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THIRD DIVISION Regional Trial Court (RTC) of Tagum City, Branch 30 in its June 30,
2004 Decision.3 ᄃ
CRESENCIO BAO AND HEIRS OF
THE DECEASED AMANCIO
ASUMBRADO, NAMELY:
ROSALINDA ASUMBRADO,
VICENTE ASUMBRADO, ROEL G.R. No. 191703 The Facts
ASUMBRADO, ANNALYN
ASUMBRADO, ARNIEL Present: In the early afternoon of November 6, 1993, respondent
ASUMBRADO, ALFIE Wenifredo Salvaa (Salvaa) was driving the bus owned by respondent
ASUMBRADO and RUBELYN VELASCO, JR., J., Chairperson Bachelor Express, Inc./Ceres Liner, Inc. with plate number LVD-273
ASUMBRADO, PERALTA, and body number 4042 (Bus 4042) along the national highway at
Petiti ABAD, Magdum, Tagum City bound for Davao City. At about 1:20 in the
oner MENDOZA, and afternoon, he overtook a Lawin PUJ jeepney while negotiating a blind
s, PERLAS-BERNABE, JJ. curve in a descending road at Km. 60, causing him to intrude into the
opposite lane and bump the 10-wheeler Hino dump truck of petitioner
- versus - Cresencio Bao (Bao) running uphill from the opposite direction. The
Promulgated: collision resulted in damage to both vehicles, the subsequent death of
BACHELOR EXPRESS, INC./ the truck driver, Amancio Asumbrado (Asumbrado), and serious
CERES LINER, INC. and March 12, 2012 physical injuries to bus driver Salvaa.
WENIFREDO SALVAA,
Resp On March 11, 1994, Bao and the heirs of Asumbrado
onde (collectively called petitioners) filed a complaint4 ᄃ for quasi-delict,
nts. damages and attorney's fees against respondents, accusing Salvaa of
negligently driving Bus 4042 causing it to collide with the dump truck.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
----x Respondents denied liability, claiming that prior to the collision,
Bus 4042 was running out of control because of a problem in the
DECISION steering wheel system which could not have been avoided despite their
maintenance efforts. Instead, they claimed that Asumbrado had the last
clear chance to avoid the collision had he not driven the dump truck at a
PERLAS-BERNABE, J.: very fast speed.
This petition for review under Rule 45 of the Rules of Court The RTC Decision
assails the February 20, 2009 Decision1 ᄃ and February 9, 2010
Resolution2 ᄃ of the Court of Appeals (CA) in CA-G.R. CV No. 00190, After due proceedings, the RTC found that the immediate and
which reduced the amount of damages awarded to petitioners by the proximate cause of the accident was the reckless negligence of the bus
2
driver, Salvaa, in attempting to overtake a jeepney along a descending 2. To the Heirs of the late Amancio Asumbrado -
blind curve and completely invading the opposite lane. The photographs
taken immediately after the collision, the Traffic Accident and (a) P50,000.00, as civil indemnity for the
Investigation Report, and the Sketch all showed the dump truck at the death of Amancio Asumbrado;
shoulder of its proper lane while the bus was positioned diagonally in
the same lane with its right side several feet from the center line. (b) P20,268.45, as reimbursement for the
medicines, hospitalization and funeral
Having established the negligence of its employee, the expenses incurred by the late Amancio
presumption of fault or negligence on the part of the employer, Asumbrado;
respondent Bachelor Express, Inc./Ceres Liner, Inc., arose, which it
failed to rebut by evidence that it exercised due diligence in the (c) P576,000.00, as loss of earning
selection and supervision of its bus driver Salvaa. The RTC thus capacity of the late Amancio Asumbrado;
disposed of the case as follows:
(d) P100,000.00 and P50,000.00, as
In View Of All The Foregoing, judgment is moral damages and exemplary damages,
hereby rendered in favor of the plaintiffs and respectively;
against the defendants; ordering the defendants to
solidarily pay: 3. To the Plaintiffs -

1. To plaintiff Cresencio Bao - (a) P25,000.00, as reimbursement of the


expenses incurred initially by them in the
(a) P700,000.00, as payment for his Hino preparation of this complaint and other
dump truck which was rendered a total expenses in instituting the suit;
wreck;
(b) Attorney's fee in the sum of equivalent
(b) P296,601.50 per month, as loss of to 25% of plaintiffs' total claim against the
earning of the Hino dump truck, to be defendants plus P14,500.00, as
computed from November 6, 1993 with appearance fees;
legal interest thereon until the
P700,000.00 mentioned in the next (c) Costs of suit.
preceding number will be fully paid by
the defendants to plaintiff Cresencio Bao; SO ORDERED.5 ᄃ

(c) P100,000.00 and P50,000.00, as moral


damages and exemplary damages, The CA Ruling
respectively;
3
On appeal, the CA affirmed the RTC's findings on respondents' negligence on him. Thus, although the issue of negligence is basically
negligence and liability for damages, but deleted the separate awards of factual,6 ᄃ the Court may properly pass upon this question under Rule
exemplary damages in favor of petitioners for their failure to prove that 45 of the Rules of Court.
respondents acted with gross negligence.
In the case of Government Service Insurance System v. Pacific Airways
Similarly, the appellate court deleted the awards for the value of Corporation,7 ᄃ the Court has defined gross negligence as one that is
and lost income from the dump truck for lack of sufficient basis, characterized by the want of even slight care, acting or omitting to act in
awarding in their stead temperate damages in the sums of P100,000.00 a situation where there is a duty to act, not inadvertently but willfully
and P200,000.00, respectively. The CA also deleted the award of moral and intentionally with a conscious indifference to consequences insofar
damages to Bao for the damage to his property. as other persons may be affected.

With respect to petitioner Heirs, the CA reduced the RTC's In the present case, records show that when bus driver Salvaa overtook
awards of actual damages representing the hospital and funeral expenses the jeepney in front of him, he was rounding a blind curve along a
from P20,268.45 to P19,136.90; loss of earning capacity from descending road. Considering the road condition, and that there was
P576,000.00 to P415,640.16; and moral damages from P100,000.00 to only one lane on each side of the center line for the movement of traffic
P50,000.00. in opposite directions, it
would have been more prudent for him to confine his bus to its proper
Finally, the appellate court deleted the award of litigation place. Having thus encroached on the opposite lane in the process of
expenses and reduced the award of attorney's fees from 25% of overtaking the jeepney, without ascertaining that it was clear of
petitioners' claims to P50,000.00. oncoming traffic that resulted in the collision with the approaching
dump truck driven by deceased Asumbrado, Salvaa was grossly
negligent in driving his bus. He was remiss in his duty to determine that
the road was clear and not to proceed if he could not do so in safety.8 ᄃ
The Issues Before The Court
Consequently, the CA erred in deleting the awards of exemplary
In the instant petition, petitioners posit that respondent Salvaa was damages, which the law grants to serve as a warning to the public and as
grossly negligent in continuing to drive the bus even after he had a deterrent against the repetition of similar deleterious actions. However,
discovered the malfunction in its steering wheel. They further averred the award should be tempered as it is not intended to enrich one party or
that the CA erred in reducing the amounts of damages awarded by the to impoverish another.9 ᄃ Thus, the Court reinstates the separate awards
RTC despite sufficient evidence. of exemplary damages to petitioners in the amount of P50,000.00.

The Court's Ruling With respect to Bao, the award of moral damages for the loss of his
dump truck was correctly deleted since the damage to his vehicle was
While the courts a quo, in their respective decisions, have concurred that not shown to have been made willfully or deliberately.10 ᄃ However, the
the proximate cause of the collision was the negligence of the bus Court finds the grant of P100,000.00 as temperate damages for the
driver, Salvaa, in overtaking the jeepney in front as the bus traversed a damaged vehicle to be insufficient considering its type as a 10-wheeler
curve on the highway, they, however, imputed varied degrees of dump truck and its good running condition at the time of the incident.
4
Instead, the Court finds the amount of P400,000.00 as fair and SO ORDERED.
reasonable under the circumstances. With respect to the adjudged lost G.R. No. 186469 June 13, 2012
income from the dump truck, the Court sustains, for being just and THE PEOPLE OF THE PHILIPPINES, Plaintiff-appellee,
equitable, the award of temperate damages in the sum of P200,000.00. vs.
JOVER MATIAS y DELA FUENTE, Accused-appellant.
On the other hand, the Court upholds the grant to petitioner Heirs of RESOLUTION
P19,136.90 as actual damages corresponding to the pecuniary loss that PERLAS-BERNABE, J.:
they have actually sustained, P50,000.00 as death indemnity, the This resolves the appeal from the August 19, 2008 Decision1 of the
reduced awards of P50,000.00 as moral damages and P415,640.16 as Court of Appeals (CA) in CA-G.R. CR-H.C. No. 02781 filed by
loss of earning capacity of the deceased Asumbrado, which are all in appellant Jover Matias y Dela Fuente which affirmed his conviction for
conformity with prevailing jurisprudence.11 ᄃ the crime of "rape" under Sec. 5 (b), Article III of Republic Act (RA)
No. 7610.2
Finally, the attorney's fees of P50,000.00 as awarded by the CA is The Factual Antecedents
increased to P100,000.00 considering the length of time that this case Appellant Jover Matias y Dela Fuente and private complainant AAA3
has been pending, or a period of about 18 years since the complaint a were neighbors at Sto. Niño St., Barangay San Antonio, Quezon City. In
quo was filed on March 11, 1994. the evening of June 6, 2004, AAA, a minor, having been born on April
23, 1991, was on her way to the vegetable stall ("gulayan") of a certain
WHEREFORE, the assailed February 20, 2009 Decision and February "Manuela" to buy something when, all of a sudden, appellant pulled her
9, 2010 Resolution of the Court of Appeals are AFFIRMEDwith towards a house that was under construction. There, he forced her to lie
MODIFICATIONS. Respondents are ordered to solidarily pay: on a bamboo bed ("papag"), removed her shorts and underwear, and
inserted first, his finger, and then his penis into her vagina. Appellant
(1) petitioner Heirs of Amancio Asumbrado: threatened to kill her if she should report the incident to anyone.
(a) P19,136.90 as actual damages representing When AAA arrived home, she narrated to her mother and aunt what
hospital and funeral expenses; appellant did to her.1âwphi1 Together, they proceeded to the barangay
(b) P415,640.16 as loss of earning capacity of to report the incident and, thereafter, to the Baler District Police Station
the deceased Asumbrado; to file a complaint. A physical examination was conducted by Police
(c) P50,000.00 as death indemnity; Chief Inspector Pierre Paul Figeroa Carpio upon AAA, who was found
(d) P50,000.00 as moral damages; and to have "[d]eep-healed lacerations at 3 and 7 o’clock positions" and was
(e) P50,000.00 as exemplary damages. in a non-virgin state physically at the time of examination.
(2) petitioner Cresencio Bao: Subsequently, appellant was charged with rape under Article 266-A of
(a) P400,000.00 as temperate damages for his damaged dump the Revised Penal Code (RPC) in an Amended Information4 dated July
truck; 16, 2004.
(b) P200,000.00 as lost income of the said truck; and In defense, appellant claimed that in the evening of the incident, he and
(c) P50,000.00 as exemplary damages. his uncle, Romeo Matias, were doing construction work at the house of
(3) attorney's fees of P100,000.00 to petitioners his aunt, also located at Sto. Nino St., Barangay San Antonio, Quezon
collectively. City. He was therefore surprised when two policemen arrested him at
around 6:30 in the evening of even date and detained him at the Baler
5
Police Station. The penalty of reclusion temporal in its medium period to reclusion
The RTC Ruling perpetua shall be imposed upon the following:
In its April 19, 2007 Decision,5 the RTC convicted appellant for "rape" (a) x x x
under Sec. 5 (b), Article III of RA 7610 and imposed the penalty of (b) Those who commit the act of sexual intercourse or lascivious
reclusion perpetua.The RTC likewise directed him to pay AAA the conduct with a child exploited in prostitution or subject to other sexual
amount of ₱50,000 as civil indemnity and ₱30,000 as moral damages. abuse; xxx7
In convicting appellant, the RTC gave full credence to AAA's testimony, In the case of People v. Pangilinan,8 which affirmed the doctrines
which was straightforward and positive. On the other hand, it found enunciated in the cases of People v. Dahilig9 and People v. Abay,10 the
appellant’s defenses of denial and alibi as weak, taking into Court explained:
consideration that his aunt's house where he was allegedly doing Under Section 5 (b), Article III of RA 7610 in relation to RA 8353, if the
construction work was just a few meters away from the vegetable stall, victim of sexual abuse is below 12 years of age, the offender should not
clearly making it possible for him to be at the locus criminis at the time be prosecuted for sexual abuse but for statutory rape under Article 266-
of the incident. A(1)(d) of the Revised Penal Code and penalized with reclusion
The CA Ruling perpetua. On the other hand, if the victim is 12 years or older, the
In its assailed Decision,6 the CA affirmed the RTC Decision in toto, offender should be charged with either sexual abuse under Section 5(b)
finding no compelling reason to depart from its findings and of RA 7610 or rape under Article 266-A (except paragraph 1[d]) of the
conclusions. The appellate court held that if the RTC found AAA's Revised Penal Code. However, the offender cannot be accused of both
testimony to be credible, logical and consistent, then it should be given crimes for the same act because his right against double jeopardy will be
great respect, as the RTC had the ability to observe firsthand the prejudiced. A person cannot be subjected twice to criminal liability for a
demeanor and deportment of the witnesses on stand. single criminal act. Likewise, rape cannot be complexed with a violation
Moreover, for appellant's alibi to prosper, he should be able to show that of Section 5(b) of RA 7610. Under Section 48 of the Revised Penal
he was a great distance away from the place of the incident and that it Code (on complex crimes), a felony under the Revised Penal Code (such
was impossible for him to be there or within its immediate vicinity at as rape) cannot be complexed with an offense penalized by a special
the time of the commission of the crime. The CA ruled that it is highly law.
unlikely for a young girl to fabricate a story that would destroy her In this case, the RTC, as affirmed by the CA, convicted appellant for
reputation and her family’s life and endure the discomforts of trial. "rape" under Sec. 5 (b), Article III of RA 7610 and sentenced him to
Issue Before The Court reclusion perpetua, upon a finding that AAA was a minor below 12
The sole issue to be resolved in this appeal is whether the CA committed years old at the time of the commission of the offense on June 6, 2004.
reversible error in affirming in toto the Decision of the RTC, which However, a punctilious scrutiny of the records shows that AAA was
convicted appellant of "rape" under Sec. 5 (b), Article III of RA 7610. born on April 23, 1991, which would make her 13 years old at the time
The Court's Ruling of the commission of the offense on June 6, 2004. Thus, appellant can
Sec. 5 (b), Article III of RA 7610 provides: be prosecuted and convicted either under Sec. 5 (b), Article III of RA
Section 5. Child Prostitution and Other Sexual Abuse. - Children, 7610 for sexual abuse, or under Article 266-A of the RPC, except for
whether male or female, who for money, profit, or any other rape under paragraph 1(d).11 It bears pointing out that the penalties
consideration or due to the coercion or influence of any adult, syndicate under these two laws differ: the penalty for sexual abuse under Sec. 5
or group, indulge in sexual intercourse or lascivious conduct, are (b), Article III of RA 7610 is reclusion temporal medium to reclusion
deemed to be children exploited in prostitution and other sexual abuse. perpetua, while rape under Article 266-A of the RPC is penalized with
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reclusion perpetua. BANGIS, ROGELIO B.
On this score, it is worth noting that in its April 19, 2007 Decision,12 BANGIS, RAQUEL B. QUILLO,
the RTC concluded that AAA was the "victim of sexual abuse labeled ROMULO B. BANGIS,
'rape',"13 considering the established fact that there was sexual ROSALINA B. PARAN, Present:
intercourse between him and AAA. Thus, appellant's conviction was ROSARIO B. REDDY,
clearly under Sec. 5 (b), Article III of RA 7610 or sexual abuseand not REYNALDO B. BANGIS, and PERALTA, J., *Acting
for rape under Article 266-A of the RPC. REMEDIOS B. LASTRE, Chairperson,
In the light of all the foregoing, there is a need to modify the penalty Petitioners, ABAD,
imposed upon appellant. Following the pronouncement in the case of VILLARAMA, JR.,**
Malto v. People14 for sexual abuse, and in the absence of any mitigating -versus- MENDOZA, and
or aggravating circumstances, the Court finds it appropriate to impose PERLAS-BERNABE, JJ.
the penalty of reclusion temporal in its maximum period, which has the HEIRS OF SERAFIN AND
range of 17 years, 4 months and 1 day to 20 years. SALUD ADOLFO, namely: LUZ
Applying the Indeterminate Sentence Law,15 therefore, the maximum A. BANNISTER, SERAFIN
term of the indeterminate penalty shall be that which could be properly ADOLFO, JR., and ELEUTERIO Promulgated:
imposed under the law, which is 17 years, 4 months and 1 day to 20 ADOLFO rep. by his Heirs,
years of reclusion temporal, while the minimum term shall be within the namely: MILAGROS, JOEL, June 13, 2012
range next lower in degree, which is prision mayor in its medium period MELCHOR, LEA, MILA,
to reclusion temporal in its minimum period, or a period ranging from 8 NELSON, JIMMY and
years and 1 day to 14 years and 8 months. Similarly, the award of moral MARISSA, all surnamed
damages is increased from ₱30,000.00 to ₱50,000.00, pursuant to the ADOLFO,
Malto case. Respondents.
WHEREFORE, the appeal is DISMISSED. The August 19, 2008 x-------------------------------------------------------------------------------------
Decision of the Court of Appeals in CA-G.R. CR-H.C. No. 02781 ----x
finding appellant Jover Matias y Dela Fuente guilty beyond reasonable
doubt of sexual abuse under Section 5 (b), Article III of Republic Act DECISION
No. 7610 is AFFIRMED with MODIFICATIONS as to penalty and the
amount of damages awarded. Appellant is sentenced to suffer the PERLAS-BERNABE, J.:
penalty of 12 years of prision mayor as minimum to 17 years, 4 months
and 1 day of reclusion temporal as maximum, and ordered to pay the
private complainant the amount of ₱50,000.00 as moral damages. The Assailed in this Petition for Review on Certiorari under Rule 45 of the
rest of the assailed Decision stands. Rules of Court is the March 30, 2009 Decision[1]of the Court of
SO ORDERED. Appeals Mindanao Station (CA) and its December 2, 2009
Resolution[2]in CA-G.R. CV No. 00722-MIN which declared that the
ANICETO BANGIS substituted G.R. No. 190875 transaction between the parties was a mortgage, not a sale, and ordered
by his heirs, namely: RODOLFO petitioners to surrender the possession of the disputed lot upon
B. BANGIS, RONNIE B. respondents' full payment of their indebtedness.
7
the mortgaged property from Bangis but the latter refused, claiming that
the transaction between him and Adolfo was one of sale. During the
THE ANTECEDENT FACTS conciliation meetings in the barangay, Bangis' son, Rudy Bangis,
showed them a copy of a deed of sale and a certificate of title to the
disputed lot.[12]The parties having failed to amicably settle their
The spouses Serafin, Sr. and Saludada[3]Adolfo were the original differences, a certificate to file action[13]was issued by the barangay.
registered owners of a 126,622 square meter lot covered by Original
Certificate of Title (OCT) No. P-489 issued on December 15, 1954
(derived from Homestead Patent No. V-34974), located in Valencia, THE PROCEEDINGS BEFORE THE RTC
Malaybalay, Bukidnon. This property was mortgaged to the then
Rehabilitation Finance Corporation (now Development Bank of the
Philippines or DBP) on August 18, 1955,[4]and upon default in the On July 26, 2000, the Heirs of Adolfo filed a complaint[14]before the
payment of the loan obligation, was foreclosed and ownership was Regional Trial Court (RTC) for annulment of deed of sale and
consolidated in DBP's name under Transfer Certificate of Title (TCT) declaration of the purported contract of sale as antichresis, accounting
No. T-1152.[5]Serafin Adolfo, Sr., however, repurchased the same and and redemption of property and damages against Bangis, docketed as
was issued TCT No. 6313[6]on December 1, 1971, a year after his wife Civil Case No. 2993-00. The complaint was amended on September 11,
died in 1970. 2001 to include a prayer for the cancellation of TCT No. T-10567 and
the tax declarations in the name of Bangis in view of the
manifestation[15]filed by Ex-Officio Register of Deeds, Atty. Phoebe
Sometime in 1975, Serafin Adolfo, Sr. (Adolfo) allegedly mortgaged the Loyola Toribio of the Registry of Deeds, Malaybalay City which states
subject property for the sum of P12,500.00 to Aniceto Bangis (Bangis) that the said title was of "dubious" origin since there was no deed of
who immediately took possession of the land.[7]The said transaction conveyance upon which the said transfer certificate of title was based
was, however, not reduced into writing.[8] and that its derivative title, TCT No. T-10566, does not exist in the files
of the Registry of Deeds.[16]On November 12, 2001, the complaint was
again amended to reflect the other certificates of titles issued in the
When Adolfo died, his heirs, namely, Luz Adolfo Bannister, Serafin names of the Heirs of Adolfo and the amount of P12,500.00
Adolfo, Jr. and Eleuterio Adolfo (Heirs of Adolfo), executed a Deed of representing the mortgage debt,[17]followed by another amendment on
Extrajudicial Partition dated December 24, 1997 covering the subject October 13, 2003 to include the allegation that they have partitioned the
property and TCT No. T-65152[9]was issued to them. On May 26, 1998, subject lot on December 24, 1997 and that no copy of the supposed deed
the said property was subdivided and separate titles were issued in of sale in favor of Bangis can be found in the records of the Provincial
names of the Heirs of Adolfo, as follows: TCT Nos. T-66562 and T- Assessor's Office and the Registrar of Deeds. They further prayed, in the
66563 for Luz Adolfo Banester[10]; TCT Nos. T-66560 and T-66561 in alternative, to be allowed to redeem the subject lot under the Homestead
the name of Serafin Adolfo, Jr.; and TCT Nos. T-66564 and T-66565 in Law and that Bangis be ordered to indemnify them: (a) P50,000.00 each
favor of Eleuterio Adolfo.[11] as moral damages; (b) 20% of the value of the property as attorney's
fees; and (c) P50,000.00 as litigation expenses as well as the costs of
suit.[18]
In June 1998, the Heirs of Adolfo expressed their intention to redeem
8
defendants, decision is hereby rendered:
In his Answer with Counterclaim,[19]Bangis claimed to have bought the
subject property from Adolfo for which TCT No. T-10567[20]was 1. Declaring the contract between the plaintiffs and
issued. He also alleged to have been in open and adverse possession of defendants as a mere mortgage or antichresis and since
the property since 1972 and that the cause of action of the Heirs of the defendants have been in the possession of the
Adolfo has prescribed. On November 11, 2001, Bangis died and was property in 1975 up to the present time enjoying all its
substituted in this suit by his heirs, namely, Rodolfo B. Bangis, Ronie B. fruits or income, the mortgaged loan of P12,000.00 is
Bangis, Rogelio B. Bangis, Raquel B. Quillo, Romulo B. Bangis, deemed fully paid;
Rosalina B. Paran, Rosario B. Reddy, Reynaldo B. Bangis and
Remedios B. Lastre (Heirs of Bangis).[21] 2. Ordering the defendants to deliver the possession of
the property in question and all the improvements
thereon to the plaintiffs peacefully;
During the trial, one of the Heirs of Bangis, Rodolfo Bangis, presented a
photocopy of an Extra-Judicial Settlement with Absolute Deed of Sale 3. Declaring TCT No. 10567 in the name of Aniceto
dated December 30, 1971[22]for the purpose of proving the sale of the Bangis as NULL AND VOID AB INITIO and directing
subject lot by Adolfo and his heirs in favor of his predecessors-in- the Office of the Register of Deeds to cause its
interest, Aniceto Bangis and Segundino Cortel, for the sum of cancellation from its record to avoid confusion regarding
P13,000.00. He also presented a Promissory Note[23]of even date the ownership thereof; and
purportedly executed by Bangis and Segundino Cortel undertaking to
pay the balance of the purchase price in the amount of P1,050.00. 4. Declaring all the transfer certificates of title issued in
[24]Both documents were notarized by Atty. Valentin Murillo who favor of the plaintiffs namely, Luz Adolfo-Bannister,
testified to the fact of their execution.[25]Rodolfo Bangis likewise Serafin Adolfo, Jr. and Eleuterio Adolfo, as above-
testified that they have been paying the taxes due on the property and mentioned as the ones valid and issued in accordance
had even used the same as collateral for a loan with a bank.[26] with PD 1529.

SO ORDERED.
On rebuttal, one of the Heirs of Adolfo, Luz Adolfo Bannister, denied
the due execution and genuineness of the foregoing Extra-Judicial
Settlement with Absolute Deed of Sale alleging forgery.[27] Aggrieved, the Heirs of Bangis appealed the foregoing disquisition to
the Court of Appeals (CA).

On December 29, 2005, the RTC rendered a Decision[28]in favor of the


Heirs of Adolfo, the dispositive portion of which reads: THE CA RULING

WHEREFORE, the preponderance of evidence being In its assailed Decision, the CA affirmed the RTC finding that the
strongly in favor of the plaintiffs and against the contract between the parties was a mortgage, not a sale. It noted that
9
while Bangis was given possession of the subject property, the No. T-10567 was not offered in evidence and worse, certified as of
certificate of title remained in the custody of Adolfo and was never dubious origin per the Manifestation of the Registrar of Deeds.[36]
cancelled. The CA also ordered the Heirs of Adolfo to pay the Heirs of
Bangis the mortgage debt of P12,500.00[29]with twelve (12%) percent
interest reckoned from 1975 until 1998 and to deliver to them the THE COURT'S RULING
possession of the property upon full payment.[30]It, however, deleted
the RTC order directing the Register of Deeds to cancel TCT No. T- The petition must fail.
10567 in the name of Bangis for being a collateral attack proscribed
under PD 1529.[31]
At the outset, it should be emphasized that a petition for review on
certiorari under Rule 45 of the Rules of Court involves only questions of
Dissatisfied, the Heirs of Bangis filed a Motion for law and not of facts. A question of law exists when there is doubt as to
Reconsideration[32]arguing that the CA erred in disregarding their what the law is on a given set of facts while a question of fact arises
testimonial and documentary evidence, particularly, the Extra-Judicial when there is doubt as to the truth or falsity of the alleged facts.[37]
Settlement with Absolute Deed of Sale (Exh. 2) which purportedly
established the sale in favor of their predecessor-in-interest, Aniceto
Bangis. The said motion was, however, denied in the The Heirs of Bangis, in insisting that both the RTC and the CA
Resolution[33]dated December 2, 2009. erroneously disregarded the evidence of sale they presented, are
effectively asking the Court to re-evaluate factual issues which is
proscribed under Rule 45. "Such questions as to whether certain items
THE ISSUE BEFORE THE COURT of evidence should be accorded probative value or weight, or rejected as
feeble or spurious, or whether or not the proofs on one side or the other
are clear and convincing and adequate to establish a proposition in issue,
Hence, the instant petition for review on certiorari based on the lone are without doubt questions of fact."[38]
assignment of error[34]that the transaction between the parties was one
of sale and not a mortgage or antichresis. In support, petitioner Heirs of
Bangis maintain that the CA erred in not giving probative weight to the Nonetheless, the Court perused the records and found substantial
Extra-Judicial Settlement with Absolute Deed of Sale[35]which evidence supporting the factual findings of the RTC, as affirmed by the
supposedly bolsters their claim that their father, Aniceto Bangis, bought CA, that the nature of the transaction between the parties' predecessors-
the subject parcel of land from Adolfo. Hence, the corresponding title, in-interest was a mortgage and not a sale. Thus, the maxim that factual
TCT No. T-10567, issued as a consequence should be respected. findings of the trial court when affirmed by the CA are final and
conclusive on the Court[39]obtains in this case.

On their part, respondent Heirs of Adolfo averred that no reversible


error was committed by the CA in upholding that no sale transpired THERE WAS NEITHER AN
between the parties' predecessors-in-interest. Moreover, petitioners' TCT ANTICHRESIS NOR SALE
10

(3) When the original consists of


numerous accounts or other documents
For the contract of antichresis to be valid, Article 2134 of the Civil Code which cannot be examined in court
requires that "the amount of the principal and of the interest shall be without great loss of time and the fact
specified in writing; otherwise the contract of antichresis shall be void." sought to be established from them is only
In this case, the Heirs of Adolfo were indisputably unable to produce the general result of the whole; and
any document in support of their claim that the contract between Adolfo
and Bangis was an antichresis, hence, the CA properly held that no such (4) When the original is a public record in
relationship existed between the parties. [40] the custody of a public officer or is
recorded in a public office.

On the other hand, the Heirs of Bangis presented an Extra-Judicial


Settlement with Absolute Deed of Sale dated December 30, 1971[41]to
justify their claimed ownership and possession of the subject land. SEC. 5. When original document is unavailable. - When
However, notwithstanding that the subject of inquiry is the very contents the original document has been lost or destroyed, or
of the said document, only its photocopy[42]was presented at the trial cannot be produced in court, the offeror, upon proof of its
without providing sufficient justification for the production of secondary execution or existence and the cause of its unavailability
evidence, in violation of the best evidence rule embodied under Section without bad faith on his part, may prove its contents by a
3 in relation to Section 5 of Rule 130 of the Rules of Court, to wit: copy, or by a recital of its content in some authentic
document, or by the testimony of witnesses in the order
SEC. 3. Original document must be produced; stated.
exceptions. - When the subject of inquiry is the contents
of a document, no evidence shall be admissible other
than the original document itself, except in the following The bare testimony of one of the Heirs of Bangis, Rodolfo Bangis, that
cases: the subject document was only handed[43]to him by his father, Aniceto,
with the information that the original thereof "could not be
(1) When the original has been lost or found"[44]was insufficient to justify its admissibility. Moreover, the
destroyed, or cannot be produced in court, identification made by Notary Public Atty. Valentin Murillo[45]that he
without bad faith on the part of the notarized such document cannot be given credence as his conclusion
offeror; was not verified against his own notarial records.[46]Besides, the Heirs
of Bangis could have secured a certified copy of the deed of sale from
(2) When the original is in the custody or the Assessor's Office[47]that purportedly had its custody in compliance
under the control of the party against with Section 7, Rule 130[48]of the Rules of Court.
whom the evidence is offered, and the
latter fails to produce it after reasonable
notice; In sum, the Heirs of Bangis failed to establish the existence and due
11
execution of the subject deed on which their claim of ownership was as to how this title was transferred in the name of Anecito
founded. Consequently, the RTC and CA were correct in affording no Bangis. Nothing will show which will validly supports
probative value to the said document.[49] [sic] the said transfer, in other words the said title is
dubious.

TCT NO. T-10567 IN THE NAME OF This Original Certificate of Title No. P-489 in the name
ANICETO BANGIS CANNOT PREVAIL of Serafin Adolfo was mortgage to the Development
OVER THE TITLES OF THE HEIRS OF Bank of the Philippines and then it was consolidated and
ADOLFO Transfer Certificate of Title No. T-1152 was issued in the
name of Development Bank of the Philippines. From the
Development Bank of the Philippines a Deed of Sale was
Records reveal that TCT No. T-10567 purportedly secured as a executed by the Development Bank of the Philippines in
consequence of the deed of sale executed by Adolfo and his heirs in favor of Serafin Adolfo and Transfer Certificate of Title
favor of Bangis was not offered in evidence. A perusal of its copy, No. T-6313 marked annex "B-1" was issued in the name
however, shows that it was a transfer from TCT No. T-10566,[50]which of Serafin Adolfo.
title the Heirs of Bangis unfortunately failed to account for, and bore no
relation at all to either OCT No. P-489 (the original title of the Spouses An Extrajudicial Settlement was now [sic] by the Heirs
Adolfo) or TCT No. T-6313 (issued to Adolfo when he repurchased the of Serafin Adolfo and Transfer Certificate of Title Nos. T-
same property from DBP). The Manifestation[51]of the Register of 65152 annex "B-2", T-66560 annex "B-3", T-66561
Deeds of Malaybalay City regarding the doubtful origin of TCT No. T- annex "B-4", T-66562 annex "B-5", T-66563 annex "B-
10567 and the regularity of the titles of the Heirs of Adolfo are 6", T-66564 annex "B-7", and T-66565 annex "B-8" were
insightful, thus: issued to the Heirs.

That the verification from the office of the original copy The titles issued to the Heirs of Serafin Adolfo were
of Transfer Certificate of Title No. T-10567 in the name legitimately issued by this office after all its [sic]
of Anecito Bangis is existing in the office. Machine copy requirements and supporting documents were submitted
of the said title is hereto attached as annex "A" but and proper annotations were reflected at the back of the
nothing in the title whether annotated or attached, any title of Serafin Adolfo.
Deed of Conveyance or other Documents by which said
title was issued or transferred in the name of Anecito Transfer Certificate of Title No. T-10567 as shown on the
Bangis. title was derived from Transfer Certificate of Title No. T-
10566 but [sic] title is not existing in this office.
That for the information and guidance of the court
attached herewith is a machine copies [sic] Original
Certificate of Title No. P-489 in the name of Serafin As held in the case of Top Management Programs Corporation v. Luis
Adolfo, marked as annex "B" which supposedly the Fajardo and the Register of Deeds of Las Pias City:[52]"if two
mother title of Transfer Certificate of Title No. T-10567 certificates of title purport to include the same land, whether wholly or
12
partly, the better approach is to trace the original certificates from which considered as a collateral attack on the title.
the certificates of titles were derived." Development Bank of the Philippines v. Court of Appeals
is similar to the case before us insofar as petitioner in that
case filed an action for recovery of possession against
Having, thus, traced the roots of the parties' respective titles supported respondent who, in turn, filed a counterclaim claiming
by the records of the Register of Deeds of Malaybalay City, the courts a ownership of the land. In that case, the Court ruled:
quo[53]were correct in upholding the title of the Heirs of Adolfo as
against TCT No. T-10567 of Bangis, notwithstanding its earlier issuance Nor is there any obstacle to the
on August 18, 1976[54]or long before the Heirs of Adolfo secured their determination of the validity of TCT No.
own titles on May 26, 1998. To paraphrase the Court's ruling in Mathay 10101. It is true that the indefeasibility of
v. Court of Appeals:[55]where two (2) transfer certificates of title have torrens title cannot be collaterally
been issued on different dates, the one who holds the earlier title may attacked. In the instant case, the original
prevail only in the absence of any anomaly or irregularity in the process complaint is for recovery of possession
of its registration, which circumstance does not obtain in this case. filed by petitioner against private
respondent, not an original action filed by
CANCELLATION OF the latter to question the validity of TCT
TCT NO. T-10567 No. 10101 on which petitioner bases its
right. To rule on the issue of validity in a
case for recovery of possession is
The Court cannot sustain the CA's ruling[56]that TCT No. T-10567 tantamount to a collateral attack.
cannot be invalidated because it constitutes as a collateral attack which However, it should not [b]e overlooked
is contrary to the principle of indefeasibility of titles. that private respondent filed a
counterclaim against petitioner, claiming
It must be noted that Bangis interposed a counterclaim in his Answer ownership over the land and seeking
seeking to be declared as the true and lawful owner of the disputed damages. Hence, we could rule on the
property and that his TCT No. T-10567 be declared as superior over the question of the validity of TCT No. 10101
titles of the Heirs of Adolfo.[57]Since a counterclaim is essentially a for the counterclaim can be considered a
complaint[58]then, a determination of the validity of TCT No. T-10567 direct attack on the same. A counterclaim
vis-a-vis the titles of the Heirs of Adolfo can be considered as a direct, is considered a complaint, only this time,
not collateral, attack on the subject titles.[59] it is the original defendant who becomes
the plaintiff... It stands on the same
footing and is to be tested by the same
In Pasio v. Monterroyo,the Court has ruled, thus: rules as if it were an independent action. x
x x (Citations omitted) [60]
It is already settled that a counterclaim is considered an
original complaint and as such, the attack on the title in a
case originally for recovery of possession cannot be Besides, the prohibition against collateral attack does not apply to
13
spurious or non-existent titles, which are not accorded indefeasibility, refused. The mortgage contract therefore continued to subsist despite the
[61]as in this case. lapse of a considerable number of years from the time it was constituted
THE PRESENT ACTION in 1975 because the mortgage debt has not been satisfied.
HAS NOT PRESCRIBED

Following the Court's ruling in the iconic case of Eastern Shipping


The claim of the Heirs of Bangis that since they have been in possession Lines, Inc. v. Court of Appeals,[64]the foregoing liability, which is
of the subject land since 1972 or for 28 years reckoned from the filing of based on a loan or forbearance of money, shall be subject to legal
the complaint in 2000 then, the present action has prescribed is interest of 12% per annum from the date it was judicially determined by
untenable. It bears to note that while Bangis indeed took possession of the CA on March 30, 2009 until the finality of this Decision, and not
the land upon its alleged mortgage, the certificate of title (TCT No. from 1975 (the date of the constitution of the mortgage); nor from 1998
6313) remained with Adolfo and upon his demise, transferred to his (when an attempt to pay was made) or in 2000 at the time the complaint
heirs, thereby negating any contemplated transfer of ownership. Settled was filed, because it was the Heirs of Adolfo and not Bangis who filed
is the rule that no title in derogation of that of the registered owner can the instant suit[65]to collect the indebtedness. Thereafter, the judgment
be acquired by prescription or adverse possession.[62]Moreover, even if award inclusive of interest shall bear interest at 12% per annumuntil its
acquisitive prescription can be appreciated in this case, the Heirs of full satisfaction.[66]
Bangis' possession being in bad faith is two years shy of the requisite
30-year uninterrupted adverse possession required under Article 1137 of
the Civil Code. WHEREFORE, premises considered, the instant petition for review on
certiorari is DENIEDand the assailed Decision dated March 30, 2009 of
the Court of Appeals Mindanao Station (CA) and its Resolution dated
Consequently, the Heirs of Bangis cannot validly claim the rights of a December 2, 2009 in CA-G.R. CV No. 00722-MIN are AFFIRMED
builder in good faith as provided for under Article 449 in relation to with MODIFICATION:(1) cancelling TCT No. T-10567; and (2)
Article 448 of the Civil Code. Thus, the order for them to surrender the ordering respondent Heirs of Adolfo to pay petitioner Heirs of Bangis
possession of the disputed land together with all its improvements was the sum of P12,500.00 with legal interest of 12% per annum reckoned
properly made. from March 30, 2009 until the finality of this Decision and thereafter,
12% annual interest until its full satisfaction.

The rest of the Decision stands.


LIABILITY FOR THE PAYMENT
OF INTEREST SO ORDERED.
EN BANC

Finally, it is undisputed that the Heirs of Bangis made no judicial or


extrajudicial demand on the Heirs of Adolfo to pay the mortgage debt. PHILCOMSAT HOLDINGS G.R. No. 180308
Instead, it was the latter who signified their intent to pay their father's CORPORATION, ENRIQUE L.
loan obligation, admittedly in the amount of P12,500.00,[63]which was LOCSIN AND MANUEL D. Present:
14
ANDAL, (respondents Senate Committees) on June 7, 2007 for allegedly having
Petitioners, been approved by respondent Senate of the Republic of the Philippines
CARPIO,
(respondent Senate) with grave abuse of discretion amounting to lack or
VELASCO, JR.,*ᄃ
- versus - in excess of jurisdiction.
LEONARDO-DE CASTRO,
BRION,
PERALTA,
SENATE OF THE REPUBLIC The Factual Antecedents
BERSAMIN,
OF THE PHILIPPINES,
DEL CASTILLO,
SENATE COMMITTEE ON
ABAD,
GOVERNMENT The Philippine Communications Satellite Corporation (PHILCOMSAT)
VILLARAMA, JR.
CORPORATIONS AND PUBLIC is a wholly-owned subsidiary of the Philippine Overseas
PEREZ,
ENTERPRISES, SENATE Telecommunications Corporation (POTC), a government-sequestered
MENDOZA,**ᄃ
COMMITTEE ON PUBLIC organization in which the Republic of the Philippines holds a 35%
SERENO,
SERVICES, HON. SEN. interest in shares of stocks.[2] ᄃ Petitioner PHILCOMSAT Holdings
REYES, and
RICHARD GORDON AND Corporation (PHC), meanwhile, is a private corporation duly organized
PERLAS-BERNABE, JJ.
HON. SEN. JUAN PONCE and existing under Philippine laws and a holding company whose main
ENRILE, operation is collecting the money market interest income of
Promulgated:
PHILCOMSAT.
Respondents.
June 19, 2012
Petitioners Enrique L. Locsin and Manuel D. Andal are both directors
x------------------------------------------------------------------------------------- and corporate officers of PHC, as well as nominees of the government to
----x the board of directors of both POTC and PHILCOMSAT.[3]ᄃ By virtue
of its interests in both PHILCOMSAT and POTC, the government has,
likewise, substantial interest in PHC.
RESOLUTION

For the period from 1986 to 1996, the government, through the
Presidential Commission on Good Government (PCGG), regularly
PERLAS-BERNABE, J.: received cash dividends from POTC. In 1998, however, POTC suffered
its first loss. Similarly, in 2004, PHC sustained a P7-million loss
attributable to its huge operating expenses. By 2005, PHC's operating
expenses had ballooned tremendously. Likewise, several PHC board
This original Petition for Certiorari and Prohibition assails and seeks to members established Telecommunications Center, Inc. (TCI), a wholly-
enjoin the implementation of and nullify Committee Report No. 312[1]ᄃ owned PHC subsidiary to which PHC funds had been allegedly
submitted by respondents Senate Committees on Government advanced without the appropriate accountability reports given to PHC
Corporations and Public Enterprises and on Public Services and PHILCOMSAT.[4]ᄃ
15
recused himself from the proceedings in view of his personal interests in
POTC, nonetheless continued to participate actively in the hearings.[9]ᄃ
On February 20, 2006, in view of the losses that the government
continued to incur and in order to protect its interests in POTC,
PHILCOMSAT and PHC, Senator Miriam Defensor Santiago, during Issues Before The Court
the Second Regular Session of the Thirteenth Congress of the
Philippines, introduced Proposed Senate Resolution (PSR) No. 455[5]ᄃ
directing the conduct of an inquiry, in aid of legislation, on the The basic issues advanced before the Court are: (1) whether the
anomalous losses incurred by POTC, PHILCOMSAT and PHC and the respondent Senate committed grave abuse of discretion amounting to
mismanagement committed by their respective board of directors. PSR lack or in excess of jurisdiction in approving Committee Resolution No.
No. 455 was referred to respondent Committee on Government 312; and (2) whether it should be nullified, having proposed no piece of
Corporations and Public Enterprises, which conducted eleven (11) legislation and having been hastily approved by the respondent Senate.
public hearings[6]ᄃ on various dates. Petitioners Locsin and Andal were
invited to attend these hearings as resource persons.

On June 7, 2007, respondents Senate Committees submitted the assailed The Court's Ruling
Committee Report No. 312, where it noted the need to examine the role
of the PCGG in the management of POTC, PHILCOMSAT and PHC.
After due proceedings, the respondents Senate Committees found The respondents Senate Committees' power of inquiry relative to PSR
overwhelming mismanagement by the PCGG and its nominees over No. 455 has been passed upon and upheld in the consolidated cases of In
POTC, PHILCOMSAT and PHC, and that PCGG was negligent in the Matter of the Petition for Habeas Corpus of Camilo L. Sabio,[10]ᄃ
performing its mandate to preserve the government's interests in the said which cited Article VI, Section 21 of the Constitution, as follows:
corporations. In sum, Committee Report No. 312 recommended, inter
alia, the privatization and transfer of the jurisdiction over the shares of The Senate or the House of Representatives or any of its
the government in POTC and PHILCOMSAT to the Privatization respective committees may conduct inquiries in aid of
Management Office (PMO) under the Department of Finance (DOF) legislation in accordance with its duly published rules of
and the replacement of government nominees as directors of POTC and procedure. The rights of persons appearing in or affected
PHILCOMSAT. by such inquiries shall be respected.

On November 15, 2007, petitioners filed the instant petition before the The Court explained that such conferral of the legislative power of
Court, questioning, in particular, the haste with which the respondent inquiry upon any committee of Congress, in this case the respondents
Senate approved the challenged Committee Report No. 312.[7] ᄃ They Senate Committees, must carry with it all powers necessary and proper
also claim that respondent Senator Richard Gordon acted with partiality for its effective discharge.[11]ᄃ
and bias and denied them their basic right to counsel,[8] ᄃ and that
respondent Senator Juan Ponce Enrile, despite having voluntarily
16
On this score, the respondents Senate Committees cannot be said to In this Petition for Review on Certiorari1 under Rule 45 of the Rules of
have acted with grave abuse of discretion amounting to lack or in excess Court, petitioner Bank of the Philippine Islands (BPI) seeks to reverse
of jurisdiction when it submitted Committee Resolution No. 312, given and set aside the February 11, 2009 Decision2 and October 29, 2009
its constitutional mandate to conduct legislative inquiries. Nor can the Resolution3 of the Court of Appeals (CA) in CA-G.R. No. 87911 which
respondent Senate be faulted for doing so on the very same day that the annulled the March 1, 20043 and September 16, 20044 Orders of the
assailed resolution was submitted. The wide latitude given to Congress Regional Trial Court (RTC) of Makati City, Branch 61 and instead,
with respect to these legislative inquiries has long been settled, entered a new one directing the RTC to issue a writ of execution and/or
otherwise, Article VI, Section 21 would be rendered pointless.[12]ᄃ enforce garnishment against the bank deposit of Trendline Resources &
Commodities Exponent, Inc. (Trendline) and Leonarda Buelva (Buelva)
with the defunct Citytrust Banking Corporation (Citytrust), now merged
with BPI.
Hence, on the basis of the pronouncements in the Sabio case, and as The Facts
suggested[13] ᄃ by the parties in their respective pleadings, the issues On April 26, 1988, respondent Carlito Lee (Lee) filed a complaint for
put forth in the petition[14]ᄃ have become academic. sum of money with damages and application for the issuance of a writ
of attachment against Trendline and Buelva (collectively called
"defendants") before the RTC, docketed as Civil Case No. 88-702,
Corollarily, petitioners Locsin and Andal's allegation[15] ᄃ that their seeking to recover his total investment in the amount of P5.8 million.
constitutionally-guaranteed right to counsel was violated during the Lee alleged that he was enticed to invest his money with Trendline upon
hearings held in furtherance of PSR No. 455 is specious. The right to be Buelva’s misrepresentation that she was its duly licensed investment
assisted by counsel can only be invoked by a person under custodial consultant or commodity saleswoman. His investments, however, were
investigation suspected for the commission of a crime, and therefore lost without any explanation from the defendants.
attaches only during such custodial investigation.[16]ᄃ Since petitioners On May 4, 1988, the RTC issued a writ of preliminary attachment
Locsin and Andal were invited to the public hearings as resource whereby the Check-O-Matic Savings Accounts of Trendline with
persons, they cannot therefore validly invoke their right to counsel. Citytrust Banking Corporation, Ayala Branch, in the total amount of
P700,962.10 were garnished. Subsequently, the RTC rendered a decision
on August 8, 1989 finding defendants jointly and severally liable to Lee
WHEREFORE, the instant petition is DISMISSED. for the full amount of his investment plus legal interest, attorney’s fees
and costs of suit. The defendants appealed the RTC decision to the CA,
docketed as CA-G.R. CV No. 23166.
SO ORDERED. Meanwhile, on April 13, 1994, Citytrust filed before the RTC an Urgent
THIRD DIVISION Motion and Manifestation5 seeking a ruling on defendants' request to
G.R. No. 190144 August 1, 2012 release the amount of P591,748.99 out of the garnished amount for the
BANK OF THE PHILIPPINE ISLANDS, Petitioner, purpose of paying Trendline’s tax obligations. Having been denied for
vs. lack of jurisdiction, Trendline filed a similar motion6 with the CA which
CARLITO LEE, Respondent. the latter denied for failure to prove that defendants had no other assets
DECISION to answer for its tax obligations.
PERLAS-BERNABE, J.: On October 4, 1996, Citytrust and BPI merged, with the latter as the
17
surviving corporation. The Articles of Merger provide, among others, become a party in-interest upon the approval by the Securities and
that "all liabilities and obligations of Citytrust shall be transferred to and Exchange Commission (SEC) of the parties’ Articles of Merger. BPI’s
become the liabilities and obligations of BPI in the same manner as if Motion for Reconsideration11 was denied in the CA's October 29, 2009
the BPI had itself incurred such liabilities or obligations."7 Resolution.
On December 22, 1998, the CA denied the appeal in CA-G.R. CV No. The Issues
23166 and affirmed in toto the decision of the RTC, which had become In this petition, BPI ascribes the following errors to the CA:
final and executory on January 24, 1999. A.
Hence, Lee filed a Motion for Execution8 before the RTC on July 29, THE HONORABLE COURT OF APPEALS ERRED IN NOT
1999, which was granted. Upon issuance of the corresponding writ, he DISMISSING CA-G.R. SP No. 87911, THE PETITION FOR
sought the release of the garnished deposits of Trendline. When the writ CERTIORARI UNDER RULE 65 OF THE REVISED RULES OF
was implemented, however, BPI Manager Samuel Mendoza, Jr. denied COURT, FILED BY RESPONDENT CARLITO LEE BEING AN
having possession, control and custody of any deposits or properties IMPROPER REMEDY.
belonging to defendants, prompting Lee to seek the production of their B.
records of accounts with BPI. However, on the manifestation of BPI that THE HONORABLE COURT OF APPEALS ERRED IN RULING
it cannot locate the defendants' bank records with Citytrust, the RTC THAT PETITIONER BPI BECAME PARTY-IN-INTEREST IN THE
denied the motion on September 6, 2002. CASE FILED BY RESPONDENT CARLITO LEE UPON THE
On December 16, 2002, Lee filed a Motion for Execution and/or APPROVAL BY THE SECURITIES AND EXCHANGE
Enforcement of Garnishment9 before the RTC seeking to enforce COMMISSION OF ITS MERGER WITH CITYTRUST BANKING
against BPI the garnishment of Trendline’s deposit in the amount of CORPORATION.
P700,962.10 and other deposits it may have had with Citytrust. The C.
RTC denied the motion for dearth of evidence showing that BPI took THE HONORABLE COURT OF APPEALS ERRED IN NOT
over the subject accounts from Citytrust and the fact that BPI was not a RULING THAT THE MOTION FOR EXECUTION AND/OR
party to the case. Lee’s motion for reconsideration was likewise ENFORCEMENT OF GARNISHMENT IS NOT THE APPROPRIATE
denied.10 REMEDY IN THE EVENT THERE IS A THIRD PARTY INVOLVED
Lee elevated the matter to the CA on a petition for certiorari. In its DURING THE EXECUTION PROCESS OF A FINAL AND
February 11, 2009 Decision, the CA annulled the questioned orders, EXECUTORY JUDGMENT.
finding grave abuse of discretion on the part of the RTC in denying D.
Lee’s motion to enforce the garnishment against Trendline’s attached THE HONORABLE COURT OF APPEALS ERRED IN RULING
bank deposits with Citytrust, which have been transferred to BPI by THAT PETITIONER BPI SHOULD BE HELD ACCOUNTABLE FOR
virtue of their merger. It found BPI liable to deliver to the RTC the THE AMOUNT OF PHP700,962.10.12
garnished bank deposit of Trendline in the amount of P700,962.10, The Ruling of the Court
which Citytrust withheld pursuant to the RTC's previously-issued writ of Section 1, Rule 41 of the Revised Rules of Court provides:
attachment. SECTION 1. Subject of appeal. - x x x
The CA refused to give credence to BPI’s defense that it can no longer No appeal may be taken from:
locate Trendline’s bank records with the defunct Citytrust, as its xxx
existence was supported by evidence and by the latter's admission. (b) An interlocutory order;
Neither did it consider BPI a stranger to the case, holding it to have xxx
18
In any of the foregoing circumstances, the aggrieved party may file an obligations of Citytrust transferred to BPI as if it had incurred the same,
appropriate special civil action as provided in Rule 65.13 BPI undoubtedly became a party interested in sustaining the
A punctilious examination of the records will reveal that Lee had proceedings, as it stands to be prejudiced by the outcome of the case.
previously sought the execution of the final and executory decision of It is a settled rule that upon service of the writ of garnishment, the
the RTC dated August 8, 1989 which was granted and had resulted in garnishee becomes a "virtual party" or "forced intervenor" to the case
the issuance of the corresponding writ of execution. However, having and the trial court thereby acquires jurisdiction to bind the garnishee to
garnished the deposits of Trendline with Citytrust in the amount of ₱ comply with its orders and processes. In Perla Compania de Seguros,
700,962.10 by virtue of a writ of preliminary attachment, Lee filed anew Inc. v. Ramolete,16 the Court ruled:
a Motion for Execution and/or Enforcement of Garnishment before the In order that the trial court may validly acquire jurisdiction to bind the
RTC on December 16, 2002. While the RTC denied the motion in its person of the garnishee, it is not necessary that summons be served upon
March 1, 2004 Order, the denial was clearly with respect only to the him. The garnishee need not be impleaded as a party to the case. All that
enforcement of the garnishment, to wit: is necessary for the trial court lawfully to bind the person of the
Acting on the Motion for Execution and/or Enforcement of Garnishment garnishee or any person who has in his possession credits belonging to
filed by plaintiff Carlito Lee, and there being no evidence shown that the the judgment debtor is service upon him of the writ of garnishment.
accounts subject of the motion were taken over by the Bank of the The Rules of Court themselves do not require that the garnishee be
Philippine Islands from Citytrust Bank and considering further that served with summons or impleaded in the case in order to make him
Bank of Philippine Islands is not a party to this case, the instant Motion liable.
is DENIED for lack of merit. xxxx
SO ORDERED.14 Through the service of the writ of garnishment, the garnishee becomes a
Consequently, the foregoing Order merely involved the implementation "virtual party" to, or a "forced intervenor" in, the case and the trial court
of a writ of execution, hence, interlocutory in nature. An interlocutory thereby acquires jurisdiction to bind him to compliance with all orders
order is one that does not finally dispose of the case, and does not end and processes of the trial court with a view to the complete satisfaction
the court's task of adjudicating the parties’ contentions and determining of the judgment of the court.17
their rights and liabilities as regards each other, but obviously indicates Citytrust, therefore, upon service of the notice of garnishment and its
that other things remain to be done.15 acknowledgment that it was in possession of defendants' deposit
Conformably with the provisions of Section 1, Rule 41 of the Revised accounts in its letter-reply dated June 28, 1988, became a "virtual party"
Rules of Court above-quoted, the remedy from such interlocutory order to or a "forced intervenor" in the civil case. As such, it became bound by
is certiorari under Rule 65. Thus, contrary to the contention of BPI, the the orders and processes issued by the trial court despite not having been
CA did not err in assuming jurisdiction over the petition for certiorari. properly impleaded therein. Consequently, by virtue of its merger with
BPI likewise insists that the CA erred in considering it a party to the BPI on October 4, 1996, BPI, as the surviving corporation, effectively
case by virtue of its merger with Citytrust, the garnishee of defendants' became the garnishee, thus the "virtual party" to the civil case.
deposits. Corollarily, it should be emphasized that a merger of two corporations
The Court is not convinced. produces, among others, the following effects:
Section 5, Rule 65 of the Revised Rules of Court requires that persons 1. The constituent corporations shall become a single corporation which,
interested in sustaining the proceedings in court must be impleaded as in case of merger, shall be the surviving corporation designated in the
private respondents. Upon the merger of Citytrust and BPI, with the plan of merger; and in case of consolidation, shall be the consolidated
latter as the surviving corporation, and with all the liabilities and corporation designated in the plan of consolidation;
19
2. The separate existence of the constituent corporation shall cease, claims an interest in the property adverse to him or denies the debt, the
except that of the surviving or the consolidated corporation; court may authorize, by an order made to that effect, the judgment
3. The surviving or the consolidated corporation shall possess all the oblige to institute an action against such person or corporation for the
rights, privileges, immunities and powers and shall be subject to all the recovery of such interest or debt, forbid a transfer or other disposition of
duties and liabilities of a corporation organized under this Code; such interest or debt within one hundred twenty (120) days from notice
4. The surviving or the consolidated corporation shall thereupon and of the order, and may punish disobedience of such order as for
thereafter possess all the rights, privileges, immunities and franchises of contempt. Such order may be modified or vacated at any time by the
each of the constituent corporations; and all property, real or personal, court which issued it, or by the court in which the action is brought,
and all receivables due on whatever account, including subscriptions to upon such terms as may be just. (Underscoring supplied).
shares and other choses in action, and all and every other interest of, or The institution of a separate action against a garnishee contemplates a
belonging to, or due to each constituent corporation, shall be deemed situation where the garnishee (third person) "claims an interest in the
transferred to and vested in such surviving or consolidated corporation property adverse to him (judgment debtor) or denies the debt."19
without further act or deed; and Neither of these situations exists in this case. The garnishee does not
5. The surviving or consolidated corporation shall be responsible and claim any interest in the deposit accounts of the defendants, nor does it
liable for all the liabilities and obligations of each of the constituent deny the existence of the deposit accounts. In fact, Citytrust admitted in
corporations in the same manner as if such surviving or consolidated its letter dated June 28, 1988 that it is in possession of the deposit
corporation had itself incurred such liabilities or obligations; and any accounts.
pending claim, action or proceeding brought by or against any of such Considering the foregoing disquisitions, BPI's liability for the garnished
constituent corporations may be prosecuted by or against the surviving deposits of defendants has been clearly established.
or consolidated corporation. The rights of creditors or liens upon the Garnishment has been defined as a specie of attachment for reaching
property of any of such constituent corporations shall not be impaired credits belonging to the judgment debtor and owing to him from a
by such merger or consolidation.18 (Underscoring supplied) stranger to the litigation.20 A writ of attachment is substantially a writ
In sum, although Citytrust was dissolved, no winding up of its affairs or of execution except that it emanates at the beginning, instead of at the
liquidation of its assets, privileges, powers and liabilities took place. As termination, of a suit. It places the attached properties in custodia legis,
the surviving corporation, BPI simply continued the combined obtaining pendente lite a lien until the judgment of the proper tribunal
businesses of the two banks and absorbed all the rights, privileges, on the plaintiff’s claim is established, when the lien becomes effective
assets, liabilities and obligations of Citytrust, including the latter’s as of the date of the levy.21
obligation over the garnished deposits of the defendants. By virtue of the writ of garnishment, the deposits of the defendants with
Adopting another tack, BPI claims that Lee should have instead availed Citytrust were placed in custodia legis of the court. From that time
himself of the remedy provided under Section 43, Rule 39 of the onwards, their deposits were under the sole control of the RTC and
Revised Rules of Court because he is a third party to the case who Citytrust holds them subject to its orders until such time that the
denies possession of the property. attachment or garnishment is discharged, or the judgment in favor of
The argument is specious. Lee is satisfied or the credit or deposit is delivered to the proper officer
Section 43, Rule 39 of the Revised Rules of Court states: of the court.22 Thus, Citytrust, and thereafter BPI, which automatically
SECTION 43. Proceedings when indebtedness denied or another person assumed the former’s liabilities and obligations upon the approval of
claims the property. – If it appears that a person or corporation, alleged their Articles of Merger, is obliged to keep the deposit intact and to
to have property of the judgment obligor or to be indebted to him, deliver the same to the proper officer upon order of the court.
20
However, the RTC is not permitted to dissolve or discharge a
preliminary attachment or garnishment except on grounds specifically
provided23 in the Revised Rules of Court, namely,24 (a) the debtor has
posted a counter-bond or has made the requisite cash deposit;25 (b) the
attachment was improperly or irregularly issued26 as where there is no
ground for attachment, or the affidavit and/or bond filed therefor are
defective or insufficient; (c) the attachment is excessive, but the
discharge shall be limited to the excess;27 (d) the property attachment is
exempt from preliminary attachment;28 or (e) the judgment is rendered
against the attaching creditor.29
Evidently, the loss of bank records of a garnished deposit is not a ground
for the dissolution of garnishment. Consequently, the obligation to
satisfy the writ stands.
Moreover, BPI cannot avoid the obligation attached to the writ of
garnishment by claiming that the fund was not transferred to it, in light
of the Articles of Merger which provides that "all liabilities and
obligations of Citytrust shall be transferred to and become the liabilities
and obligations of BPI in the same manner as if the BPI had itself
incurred such liabilities or obligations, and in order that the rights and
interest of creditors of Citytrust or liens upon the property of Citytrust
shall not be impaired by merger."30
Indubitably, BPI IS liable to deliver the fund subject of the writ of
garnishment.
With regard to the amount of the garnished fund, the Court concurs with
the finding of the CA that the total amount of garnished deposit of
Trendline as of January 27, 1994 is P700,962.10,31 extant in its motion
for partial lifting of the writ of preliminary attachment32 and which
amount, as correctly observed by the CA, remains undisputed33
throughout the proceedings relative to this case.
WHEREFORE, the instant petition is DENIED and the assailed
February 11, 2009 Decision and October 29, 2009 Resolution of the
Court of Appeals are AFFIRMED.
SO ORDERED.