direct responsibility for the loss of and/or damage
to the cargo. 14
On this point, in denying petitioner's motion for reconsideration, the Court of
Appeals resolved that although the bills of lading were not offered in evidence,
the litigation obviously revolves on such bills of lading which are practically the
documents or contracts sued upon, hence, they are inevitably involved and their
provisions cannot be disregarded in the determination of the relative rights of the
parties thereto. 15
Respondent court correctly passed upon the matter of prescription, since that
defense was so considered and controverted by the parties. This issue may
accordingly be taken cognizance of by the court even if not inceptively raised as
a defense so long as its existence is plainly apparent on the face of relevant
pleadings. 16 In the case at bar, prescription as an affirmative defense was
seasonably raised by SLI in its answer, 17 except that the bills of lading
embodying the same were not formally offered in evidence, thus reducing the
bone of contention to whether or not prescription can be maintained as such
defense and, as in this case, consequently upheld on the strength of mere
references thereto.
As petitioners are suing upon SLI's contractual obligation under the contract of
carriage as contained in the bills of lading, such bills of lading can be categorized
as actionable documents which under the Rules must be properly pleaded either
as causes of action or defenses, 18 and the genuineness and due execution of
which are deemed admitted unless specifically denied under oath by the adverse
party. 19 The rules on actionable documents cover and apply to both a cause of
action or defense based on said documents. 20
In the present case and under the aforestated assumption that the time limit
involved is a prescriptive period, respondent carrier duly raised prescription as an
affirmative defense in its answer setting forth paragraph 5 of the pertinent bills of
lading which comprised the stipulation thereon by parties, to wit:
5. Claims for shortage, damage, must be made at the time of
delivery to consignee or agent, if container shows exterior
signs of damage or shortage. Claims for non-delivery,
misdelivery, loss or damage must be filed within 30 days from
accrual. Suits arising from shortage, damage or loss, non-
delivery or misdelivery shall be instituted within 60 days from
date of accrual of right of action. Failure to file claims or
institute judicial proceedings as herein provided constitutes
waiver of claim or right of action. In no case shall carrier be
liable for any delay, non-delivery, misdelivery, loss of damage
to cargo while cargo is not in actual custody of carrier. 21
In their reply thereto, herein petitioners, by their own assertions that —
2. In connection with Pars. 14 and 15 of defendant Sweet
Lines, Inc.'s Answer, plaintiffs state that such agreements are
what the Supreme Court considers as contracts of adhesion
(see Sweet Lines, Inc. vs. Hon. Bernardo Teves, et al., G.R.
No. L-37750, May 19, 1978) and, consequently, the provisions
therein which are contrary to law and public policy cannot be
availed of by answering defendant as valid defenses. 22
thereby failed to controvert the existence of the bills of lading and the
aforequoted provisions therein, hence they impliedly admitted the same when
they merely assailed the validity of subject stipulations.
Petitioners' failure to specifically deny the existence, much less the genuineness
and due execution, of the instruments in question amounts to an admission.
Judicial admissions, verbal or written, made by the parties in the pleadings or in
the course of the trial or other proceedings in the same case are conclusive, no
evidence being required to prove the same, and cannot be contradicted unless
shown to have been made through palpable mistake or that no such admission
was made. 23 Moreover, when the due execution and genuineness of an
instrument are deemed admitted because of the adverse party's failure to make a
specific verified denial thereof, the instrument need not be presented formally in
evidence for it may be considered an admitted fact. 24
Even granting that petitioners' averment in their reply amounts to a denial, it has
the procedural earmarks of what in the law on pleadings is called a negative
pregnant, that is, a denial pregnant with the admission of the substantial facts in
the pleading responded to which are not squarely denied. It is in effect an
admission of the averment it is directed to. 25 Thus, while petitioners objected to
the validity of such agreement for being contrary to public policy, the existence of
the bills of lading and said stipulations were nevertheless impliedly admitted by
them.
We find merit in respondent court's comments that petitioners failed to touch on
the matter of the non-presentation of the bills of lading in their brief and earlier on
in the appellate proceedings in this case, hence it is too late in the day to now
allow the litigation to be overturned on that score, for to do so would mean an
over-indulgence in technicalities. Hence, for the reasons already advanced, the
non-inclusion of the controverted bills of lading in the formal offer of evidence
cannot, under the facts of this particular case, be considered a fatal procedural
lapse as would bar respondent carrier from raising the defense of prescription.
Petitioners' feigned ignorance of the provisions of the bills of lading, particularly
on the time limitations for filing a claim and for commencing a suit in court, as
their excuse for non-compliance therewith does not deserve serious attention.
It is to be noted that the carriage of the cargo involved was effected pursuant to
an "Application for Delivery of Cargoes without Original Bill of Lading" issued on
May 20, 1977 in Davao City 26 with the notation therein that said application
corresponds to and is subject to the terms of bills of lading MD-25 and MD-26. It
would be a safe assessment to interpret this to mean that, sight unseen,
petitioners acknowledged the existence of said bills of lading. By having the
cargo shipped on respondent carrier's vessel and later making a claim for loss on
the basis of the bills of lading, petitioners for all intents and purposes accepted
said bills. Having done so they are bound by all stipulations contained
therein. 27 Verily, as petitioners are suing for recovery on the contract, and in fact
even went as far as assailing its validity by categorizing it as a contract of
adhesion, then they necessarily admit that there is such a contract, their
knowledge of the existence of which with its attendant stipulations they cannot
now be allowed to deny.
On the issue of the validity of the controverted paragraph 5 of the bills of lading
above quoted which unequivocally prescribes a time frame of thirty (30) days for
filing a claim with the carrier in case of loss of or damage to the cargo and sixty
(60) days from accrual of the right of action for instituting an action in court, which
periods must concur, petitioners posit that the alleged shorter prescriptive period
which is in the nature of a limitation on petitioners' right of recovery is
unreasonable and that SLI has the burden of proving otherwise, citing the earlier
case of Southern Lines, Inc. vs. Court of Appeals, et al. 28 They postulate this on
the theory that the bills of lading containing the same constitute contracts of
adhesion and are, therefore, void for being contrary to public policy, supposedly
pursuant to the dictum in Sweet Lines, Inc. vs. Teves, et al. 29
Furthermore, they contend, since the liability of private respondents has been
clearly established, to bar petitioners' right of recovery on a mere technicality will
pave the way for unjust enrichment. 30 Contrarily, SLI asserts and defends the
reasonableness of the time limitation within which claims should be filed with the
carrier; the necessity for the same, as this condition for the carrier's liability is
uniformly adopted by nearly all shipping companies if they are to survive the
concomitant rigors and risks of the shipping industry; and the countervailing
balance afforded by such stipulation to the legal presumption of negligence under
which the carrier labors in the event of loss of or damage to the cargo. 31
It has long been held that Article 366 of the Code of Commerce applies not only
to overland and river transportation but also to maritime
transportation. 32 Moreover, we agree that in this jurisdiction, as viewed from
another angle, it is more accurate to state that the filing of a claim with the carrier
within the time limitation therefor under Article 366 actually constitutes a
condition precedent to the accrual of a right of action against a carrier for
damages caused to the merchandise. The shipper or the consignee must allege
and prove the fulfillment of the condition and if he omits such allegations and
proof, no right of action against the carrier can accrue in his favor. As the
requirements in Article 366, restated with a slight modification in the assailed
paragraph 5 of the bills of lading, are reasonable conditions precedent, they are
not limitations of action. 33 Being conditions precedent, their performance must
precede a suit for enforcement 34and the vesting of the right to file spit does not
take place until the happening of these conditions. 35
Now, before an action can properly be commenced all the essential elements of
the cause of action must be in existence, that is, the cause of action must be
complete. All valid conditions precedent to the institution of the particular action,
whether prescribed by statute, fixed by agreement of the parties or implied by law
must be performed or complied with before commencing the action, unless the
conduct of the adverse party has been such as to prevent or waive performance
or excuse non-performance of the condition. 36
It bears restating that a right of action is the right to presently enforce a cause of
action, while a cause of action consists of the operative facts which give rise to
such right of action. The right of action does not arise until the performance of all
conditions precedent to the action and may be taken away by the running of the
statute of limitations, through estoppel, or by other circumstances which do not
affect the cause of action. 37 Performance or fulfillment of all conditions precedent
upon which a right of action depends must be sufficiently alleged, 38considering
that the burden of proof to show that a party has a right of action is upon the
person initiating the suit. 39
More particularly, where the contract of shipment contains a reasonable
requirement of giving notice of loss of or injury to the goods, the giving of such
notice is a condition precedent to the action for loss or injury or the right to
enforce the carrier's liability. Such requirement is not an empty formalism. The
fundamental reason or purpose of such a stipulation is not to relieve the carrier
from just liability, but reasonably to inform it that the shipment has been damaged
and that it is charged with liability therefor, and to give it an opportunity to
examine the nature and extent of the injury. This protects the carrier by affording
it an opportunity to make an investigation of a claim while the matter is fresh and
easily investigated so as to safeguard itself from false and fraudulent claims. 40
Stipulations in bills of lading or other contracts of shipment which require notice
of claim for loss of or damage to goods shipped in order to impose liability on the
carrier operate to prevent the enforcement of the contract when not complied
with, that is, notice is a condition precedent and the carrier is not liable if notice is
not given in accordance with the stipulation, 41 as the failure to comply with such
a stipulation in a contract of carriage with respect to notice of loss or claim for
damage bars recovery for the loss or damage suffered. 42
On the other hand, the validity of a contractual limitation of time for filing the suit
itself against a carrier shorter than the statutory period therefor has generally
been upheld as such stipulation merely affects the shipper's remedy and does
not affect the liability of the carrier. In the absence of any statutory limitation and
subject only to the requirement on the reasonableness of the stipulated limitation
period, the parties to a contract of carriage may fix by agreement a shorter time
for the bringing of suit on a claim for the loss of or damage to the shipment than
that provided by the statute of limitations. Such limitation is not contrary to public
policy for it does not in any way defeat the complete vestiture of the right to
recover, but merely requires the assertion of that right by action at an earlier
period than would be necessary to defeat it through the operation of the ordinary
statute of limitations. 43
In the case at bar, there is neither any showing of compliance by petitioners with
the requirement for the filing of a notice of claim within the prescribed period nor
any allegation to that effect. It may then be said that while petitioners may
possibly have a cause of action, for failure to comply with the above condition
precedent they lost whatever right of action they may have in their favor or, token
in another sense, that remedial right or right to relief had prescribed. 44
The shipment in question was discharged into the custody of the consignee on
May 15, 1977, and it was from this date that petitioners' cause of action accrued,
with thirty (30) days therefrom within which to file a claim with the carrier for any
loss or damage which may have been suffered by the cargo and thereby perfect
their right of action. The findings of respondent court as supported by petitioners'
formal offer of evidence in the court below show that the claim was filed with SLI
only on April 28, 1978, way beyond the period provided in the bills of
lading 45 and violative of the contractual provision, the inevitable consequence of
which is the loss of petitioners' remedy or right to sue. Even the filing of the
complaint on May 12, 1978 is of no remedial or practical consequence, since the
time limits for the filing thereof, whether viewed as a condition precedent or as a
prescriptive period, would in this case be productive of the same result, that is,
that petitioners had no right of action to begin with or, at any rate, their claim was
time-barred.
What the court finds rather odd is the fact that petitioner TPI filed a provisional
claim with DVAPSI as early as June 14, 1977 46 and, as found by the trial court, a
survey fixing the extent of loss of and/or damage to the cargo was conducted on
July 8, 1977 at the instance of petitioners. 47 If petitioners had the opportunity and
awareness to file such provisional claim and to cause a survey to be conducted
soon after the discharge of the cargo, then they could very easily have filed the
necessary formal, or even a provisional, claim with SLI itself 48 within the
stipulated period therefor, instead of doing so only on April 28, 1978 despite the
vessel's arrival at the port of destination on May 15, 1977. Their failure to timely
act brings us to no inference other than the fact that petitioners slept on their
rights and they must now face the consequences of such inaction.
The ratiocination of the Court of Appeals on this aspect is worth reproducing:
xxx xxx xxx
It must be noted, at this juncture, that the aforestated time
limitation in the presentation of claim for loss or damage, is but
a restatement of the rule prescribed under Art. 366 of the Code
of Commerce which reads as follows:
Art. 366. Within the twenty-four hours
following the receipt of the merchandise, the
claim against the carrier for damage or
average which may be found therein upon
opening the packages, may be made,
provided that the indications of the damage
or average which gives rise to the claim
cannot be ascertained from the outside part
of the packages, in which case the claims
shall be admitted only at the time of the
receipt.
After the periods mentioned have elapsed, or
the transportation charges have been paid,
no claim shall be admitted against the carrier
with regard to the condition in which the
goods transported were delivered.
Gleanable therefrom is the fact that subject stipulation even
lengthened the period for presentation of claims thereunder.
Such modification has been sanctioned by the Supreme Court.
In the case of Ong Yet (M)ua Hardware Co., Inc. vs. Mitsui
Steamship Co., Ltd., et al., 59 O.G. No. 17, p. 2764, it ruled
that Art. 366 of the Code of Commerce can be modified by a
bill of lading prescribing the period of 90 days after arrival of
the ship, for filing of written claim with the carrier or agent,
instead of the 24-hour time limit after delivery provided in the
aforecited legal provision.
Tested, too, under paragraph 5 of said Bill of Lading, it is
crystal clear that the commencement of the instant suit on May
12, 1978 was indeed fatally late. In view of the express
provision that "suits arising from
. . . damage or loss shall be instituted within 60 days from date
of accrual of right of action," the present action necessarily fails
on ground of prescription.
In the absence of constitutional or statutory
prohibition, it is usually held or recognized
that it is competent for the parties to a
contract of shipment to agree on a limitation
of time shorter than the statutory period,
within which action for breach of the contract
shall be brought, and such limitation will be
enforced if reasonable . . . (13 C.J.S. 496-
497)
A perusal of the pertinent provisions of law on the matter would
disclose that there is no constitutional or statutory prohibition
infirming paragraph 5 of subject Bill of Lading. The stipulated
period of 60 days is reasonable enough for appellees to
ascertain the facts and thereafter to sue, if need be, and the
60-day period agreed upon by the parties which shortened the
statutory period within which to bring action for breach of
contract is valid and binding. . . . (Emphasis in the original
text.) 49
As explained above, the shortened period for filing suit is not unreasonable and
has in fact been generally recognized to be a valid business practice in the
shipping industry. Petitioners' advertence to the Court's holding in the Southern
Lines case, supra, is futile as what was involved was a claim for refund of excess
payment. We ruled therein that non-compliance with the requirement of filing a
notice of claim under Article 366 of the Code of Commerce does not affect the
consignee's right of action against the carrier because said requirement applies
only to cases for recovery of damages on account of loss of or damage to cargo,
not to an action for refund of overpayment, and on the further consideration that
neither the Code of Commerce nor the bills of lading therein provided any time
limitation for suing for refund of money paid in excess, except only that it be filed
within a reasonable time.
The ruling in Sweet Lines categorizing the stipulated limitation on venue of action
provided in the subject bill of lading as a contract of adhesion and, under the
circumstances therein, void for being contrary to public policy is evidently
likewise unavailing in view of the discrete environmental facts involved and the
fact that the restriction therein was unreasonable. In any case, Ong Yiu vs. Court
of Appeals, et al., 50 instructs us that "contracts of adhesion wherein one party
imposes a ready-made form of contract on the other . . . are contracts not entirely
prohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres he gives his consent." In the present case, not even an
allegation of ignorance of a party excuses non-compliance with the contractual
stipulations since the responsibility for ensuring full comprehension of the
provisions of a contract of carriage devolves not on the carrier but on the owner,
shipper, or consignee as the case may be.
While it is true that substantial compliance with provisions on filing of claim for
loss of or damage to cargo may sometimes suffice, the invocation of such an
assumption must be viewed vis-a-vis the object or purpose which such a
provision seeks to attain and that is to afford the carrier a reasonable opportunity
to determine the merits and validity of the claim and to protect itself against
unfounded impositions. 51 Petitioners' would nevertheless adopt an adamant
posture hinged on the issuance by SLI of a "Report on Losses and Damages,"
dated May 15, 1977, 52 from which petitioners theorize that this charges private
respondents with actual knowledge of the loss and damage involved in the
present case as would obviate the need for or render superfluous the filing of a
claim within the stipulated period.
Withal, it has merely to be pointed out that the aforementioned report bears this
notation at the lower part thereof: "Damaged by Mla. labor upon unloading; B/L
noted at port of origin," as an explanation for the cause of loss of and/or damage
to the cargo, together with an iterative note stating that "(t)his Copy should be
submitted together with your claim invoice or receipt within 30 days from date of
issue otherwise your claim will not be honored."
Moreover, knowledge on the part of the carrier of the loss of or damage to the
goods deducible from the issuance of said report is not equivalent to nor does it
approximate the legal purpose served by the filing of the requisite claim, that is,
to promptly apprise the carrier about a consignee's intention to file a claim and
thus cause the prompt investigation of the veracity and merit thereof for its
protection. It would be an unfair imposition to require the carrier, upon discovery
in the process of preparing the report on losses or damages of any and all such
loss or damage, to presume the existence of a claim against it when at that time
the carrier is expectedly concerned merely with accounting for each and every
shipment and assessing its condition. Unless and until a notice of claim is
therewith timely filed, the carrier cannot be expected to presume that for every
loss or damage tallied, a corresponding claim therefor has been filed or is
already in existence as would alert it to the urgency for an immediate
investigation of the soundness of the claim. The report on losses and damages is
not the claim referred to and required by the bills of lading for it does not fix
responsibility for the loss or damage, but merely states the condition of the goods
shipped. The claim contemplated herein, in whatever form, must be something
more than a notice that the goods have been lost or damaged; it must contain a
claim for compensation or indicate an intent to claim. 53
Thus, to put the legal effect of respondent carrier's report on losses or damages,
the preparation of which is standard procedure upon unloading of cargo at the
port of destination, on the same level as that of a notice of claim by imploring
substantial compliance is definitely farfetched. Besides, the cited notation on the
carrier's report itself makes it clear that the filing of a notice of claim in any case
is imperative if carrier is to be held liable at all for the loss of or damage to cargo.
Turning now to respondent DVAPSI and considering that whatever right of action
petitioners may have against respondent carrier was lost due to their failure to
seasonably file the requisite claim, it would be awkward, to say the least, that by
some convenient process of elimination DVAPSI should proverbially be left
holding the bag, and it would be pure speculation to assume that DVAPSI is
probably responsible for the loss of or damage to cargo. Unlike a common
carrier, an arrastre operator does not labor under a presumption of negligence in
case of loss, destruction or deterioration of goods discharged into its custody. In
other words, to hold an arrastre operator liable for loss of and/or damage to
goods entrusted to it there must be preponderant evidence that it did not exercise
due diligence in the handling and care of the goods.
Petitioners failed to pinpoint liability on any of the original defendants and in this
seemingly wild goose-chase, they cannot quite put their finger down on when,
where, how and under whose responsibility the loss or damage probably
occurred, or as stated in paragraph 8 of their basic complaint filed in the court
below, whether "(u)pon discharge of the cargoes from the original carrying
vessel, the SS VISHVA YASH," and/or upon discharge of the cargoes from the
interisland vessel the MV "SWEET LOVE," in Davao City and later while in the
custody of defendant arrastre operator. 54
The testimony of petitioners' own witness, Roberto Cabato, Jr., Marine and
Aviation Claims Manager of petitioner Philamgen, was definitely inconclusive and
the responsibility for the loss or damage could still not be ascertained therefrom:
Q In other words, Mr. Cabato, you only
computed the loss on the basis of the figures
submitted to you and based on the
documents like the survey certificate and the
certificate of the arrastre?
A Yes, sir.
Q Therefore, Mr. Cabato, you have no idea you be able to tell the respective liabilities of
how or where these losses were incurred? the bailees and/or carriers concerned?

A No, sir. A No, sir. (Emphasis ours.) 55

xxx xxx xxx
Q Mr. Witness, you said that you processed
and investigated the claim involving the
shipment in question. Is it not a fact that in
your processing and investigation you
considered how the shipment was
transported? Where the losses could have
occurred and what is the extent of the
respective responsibilities of the bailees
and/or carriers involved?
Neither did nor could the trial court, much less the Court of Appeals, precisely
establish the stage in the course of the shipment when the goods were lost,
destroyed or damaged. What can only be inferred from the factual findings of the
trial court is that by the time the cargo was discharged to DVAPSI, loss or
damage had already occurred and that the same could not have possibly
occurred while the same was in the custody of DVAPSI, as demonstrated by the
observations of the trial court quoted at the start of this opinion.
ACCORDINGLY, on the foregoing premises, the instant petition is DENIED and
the dismissal of the complaint in the court a quo as decreed by respondent Court
of Appeals in its challenged judgment is hereby AFFIRMED.

xxx xxx xxx SO ORDERED.

A With respect to the shipment being

transported, we have of course to get into it
in order to check whether the shipment
coming in to this port is in accordance with
the policy condition, like in this particular
case, the shipment was transported to
Manila and transhipped through an
interisland vessel in accordance with the
policy. With respect to the losses, we have a
general view where losses could have
occurred. Of course we will have to consider
the different bailees wherein the shipment
must have passed through, like the ocean
vessel, the interisland vessel and the
arrastre, but definitely at that point and time
we cannot determine the extent of each
liability. We are only interested at that point
and time in the liability as regards the
underwriter in accordance with the policy
that we issued.

xxx xxx xxx

Q Mr. Witness, from the documents, namely,

the survey of Manila Adjusters and
Surveyors Company, the survey of Davao
Arrastre contractor and the bills of lading
issued by the defendant Sweet Lines, will
THE HEIRS OF MARCELINO G.R. No. 169454 On April 24, 1919, a private deed of donation propter nuptias[5] was executed by
DORONIO, NAMELY: REGINA spouses Simeon Doronio and Cornelia Gante in favor of Marcelino Doronio and the latters
AND FLORA, BOTH SURNAMED wife, Veronica Pico. One of the properties subject of said deed of donation is the one that
DORONIO, Present: it described as follows:
Petitioners,
YNARES-SANTIAGO, J., Fourth A piece of residential land located in the barrio of
Chairper Cabalitian but we did not measure it, the area is bounded on the north
son, by Gabriel Bernardino; on the east by Fortunato Doronio; on the
- versus - AUSTRIA-MARTINEZ, south by Geminiano Mendoza and on the west by a road to
CHICO-NAZARIO, Villasis. Constructed on said land is a house of light materials also a
NACHURA, and part of the dowry. Value 200.00.[6]
HEIRS OF FORTUNATO REYES, JJ.
DORONIO, NAMELY: TRINIDAD
ROSALINA DORONIO-BALMES,
MODING DORONIO, FLORENTINA It appears that the property described in the deed of donation is the one covered
DORONIO, AND ANICETA Promulgated: by OCT No. 352. However, there is a significant discrepancy with respect to the identity
ALCANTARA-MANALO, of the owner of adjacent property at the eastern side. Based on OCT No. 352, the adjacent
Respondents. December 27, 2007 owners are Zacarias Najorda and Alejandro Najorda, whereas based on the deed of
x--------------------------------------------------x donation, the owner of the adjacent property is Fortunato Doronio. Furthermore, said deed
of donation remained a private document as it was never notarized.[7]
DECISION
Both parties have been occupying the subject land for several decades[8] although
they have different theories regarding its present ownership. According to petitioners, they
REYES, R.T., J.: are now the owners of the entire property in view of the private deed of donation propter
nuptias in favor of their predecessors, Marcelino Doronio and Veronica Pico.
For Our review on certiorari is the Decision[1] of the Court of Appeals (CA)
reversing that[2] of the Regional Trial Court (RTC), Branch 45, Anonas, Urdaneta City, Respondents, on the other hand, claim that only half of the property was actually
Pangasinan, in an action for reconveyance and damages. The CA declared respondents as incorporated in the said deed of donation because it stated that Fortunato Doronio, instead
rightful owners of one-half of the subject property and directed petitioners to execute a of Zacarias Najorda and Alejandro Najorda, is the owner of the adjacent property at the
registerable document conveying the same to respondents. eastern side. Respondents posit that the donors respected and segregated the possession of
Fortunato Doronio of the eastern half of the land. They are the ones who have been
possessing said land occupied by their predecessor, Fortunato Doronio.
The Facts
Eager to obtain the entire property, the heirs of Marcelino Doronio and Veronica
Spouses Simeon Doronio and Cornelia Gante, now both deceased, were the registered Pico filed, on January 11, 1993, before the RTC in Urdaneta, Pangasinan a petition For the
owners of a parcel of land located at Barangay Cabalitaan, Asingan, Pangasinan covered Registration of a Private Deed of Donation[9] docketed as Petition Case No. U-920. No
by Original Certificate of Title (OCT) No. 352.[3] The courts below described it as follows: respondents were named in the said petition[10] although notices of hearing were posted on
the bulletin boards of Barangay Cabalitaan, Municipalities of Asingan and Lingayen.[11]
Un terreno (Lote 1018), situada en el municipio de Asingan, Linda por
el NE; con propriedad de Gabriel Bernardino; con el SE con
propriedad de Zacarias Najorda y Alejandro Najorda; por el SO con During the hearings, no one interposed an objection to the petition. [12] After
propriedad de Geminiano Mendoza y por el NO con el camino para the RTC ordered a general default,[13] the petition was eventually granted on September 22,
Villasis; midiendo una extension superficial mil ciento cincuenta y dos 1993. This led to the registration of the deed of donation, cancellation of OCT No. 352 and
metros cuadrados.[4] issuance of a new Transfer Certificate of Title (TCT) No. 44481 in the names of Marcelino
The spouses had children but the records fail to disclose their number. It is clear, Doronio and Veronica Pico.[14] Thus, the entire property was titled in the names of
however, that Marcelino Doronio and Fortunato Doronio, now both deceased, were among petitioners predecessors.
them and that the parties in this case are their heirs. Petitioners are the heirs
of Marcelino Doronio, while respondents are the heirs of Fortunato Doronio. On April 28, 1994, the heirs of Fortunato Doronio filed a pleading before
the RTC in the form of a petition in the same Petition Case No. U-920. The petition was
for the reconsideration of the decision of the RTC that ordered the registration of the
subject deed of donation. It was prayed in the petition that an order be issued declaring null
and void the registration of the private deed of donation and that TCT No. 44481 be
cancelled. However, the petition was dismissed on May 13, 1994 on the ground that the
decision in Petition Case No. U-920 had already become final as it was not appealed.
Determined to remain in their possessed property, respondent heirs of Fortunato
Doronio (as plaintiffs) filed an action for reconveyance and damages with prayer for
preliminary injunction[15] against petitioner heirs of Marcelino Doronio (as defendants)
before the RTC, Branch 45, Anonas, Urdaneta City, Pangasinan. Respondents contended,
among others, that the subject land is different from what was donated as the descriptions
of the property under OCT No. 352 and under the private deed of donation were
different. They posited that spouses Simeon Doronio and Cornelia Gante intended to
donate only one-half of the property.
During the pre-trial conference, the parties stipulated, among others, that the
property was originally covered by OCT No. 352 which was cancelled by TCT No.
44481.They also agreed that the issues are: (1) whether or not there was a variation in the
description of the property subject of the private deed of donation and OCT No. 352; (2)
whether or not respondents had acquired one-half of the property covered by OCT No. 352
by acquisitive prescription; (3) whether or not the transfer of the whole property covered
by OCT No. 352 on the basis of the registration of the private deed of donation
notwithstanding the discrepancy in the description is valid; (4) whether or not respondents
are entitled to damages; and (5) whether or not TCT No. 44481 is valid.[16]
RTC Decision
After due proceedings, the RTC ruled in favor of petitioner heirs of Marcelino
Doronio (defendants). It concluded that the parties admitted the identity of the land which
they all occupy;[17] that a title once registered under the torrens system cannot be defeated
by adverse, open and notorious possession or by prescription; [18] that the deed of donation
in consideration of the marriage of the parents of petitioners is valid, hence, it led to the
eventual issuance of TCT No. 44481 in the names of said parents;[19] and that respondent
heirs of Fortunato Doronio (plaintiffs) are not entitled to damages as they are not the
rightful owners of the portion of the property they are claiming. [20]
The RTC disposed of the case, thus:
WHEREFORE, premises considered, the Court hereby
renders judgment DISMISSING the herein Complaint filed by
plaintiffs against defendants.[21]
Disagreeing with the judgment of the RTC, respondents appealed to the
CA. They argued that the trial court erred in not finding that respondents predecessor-in-
interest acquired one-half of the property covered by OCT No. 352 by tradition and/or
intestate succession; that the deed of donation dated April 26, 1919 was null and void; that
assuming that the deed of donation was valid, only one-half of the property was actually
donated to Marcelino Doronio and Veronica Pico; and that respondents acquired ownership
of the other half portion of the property by acquisitive prescription. [22]
CA Disposition
In a Decision dated January 26, 2005, the CA reversed the RTC decision with
the following disposition:
WHEREFORE, the assailed Decision dated June 28, 2002 is
REVERSED and SET ASIDE. Declaring the appellants as rightful
owners of one-half of the property now covered by TCT No. 44481,
the appellees are hereby directed to execute a registerable document
conveying the same to appellants.
SO ORDERED.[23]
The appellate court determined that (t)he intention to donate half of the disputed
property to appellees predecessors can be gleaned from the disparity of technical
descriptions appearing in the title (OCT No. 352) of spouses Simeon Doronio and Cornelia
Gante and in the deed of donation propter nuptias executed on April 24, 1919 in favor of
appellees predecessors.[24]
The CA based its conclusion on the disparity of the following technical
descriptions of the property under OCT No. 352 and the deed of donation, to wit:
The court below described the property covered by OCT No.
352 as follows:
Un terreno (Lote 1018), situada en el
municipio de Asingan, Linda por el NE; con
propriedad de Gabriel Bernardino; con el SE con
propriedad de Zacarias Najorda y Alejandro
Najorda; por el SO con propriedad de Geminiano
Mendoza y por el NO con el camino para Villasis;
midiendo una extension superficial mil ciento
cincuenta y dos metros cuadrados.
On the other hand, the property donated to appellees
predecessors was described in the deed of donation as:
Fourth A piece of residential land located in the
barrio of Cabalitian but we did not measure it, the
area is bounded on the north by Gabriel
Bernardino; on the east by Fortunato Doronio;
on the south by Geminiano Mendoza and on the
west by a road to Villasis. Constructed on said
land is a house of light materials also a part of the
dowry. Value 200.00.[25] (Emphasis ours)
Taking note that the boundaries of the lot donated to Marcelino Doronio and
Veronica Pico differ from the boundaries of the land owned by spouses Simeon Doronio
and Cornelia Gante, the CA concluded that spouses Simeon Doronio and Cornelia Gante
donated only half of the property covered by OCT No. 352. [26]
Regarding the allegation of petitioners that OCT No. 352 is inadmissible in
evidence, the CA pointed out that, while the OCT is written in the Spanish language, this
document already forms part of the records of this case for failure of appellees to interpose
a timely objection when it was offered as evidence in the proceedings a quo. It is a well-
settled rule that any objection to the admissibility of such evidence not raised will be
considered waived and said evidence will have to form part of the records of the case as
competent and admitted evidence.[27]
The CA likewise ruled that the donation of the entire property in favor of petitioners
predecessors is invalid on the ground that it impairs the legitime of respondents
predecessor, Fortunato Doronio. On this aspect, the CA reasoned out:
Moreover, We find the donation of the entire property in favor of
appellees predecessors invalid as it impairs the legitime of appellants
predecessor. Article 961 of the Civil Code is explicit. In default of
testamentary heirs, the law vests the inheritance, x x x, in the legitimate
x x x relatives of the deceased, x x x. As Spouses Simeon Doronio and
Cornelia Gante died intestate, their property shall pass to their lawful
heirs, namely: Fortunato and Marcelino Doronio. Donating the entire
property to Marcelino Doronio and Veronica Pico and excluding
another heir, Fortunato, tantamounts to divesting the latter of his
rightful share in his parents inheritance. Besides, a persons prerogative
to make donations is subject to certain limitations, one of which is that
he cannot give by donation more than what he can give by will (Article
752, Civil Code). If he does, so much of what is donated as exceeds
what he can give by will is deemed inofficious and the donation is
reducible to the extent of such excess.[28]
Petitioners were not pleased with the decision of the CA. Hence, this petition
under Rule 45.
Issues
Petitioners now contend that the CA erred in:
1. DECLARING ADMISSIBILITY OF THE ORIGINAL
CERTIFICATE OF TITLE NO. 352 DESPITE OF LACK OF
TRANSLATION THEREOF.
2. (RULING THAT) ONLY HALF OF THE DISPUTED
PROPERTY WAS DONATED TO THE PREDECESSORS-
IN-INTEREST OF THE HEREIN APPELLANTS.
3. (ITS) DECLARATION THAT THE
DONATION PROPTER NUPTIAS IS INNOFICIOUS, IS
PREMATURE, AND THUS IT IS
ILLEGAL AND UNPROCEDURAL.[29]
Our Ruling
OCT No. 352 in Spanish Although Not
Translated into English or Filipino Is
Admissible For Lack of Timely Objection
Petitioners fault the CA for admitting OCT No. 352 in evidence on the ground
that it is written in Spanish language. They posit that (d)ocumentary evidence in an
unofficial language shall not be admitted as evidence, unless accompanied with a
translation into English or Filipino.[30]
The argument is untenable. The requirement that documents written in an
unofficial language must be accompanied with a translation in English or Filipino as a
prerequisite for its admission in evidence must be insisted upon by the parties at the trial
to enable the court, where a translation has been impugned as incorrect, to decide the
issue.[31] Where such document, not so accompanied with a translation in English or
Filipino, is offered in evidence and not objected to, either by the parties or the court, it must
be presumed that the language in which the document is written is understood by all, and
the document is admissible in evidence.[32]
Moreover, Section 36, Rule 132 of the Revised Rules of Evidence provides:
SECTION 36. Objection. Objection to evidence offered
orally must be made immediately after the offer is made.
Objection to a question propounded in the course of the oral
examination of a witness shall be made as soon as the grounds therefor
shall become reasonably apparent.
An offer of evidence in writing shall be objected to within
three (3) days after notice of the offer unless a different period is
allowed by the court.
In any case, the grounds for the objections must be specified.
(Emphasis ours)
Since petitioners did not object to the offer of said documentary evidence on
time, it is now too late in the day for them to question its admissibility. The rule is that
evidence not objected may be deemed admitted and may be validly considered by the court
in arriving at its judgment.[33] This is true even if by its nature, the evidence is inadmissible
and would have surely been rejected if it had been challenged at the proper time. [34]
As a matter of fact, instead of objecting, petitioners admitted the contents of
Exhibit A, that is, OCT No. 352 in their comment[35] on respondents formal offer of
documentary evidence. In the said comment, petitioners alleged, among others, that
Exhibits A, B, C, D, E, F and G, are admitted but not for the purpose they are offered
because these exhibits being public and official documents are the best evidence of
that they contain and not for what a party would like it to prove.[36] Said evidence was
admitted by the RTC.[37] Once admitted without objection, even though not admissible
under an objection, We are not inclined now to reject it.[38] Consequently, the evidence that
was not objected to became property of the case, and all parties to the case are considered
amenable to any favorable or unfavorable effects resulting from the said evidence. [39]
Issues on Impairment of Legitime
Should Be Threshed Out in a Special
Proceeding, Not in Civil Action for
Reconveyance and Damages
On the other hand, petitioners are correct in alleging that the issue regarding the
impairment of legitime of Fortunato Doronio must be resolved in an action for the
settlement of estates of spouses Simeon Doronio and Cornelia Gante. It may not be passed
upon in an action for reconveyance and damages. A probate court, in the exercise of its
limited jurisdiction, is the best forum to ventilate and adjudge the issue of impairment of
legitime as well as other related matters involving the settlement of estate. [40]
An action for reconveyance with damages is a civil action, whereas matters
relating to settlement of the estate of a deceased person such as advancement of property
made by the decedent, partake of the nature of a special proceeding. Special proceedings
require the application of specific rules as provided for in the Rules of Court.[41]
As explained by the Court in Natcher v. Court of Appeals:[42]
Section 3, Rule 1 of the 1997 Rules of Civil Procedure
defines civil action and special proceedings, in this wise:
x x x a) A civil action is one by which a
party sues another for the enforcement or
protection of a right, or the prevention or redress
of a wrong.
A civil action may either be ordinary or
special. Both are governed by the rules for
ordinary civil actions, subject to specific rules
prescribed for a special civil action.
xxxx
c) A special proceeding is a remedy by
which a party seeks to establish a status, a right or
a particular fact.
As could be gleaned from the foregoing, there lies a marked
distinction between an action and a special proceeding. An action is a
formal demand of ones right in a court of justice in the manner
prescribed by the court or by the law. It is the method of applying legal
remedies according to definite established rules. The term special
proceeding may be defined as an application or proceeding to establish
the status or right of a party, or a particular fact. Usually, in special
proceedings, no formal pleadings are required unless the statute
expressly so provides. In special proceedings, the remedy is granted
generally upon an application or motion.
Citing American Jurisprudence, a noted authority in
Remedial Law expounds further:
It may accordingly be stated generally
that actions include those proceedings which are
instituted and prosecuted according to the ordinary
rules and provisions relating to actions at law or
suits in equity, and that special proceedings
include those proceedings which are not ordinary
in this sense, but is instituted and prosecuted
according to some special mode as in the case of
proceedings commenced without summons and
prosecuted without regular pleadings, which are
characteristics of ordinary actions x x x. A special
proceeding must therefore be in the nature of a
distinct and independent proceeding for particular
relief, such as may be instituted independently of
a pending action, by petition or motion upon
notice.
Applying these principles, an action for reconveyance and
annulment of title with damages is a civil action, whereas matters
relating to settlement of the estate of a deceased person such as
advancement of property made by the decedent, partake of the nature
of a special proceeding, which concomitantly requires the application
of specific rules as provided for in the Rules of Court.
Clearly, matters which involve settlement and distribution of
the estate of the decedent fall within the exclusive province of the
probate court in the exercise of its limited jurisdiction.
Thus, under Section 2, Rule 90 of the Rules of Court,
questions as to advancement made or alleged to have been made by the
deceased to any heir may be heard and determined by the court having
jurisdiction of the estate proceedings, and the final order of the court
thereon shall be binding on the person raising the questions and on the
heir.
While it may be true that the Rules used the word may, it is
nevertheless clear that the same provision contemplates a probate court
when it speaks of the court having jurisdiction of the estate
proceedings.
Corollarily, the Regional Trial Court in the instant case,
acting in its general jurisdiction, is devoid of authority to render an
adjudication and resolve the issue of advancement of the real property
in favor of herein petitioner Natcher, inasmuch as Civil Case No.
 71075 for reconveyance and annulment of title with damages is not, to
our mind, the proper vehicle to thresh out said question. Moreover,
under the present circumstances, the RTC of Manila, Branch 55, was
not properly constituted as a probate court so as to validly pass upon
the question of advancement made by the decedent Graciano Del
Rosario to his wife, herein petitioner Natcher.
We likewise find merit in petitioners contention that before any conclusion about
the legal share due to a compulsory heir may be reached, it is necessary that certain steps
be taken first.[43] The net estate of the decedent must be ascertained, by deducting all
payable obligations and charges from the value of the property owned by the deceased at
the time of his death; then, all donations subject to collation would be added to it. With the
partible estate thus determined, the legitime of the compulsory heir or heirs can be
established; and only then can it be ascertained whether or not a donation had prejudiced
the legitimes.[44]
Declaration of Validity of Donation
Can Be Challenged by an Interested
Party Not Impleaded in Petition for
Quieting of Title or Declaratory Relief
or Where There is No Res Judicata.
Moreover, This Court Can Consider
a Factual Matter or Unassigned Error
in the Interest of Substantial Justice.
Nevertheless, petitioners cannot preclude the determination of validity of the deed of
donation on the ground that (1) it has been impliedly admitted by respondents; (2) it has
already been determined with finality by the RTC in Petition Case No. U-920; or (3) the
only issue in an action for reconveyance is who has a better right over the land.[45]
The validity of the private deed of donation propter nuptias in favor of
petitioners predecessors was one of the issues in this case before the lower courts. The pre-
trial order[46] of the RTC stated that one of the issues before it is (w)hether or not the
transfer of the whole property covered by OCT No. 352 on the basis of the private deed of
donation notwithstanding the discrepancy in the description is valid. Before the CA, one
of the errors assigned by respondents is that THE TRIAL COURT ERRED IN NOT
FINDING THAT THE PRIVATE DEED OF DONATION DATED APRIL 26,
1919 WAS NULL AND VOID.[47]
The issue of the validity of donation is likewise brought to Us by petitioners as
they stated in their Memorandum[48] that one of the issues to be resolved is regarding the
alleged fact that THE HONORABLE COURT OF APPEALS ERRED IN FINDING THE
DONATION INVALID. We are thus poised to inspect the deed of donation and to
determine its validity.
We cannot agree with petitioners contention that respondents may no longer question the
validity of the deed of donation on the ground that they already impliedly admitted
it. Under the provisions of the Civil Code, a void contract is inexistent from the
beginning. The right to set up the defense of its illegality cannot be waived.[49] The right to
set up the nullity of a void or non-existent contract is not limited to the parties as in the
case of annullable or voidable contracts; it is extended to third persons who are directly
affected by the contract.[50]
Consequently, although respondents are not parties in the deed of donation, they
can set up its nullity because they are directly affected by the same. [51] The subject of the
deed being the land they are occupying, its enforcement will definitely affect them.
Petitioners cannot also use the finality of the RTC decision in Petition Case No.
U-920[52] as a shield against the verification of the validity of the deed of
donation.According to petitioners, the said final decision is one for quieting of title.[53] In
other words, it is a case for declaratory relief under Rule 64 (now Rule 63) of the Rules of
Court, which provides:
SECTION 1. Who may file petition. Any person interested
under a deed, will, contract or other written instrument, or whose rights
are affected by a statute, executive order or regulation, or ordinance,
may, before breach or violation thereof, bring an action to determine
any question of construction or validity arising under the instrument or
statute and for a declaration of his rights or duties thereunder.
An action for the reformation of an instrument, to quiet title
to real property or remove clouds therefrom, or to consolidate
ownership under Article 1607 of the Civil Code, may be brought
under this rule.
SECTION 2. Parties. All persons shall be made parties
who have or claim any interest which would be affected by the
declaration; and no declaration shall, except as otherwise provided
in these rules, prejudice the rights of persons not parties to the
action. (Emphasis ours)
However, respondents were not made parties in the said Petition Case No. U-
920. Worse, instead of issuing summons to interested parties, the RTC merely allowed the
posting of notices on the bulletin boards of Barangay Cabalitaan, Municipalities of
Asingan and Lingayen, Pangasinan. As pointed out by the CA, citing the ruling of the RTC:
x x x In the said case or Petition No. U-920, notices were posted on the
bulletin boards of barangay Cabalitaan, Municipalities of Asingan and
Lingayen, Pangasinan, so that there was a notice to the whole world
and during the initial hearing and/or hearings, no one interposed
objection thereto.[54]
Suits to quiet title are not technically suits in rem, nor are they, strictly
speaking, in personam, but being against the person in respect of the res, these proceedings
are characterized as quasi in rem.[55] The judgment in such proceedings is conclusive only
between the parties.[56] Thus, respondents are not bound by the decision in Petition Case
No. U-920 as they were not made parties in the said case.
 The rules on quieting of title[57] expressly provide that any declaration in a suit
to quiet title shall not prejudice persons who are not parties to the action.
That respondents filed a subsequent pleading[58] in the same Petition Case No.
U-920 after the decision there had become final did not change the fact that said decision
became final without their being impleaded in the case. Said subsequent pleading was
dismissed on the ground of finality of the decision.[59]
Thus, the RTC totally failed to give respondents their day in court. As a result,
they cannot be bound by its orders. Generally accepted is the principle that no man shall
be affected by any proceeding to which he is a stranger, and strangers to a case are not
bound by judgment rendered by the court.[60]
Moreover, for the principle of res judicata to apply, the following must be
present: (1) a decision on the merits; (2) by a court of competent jurisdiction; (3) the
decision is final; and (4) the two actions involve identical parties, subject matter and causes
of action.[61] The fourth element is not present in this case. The parties are not identical
because respondents were not impleaded in Petition Case No. U-920. While the subject
matter may be the same property covered by OCT No. 352, the causes of action are
different. Petition Case No. U-920 is an action for declaratory relief while the case below
is for recovery of property.
We are not persuaded by petitioners posture that the only issue in this action for
reconveyance is who has a better right over the land; and that the validity of the deed of
donation is beside the point.[62] It is precisely the validity and enforceability of the deed of
donation that is the determining factor in resolving the issue of who has a better right over
the property. Moreover, notwithstanding procedural lapses as to the appropriateness of the
remedies prayed for in the petition filed before Us, this Court can brush aside the
technicalities in the interest of justice. In some instances, this Court even suspended its
own rules and excepted a case from their operation whenever the higher interests of justice
so demanded.[63]
Moreover, although respondents did not directly raise the issue of validity of the
deed of donation at the commencement of the case before the trial court, it was
stipulated[64] by the parties during the pre-trial conference. In any event, this Court has
authority to inquire into any question necessary in arriving at a just decision of a case before
it.[65] Though not specifically questioned by the parties, additional issues may also be
included, if deemed important for substantial justice to be rendered.[66]
Furthermore, this Court has held that although a factual issue is not squarely
raised below, still in the interest of substantial justice, this Court is not prevented from
considering a pivotal factual matter. The Supreme Court is clothed with ample authority to
review palpable errors not assigned as such if it finds that their consideration is necessary
in arriving at a just decision.[67]
A rudimentary doctrine on appealed cases is that this Court is clothed with ample
authority to review matters, even if they are not assigned as errors on appeal, if it finds that
their consideration is necessary at arriving at a just decision of the case. [68] Also, an
unassigned error closely related to an error properly assigned or upon which the
determination of the question raised by the error properly assigned is dependent, will be
considered by the appellate court notwithstanding the failure to assign it as an error. [69]
Donation Propter Nuptias of Real
Property Made in a Private Instrument
Before the New Civil Code Took Effect
on August 30, 1950 is Void
We now focus on the crux of the petition, which is the validity of the deed of
donation. It is settled that only laws existing at the time of the execution of a contract are
applicable to it and not the later statutes, unless the latter are specifically intended to have
retroactive effect.[70] Accordingly, the Old Civil Code applies in this case as the
donation propter nuptias was executed in 1919, while the New Civil Code took effect only
on August 30, 1950.
Under the Old Civil Code, donations propter nuptias must be made in a public
instrument in which the property donated must be specifically described.[71] Article 1328
of the Old Civil Code provides that gifts propter nuptias are governed by the rules
established in Title 2 of Book 3 of the same Code. Article 633 of that title provides that the
gift of real property, in order to be valid, must appear in a public document.[72] It is settled
that a donation of real estate propter nuptias is void unless made by public instrument.[73]
In the instant case, the donation propter nuptias did not become valid. Neither did it create
any right because it was not made in a public instrument. [74] Hence, it conveyed no title to
the land in question to petitioners predecessors.
Logically, then, the cancellation of OCT No. 352 and the issuance of a new TCT No. 44481
in favor of petitioners predecessors have no legal basis. The title to the subject property
should, therefore, be restored to its original owners under OCT No. 352.
Direct reconveyance to any of the parties is not possible as it has not yet been determined
in a proper proceeding who among the heirs of spouses Simeon Doronio and Cornelia
Gante is entitled to it. It is still unproven whether or not the parties are the only ones entitled
to the properties of spouses Simeon Doronio and Cornelia Gante. As earlier intimated,
there are still things to be done before the legal share of all the heirs can be properly
adjudicated.[75]
Titled Property Cannot Be Acquired
By Another By Adverse Possession
or Extinctive Prescription
Likewise, the claim of respondents that they became owners of the property by
acquisitive prescription has no merit. Truth to tell, respondents cannot successfully invoke
the argument of extinctive prescription. They cannot be deemed the owners by acquisitive
prescription of the portion of the property they have been possessing. The reason is that the
property was covered by OCT No. 352. A title once registered under the torrens system
cannot be defeated even by adverse, open and notorious possession; neither can it be
defeated by prescription.[76] It is notice to the whole world and as such all persons are bound
by it and no one can plead ignorance of the registration.[77]
 The torrens system is intended to guarantee the integrity and conclusiveness of
the certificate of registration, but it cannot be used for the perpetration of fraud against the
real owner of the registered land.[78] The system merely confirms ownership and does not
create it. Certainly, it cannot be used to divest the lawful owner of his title for the purpose
of transferring it to another who has not acquired it by any of the modes allowed or
recognized by law. It cannot be used to protect a usurper from the true owner, nor can it be
used as a shield for the commission of fraud; neither does it permit one to enrich himself
at the expense of another.[79] Where such an illegal transfer is made, as in the case at bar,
the law presumes that no registration has been made and so retains title in the real owner
of the land.[80]

Although We confirm here the invalidity of the deed of donation and of its
resulting TCT No. 44481, the controversy between the parties is yet to be fully settled. The
issues as to who truly are the present owners of the property and what is the extent of their
ownership remain unresolved. The same may be properly threshed out in the settlement of
the estates of the registered owners of the property, namely: spouses Simeon Doronio and
Cornelia Gante.

WHEREFORE, the appealed Decision is REVERSED AND SET ASIDE. A

new one is entered:

(1) Declaring the private deed of donation propter nuptias in favor of petitioners
predecessors NULL AND VOID; and
(2) Ordering the Register of Deeds of Pangasinan to:

(a) CANCEL Transfer Certificate of Title No. 44481 in the

names of Marcelino Doronio and Veronica Pico; and

(b) RESTORE Original Certificate of Title No. 352 in the

names of its original owners, spouses Simeon Doronio and Cornelia
Gante.

SO ORDERED.
G.R. No. L-9181 November 28, 1955
THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
THE HON. NICASIO YATCO, Judge of the Court of First Instance of Rizal,
Quezon City Branch, and JUAN CONSUNJI and ALFONSO
PANGANIBAN, respondents.
Office of the Solicitor General Ambrosio Padilla, Solicitor Meliton G. Soliman, City
Attorney Pedro R. Revilla and Assistant City Attorney Julian E. Lustre for
petitioner.
Estanislao A. Fernandez, Augusto Ilagan, Claro T. Almeda and Rufino Navarro
for respondents.
REYES, J.B.L., J.:
In an amended information filed by the City Attorney of Quezon City on March
22, 1955, Juan Consunji, Alfonso Panganiban, and another whose identity is still
unknown, were charged with having conspired together in the murder of one
Jose Ramos (Criminal Case No. Q-1637 of the Court of First Instance of Quezon
City). Trial of the case started on May 3, 1955, and in several hearings the
prosecution had been presenting its evidence. During the progress of the trial on
May 18, 1955, while the prosecution was questioning one of its witnesses, Atty.
Arturo Xavier of the National Bureau of Investigation, in connection with the
making of a certain extra-judicial confession (allegedly made before him) by
defendant Juan Consunji to the witness, counsel for the other defendant Alfonso
Panganiban interposed a general objection to any evidence on such confession
on the ground that it was hearsay and therefore incompetent as against the other
accused Panganiban. The Court below ordered the exclusion of the evidence
objected to, but on an altogether different ground: that the prosecution could not
be permitted to introduce the confessions of defendants Juan Consunji and
Alfonso Panganiban to prove conspiracy between them, without prior proof of
such conspiracy by a number of definite acts, conditions, and circumstances.
Thereafter, according to the transcript, the following remarks were made:
FISCAL LUSTRE:
May we know from counsel if he is also objecting to the admissibility of
the confession of Consunji as against the accused Consunji himself?
COURT:
That would be premature because there is already a ruling of the Court
that you cannot prove a confession unless you prove first conspiracy
thru a number of indefinite acts, conditions and circumstances as
required by law. Annex "B" of the petition, p. 9
The prosecution then moved in writing for a reconsideration of the order of
exclusion, but again the motion was denied. Wherefore, this petition for certiorari
was brought before this Court by the Solicitor General, for the review and
annulment of the lower Court's order completely excluding any evidence on the
extrajudicial confessions of the accused Juan Consunji and Alfonso Panganiban
without prior proof of conspiracy.
We believe that the lower Court committed a grave abuse of discretion in
ordering the complete exclusion of the prosecution's evidence on the alleged
confessions of the accused Juan Consunji at the stage of the trial when the ruling
was made.
Section 14, Rule 123, Rules of Court, is specific as to the admissibility of the
extrajudicial confession of an accused, freely and voluntarily made, as evidence
against him.
SEC. 14. Confession. — The declaration of an accused expressly
acknowledging the truth of his guilt as to the offense charged, may be
given in evidence against him.
Under the rule of multiple admissibility of evidence, even if Consunji's confession
may not be competent as against his co-accused Panganiban, being hearsay as
to the latter, or to prove conspiracy between them without the conspiracy being
established by other evidence, the confession of Consunji was, nevertheless,
admissible as evidence of the declarant's own guilt (U. S. vs. Vega, 43 Phil. 41;
People vs. Bande, 50 Phil. 37; People vs. Buan, 64 Phil. 296), and should have
been admitted as such.
The rule cited by the Court below in support of its exclusion of the proffered
evidence is Sec. 12 of Rule 123, providing that:
The act or declaration of a conspirator relating to the conspiracy and
during its existence may be given in evidence against the co-conspirator
after the conspiracy is shown by evidence other than such act or
declaration.
Manifestly, the rule refers to statements made by one conspirator during the
pendency of the unlawful enterprises("during its existence") and in furtherance of
its object, and not to a confession made, as in this case, long after the conspiracy
had been brought to an end (U. S. vs. Empeinado, 9 Phil., 613; U. S. vs.
Raymundo, 14 Phil., 416; People vs. Badilla, 48 Phil., 718; People vs. Nakpil, 52
Phil., 985).
Besides, the prosecution had not yet offered the confessions to prove conspiracy
between the two accused, nor as evidence against both of them. In fact, the
alleged confessions (both in writing and in tape recordings) had not yet even
been identified (the presentation of Atty. Xavier was precisely for the purpose of
identifying the confessions), much less formally offered in evidence. For all we
know, the prosecution might still be able to adduce other proof of conspiracy
between Consunji and Panganiban before their confessions are formally offered
in evidence. Assuming, therefore, that section 12 of Rule 123 also applies to the
confessions in question, it was premature for the respondent Court to exclude
them completely on the ground that there was no prior proof of conspiracy.
It is particularly noteworthy that the exclusion of the proferred confessions was
not made on the basis of the objection interposed by Panganiban's counsel, but
upon an altogether different ground, which the Court issued motu proprio.
Panganiban's counsel objected to Consunji's confession as evidence of the guilt
of the other accused Panganiban, on the ground that it was hearsay as to the
latter. But the Court, instead of ruling on this objection, put up its own objection to
the confessions — that it could not be admitted to prove conspiracy between
Consunji and Panganiban without prior evidence of such conspiracy by a number
of indefinite acts, conditions, circumstances, etc. and completely excluded the
confessions on that ground. By so doing, the Court overlooked that the right to
object is a mere privilege which the parties may waive; and if the ground for
objection is known and not reasonably made, the objection is deemed waived
and the Court has no power, on its own motion, to disregard the evidence
(Marcella vs. Reyes, 12 Phil., 1).
remembered that in the heat of the battle over which the presides, a
judge of first instance may possibly fall into error in judging of the
relevancy of proof where a fair and logical connection is in fact shown.
When such a mistake is made and the proof is erroneously ruled out,
the Supreme Court, upon appeal, often finds itself embarrassed and
possibly unable to correct the effects of the error without returning the
case for a new trial, — a step which this Court is always very loath to
take. On the other hand, the admission of proof in a court of first
instance, even if the question as to its form, materiality, or relevancy is
doubtful, can never result in much harm to either litigant, because the
trial judge is supposed to know the law; and it is duty, upon final
consideration of the case, to distinguish the relevant and material from
the irrelevant and immaterial. If this course is followed and the cause is
prosecuted to the Supreme Court upon appeal, this Court then has all
the material before it necessary to make a correct judgment.
There is greater reason to adhere to such policy in criminal cases where
questions arise as to admissibility of evidence for the prosecution, for the
unjustified exclusion of evidence may lead to the erroneous acquittal of the
accused or the dismissal of the charges, from which the People can no longer
appeal.

We see no need for the present to discuss the question of the admissibility of the Wherefore, the order excluding the confessions of the accused Juan Consunji
individual extrajudicial confessions of two or more accused for the purpose of and Alfonso Panganiban is annulled and set aside and the Court below is
establishing conspiracy between them through the identity of the confessions in directed to proceed with the trial in accordance with law and this opinion. Costs
essential details. After all, the confessions are not before us and have not even against respondents Juan Consunji and Alfonso Panganiban. So ordered.
been formally offered in evidence for any purpose. Suffice it to say that the lower
Court should have allowed such confessions to be given in evidence at least as
against the parties who made them, and admit the same conditionally to
establish conspiracy, in order to give the prosecution a chance to get into the
record all the relevant evidence at its disposal to prove the charges. At any rate,
in the final determination and consideration of the case, the trial Court should be
able to distinguish the admissible from the inadmissible, and reject what, under
the rules of evidence, should be excluded.

Once more, attention should be called to the ruling of this Court in the case of
Prats & Co. vs. Phoenix Insurance Co., 52 Phil., 807, 816-817:

In the course of long experience we have observed that justice is most

effectively and expeditiously administered in the courts where trial
objections to the admission of proof are received with least favor. The
practice of excluding evidence on doubtful objections to its materiality or
technical objections to the form of the questions should be avoided. In a
case of any intricacy it is impossible for a judge of first instance, in the
early stages of the development of the proof, to know with any certainty
whether testimony is relevant or not; and where there is no indication of
bad faith on the part of the Attorney offering the evidence, the court may
as a rule safely accept the testimony upon the statement of the attorney
that the proof offered will be connected later. Moreover, it must be
G.R. No. 105813 September 12, 1994
CONCEPCION M. CATUIRA, petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
Arnold V. Guerrero & Associates for petitioner.
BELLOSILLO, J.:
Is the testimony of a witness inadmissible in evidence if not formally offered at
the time the witness is called to testify, as required in Sec. 35, in relation to Sec.
34, Rule 132, of the Revised Rules on Evidence? 1
On 8 June 1990, two (2) Informations for estafa were filed against petitioner
Concepcion M. Catuira with the Regional Trial Court of Calamba, Laguna, for
having issued two (2) checks in payment of her obligation to private complainant
Maxima Ocampo when petitioner had no sufficient funds to cover the same,
which checks upon presentment for payment were dishonored by the drawee
bank. 2
After the prosecution had presented its evidence, petitioner Concepcion M.
Catuira filed a Motion to Dismiss (by way of Demurrer to Evidence) under Sec.
15, Rule 119, of the 1985 Revised Rules on Criminal Procedure. 3 Petitioner
contended that the testimony of private respondent Ocampo was inadmissible in
evidence since it was not properly introduced when she was called to testify as
mandated in Sec. 35, Rule 132, of the Revised Rules on Evidence. Petitioner
also argued that even if the testimony of private respondent was considered, the
evidence of the prosecution still failed to prove that the checks were issued in
payment of an obligation.
On 26 July 1991, the trial court denied the motion to dismiss for lack of merit. On
18 October 1991, it likewise denied the motion to reconsider its denial of the
motion to dismiss.
On 4 November 1991 petitioner elevated her case to the Court of Appeals
through a petition for certiorari, prohibition and mandamus. In a similar move, the
appellate court rejected her petition and sustained the trial court in its denial of
the motion to dismiss. Hence, this recourse seeking to annul the decision of the
Court of Appeals rendered on 27 February 1992 as well as its resolution of 1
June 1992. 4
Petitioner claims that the Court of Appeals erred when it accepted the testimony
of private respondent despite the undisputed fact that it was not offered at the
time she was called to testify; her testimony should have been stricken off the
record pursuant to Sec. 34, Rule 132, which prohibits the court from considering
evidence which has not been formally offered; and, it was error for respondent
appellate court to declare that petitioner's objection was not done at the proper
time since under Sec. 36, Rule 132, 5 objection to evidence offered orally must
be made immediately after the offer is made. Evidently, petitioner could not have
waived her right to object to the admissibility of the testimony of private
respondent since the rule requires that it must be done only at the time such
testimony is presented and the records plainly show that the opportunity for
petitioner to object only came when the prosecution attempted, albeit belatedly,
to offer the testimony after it has rested its case. 6
The petition is devoid of merit. The reason for requiring that evidence be formally
introduced is to enable the court to rule intelligently upon the objection to the
questions which have been asked. 7 As a general rule, the proponent must show
its relevancy, materiality and competency. Where the proponent offers evidence
deemed by counsel of the adverse party to be inadmissible for any reason, the
latter has the right to object. But such right is a mere privilege which can be
waived. Necessarily, the objection must be made at the earliest opportunity, lest
silence when there is opportunity to speak may operate as a waiver of
objections. 8
Thus, while it is true that the prosecution failed to offer the questioned testimony
when private respondent was called to the witness stand, petitioner waived this
procedural error by failing to object at the appropriate time, i.e., when the ground
for objection became reasonably apparent the moment private respondent was
called to testify without any prior offer having been made by the proponent. Most
apt is the observation of the appellate court:
While it is true that the prosecution failed to offer in evidence
the testimony of the complaining witness upon calling her to
testify and that it was only after her testimony and after the
petitioner moved that it be stricken that the offer was made, the
respondent Court did not gravely err in not dismissing the case
against the petitioner on the ground invoked. For, she should
have objected to the testimony of the complaining witness
when it was not first offered upon calling her and should not
have waited in ambush after she had already finished
testifying. By so doing she did not save the time of the Court in
hearing the testimony of the witness that after all according to
her was inadmissible. And for her failure to make known her
objection at the proper time, the procedural error or defect was
waived. 9
Indeed, the rationale behind Sec. 34, Rule 132, is manifest in the minutes of the
Revision of Rules Committee. 10Thus —
 The new rule would require the testimony of a witness to offer
it at the time the witness is called to testify. This is the best
time to offer the testimony so that the court's time will not be
wasted. Since it can right away rule on whether the testimony
is not necessary because it is irrelevant or immaterial.

If petitioner was genuinely concerned with the ends of justice being served, her
actuations should have been otherwise. Instead, she attempted to capitalize on a
mere technicality to have the estafa case against her dismissed. 11 But even
assuming that petitioner's objection was timely, it was at best pointless and
superfluous. For there is no debating the fact that the testimony of complaining
witness is relevant and material in the criminal prosecution of petitioner for
estafa. It is inconceivable that a situation could exist wherein an offended party's
testimony is immaterial in a criminal proceeding. Consequently, even if the offer
was belatedly made by the prosecution, there is no reason for the testimony to
be expunged from the record. On the contrary, the unoffered oral evidence must
be admitted if only to satisfy the court's sense of justice and fairness and to
stress that substantial justice may not be denied merely on the ground of
technicality. 12

WHEREFORE, the decision of the Court of Appeals sustaining the order of the
Regional Trial Court of Calamba, Laguna, Br. 35, denying petitioner's motion to
dismiss (by way of demurrer to evidence) is AFFIRMED. Costs against petitioner.

SO ORDERED.
G.R. No. 86062 June 6, 1990
INTERPACIFIC TRANSIT, INC., petitioner,
vs.
RUFO AVILES and JOSEPHINE AVILES, respondents.
Balane, Barican, Cruz, Alampay Law Office for petitioner.
Francisco G. Mendoza private respondents.
CRUZ, J.:
This case hinges on the proper interpretation and application of the rules on the
admissibility of documentary evidence and the viability. of a civil action for
damages arising from the same acts imputed to the defendant in a criminal
action where he has been acquitted.
In the information filed against Rufo and Josephine Aviles, the private
respondents herein, it was alleged that being then sub-agents of Interpacific
Transit, Inc. and as such enjoying its trust and confidence, they collected from its
various clients payments for airway bills in the amount of P204,030.66 which,
instead of remitting it to their principal, they unlawfully converted to their own
personal use and benefit. 1
At the trial, the prosecution introduced photocopies of the airway bills supposedly
received by the accused for which they had not rendered proper accounting. This
was done in, the course of the direct examination of one of the prosecution
witnesses. 2 The defense objected to their presentation, invoking the best
evidence rule. The prosecution said it would submit the original airway bills in
due time. Upon such undertaking, the trial court allowed the marking of the said
documents a s Exhibits "B" to "OO." The e prosecution n did submit the original
airway bills nor did it prove their loss to justify their substitution with secondary
evidence. Nevertheless, when the certified photocopies of the said bills formally
were offered, 3 in evidence, the defense interposed no objection.
In acquitting the accused, Judge Herminio I. Benito of the Regional Trial Court of
Makati rejected the agency theory of the prosecution and held that the
relationship between the petitioner and Rufo Aviles was that of creditor and
debtor only. "Under such relationship,' it declared, "the outstanding account, if
any, of the accused in favor of ITI would be in the nature of an indebtedness, the
non- payment of which does not Constitute estafa." 4
The court' also held that the certified photocopies of the airway by were not
admissible under the rule that "there can be no evidence of a writing the content
of which is the subject of inquiry other' than the writing itself." Loss of the
originals had not been proved to justify the exception to the rule as one of the
prosecution witness had testified that they were still in the ITI bodega. Neither
had it been shown that the originals had been "recorded in an existing record a
certified copy of which is made evidence by law."
In its order denying the motion for reconsideration, the trial court declared that it
"had resolved the issue of whether the accused has civil obligation to ITI on the
basis of the admissibility in evidence of the xerox copies of the airway bills." 5
Right or wrong, the acquittal on the merits of the accused can no longer be the
subject of an appeal under the double jeopardy rule. However, the petitioner
seeks to press the civil liability of the private respondents, on the ground that the
dismissal of the criminal action did not abate the civil claim for the recovery of the
amount. More to the point, ITI argues that the evidence of the airways bills
should not have been rejected and that it had sufficiently established the
indebtedness of the private respondents to it.
The Court of Appeals 6 affirmed, the decision of the trial court in toto, adding that
the existing record spoken of in Section 2 (e) and (d) of Rule 130 of the Rules of
Court must be in the custody, of a public officer only. It also declared that:
Since no evidence of civil liability was presented, no necessity
existed on the part of the private respondents to present
evidence of payment of an obligation which was not shown to
exist.
The petitioner now asks this Court to annul that judgment as contrary to law and
the facts established at the As in the courts below, it is insisting on the
admissibility of its evidence to prove the civil liability of the private respondents.
We agree with the petitioner. The certified photocopies of the airway bills should
have been considered.
In assessing this evidence, the lower courts confined themselves to the best
evidence rule and the nature of the documents being presented, which they held
did not come under any of the exceptions to the rule. There is no question that
the photocopies were secondary evidence and as such were not admissible
unless there was ample proof of the loss of the originals; and neither were the
other exceptions allowed by the Rules applicable. The trouble is that in rejecting
these copies under Rule 130, Section 2, the respondent court disregarded an
equally important principle long observed in our trial courts and amply supported
by jurisprudence.
This is the rule that objection to documentary evidence must be made at the time
it is formally offered. as an exhibit and not before. Objection prior to that time is
premature.
It is instructive at this paint to make a distinction between Identification of
documentary evidence and its formal offer as an exhibit. The first is done in the
course of the trial and is accompanied by the marking of the evidence an an
exhibit. The second is done only when the party rests its case and not before.
The mere fact that a particular document is Identified and marked as an exhibit
does not mean it will be or has been offered as part of the evidence of the party.
The party may decide to formally offer it if it believes this will advance its cause,
and then again it may decide not to do so at all. In the latter event, the trial court
is, under Rule 132, Section 35, not authorized to consider it.
Objection to the documentary evidence must be made at the time it is formally
offered, not earlier. The Identification of the document before it is marked as an
exhibit does not constitute the formal offer of the document as evidence for the
party presenting it. Objection to the Identification and marking of the document is
not equivalent to objection to the document when it is formally offered in
evidence. What really matters is the objection to the document at the time it is
formally offered as an exhibit.
In the case at bar, the photocopies of the airway bills were objected to by the
private respondents as secondary evidence only when they, were being
Identified for marking by the prosecution. They were nevertheless marked as
exhibits upon the promise that the original airway bills would be submitted later. it
is true that the originals were never produced. Yet, notwithstanding this omission,
the defense did not object when the exhibits as previously marked were formally
offered in evidence. And these were subsequently admitted by the trial court. 7
In People v. Teodoro, 8 a document being Identified by a prosecution witness
was objected to as merely secondary, whereupon the trial judge ordered the
testimony stricken out. This Court, in holding the objection to be premature, said:
It must be noted that the Fiscal was only Identifying the official
records of service of the defendant preparatory to introducing
them as evidence. ... The time for the presentation of the
records had not yet come; presentation was to be made after
their Identification. For what purpose and to what end the
Fiscal would introduce them as evidence was not yet stated or
disclosed. ... The objection of counsel for the defendant was,
therefore, premature, especially as the Fiscal had not yet
stated for what purpose he would introduce the said records. ...
The time for objecting the evidence is when the same is
offered. (Emphasis supplied).
The objection of the defense to the photocopies of the airway bins while they
were being Identified and marked as exhibits did not constitute the objection it
should have made when the exhibits were formally offered in evidence by the
prosecution. No valid and timely objection was made at that time. And it is no
argument to say that the earlier objection should be considered a continuing
objection under Sec. 37 of Rule 132, for that provision obviously refers to a single
objection to a class of evidence (testimonial or documentary) which when first
offered is considered to encompass the rest of the evidence. The presumption is,
of course, that there was an offer and a seasonable objection thereto. But, to
repeat, no objection was really made in the case before us because it was not
made at the proper time.
It would have been so simple for the defense to reiterate its former objection, this
time seasonably, when the formal offer of exhibits was made. It is curious that it
did not, especially so since the objections to the formal offer of exhibits was
made in writing. In fact, the defense filed no objection at all not only to the
photocopies but to all the other exhibits of the prosecution.
The effect of such omission is obvious. The rule is that evidence not objected to
is deemed admitted and may be validly considered by the court in arriving at its
judgment. 9 This is true even if by its nature the evidence is inadmissible and
would have surely been rejected if it had been challenged at the proper time.
The records certainly would have been the, beet proof of such
former conviction. The certificate was not the best proof. There
seems to be no justification for the presentation of proof of a
character. ... Under an objection upon the ground that the said
certificate was not the best proof, it should have been rejected.
Once admitted, however, without objection, even though not
admissible under an objection, we are not inclined now to
reject it. If the defendant had opportunely presented an
objection to the admissibility of said certificate, no doubt the
prosecution would have presented the best proof upon the
questions to which said certificate relates. 10
(It) is universally accepted that when secondary or incompetent
evidence is presented and accepted without any objection on
the part of the other party, the latter is bound thereby and the
court is obliged to grant it the probatory value it deserves. 11
We hold therefore that it was erroneous for the lower courts to reject the
photocopies of the airway bills to prove the liability of the private respondents to
the petitioner. While we may agree that there was really no criminal liability that
could attach to them because they had no fiduciary relationship with ITI, the
rejected evidence sufficiently established their indebtedness to the petitioner.
Hence, we must reverse the ruling below that "on account of the inadmissibility of
the prosecution's Exhibits 'B' and 'OO', coupled with the denial made by the
accused, there appears to be no concrete proof of such accountability."
Accoording to Rule 120, Section 2, of the Rules of Court:
In case of acquittal, unless there is a clear showing that the act
from which the civil liability might arise did not exist, the
judgment shall make a finding on the civil liability of the
accused in favor of the offended party.
With the admission of such exhibits pursuant to the ruling above made, we find
that there is concrete proof of the defendant's accountability. More than this, we
also disbelieve the evidence of the private respondents that the said airway bills
had been paid for. The evidence consists only of check stubs corresponding to
payments allegedly made by the accused to the ITI, and we find this insufficient.

As it is Aviles who has alleged payment, it is for him to prove that allegation. He
did not produce any receipt of such payment. He said that the cancelled payment
checks had been lost and relied merely on the check stubs, which are self-
serving. The prosecution correctly stressed in its motion for reconsideration that
the accused could have easily secured a certification from the bank that the
checks allegedly issued to ITI had been honored. No such certification was
presented. In short, the private respondents failed to establish their allegation
that payment for the airway bills delivered to them had been duly remitted to ITI.

In Padilla v. Court of Appeals, 12 we held:

There appear to be no sound reasons to require a separate

civil action to still be filed considering that the facts to be
proved in the civil case have already been established in the
criminal proceedings where the accused was acquitted. He
was, in fact, exonerated of the charge. The constitutional
presumption of innocence called for more vigilant efforts on the
part of prosecuting attorneys and defense counsel, a keener
awareness by all witnesses of the serious implications of
perjury, and a more studied consideration by the judge of the
entire records and of applicable statutes and precedents. To
require a separate civil action simply because the accused was
I acquitted would mean needless clogging of court dockets and
unnecessary duplication of litigation with all its attendant loss
of time, effort, and money on the part of all concerned.

By the same token, we find that remand of this case to, the trial court for further
hearings would be a needless waste of time and effort to the prejudice of the
speedy administration of justice. Applying the above ruling, we hereby declare
therefore, on the basis of the evidence submitted at the trial as reflected in the
records before us, that the private respondents are liable to the petitioner in the
sum of P204,030.66, representing the cost of the airway bills.

WHEREFORE, the petition is GRANTED. The challenged decision of the Court

of Appeals is SET ASIDE and a new one is rendered ORDERING the private
respondents to. pay to the petitioner the sum of P204,030.66, with 6% interest
from November 16, 1981, plus the costs of this suit.

SO ORDERED.