observed whilst stored at the pier - 699 bags; and shortlanded -
110 bags (Exhs. P and P-1).
SECOND DIVISION
[G.R. No. 87434. August 5, 1992.]
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.
REGALADO, J p:
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. 2 and 3 of the interisland carrier.
These were commingled with similar cargoes belonging to Evergreen
Plantation and also Stanfilco. LLjur
"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
"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 as reimbursable attorney's fees and other litigation expenses; LLpr
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 stand
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: LLpr
"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. llcd
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 34 and the vesting of the right to file suit 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, 38 considering 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, taken 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: LLphil
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. Cdpr
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 far-fetched. 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. LLjur
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 how or where these
losses were incurred?
 A No, sir.

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?

xxx xxx xxx

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
you be able to tell the respective liabilities of the bailees and/or
carriers concerned?

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

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. LexLib

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.

SO ORDERED.

Narvasa, C . J ., Padilla and Nocon, JJ., concur.


THIRD DIVISION
[G.R. No. 169454. December 27, 2007.]
THE HEIRS OF MARCELINO DORONIO, NAMELY: REGINA AND FLORA,
BOTH SURNAMED DORONIO, petitioners, vs. HEIRS OF FORTUNATO
DORONIO, NAMELY: TRINIDAD ROSALINA DORONIO-BALMES,
MODING DORONIO, FLORENTINA DORONIO, AND ANICETA
ALCANTARA-MANALO, respondents.
REYES, R.T., J p:
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, Pangasinan, in an
action for reconveyance and damages. The CA declared respondents as rightful owners of one-
half of the subject property and directed petitioners to execute a registerable document
conveying the same to respondents.
The Facts
Spouses Simeon Doronio and Cornelia Gante, now both deceased, were the
registered owners of a parcel of land located at Barangay Cabalitaan, Asingan, Pangasinan
covered by Original Certificate of Title (OCT) No. 352. 3 The courts below described it 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. 4
The spouses had children but the records fail to disclose their number. It is clear,
however, that Marcelino Doronio and Fortunato Doronio, now both deceased, were among 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 24, 1919, a private deed of donation propter nuptias 5 was executed by
spouses Simeon Doronio and Cornelia Gante in favor of Marcelino Doronio and the latter's wife,
Veronica Pico. One of the properties subject of said deed of donation is the one that it described
as follows:
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. 6 HTASIa
It appears that the property described in the deed of donation is the one covered by
OCT No. 352. However, there is a significant discrepancy with respect to the identity of the
owner of adjacent property at the eastern side. Based on OCT No. 352, the adjacent owners are
Zacarias Najorda and Alejandro Najorda, whereas based on the deed of 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
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 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.
Respondents, on the other hand, claim that only half of the property was actually
incorporated in the said deed of donation because it stated that Fortunato Doronio, instead of
Zacarias Najorda and Alejandro Najorda, is the owner of the adjacent property at the 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.
Eager to obtain the entire property, the heirs of Marcelino Doronio and Veronica Pico
filed, on January 11, 1993, before the RTC in Urdaneta, Pangasinan a petition "For the
Registration of a Private Deed of Donation" 9 docketed as Petition Case No. U-920. No
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
During the hearings, no one interposed an objection to the petition. 12 After the RTC
ordered a general default, 13 the petition was eventually granted on September 22, 1993. This
led to the registration of the deed of donation, cancellation of OCT No. 352 and issuance of a
new Transfer Certificate of Title (TCT) No. 44481 in the names of Marcelino Doronio and
Veronica Pico. 14 Thus, the entire property was titled in the names of petitioners' predecessors.
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 CcaASE
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: TIaDHE
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, . . ., in the legitimate . . .
relatives of the deceased, . . . .” 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 person's 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. cHDEaC
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 EAcTDH
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:
. . . 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.
xxx xxx xxx
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 one's 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 . . . . 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. aSTAIH
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 cHEATI
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:
. . . 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. aATESD
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
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

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
(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.
Ynares-Santiago, Austria-Martinez, Chico-Nazario and Nachura, JJ., concur.
||| (Heirs of Doronio v. Heirs of Doronio, G.R. No. 169454, [December 27, 2007], 565 PHIL 766-793)

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 aDHCcE
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

FIRST DIVISION
[G.R. No. 165606. February 6, 2006.]
DEUTSCHE BANK MANILA, petitioner, vs. SPOUSES CHUA YOK SEE and
REBECCA SEE, JOMIRA CORPORATION, F.E.E. INTERNATIONAL
PHILIPPINES, INC., JOSEFINA LIM, LUCITA L. KHO, and LILY L.
CO, respondents.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; A WRIT
OF CERTIORARI MAY BE ISSUED ONLY FOR THE CORRECTION OF ERRORS OF
JURISDICTION OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION, NOT ERRORS OF JUDGMENT. — Indeed, a writ of certiorari may be issued
only for the correction of errors of jurisdiction or grave abuse of discretion amounting to lack or
excess of jurisdiction, not errors of judgment. Where the issue or question involves or affects the
wisdom or legal soundness of the decision — not the jurisdiction of the court to render said
decision — the same is beyond the province of a petition for certiorari. Grave abuse of discretion
implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of
positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law as where the power is exercised in an arbitrary and despotic manner by
reason of passion and hostility.
2. ID.; ID.; ID.; A RULING ON THE ADMISSION OF EVIDENCE, EVEN IF WRONG, IS
NOT AN ABUSE OF DISCRETION BUT SIMPLY AN ERRONEOUS RULING. — Not every error in
proceeding, or every erroneous conclusion of law or fact, is abuse of discretion. If at all there
was any mistake in said decisions, such mistake can only be characterized as an error of
judgment. A ruling on the admission of evidence, even if wrong, is not an abuse of discretion but
simply an erroneous ruling. As long as the trial court acts within its jurisdiction, any alleged error
committed in the exercise of its discretion will amount to nothing more than mere errors of
judgments, correctible by an appeal and not by a petition for certiorari.
3. ID.; ID.; ID.; PROPER REMEDY OF PETITIONER WAS TO APPEAL IN DUE
COURSE FROM THE JUDGMENT OR DECISION OF THE TRIAL COURT ON THE MERITS OF
THE CASE TO THE COURT OF APPEALS; APPEAL IN DUE COURSE IS A SPEEDY AND
ADEQUATE REMEDY. — The proper remedy of petitioner was to appeal in due course from the
judgment or decision of the trial court on the merits of the case to the CA. On appeal, the
petitioner may assail the trial court's Order on the admission of its evidence and pray that the
appellate court resolve whether the trial court's rulings thereon are correct. Since the documents
were admitted and made part of the records of the case, the appellate court can easily ascertain
whether the trial court erred in not admitting all the documents for the purpose for which they
were offered. The early case of Lamagan v. De la Cruz is supportive of this: As the petitioner-
appellant concedes in her petition and brief, it is beyond question that rulings of the trial court on
procedural questions and on admissibility of evidence during the course of the trial are
interlocutory in nature and may not be the subject of separate appeal or review on certiorari, but
are to be assigned as errors and reviewed in the appeal properly taken from the decision
rendered by the trial court on the merits of the case. If the rule were otherwise, there simply
would be no end to the trial of cases, for any litigant, not satisfied with the trial court's ruling
admitting or excluding any proffered oral or documentary evidence, would then indefinitely tie up
the trial while elevating the ruling for review by the appellate court. This Court has consistently
ruled that in a petition for certiorari from an interlocutory order, the petitioner is burdened to
prove that the remedy of appeal would not afford adequate and expeditious relief. A remedy is
plain, speedy, and adequate remedy if it will promptly relieve the petitioners from the injurious
effects of the acts of the lower court. Appeal in due course is a speedy and adequate remedy.
4. ID.; ID.; ID.; BARE ALLEGATIONS OF PARTIALITY WILL NOT SUFFICE TO
DISQUALIFY A JUDGE ON THE GROUND OF BIAS AND PREJUDICE; MOVANT MUST PROVE
THE BIAS AND PREJUDICE WITH CLEAR AND CONVINCING EVIDENCE. — To disqualify a
judge on the ground of bias and prejudice, the movant must prove the same with clear and
convincing evidence. Bare allegations of partiality will not suffice. It cannot be presumed,
especially if weighed against the sacred oaths of office of magistrates, requiring them to
administer justice fairly and equitably.
CALLEJO, SR., J p:
Before us is a petition for review of the Decision 1 of the Court of Appeals (CA) in CA-
G.R. SP No. 82912 which dismissed the petition for certiorari filed by petitioner Deutsche Bank
Manila assailing the Order 2 of the Regional Trial Court of Makati, Branch 57.
The case arose from the following antecedents:
On January 15, 1998, Deutsche Bank (Manila) filed a complaint for Sum of Money and
Damages against spouses Chua Yok See and Rebecca See, Jomira Corporation, F.E.E.
International Philippines, Inc., Josefina Lim, Lucita L. Kho and Lily Co with the Regional Trial
Court (RTC) of Makati. 3 The complaint was docketed as Civil Case No. 98-109 and raffled to
Branch 57 of the Makati RTC, which was then presided by Judge Bonifacio Sanz Maceda.
The complaint alleged, inter alia, that the defendants dealt in U$:P F/X Forwards with
and through the plaintiff. The latter was given a Cut-Loss Order to close, on a best effort basis,
their F/X Forward positions once the exchange rate hit P26.45:$1.00. On July 11, 1997, the peso
suddenly depreciated against the US dollar, and due to the highly volatile and illiquid conditions
of the foreign exchange market at the time, the plaintiff was only able to implement the Cut-Loss
Order on July 15, 1997 at the average closing rate of P30.43:$1.00. Consequently, the
defendants incurred a total loss of P45,812,240.00. In accordance with the security arrangement
between the parties, the plaintiff applied the defendants' deposits in the Hold-Out Accounts to
pay for the loss. According to the plaintiff, there remained an unpaid amount of P11,251,032.47.
Despite demands, the defendants failed to pay the said amount and even denied having made
any investments in US$:P F/X Forwards with and through the plaintiff. 4
The plaintiff prayed that, after due proceedings, judgment be rendered in its favor, as
follows:
(a) Ordering defendants See Spouses and Jomira, jointly and
solidarily, to pay Plaintiff Bank the amount of P4,551,116.49, plus legal
interest, as actual damages;
 (b) Ordering defendants See Spouses and F.E.E., jointly and
solidarily, to pay Plaintiff Bank the amount of P4,245,777.46, plus legal
interest, as actual damages;
(c) Ordering defendants Lim, Kho and Co, jointly and solidarily, to
pay Plaintiff Bank the amount of P2,454,138.52, plus legal interest, as actual
damages;
(d) Ordering all the defendants, jointly and solidarily, to pay Plaintiff
Bank the amount of P5,000,000.00 as exemplary damages;
(e) Ordering all the defendants, jointly and solidarily, to pay Plaintiff
Bank the amount of P500,000.00 as and for attorney's fees;
(f) Ordering all the defendants, jointly and solidarily, to pay the
costs of suit; and
(g) Granting the Plaintiff Bank all other reliefs just and equitable
under the premises. 5
In their Answer, the defendants interposed the following affirmative defenses:
4.1. The contracts upon which plaintiff's claims are based are
unenforceable under:
(a) The Statute of Frauds; and/or
(b) Articles 1317 and 1403 (1) of the New Civil Code, which
provide:
"Art. 1317. No one may contract in the name of another
without being authorized by the latter, or unless he has by law a
right to represent him. SaHcAC
A contract entered into in the name of another by one
who has no authority or legal representation, or who has acted
beyond his powers, shall be unenforceable, unless it is ratified,
expressly or impliedly, by the person on whose behalf it has been
executed, before it is revoked by the other contracting party.
xxx xxx xxx
"Art. 1403 (1). The following contracts are
unenforceable, unless they are ratified:
(1) Those entered into in the name of another person by
one who has been given no authority or legal representation, or
who has acted beyond his powers.
xxx xxx xxx"
4.2. Plaintiff has no cause of action against the defendants.
4.2.1. Defendants have never entered into US$:Peso F/X
Forward Transactions with plaintiff. Neither
does plaintiff have the authority to deal in
US$ F/X Forward transactions in behalf of the
defendants, particularly those which are the
subject of this suit.
4.2.2. Plaintiff has no basis to hold defendants liable to
pay the losses supposedly incurred as a
result of entering into the US$:Peso F/X
Forward transactions which are the subject of
this suit.
4.2.3. Plaintiff has no basis, in law or contract, to offset
losses supposedly incurred by defendants on
US$:Peso F/X forward transactions against
the accounts of defendants Jomira, FEE and
the Lim Sisters.
4.2.4. Plaintiff has no cause of action to hold defendants
Chua Yok See and Rebecca See liable for
any obligation incurred by defendants
JOMIRA and FEE. 6
They prayed that, after due proceedings, judgment be rendered in their favor, as
follows:
(1) Ordering plaintiff to pay the defendants the following amounts,
representing their principal obligation P33,940,014.00 and US$494,950.27
covering the amount of the deposits plus interest;
(2) Ordering plaintiff to pay defendants the amount of P28 Million
as actual damages;
(3) Ordering plaintiff to pay defendants P35 Million by way of moral
damages and damage to defendant corporations' goodwill;
(4) Ordering plaintiff to pay defendant at least P35 Million by way of
exemplary damages;
(5) Ordering plaintiff to pay defendant at least P1 Million as and for
attorney's fees and expenses of litigation; and
(6) Ordering the plaintiff to pay the costs of the suit. cHSTEA
Defendants pray for such other relief as may be deemed just and
equitable. 7
Before pre-trial, Judge Reinato G. Quilala replaced Judge Bonifacio Sanz Maceda as
the Presiding Judge of Branch 57. On June 22, 1999, Judge Quilala issued a Pre-Trial Order. 8
Trial ensued. The plaintiff adduced documentary evidence marked as Exhibits "A" to
"KKKKKKK" and their sub-markings. After the presentation of its witnesses, the plaintiff offered
its documentary evidence praying that —
. . . the foregoing documentary exhibits be admitted for the
purposes for which they are offered and as part of the testimonies of the
witnesses of Plaintiff Deutsche Bank Manila particularly:
(a) Michael S. Chua;
(b) Carrie S. Tan;
(c) Manuel G. Ahyong, Jr.;
(d) Luz R. Par;
(e) Soccoro I. Calixto;
(f) Eduardo Manansala; and
(g) Atty. Patricia-Ann T. Prodigalidad.
 Deutsche Bank prays for such further or other relief as may be just
and equitable under the premises. 9
The defendants filed their Objections/Comments to the Plaintiff's Formal Offer of
Documentary Evidence. 10 On April 30, 2003, the trial court issued an Order pertaining to the
documentary evidence of the plaintiffs and indicating the reasons for the denial or admission
thereof:
1. Exhs. "A", "A-1" to "A-8" and sub-markings denied admission for being
hearsay and self-serving. Said exhibits appear to be immaterial
and irrelevant as said defendants SEE's Account No. 1071190
relative to which Exhibit "A" was prepared has already been closed
by defendants prior to the subject F/X transactions;
2. Exhs. "B", "B-1" to "B-4" are DENIED admission for being irrelevant and
immaterial as defendants SEE's Account No. 1071190 was closed
by said defendants prior to the subject F/X Transactions;
3. Exhs. "C", "C-1" to "C-2" are DENIED admission as the handwritten
Summary of alleged F/X Transactions of defendants See covering
the period 11 October 1996 to February 1998 are self-serving,
immaterial and irrelevant to the subject FX transaction which were
made in their personal capacities are not the subject of the instant
case.
4. Exhs. "D", "D-1" to "D-2" and their sub-markings; Exhs. "UU", "UU-1" to
"UU-6"; "VV", "VV-1" to "VV-4" are admitted there being no
objection to their admission;
5. Exhs. "E", "E-1 to "E-5" are admitted there being no objection to their
admission;
6. Exhs. "F", "F-1" to "F-10", Exhs. "XX", "XX-1"; Exhs. "YY", "YY-1" to "YY-
3"; Exhs. "ZZ" to "ZZ-2"; Exhs. "AAA", "AAA-1", "BBB", "BBB-1"
to "BBB-3", "CCC", "CCC-1" to "CCC-5" are admitted there being
no objection to their admission;
7. Exhs. "G", "G-1" to "G-4" are denied admission for being hearsay and self-
serving;
8. Exh. "H" and sub-markings, which is the unsigned Summary of the alleged
F/X Transaction of FEE Enterprises covering the period of 2
December 1996 to 16 May 1997 is denied admission for being self-
serving, immaterial and irrelevant to the subject FX transactions;
9. Exh. "I" which is the unsigned Summary of the alleged F/X transactions of
FEE covering the period 30 May 1997 to 4 August 1997 is denied
admission for being self-serving. Said Exhibit does not support the
purposes of the offer.
10. Exhs. "J", "J-1" to "J-3", are denied admission for being hearsay and self-
serving;
11. Exhs. "K", "K-1" to "K-4", "L", "L-1" to "L-4" are denied admission as the
said exhibits relative to defendants SEE's account number
1071190 has already been closed prior to the subject F/X
Transactions;
12. Exhs. "M", "M-1" to "M-6", "O", "O-1" to "O-8" are denied admission for
being hearsay and for being self-serving and said exhibits do not
support the purposes of the offer;
13. Exh. "N" is denied admission for being self-serving and said exhibits does
not support the purposes of the offer; and immaterial and irrelevant
to the subject F/X transactions;
14. Exhs. "P" to "P-1" is (sic) admitted there being no objection to their
admission.
15. Exhs. "Q", "Q-1" to "Q-8" are denied for being hearsay, self-serving and
irrelevant as said exhibits do not support the purposes of the offer;
16. Exhs. "R", "R-1" are denied admission for being self-serving as said
exhibits do not support the purposes of the offer. Also, said
exhibits appear to be immaterial and irrelevant to the subject F/X
transactions;
17. Exhs. "S", "S-1" to "S-2" are denied admission for being irrelevant to the
subject F/X Transactions;
18. Exhs. "T", "T-1" to "T-4" are admitted subject to the defendants'
objections/comment thereon;
19. Exhs. "U", "U-1" to "U-16" are admitted noting, however, defendants'
objection/comment thereto;
20. Exh. "V" is admitted noting, however, the defendants' objection/comment
thereto;
21. Exhs. "W", "W-1" to "W-6" are admitted, noting, however defendants'
objection/comment thereto;
22. Exh. "X" is denied admission for being self-serving as said exhibits on its
face was not addressed to defendants See in their representative
capacities;
23. Exhs. "Y", "Z", "AA", "AA-1", "BB", "EE", "FF", "GG" are denied
admission for being self-serving as defendants neither entered nor
authorized plaintiff to enter into the subject F/X transactions;
24. Exhs. "CC", "DD" are denied admission for being self-serving, immaterial
and irrelevant as the defendants Lim sisters have not entered into
nor did they authorize plaintiff to enter into the subject F/X
Transactions in April and May 1997;
25. Exhs. "HH", "HH-1" to "HH-3" are denied admission for being irrelevant
as Acct. No. 1071190 has been closed by defendant SEE prior to
the subject F/X Transactions;
26. Exhs. "II", "0II-1" to "II-4", "JJ", "JJ-1" to JJ-3", "KK", "KK-1" to "KK-4"
are denied admission for being immaterial, irrelevant as the signing
by defendants of the said pro-forma exhibits did not exempt the
plaintiff from sending a confirmation receipt covering an F/X
Transactions to the defendants for their conformity nor did it
authorize plaintiff to execute F/X transactions for and in behalf of
the defendants without their consent and authority;
27. Exhs. "LL", "LL-1" to "LL-2"; "MM", "MM-1 to "MM-3" are denied
admission for being irrelevant and immaterial as the instant case
does not involve an issue about facsimile order and instruction
made by the defendants; Further, Account Number 1071190 of
defendants SEE, to which Exh. "LL" was executed, was closed by
said defendants prior to the subject F/X transactions;
28. Exhs. "NN", "NN-1" to "NN-4", "QQ", "QQ-1" to "QQ-2" and sub-
markings, "TT", "TT-1" to "TT-2" and sub-marking; Exhs. "HHH",
"HHH-1" to "HHH-3" are admitted, noting however the defendants'
objections/comment thereto;
29. Exhs. "OO", "OO-1" to "OO-5", "PP", "PP-1" to "PP-3" are denied
admission for being immaterial, irrelevant as said exhibits relative
to defendants" SEE account number 10771190 (sic) was closed by
said defendants prior to the subject F/X transactions;
30. Exhs. "DDD", "DDD-1" to "DDD-13" and sub-markings are admitted
noting however the defendants' objections/comments thereto;
31. Exhs. "RR" to "RR-6", "RR-5-A" are denied admission for being irrelevant
and immaterial;
32. Exhs. "SS", "SS-1" are denied admission for being immaterial, irrelevant,
to the subject F/X transactions, plaintiff is not suing for alleged
losses arising from the F/X transaction made by defendants See in
their personal capacity.
33. Exhs. "WW", "WW-1" to "WW-2", "WW-1-A" are denied admission for
being self-serving, immaterial and irrelevant and the said exhibits
does not support the purposes of the offer. CAIHaE
34. Exhs. "EEE", "EEE-1" are denied admission for being self-serving as
defendant Chua Yok See did not give a stop loss order and Take
Profit Order to the plaintiff for the simple reason that defendants
have not authorized, nor did they enter into the subject F/X
transactions;
35. Exhs. "FFF", "FFF-1", "GGG", "GGG-1" to "GGG-3" are denied admission
for being self-serving, immaterial to the subject F/X transactions;
36. Exhs. "III", "JJJ", "KKK", "LLL", "MMM", "NNN", "OOO", "OOO-1" to
"OOO-7", "NNNNNN", "OOOOOO", "PPPPPP" are admitted,
noting however the defendants' objections/comments thereto.
37. Exhs. "PPP", "PPP-1", "QQQ", "RRR", "RRR-1", "SSS", "SSS-1" are
denied admission for being immaterial and irrelevant to the subject
F/X transactions;
38. Exhs. "TTT", "UUU", "VVV", WWW", "XXX", "YYY", "ZZZ", "AAAA", "IIII",
"JJJJ", "KKKK", "LLLL", "MMMM", "NNNN", "OOOO", "PPPP",
"QQQQ", "RRRR", "SSSS", "TTTT", "UUUU", "VVVV", "WWWW",
"XXXX", "YYYY", "ZZZZ", "AAAAA", "BBBBB", "CCCCC",
"DDDDD", "EEEEE", FFFFF", "GGGGG", "HHHHH", "IIIII", "JJJJJ",
"KKKKK", "MMMMM", "NNNNN", "OOOOO", "PPPPP",
"QQQQQ", "RRRRR", "SSSSS", "TTTTT", "UUUUU", "VVVVV",
"WWWWW", "XXXXX", "YYYYY", "ZZZZZ", "AAAAAA",
"BBBBBB", "FFFFFF", "GGGGGG", "HHHHHH" are denied
admission for being irrelevant as the said exhibits are grossly
insufficient to show the completion of the subject F/X transactions;
39. Exhs. "IIIIII", "JJJJJJ", are denied admission for being immaterial and
irrelevant as the said exhibits are grossly insufficient to prove the
existence of the subject F/X transactions;
40. Exh. "BBBB", "CCCC", "DDDD", "EEEE", "FFFF", "GGGG", "HHHH",
"MMMMMM" are denied admission for being grossly insufficient to
prove the existence of the subject F/X Transactions;
41. Exhs. "LLLLL", "CCCCCC", "DDDDDD", "EEEEEE", are denied admission
for being grossly insufficient to prove the existence of the subject
F/X transactions;
42. Exhs. "KKKKKK", "LLLLLL", are denied admission for being grossly
insufficient to prove the existence of the subject F/X Transactions;
43. Exh. "QQQQQQ" is denied admission for lack of confirmation receipt to
support the said F/X transactions;
44. Exhs. "RRRRRR", "RRRRRR-1", "RRRRRR-2" are denied admission as it
appears that the act of plaintiff in debiting the account of JOMIRA
to settle the alleged losses from the subject F/X transactions was
unauthorized and without factual and legal basis;
45. Exh. "SSSSSS" is denied admission for lack of confirmation receipt to
support the said F/X transactions;
46. Exhs. "TTTTTT", "UUUUUU" are denied admission for lack of
confirmation receipt to support the said F/X transactions;
47. Exhs. "VVVVVV", "WWWWWW", are denied admission for lack of
confirmation receipt to support the said F/X transactions;
48. Exhs. "XXXXXX", "YYYYYY", "ZZZZZZ", "AAAAAAA", "BBBBBBB",
"CCCCCCC" are denied admission for lack of confirmation receipt
to support the said F/X transactions;
49. Exhs. "DDDDDDD", "EEEEEEE", are admitted, noting however the
defendants' objections/comments thereto;
50. Exhs. "FFFFFFF", "GGGGGGG", are denied admission for lack of
confirmation receipt to support the said F/X transactions;
51. Exhs. "HHHHHHH", "IIIIIII", "JJJJJJJ", "KKKKKKK", are denied admission
as plaintiff has no basis to match the subject F/X transactions.
SO ORDERED. 11
The plaintiff filed a motion for the reconsideration 12 of the Order and an Omnibus
Motion: (1) to Inhibit; and (2) to Defer Resolution of the Motion for Reconsideration.13 In support
of its motion, the plaintiff alleged that:
THE HONORABLE PRESIDING JUDGE'S CLEAR AND
CATEGORICAL, ALBEIT ERRONEOUS PRONOUNCEMENTS, IN HIS ORDER
DATED 30 APRIL 2003 SHOWS [sic] BIAS AND PARTIALITY, AND
CONSTITUTES [sic] A PREJUDGMENT OF THE CASE. 14
The defendants opposed the motions of the plaintiff. 15 On September 5, 2003, the
court issued an Order denying the omnibus motion, and granting the plaintiff's motion for
reconsideration, thus:
Clearly, the Court's duty to decide the instant case "without fear of
repression" cannot be overturned by an unproven speculation of bias and
prejudice. The Court, therefore, cannot inhibit itself from hearing the instant
case.
Thus, there is no cogent reason to defer the resolution of plaintiff's
Motion for Reconsideration.
After a consideration of the grounds relied upon by plaintiff in its
Motion for Reconsideration, the Court finds reason to set aside its Order
dated 30 April 2003.
 WHEREFORE, plaintiff's OMNIBUS MOTION TO INHIBIT AND
DEFER RESOLUTION is hereby denied for lack of merit, while
plaintiff's MOTION FOR RECONSIDERATION is hereby granted. All the
documentary exhibits of plaintiff are hereby ordered admitted as part of the
testimonies of the witness who testified thereon.
SO ORDERED. 16
The plaintiff filed a motion for the partial reconsideration of the trial court's Order
praying that:
WHEREFORE, plaintiff Deutsche Bank respectfully prays this
Honorable Court reverse its 5 September 2003, insofar as it denied
Deutsche's Motion to Inhibit dated 4 June 2003, and admitted Deutsche's
documentary exhibits, only as part of the testimony of the witnesses and,
consequently, the Honorable Presiding Judge Reinato G. Quilala voluntarily
disqualify and/or inhibit himself from trying and deciding this case; and all of
Deutsche's documentary exhibits be admitted for the purposes for which they
are offered, and as part of the testimonies of its witnesses.
Deutsche Bank prays for such further or other relief as may be just
and equitable. 17
The court denied the motion in its Order 18 dated January 7, 2004.
The plaintiff, now the petitioner, filed a petition for certiorari with the CA, contending
that:
I
THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OR EXCESS OF JURISDICTION, IN NOT INHIBITING
HIMSELF FROM THE CASE CONSIDERING THAT THE EXPLICIT AND
CATEGORICAL DECLARATIONS OF THE RESPONDENT JUDGE IN HIS
ORDER DATED 30 APRIL 2003 CLEARLY SHOW BIAS AND PARTIALITY
AND CONSTITUTE A PREJUDGMENT OF THE CASE. cEDIAa
II
THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OR EXCESS OF JURISDICTION, IN ONLY
ADMITTING THE DOCUMENTARY EXHIBITS OF PETITIONER AS PART OF
THE TESTIMONIES OF THE WITNESSES WHO TESTIFIED THEREON. 19
In support of the second assigned error, the petitioner made the following allegations:
6.13 In its Motion for Reconsideration of the 30 April 2004 Order,
petitioner moved that all of its documentary exhibits be admitted for the
purposes stated in the offer, and as part of the testimonies of its witnesses.
Petitioner also called attention to the fact that there is no basis for the denial
of said exhibits, particularly since the reasons cited by the respondent Judge
are not addressed to the admissibility of evidence, but rather to the weight
thereof.
6.14 Respondent Judge did not address any of the issues raised
as to the propriety of admission of the documentary evidence. Instead, it
made a general statement admitting petitioner's exhibits, but only as part of
the witnesses' testimonies.
6.15 Clearly, by not addressing the arguments raised in petitioner's
Motion for Reconsideration as to the admissibility of its documentary exhibits
with respect to the purposes stated therein, respondent Judge acted
capriciously and whimsically. Under the principle of due process, Petitioner is
entitled to be apprised of the basis of any order. 20
The petition contained the following prayer:
WHEREFORE, it is most respectfully prayed of this Honorable
Court that:
1. Upon the filing of this Petition, a Temporary Restraining
Order/Writ of Preliminary Injunction be issued enjoining the Honorable
Reinato G. Quilala of the Regional Trial Court of Makati City, Branch 7, from
conducting further proceedings in Civil Case No. 98-109, including but not
limited to the setting and conducting hearings for the reception of private
respondents' evidence until after the instant Petition is resolved.
2. The Petition be given due course and judgment be rendered
reversing the Assailed Orders of the respondent Court, dated 5 September
2003 and 7 January 2004, and a writ of certiorari be issued:
a. Ordering the respondent Judge to inhibit himself from trying and
deciding Civil Case No. 98-109; and
b. Admitting all of petitioner's documentary exhibits for the
purposes for which they are offered, and as part of the
testimonies of its witnesses.
Other relief, just or equitable under the circumstances are likewise
prayed for. 21
On September 20, 2004, the CA rendered judgment dismissing the petition.
According to the CA,
Petitioner imputes to respondent Judge grave abuse of discretion
upon: (a) the denial of almost all of its documentary evidence; (b) adopting, as
the court's ruling, the objections of private respondents to the admissibility of
said evidence; and (c) prejudging the case through its findings on the non-
liability of private respondents. It also insists in the inhibition of respondent
Judge for being biased and partial against them.
The imputation is not well-taken. Respondent Judge's rejection of
documentary exhibits on valid and lawful grounds does not amount to grave
abuse of discretion. As part of his judicial function, the respondent Judge is
undeniably clothed with authority to admit or reject evidence determinative of
the outcome of the case. He may properly intervene in the presentation of
evidence to expedite and prevent unnecessary waste of time.
Petitioner, being the plaintiff in the main case, has yet to present
and prove at the trial its evidence-in-chief in support of its cause of action.
Appreciation of the evidence is at best preliminary and should not prevent the
trial judge from making a final assessment of the evidence before him after
full trial. Thus, respondent Judge correctly declared:
"Other than the pronouncements made by the Court in
its Order dated 30 April 2003, plaintiff has not shown any
circumstances or actuations on the part of the Court that would
even hint at any bias or prejudice. Plaintiff's claim that the Court
has already prejudged the cases is also unfounded, there being no
evidence to show such alleged prejudgment. It should be noted
that the Court merely ruled on the admissibility of the documents
presented as exhibits and not on the probative value of the
documents. Besides, the plaintiff is not left without any remedy
since they [sic] can resort to the tender of their [sic] excluded
 evidenced [sic] under Sec. 40, Rule 132 of the Revised Rules of
Court."
If, indeed, respondent Judge misappreciated certain evidence,
such are not jurisdictional matters that may be determined and ruled upon in
a certiorari proceeding. A review of facts and evidence is not the province of
the extraordinary remedy of certiorari, which is extra-ordinem — beyond the
ambit of appeal. Petitioner, nonetheless, failed to prove grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of
respondent Judge.
Consequently, respondent Judge's inhibition from hearing the case
is uncalled for. The issue of voluntary inhibition is primarily a matter of
conscience and sound discretion based on valid reasons on the part of the
judge. Mere suspicion that a judge is partial to one of the parties is not
enough to show that the former favors the latter. Bare allegations cannot
overturn the presumption that a judge acted regularly and with impartiality.
Hence, petitioner's application for temporary restraining order/writ
of preliminary injunction cannot be granted for lack of factual and legal
basis. 22
Petitioner now comes to this Court for relief claiming that the appellate court erred, as
follows:
A. THE COURT OF APPEALS ERRED IN FAILING TO CONSIDER THAT
JUDGE QUILALA'S DENIAL OF ADMISSION TO MOST OF
DEUTSCHE'S EXHIBITS BASED ON HIS PERCEIVED LACK OF
WEIGHT THEREOF, AND, CONSEQUENTLY, HIS RESOLUTION
OF THE MAIN FACTUAL ISSUE INVOLVED IN THE
CONTROVERSY WAS GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION. EDATSI
B. THE COURT OF APPEALS ERRED IN NOT REVERSING JUDGE
QUILALA'S ASSAILED ORDERS ADMITTING THE
DOCUMENTARY EXHIBITS OF DEUTSCHE ONLY AS PART OF
THE TESTIMONIES OF THE WITNESSES WHO TESTIFIED
THEREON, WHICH HE ISSUED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION.
C. THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT JUDGE
QUILALA, WHO RULED THAT RESPONDENTS DID NOT HAVE
ANY LIABILITY ON THE TRANSACTIONS SUBJECT OF THE CASE
BECAUSE THE SAME WERE ALLEGEDLY NOT AUTHORIZED,
AND WHO MADE AN EXPRESS FINDING ON THE MAIN FACTUAL
ISSUE IN THIS CASE, EVEN IF RESPONDENTS HAD YET TO
PRESENT THEIR EVIDENCE, SHOULD BE COMPELLED TO
INHIBIT HIMSELF ON THE GROUND OF BIAS AND
PREJUDGMENT. 23
Petitioner claims that the trial court committed grave abuse of discretion when it
rejected some of its exhibits in its April 30, 2003 Order on the ground that it made an express
finding on the main factual issue of the case. According to petitioner, the RTC should have ruled
only on the admissibility of the evidence. Rather, the trial court practically denied all of its
documentary evidence on grounds not pertaining to their admissibility, but based on their weight
or probative value. Petitioner submits that admissibility of the evidence should not be
confounded with its probative value. Petitioner also disputes the trial court's finding that some of
the documents were self-serving because, while they may have been prepared by the petitioner,
they were presented before the trial court and offered in evidence after respondents were given
an opportunity to rebut their veracity and authenticity. It avers that the trial court's substantial
lack of appreciation of the rules of evidence amounts to grave abuse of discretion.24
Petitioner likewise maintains that the trial court committed grave abuse of discretion
when it issued its September 5, 2003 Order admitting all of its documentary evidence but only as
part of the testimonies of its witnesses. It alleges that the trial court did not address any of the
issues it raised regarding the propriety of admitting its documentary evidence. The petitioner
avers that a document or writing which is admitted not as independent evidence but merely as
part of the testimony of a witness does not constitute proof of the facts stated therein; hence, it
is as if the documents were denied admission. 25
Petitioner avers that Judge Quilala should be compelled to inhibit himself from the
case on the ground of bias and prejudice. It contends that the RTC judge has revealed his lack
of impartiality in his April 30, 2003 Order when he made a prejudgment on the merits of the case,
particularly on the factual issue of whether or not the F/X forward transactions were authorized.
In denying some of the documents, the RTC judge declared that they are "self-serving as
respondents neither entered nor authorized plaintiff to enter into the subject F/X transactions."
Petitioner adds that Judge Quilala's partiality towards the respondents and his prejudgment of
the case also showed when he denied other documents for being "irrelevant as the said exhibits
are grossly insufficient to show the completion of the subject F/X transactions" since whether or
not such completion took place remains an issue. 26
For their part, the respondents argue that, assuming Judge Quilala erred in admitting
the petitioner's documentary exhibits only as part of the testimonies of its witnesses, such error
can hardly be considered as correctible by certiorari or amounting to grave abuse of discretion.
As long as the court acts within its jurisdiction, any alleged error committed in the exercise
thereof will amount to nothing more than errors of judgment which are reviewable by timely
appeal, and not via special civil action ofcertiorari. It is axiomatic that the trial court has the
authority and discretion to rule on the admissibility of each documentary evidence vis-à-vis the
purpose for which it is offered. Thus, it may exclude evidence, although admissible for certain
purposes, if it is inadmissible for which it is offered, and its exclusion is not reversible error.
Besides, according to respondents, the petitioner's exhibits suffer defects that render them
inadmissible to prove the purposes for which they were offered. 27 Therefore, there is no factual
basis or legal justification for the inhibition of the presiding judge. The element of bias and
prejudice must stem from an extrajudicial source. Mere disagreement as to the proper
application of certain procedural and even substantive rules neither prove bias nor prejudice on
the part of the judge nor necessitate his inhibition. 28
The issue to be resolved in this case is whether or not the presiding judge committed
grave abuse of discretion correctible by certiorari in (a) admitting the petitioner's documentary
exhibits only as part of the testimonies of the witnesses who respectively testified thereon, and
(b) not inhibiting himself from the case. aAEHCI
The petition is without merit.
Courts are required to resolve the admissibility of the evidence offered immediately
after the objection is made or within a reasonable time. It must be made during the trial and at
such time as will give the other party an opportunity to meet the situation presented by the
ruling. Courts are further mandated to state the reason or reasons for their ruling if there are two
or more objections by the other party. 29 Due process requires no less. In this case, we note
that, in the Order of September 5, 2003, the trial court failed to state its reasons for
reconsidering its earlier order, and for admitting the documentary evidence of the petitioners
only as part of the testimonies of its witnesses. At any rate, we find that the issue raised in this
case is not jurisdictional; hence, the filing of the petition for certiorari with the CA was not
proper.
Indeed, a writ of certiorari may be issued only for the correction of errors of
jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction, 30 not errors
of judgment. 31 Where the issue or question involves or affects the wisdom or legal soundness
of the decision — not the jurisdiction of the court to render said decision — the same is beyond
the province of a petition for certiorari. 32 Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction. 33 The abuse of discretion
must be patent and gross as to amount to an evasion of positive duty or a virtual refusal to ruled, this is not sufficient to establish bias and prejudice on the part of the trial court. Thus, the
perform a duty enjoined by law, or to act at all in contemplation of law as where the power is Court held in Webb v. People: 48
exercised in an arbitrary and despotic manner by reason of passion and hostility. 34
To prove bias and prejudice on the part of the respondent judge,
Petitioner, in imputing grave abuse of its discretion to the trial court in its ruling on the petitioners harp on the alleged adverse and erroneous rulings of respondent
admissibility of its documentary exhibits, relies on such court's previous order rejecting some of judge on their various motions. By themselves, however, they do not
its exhibits. However, it should be noted that the trial court has subsequently admitted all the sufficiently prove bias and prejudice to disqualify respondent judge. To be
documentary exhibits of the petitioner although merely as part of the testimonies of the disqualifying, the bias and prejudice must be shown to have stemmed from
witnesses. an extrajudicial source and result in an opinion on the merits on some basis
other than what the judge learned from his participation in the case. Opinions
We rule that neither of these rulings could be a basis for a certiorari proceeding. The formed in the course of judicial proceedings, although erroneous, as long as
trial court, in so ruling, did not commit grave abuse of discretion. Not every error in proceeding, they are based on the evidence presented and conduct observed by the
or every erroneous conclusion of law or fact, is abuse of discretion. 35 If at all there was any judge, do not prove personal bias or prejudice on the part of the judge. As a
mistake in said decisions, such mistake can only be characterized as an error of judgment. A general rule, repeated rulings against a litigant, no matter how erroneous and
ruling on the admission of evidence, even if wrong, is not an abuse of discretion but simply an vigorously and consistently expressed, are not a basis for disqualification of a
erroneous ruling. 36 As long as the trial court acts within its jurisdiction, any alleged error judge on grounds of bias and prejudice. Extrinsic evidence is required to
committed in the exercise of its discretion will amount to nothing more than mere errors of establish bias, bad faith, malice or corrupt purpose, in addition to the
judgments, correctible by an appeal and not by a petition for certiorari. 37 palpable error which may be inferred from the decision or order itself.
Although the decision may seem so erroneous as to raise doubts concerning
In Lee v. People, 38 the petitioner therein filed a petition for certiorari under Rule 65 of
a judge's integrity, absent extrinsic evidence, the decision itself would be
the Rules of Court before the CA assailing the order of the trial court admitting certain
insufficient to establish a case against the judge. The only exception to the
documents offered by the prosecution. The Court declared that the order admitting in evidence
rule is when the error is so gross and patent as to produce an ineluctable
the disputed documents was issued by the trial court in the exercise of its jurisdiction, and that
inference of bad faith or malice. HEAcDC
even if erroneous, the same is a mere error of judgment and not of jurisdiction, and hence, the
remedy of the petitioner was to appeal in due course.39 In the present case, there is likewise no xxx xxx xxx
dispute that the trial court had jurisdiction over the case. As such, it had jurisdiction to rule on
the admissibility of the documents offered in evidence. We hasten to stress that a party aggrieved by erroneous
interlocutory rulings in the course of a trial is not without remedy. The range
The proper remedy of petitioner was to appeal in due course from the judgment or
of remedy is provided in our Rules of Court and we need not make an
decision of the trial court on the merits of the case to the CA. 40 On appeal, the petitioner may
elongated discourse on the subject. But certainly, the remedy for erroneous
assail the trial court's Order on the admission of its evidence and pray that the appellate court
rulings, absent any extrinsic evidence of malice or bad faith, is not the
resolve whether the trial court's rulings thereon are correct. Since the documents were admitted
outright disqualification of the judge. For there is yet to come a judge with the
and made part of the records of the case, the appellate court can easily ascertain whether the
omniscience to issue rulings that are always infallible. The courts will close
trial court erred in not admitting all the documents for the purpose for which they were offered.
shop if we disqualify judges who err for we all err. 49
The early case of Lamagan v. De la Cruz 41 is supportive of this:
As the petitioner-appellant concedes in her petition and brief, it is The records do not show that the trial court was motivated by malice and bad faith in
beyond question that rulings of the trial court on procedural questions and on issuing its orders. In fact, it even partially granted petitioner's motion for reconsideration of its
admissibility of evidence during the course of the trial are interlocutory in previous order denying some of the documentary exhibits, and admitted all of its documentary
nature and may not be the subject of separate appeal or review on certiorari, exhibits as part of the testimonies of its witnesses. Even if the ruling may be erroneous, it is not a
but are to be assigned as errors and reviewed in the appeal properly taken sufficient ground to require the presiding judge to inhibit himself from hearing the case.
from the decision rendered by the trial court on the merits of the case. If the WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-
rule were otherwise, there simply would be no end to the trial of cases, for G.R. SP No. 82912, dated September 30, 2004, is AFFIRMED.
any litigant, not satisfied with the trial court's ruling admitting or excluding any
proffered oral or documentary evidence, would then indefinitely tie up the trial SO ORDERED.
while elevating the ruling for review by the appellate court. 42
Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Chico-Nazario, JJ., concur.
This Court has consistently ruled that in a petition for certiorari from an interlocutory
||| (Deutsche Bank Manila v. Spouses Chua Yok See, G.R. No. 165606, [February 6, 2006], 517 PHIL
order, the petitioner is burdened to prove that the remedy of appeal would not afford adequate
212-235)
and expeditious relief. 43 A remedy is plain, speedy, and adequate remedy if it will promptly
relieve the petitioners from the injurious effects of the acts of the lower court. 44 Appeal in due
course is a speedy and adequate remedy. 45
Petitioner's contention that the trial court showed bias and prejudgment of the case is
likewise without merit. To disqualify a judge on the ground of bias and prejudice, the movant
must prove the same with clear and convincing evidence. 46 Bare allegations of partiality will not
suffice. It cannot be presumed, especially if weighed against the sacred oaths of office of
magistrates, requiring them to administer justice fairly and equitably. 47

In this case, petitioner solely relies on the unfavorable rulings of the trial court,
particularly on the admission of its documentary exhibits. However, as the Court has already

FIRST DIVISION
[G.R. No. 105813. September 12, 1994.]
CONCEPCION M. CATUIRA, petitioner, vs. COURT OF APPEALS and
PEOPLE OF THE PHILIPPINES, respondents.
DECISION
BELLOSILLO, J p:
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 mandate 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. LibLex
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, 5objection 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: LLphil
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. 10 Thus —
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. prLL
SO ORDERED.
Davide, Jr., Quiason and Kapunan, JJ., concur.
Cruz, J., is on leave.
||| (Catuira v. Court of Appeals, G.R. No. 105813, [September 12, 1994], 306 PHIL 424-428)
EN BANC
[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.
REYES, J.B.L., J p:
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.
SYLLABUS
1. EVIDENCE; ADMISSIBILITY OF EVIDENCE; EXTRA-JUDICIAL CONFESSION;
ADMISSIBLE AS EVIDENCE OF DECLARANT'S GUILT. — Under the rule of multiple
admissibility of evidence, even if an accused's confession may not be competent as against his
co-accused, being hearsay as to the latter, or to prove conspiracy between them without the
conspiracy being established by other evidence, the confession is 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 be admitted as such.
2. ID.; ID.; ACT OR DECLARATION OF CONSPIRATOR; SECTION 12, RULE 123, IS
NOT APPLICABLE TO CONFESSION MADE AFTER CONSPIRACY HAS ENDED. — Section 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," refers to statements made by one
conspirator during the pendency of the unlawful enterprise ("during its existence") and in
furtherance of its object, and not to a confession made 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. Napkil, 52 Phil., 985).
3. ID.; ID.; OBJECTIONS, WAIVER OF; COURT HAS NO POWER TO DISREGARD
EVIDENCE "MOTU PROPRIO." — The exclusion of the proffered confessions was no made of
the basis of the objection interposed by defense counsel, but upon an altogether different
ground, which the Court issued motu proprio. By so doing, the Court overlooked that the right to
object is a privilege which the parties may waive; and if the ground for objection is known and
not seasonably made, the objection is deemed waived and the Court has no power, on its own
motion, to disregard the evidence (Marella vs. Reyes, 12 Phil., 1).
4. ID.; ID.; RULE ON ADMISSIBILITY OF EVIDENCE. — The practice of excluding
evidence of doubtful objections to its materiality or technical objections to the form of the
question 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 safety accept the testimony upon the
statement of the attorney that the proof offered will be connected later." (Prats & Co. vs. Pheonix
Insurance Co., 52 Phil., 807, 816-817.) 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. There is greater reason to
adhere to such policy in criminal cases where questions arises 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.
DECISION
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 yon
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 proffered 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
(Marellavs. Reyes, 12 Phil., 1).
We see no need for the present to discuss the question of the admissibility of the
individual extrajudicial confessions of two or more accused for the purpose of establishing
conspiracy between them through the identity of the confessions in essential details. After all,
the confessions are not before us and have not even 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 trivial
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 remembered that in the
heat of the battle over which he 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 its 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.
Wherefore, the order excluding the confessions of the accused Juan Consunji and
Alfonso Panganiban is annulled and set aside and the Court below is directed to proceed with
the trial in accordance with law and this opinion Costs against respondents Juan Consunji and
Alfonso Panganiban. So ordered.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo,
Labrador and Concepcion, JJ., concur.
||| (People v. Yatco, G.R. No. L-9181, [November 28, 1955], 97 PHIL 940-947)

FIRST DIVISION
[G.R. No. 86062. June 6, 1990.]
INTERPACIFIC TRANSIT, INC., petitioner, vs. RUFO AVILES and
JOSEPHINE AVILES, respondents.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; DOCUMENTARY EVIDENCE; IDENTIFICATION AND FORMAL OFFER
THEREOF AS AN EXHIBIT DISTINGUISHED. — It is instructive at this point 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 as 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.
2. ID.; ID.; ID.; OBJECTION THERETO MUST BE MADE AT THE TIME IT IS FORMALLY OFFERED. —
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.
3. ID.; ID.; ID.; ID.; PREMATURELY MADE IN CASE AT BAR. — 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. In People v. Teodoro, 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).
4. ID.; ID.; ID.; ID.; EFFECT OF PREMATURE OBJECTION. — The objection of the defense to the
photocopies of the airway bills 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.
5. ID.; ID.; ID.; ID.; EFFECT OF FAILURE TO SEASONABLY FILE OBJECTION. — The rule is that
evidence not objected to is deemed admitted and may be validly considered by the court in arriving at
its judgment. 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 best
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 secondary 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 US v. Ong Shin, (28 Phil. 242) (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. (Hodges v. Salas, et al., [63 Phil. 567]).
6. ID.; CRIMINAL PROCEDURE; JUDGMENT; RULE ON CIVIL LIABILITY OF THE ACCUSED IN CASE
OF ACQUITTAL. — According 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.
7. ID.; ID.; SEPARATE CIVIL ACTION; FILING THEREOF, NOT NECESSARY WHEN THE FACTS TO
BE PROVED IN THE CIVIL CASE HAVE ALREADY BEEN ESTABLISHED IN THE CRIMINAL
PROCEEDING. — In Padilla v. Court of Appeals, 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 criminal 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 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.
CRUZ, J p:
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 as Exhibits
"B" to "OO." The prosecution never 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 bills 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 original writing itself." Loss of the originals had not been proved to justify the exception to the
rule as one of the prosecution witnesses 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 (c) 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 trial. 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 point 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 as 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 bills 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 best 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 secondary 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
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 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.

(It) is universally accepted that when secondary or incompetent evidence is Narvasa, Gancayco and Medialdea, JJ ., concur.
presented and accepted without any objection on the part of the other party,
Griño-Aquino, J ., is on leave.
the latter is bound thereby and the court is obliged to grant it the probatory
value it deserves. 11 ||| (Interpacific Transit, Inc. v. Aviles, G.R. No. 86062, [June 6, 1990], 264 PHIL 753-763)
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."

According 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 criminal 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
 against it, had yet to be collated, determined and identified. Thus, in a letter 8 dated March 14,
1990, Justice Dizon authorized Atty. Jesus M. Gonzales (Atty. Gonzales) to sign and file on
behalf of the Estate the required estate tax return and to represent the same in securing a
Certificate of Tax Clearance. Eventually, on April 17, 1990, Atty. Gonzales wrote a
letter 9 addressed to the BIR Regional Director for San Pablo City and filed the estate tax
return 10 with the same BIR Regional Office, showing therein a NIL estate tax liability, computed
as follows: aAcDSC

COMPUTATION OF TAX
Conjugal Real Property (Sch. 1) P10,855,020.00
Conjugal Personal Property (Sch. 2) 3,460,591.34
Taxable Transfer (Sch. 3)
Gross Conjugal Estate 14,315,611.34
Less: Deductions (Sch. 4) 187,822,576.06
Net Conjugal Estate NIL
Less: Share of Surviving Spouse NIL
———————.
Net Share in Conjugal Estate NIL

xxx xxx xxx

Net Taxable Estate NIL

———————.
Estate Tax Due NIL. 11
———————.

On April 27, 1990, BIR Regional Director for San Pablo City, Osmundo G. Umali
THIRD DIVISION issued Certification Nos. 2052 12 and 2053 13 stating that the taxes due on the transfer of real
and personal properties 14 of Jose had been fully paid and said properties may be transferred to
his heirs. Sometime in August 1990, Justice Dizon passed away. Thus, on October 22, 1990, the
[G.R. No. 140944. April 30, 2008.] probate court appointed petitioner as the administrator of the Estate. 15 EIAScH
Petitioner requested the probate court's authority to sell several properties forming
RAFAEL ARSENIO S. DIZON, in his capacity as the Judicial Administrator part of the Estate, for the purpose of paying its creditors, namely: Equitable Banking Corporation
(P19,756,428.31), Banque de L'Indochine et de Suez (US$4,828,905.90 as of January 31, 1988),
of the Estate of the deceased JOSE P. FERNANDEZ, petitioner, vs.
Manila Banking Corporation (P84,199,160.46 as of February 28, 1989) and State Investment
COURT OF TAX APPEALS and COMMISSIONER OF INTERNAL
House, Inc. (P6,280,006.21). Petitioner manifested that Manila Bank, a major creditor of the
REVENUE, respondents.
Estate was not included, as it did not file a claim with the probate court since it had security over
several real estate properties forming part of the Estate. 16

NACHURA, J p:
Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of
Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision 2 dated April 30, 1999
which affirmed the Decision 3 of the Court of Tax Appeals (CTA) dated June 17, 1997. 4 THaDAE
However, on November 26, 1991, the Assistant Commissioner for Collection of the
BIR, Themistocles Montalban, issued Estate Tax Assessment Notice No. FAS-E-87-91-
003269, 17 demanding the payment of P66,973,985.40 as deficiency estate tax, itemized as
follows: HCSEcI
Deficiency Estate Tax — 1987

The Facts Estate tax P31,868,414.48

25% surcharge - late filing 7,967,103.62
On November 7, 1987, Jose P. Fernandez (Jose) died. Thereafter, a petition for the
late payment 7,967,103.62
probate of his will 5 was filed with Branch 51 of the Regional Trial Court (RTC) of Manila (probate
Interest 19,121,048.68
court). 6 The probate court then appointed retired Supreme Court Justice Arsenio P. Dizon
Compromise - non filing 25,000.00
(Justice Dizon) and petitioner, Atty. Rafael Arsenio P. Dizon (petitioner) as Special and Assistant
non payment 25,000.00
Special Administrator, respectively, of the Estate of Jose (Estate). In a letter 7 dated October 13,
no notice of death 15.00
1988, Justice Dizon informed respondent Commissioner of the Bureau of Internal Revenue (BIR)
no CPA Certificate 300.00
of the special proceedings for the Estate.
————————
Petitioner alleged that several requests for extension of the period to file the required Total amount due & collectible P66,973,985.40 18
estate tax return were granted by the BIR since the assets of the estate, as well as the claims ===============
 In his letter 19 dated December 12, 1991, Atty. Gonzales moved for the Inc., represented by Jose P.
reconsideration of the said estate tax assessment. However, in her letter 20 dated April 12, Fernandez, as mortgagors, in the
1994, the BIR Commissioner denied the request and reiterated that the estate is liable for the total amount of P240,479,693.17
payment of P66,973,985.40 as deficiency estate tax. On May 3, 1994, petitioner received the as of February 28, 1989
letter of denial. On June 2, 1994, petitioner filed a petition for review 21 before respondent CTA. (pp. 186-187, BIR records); "G" & "G-1"
Trial on the merits ensued. 9. Claim of State Investment
House, Inc. filed with the
As found by the CTA, the respective parties presented the following pieces of RTC, Branch VII of Manila,
evidence, to wit: STaHIC docketed as Civil Case No.
In the hearings conducted, petitioner did not present testimonial 86-38599 entitled "State
evidence but merely documentary evidence consisting of the following: Investment House, Inc.,
Plaintiff, versus Maritime
Nature of Document (sic) Company Overseas, Inc. and/or
Exhibits Jose P. Fernandez, Defendants",
(pp. 200-215, BIR records); "H" to "H-16"
1. Letter dated October 13, 1988 from 10. Letter dated March 14, 1990
Arsenio P. Dizon addressed to the of Arsenio P. Dizon addressed
Commissioner of Internal Revenue to Atty. Jesus M. Gonzales,
informing the latter of the special (p. 184, BIR records); "I"
proceedings for the settlement of 11. Letter dated April 17, 1990
the estate (p. 126, BIR records); "A" from J.M. Gonzales addressed
2. Petition for the probate of the will to the Regional Director of
and issuance of letter of administration BIR in San Pablo City
filed with the Regional Trial Court (p. 183, BIR records); "J"
(RTC) of Manila, docketed as Sp. 12. Estate Tax Return filed by
Proc. No. 87-42980 (pp. 107-108, the estate of the late Jose P.
BIR records); "B" & "B-1" Fernandez through its authorized
3. Pleading entitled "Compliance" representative, Atty. Jesus M.
filed with the probate Court Gonzales, for Arsenio P. Dizon,
submitting the final inventory with attachments (pp. 177-182,
of all the properties of the BIR records); "K" to "K-5"
deceased (p. 106, BIR records); "C" 13. Certified true copy of the
4. Attachment to Exh. "C" which Letter of Administration
is the detailed and complete issued by RTC Manila, Branch
listing of the properties of 51, in Sp. Proc. No. 87-42980
the deceased (pp. 89-105, BIR rec.); "C-1" to "C-17" appointing Atty. Rafael S.
5. Claims against the estate filed Dizon as Judicial Administrator
by Equitable Banking Corp. with of the estate of Jose P.
the probate Court in the amount Fernandez; (p. 102, CTA records)
of P19,756,428.31 as of March 31, and "L"
1988, together with the Annexes 14. Certification of Payment of
to the claim (pp. 64-88, BIR records); "D" to "D-24" estate taxes Nos. 2052 and
6. Claim filed by Banque de L' 2053, both dated April 27, 1990,
Indochine et de Suez with the issued by the Office of the
probate Court in the amount of Regional Director, Revenue
US $4,828,905.90 as of January Region No. 4-C, San Pablo
31, 1988 (pp. 262-265, BIR records); "E" to "E-3" City, with attachments
7. Claim of the Manila Banking (pp. 103-104, CTA records.). "M" to "M-5"
Corporation (MBC) which as of
November 7, 1987 amounts to
P65,158,023.54, but recomputed Respondent's [BIR] counsel presented on June 26, 1995 one
as of February 28, 1989 at a witness in the person of Alberto Enriquez, who was one of the revenue
total amount of P84,199,160.46; examiners who conducted the investigation on the estate tax case of
together with the demand letter the late Jose P. Fernandez. In the course of the direct examination of
from MBC's lawyer (pp. 194-197, the witness, he identified the following:
BIR records); "F" to "F-3"
8. Demand letter of Manila Banking Documents/
Corporation prepared by Asedillo, Signatures BIR Record
Ramos and Associates Law Offices
addressed to Fernandez Hermanos, 1. Estate Tax Return prepared by
 the BIR; p. 138 case. Besides, the documents marked as respondent's exhibits formed
2. Signatures of Ma. Anabella part of the BIR records of the case. 24
Abuloc and Alberto Enriquez,
Jr. appearing at the lower Nevertheless, the CTA did not fully adopt the assessment made by the BIR and it came up with
Portion of Exh. "1"; -do- its own computation of the deficiency estate tax, to wit: DaCTcA
3. Memorandum for the Commissioner, Conjugal Real Property P5,062,016.00
dated July 19, 1991, prepared by Conjugal Personal Prop. 33,021,999.93
revenue examiners, Ma. Anabella A. ——————
Abuloc, Alberto S. Enriquez and Gross Conjugal Estate 38,084,015.93
Raymund S. Gallardo; Reviewed by Less: Deductions 26,250,000.00
Maximino V. Tagle pp. 143-144 –——————
4. Signature of Alberto S. Net Conjugal Estate P11,834,015.93
Enriquez appearing at the Less: Share of Surviving Spouse 5,917,007.96
lower portion on p. 2 of Exh. "2"; -do- ——————
5. Signature of Ma. Anabella A. Net Share in Conjugal Estate P5,917,007.96
Abuloc appearing at the Add: Capital/Paraphernal
lower portion on p. 2 of Exh. "2"; -do- Properties — P44,652,813.66
6. Signature of Raymund S. Less: Capital/Paraphernal
Gallardo appearing at the Deductions 44,652,813.66
Lower portion on p. 2 of Exh. "2"; -do- ———————
7. Signature of Maximino V. Net Taxable Estate P50,569,821.62
Tagle also appearing on ============
p. 2 of Exh. "2"; -do- Estate Tax Due P29,935,342.97
8. Summary of revenue Add: 25% Surcharge for Late Filing 7,483,835.74
Enforcement Officers Audit Add: Penalties for-No notice of death 15.00
Report, dated July 19, 1991; p. 139 No CPA certificate 300.00
9. Signature of Alberto ———————
Enriquez at the lower Total deficiency estate tax P37,419,493.71
portion of Exh. "3"; -do- ============
10. Signature of Ma. Anabella A.
Abuloc at the lower
portion of Exh. "3"; -do- exclusive of 20% interest from due date of its payment until full
11. Signature of Raymond S. payment thereof
Gallardo at the lower
portion of Exh. "3"; -do- [Sec. 283 (b), Tax Code of 1987]. 25
12. Signature of Maximino
V. Tagle at the lower Thus, the CTA disposed of the case in this wise:
portion of Exh. "3"; -do-
13. Demand letter (FAS-E-87-91-00), WHEREFORE, viewed from all the foregoing, the Court finds the
signed by the Asst. Commissioner petition unmeritorious and denies the same. Petitioner and/or the heirs of
for Collection for the Commissioner Jose P. Fernandez are hereby ordered to pay to respondent the amount of
of Internal Revenue, demanding P37,419,493.71 plus 20% interest from the due date of its payment until
payment of the amount of full payment thereof as estate tax liability of the estate of Jose P.
P66,973,985.40; and p. 169 Fernandez who died on November 7, 1987. IaAHCE
14. Assessment Notice FAS-E-87-91-00 pp. 169-170 22 SO ORDERED. 26

The CTA's Ruling
On June 17, 1997, the CTA denied the said petition for review. Citing this Court's
ruling in Vda. de Oñate v. Court of Appeals, 23 the CTA opined that the aforementioned pieces
of evidence introduced by the BIR were admissible in evidence. The CTA ratiocinated: HSCATc
Although the above-mentioned documents were not formally
offered as evidence for respondent, considering that respondent has been
declared to have waived the presentation thereof during the hearing on
March 20, 1996, still they could be considered as evidence for respondent
since they were properly identified during the presentation of respondent's
witness, whose testimony was duly recorded as part of the records of this
Aggrieved, petitioner, on March 2, 1998, went to the CA via a petition for review. 27
The CA's Ruling
On April 30, 1999, the CA affirmed the CTA's ruling. Adopting in full the CTA's
findings, the CA ruled that the petitioner's act of filing an estate tax return with the BIR and the
issuance of BIR Certification Nos. 2052 and 2053 did not deprive the BIR Commissioner of her
authority to re-examine or re-assess the said return filed on behalf of the Estate. 28
On May 31, 1999, petitioner filed a Motion for Reconsideration 29 which the CA
denied in its Resolution 30 dated November 3, 1999.
Hence, the instant Petition raising the following issues:
 1. Whether or not the admission of evidence which were not formally offered
by the respondent BIR by the Court of Tax Appeals which was
subsequently upheld by the Court of Appeals is contrary to the
Rules of Court and rulings of this Honorable Court; aDCIHE
2. Whether or not the Court of Tax Appeals and the Court of Appeals erred in
recognizing/considering the estate tax return prepared and filed by
respondent BIR knowing that the probate court appointed
administrator of the estate of Jose P. Fernandez had previously
filed one as in fact, BIR Certification Clearance Nos. 2052 and
2053 had been issued in the estate's favor;
3. Whether or not the Court of Tax Appeals and the Court of Appeals erred in
disallowing the valid and enforceable claims of creditors against
the estate, as lawful deductions despite clear and convincing
evidence thereof; and
4. Whether or not the Court of Tax Appeals and the Court of Appeals erred in
validating erroneous double imputation of values on the very same
estate properties in the estate tax return it prepared and filed which
effectively bloated the estate's assets. 31
The petitioner claims that in as much as the valid claims of creditors against the
Estate are in excess of the gross estate, no estate tax was due; that the lack of a formal offer of
evidence is fatal to BIR's cause; that the doctrine laid down in Vda. de Oñate has already been
abandoned in a long line of cases in which the Court held that evidence not formally offered is
without any weight or value; that Section 34 of Rule 132 of the Rules on Evidence requiring a
formal offer of evidence is mandatory in character; that, while BIR's witness Alberto Enriquez
(Alberto) in his testimony before the CTA identified the pieces of evidence aforementioned such
that the same were marked, BIR's failure to formally offer said pieces of evidence and depriving
petitioner the opportunity to cross-examine Alberto, render the same inadmissible in evidence;
that assumingarguendo that the ruling in Vda. de Oñate is still applicable, BIR failed to comply
with the doctrine's requisites because the documents herein remained simply part of the BIR
records and were not duly incorporated in the court records; that the BIR failed to consider that
although the actual payments made to the Estate creditors were lower than their respective
claims, such were compromise agreements reached long after the Estate's liability had been
settled by the filing of its estate tax return and the issuance of BIR Certification Nos. 2052 and
2053; and that the reckoning date of the claims against the Estate and the settlement of the
estate tax due should be at the time the estate tax return was filed by the judicial administrator
and the issuance of said BIR Certifications and not at the time the aforementioned Compromise
Agreements were entered into with the Estate's creditors. 32 EcDATH
On the other hand, respondent counters that the documents, being part of the
records of the case and duly identified in a duly recorded testimony are considered evidence
even if the same were not formally offered; that the filing of the estate tax return by the Estate
and the issuance of BIR Certification Nos. 2052 and 2053 did not deprive the BIR of its authority
to examine the return and assess the estate tax; and that the factual findings of the CTA as
affirmed by the CA may no longer be reviewed by this Court via a petition for review. 33
The Issues
There are two ultimate issues which require resolution in this case:
First. Whether or not the CTA and the CA gravely erred in allowing the admission of
the pieces of evidence which were not formally offered by the BIR; and
Second. Whether or not the CA erred in affirming the CTA in the latter's determination
of the deficiency estate tax imposed against the Estate.
The Court's Ruling
The Petition is impressed with merit.
Under Section 8 of RA 1125, the CTA is categorically described as a court of record.
As cases filed before it are litigated de novo, party-litigants shall prove every minute aspect of
their cases. Indubitably, no evidentiary value can be given the pieces of evidence submitted by
the BIR, as the rules on documentary evidence require that these documents must be formally
offered before the CTA. 34 Pertinent is Section 34, Rule 132 of the Revised Rules on Evidence
which reads: HSTAcI
SEC. 34. Offer of evidence. — The court shall consider no
evidence which has not been formally offered. The purpose for which the
evidence is offered must be specified.
The CTA and the CA rely solely on the case of Vda. de Oñate, which reiterated this
Court's previous rulings in People v. Napat-a 35 and People v. Mate 36 on the admission and
consideration of exhibits which were not formally offered during the trial. Although in a long line
of cases many of which were decided after Vda. de Oñate, we held that courts cannot consider
evidence which has not been formally offered, 37 nevertheless, petitioner cannot validly assume
that the doctrine laid down in Vda. de Oñate has already been abandoned. Recently, in Ramos v.
Dizon, 38 this Court, applying the said doctrine, ruled that the trial court judge therein committed
no error when he admitted and considered the respondents' exhibits in the resolution of the
case, notwithstanding the fact that the same were not formally offered. Likewise, in Far East
Bank & Trust Company v. Commissioner of Internal Revenue, 39 the Court made reference to
said doctrine in resolving the issues therein. Indubitably, the doctrine laid down in Vda. De
Oñate still subsists in this jurisdiction. In Vda. de Oñate, we held that: cIEHAC
From the foregoing provision, it is clear that for evidence to be
considered, the same must be formally offered. Corollarily, the mere fact
that a particular document is identified and marked as an exhibit does not
mean that it has already been offered as part of the evidence of a party.
In Interpacific Transit, Inc. v. Aviles [186 SCRA 385], we had the occasion
to make a distinction between identification of documentary evidence and
its formal offer as an exhibit. We said that the first is done in the course of
the trial and is accompanied by the marking of the evidence as an exhibit
while the second is done only when the party rests its case and not before.
A party, therefore, may opt to formally offer his evidence if he believes that
it will advance his cause or not to do so at all. In the event he chooses to
do the latter, the trial court is not authorized by the Rules to consider the
same.
However, in People v. Napat-a [179 SCRA 403] citing People v.
Mate [103 SCRA 484], we relaxed the foregoing rule and allowed
evidence not formally offered to be admitted and considered by the
trial court provided the following requirements are present, viz.: first,
the same must have been duly identified by testimony duly recorded
and, second, the same must have been incorporated in the records of
the case. 40 CITSAc
From the foregoing declaration, however, it is clear that Vda. de Oñate is merely an
exception to the general rule. Being an exception, it may be applied only when there is strict
compliance with the requisites mentioned therein; otherwise, the general rule in Section 34 of
Rule 132 of the Rules of Court should prevail.
In this case, we find that these requirements have not been satisfied. The assailed
pieces of evidence were presented and marked during the trial particularly when Alberto took the
witness stand. Alberto identified these pieces of evidence in his direct testimony. 41 He was also
subjected to cross-examination and re-cross examination by petitioner. 42 But Alberto's
account and the exchanges between Alberto and petitioner did not sufficiently describe the
contents of the said pieces of evidence presented by the BIR. In fact, petitioner sought that the
lead examiner, one Ma. Anabella A. Abuloc, be summoned to testify, inasmuch as Alberto was
incompetent to answer questions relative to the working papers. 43 The lead examiner never
testified. Moreover, while Alberto's testimony identifying the BIR's evidence was duly recorded,
the BIR documents themselves were not incorporated in the records of the case. AIECSD
 A common fact threads through Vda. de Oñate and Ramos that does not exist at all in
the instant case. In the aforementioned cases, the exhibits were marked at the pre-trial
proceedings to warrant the pronouncement that the same were duly incorporated in the records
of the case. Thus, we held in Ramos:
In this case, we find and so rule that these requirements have
been satisfied. The exhibits in question were presented and marked
during the pre-trial of the case thus, they have been incorporated into
the records. Further, Elpidio himself explained the contents of these
exhibits when he was interrogated by respondents' counsel. . .
xxx xxx xxx
But what further defeats petitioner's cause on this issue is that
respondents' exhibits were marked and admitted during the pre-trial stage
as shown by the Pre-Trial Order quoted earlier. 44
While the CTA is not governed strictly by technical rules of evidence, 45 as rules of
procedure are not ends in themselves and are primarily intended as tools in the administration of
justice, the presentation of the BIR's evidence is not a mere procedural technicality which may
be disregarded considering that it is the only means by which the CTA may ascertain and verify
the truth of BIR's claims against the Estate. 46 The BIR's failure to formally offer these pieces of
evidence, despite CTA's directives, is fatal to its cause. 47 Such failure is aggravated by the fact
that not even a single reason was advanced by the BIR to justify such fatal omission. This, we
take against the BIR. HEDaTA
Per the records of this case, the BIR was directed to present its evidence 48 in the
hearing of February 21, 1996, but BIR's counsel failed to appear. 49 The CTA denied petitioner's
motion to consider BIR's presentation of evidence as waived, with a warning to BIR that such
presentation would be considered waived if BIR's evidence would not be presented at the next
hearing. Again, in the hearing of March 20, 1996, BIR's counsel failed to appear. 50 Thus, in its
Resolution 51 dated March 21, 1996, the CTA considered the BIR to have waived presentation
of its evidence. In the same Resolution, the parties were directed to file their respective
memorandum. Petitioner complied but BIR failed to do so. 52 In all of these proceedings, BIR
was duly notified. Hence, in this case, we are constrained to apply our ruling in Heirs of Pedro
Pasag v. Parocha: 53 TaDCEc
A formal offer is necessary because judges are mandated to rest
their findings of facts and their judgment only and strictly upon the
evidence offered by the parties at the trial. Its function is to enable the trial
judge to know the purpose or purposes for which the proponent is
presenting the evidence. On the other hand, this allows opposing parties to
examine the evidence and object to its admissibility. Moreover, it facilitates
review as the appellate court will not be required to review documents not
previously scrutinized by the trial court.
Strict adherence to the said rule is not a trivial matter. The Court
in Constantino v. Court of Appeals ruled that the formal offer of one's
evidence is deemed waived after failing to submit it within a
considerable period of time. It explained that the court cannot admit
an offer of evidence made after a lapse of three (3) months because to
do so would "condone an inexcusable laxity if not non-compliance
with a court order which, in effect, would encourage needless delays
and derail the speedy administration of justice."
Applying the aforementioned principle in this case, we find that
the trial court had reasonable ground to consider that petitioners had
waived their right to make a formal offer of documentary or object
evidence. Despite several extensions of time to make their formal offer,
petitioners failed to comply with their commitment and allowed almost five
months to lapse before finally submitting it. Petitioners' failure to comply
with the rule on admissibility of evidence is anathema to the efficient,
effective, and expeditious dispensation of justice. caHIAS
Having disposed of the foregoing procedural issue, we proceed to discuss the merits
of the case.
Ordinarily, the CTA's findings, as affirmed by the CA, are entitled to the highest
respect and will not be disturbed on appeal unless it is shown that the lower courts committed
gross error in the appreciation of facts. 54 In this case, however, we find the decision of the CA
affirming that of the CTA tainted with palpable error.
It is admitted that the claims of the Estate's aforementioned creditors have been
condoned. As a mode of extinguishing an obligation, 55 condonation or remission of debt 56 is
defined as: AHSEaD
an act of liberality, by virtue of which, without receiving any
equivalent, the creditor renounces the enforcement of the obligation, which
is extinguished in its entirety or in that part or aspect of the same to which
the remission refers. It is an essential characteristic of remission that it be
gratuitous, that there is no equivalent received for the benefit given; once
such equivalent exists, the nature of the act changes. It may become
dation in payment when the creditor receives a thing different from that
stipulated; or novation, when the object or principal conditions of the
obligation should be changed; or compromise, when the matter renounced
is in litigation or dispute and in exchange of some concession which the
creditor receives. 57
Verily, the second issue in this case involves the construction of Section 79 58 of
the National Internal Revenue Code 59 (Tax Code) which provides for the allowable deductions
from the gross estate of the decedent. The specific question is whether the actual claims of the
aforementioned creditors may be fully allowed as deductions from the gross estate of Jose
despite the fact that the said claims were reduced or condoned through compromise
agreements entered into by the Estate with its creditors. aESTAI
"Claims against the estate", as allowable deductions from the gross estate under
Section 79 of the Tax Code, are basically a reproduction of the deductions allowed under
Section 89 (a) (1) (C) and (E) of Commonwealth Act No. 466 (CA 466), otherwise known as the
National Internal Revenue Code of 1939, and which was the first codification of Philippine tax
laws. Philippine tax laws were, in turn, based on the federal tax laws of the United States. Thus,
pursuant to established rules of statutory construction, the decisions of American courts
construing the federal tax code are entitled to great weight in the interpretation of our own tax
laws. 60
It is noteworthy that even in the United States, there is some dispute as to whether
the deductible amount for a claim against the estate is fixed as of the decedent's death which is
the general rule, or the same should be adjusted to reflect post-death developments, such as
where a settlement between the parties results in the reduction of the amount actually
paid. 61 On one hand, the U.S. court ruled that the appropriate deduction is the "value" that the
claim had at the date of the decedent's death. 62 Also, as held in Propstra v. U.S., 63 where a
lien claimed against the estate was certain and enforceable on the date of the decedent's death,
the fact that the claimant subsequently settled for lesser amount did not preclude the estate
from deducting the entire amount of the claim for estate tax purposes. These pronouncements
essentially confirm the general principle that post-death developments are not material in
determining the amount of the deduction. ISTCHE
On the other hand, the Internal Revenue Service (Service) opines that post-death
settlement should be taken into consideration and the claim should be allowed as a deduction
only to the extent of the amount actually paid. 64 Recognizing the dispute, the Service released
Proposed Regulations in 2007 mandating that the deduction would be limited to the actual
amount paid. 65
In announcing its agreement with Propstra, 66 the U.S. 5th Circuit Court of Appeals
held:
 We are persuaded that the Ninth Circuit's decision . . .
in Propstra correctly apply the Ithaca Trust date-of-death valuation
principle to enforceable claims against the estate. As we interpret Ithaca
Trust, when the Supreme Court announced the date-of-death valuation
principle, it was making a judgment about the nature of the federal estate
tax specifically, that it is a tax imposed on the act of transferring property
by will or intestacy and, because the act on which the tax is levied occurs
at a discrete time, i.e., the instance of death, the net value of the property
transferred should be ascertained, as nearly as possible, as of that time.
This analysis supports broad application of the date-of-death valuation
rule. 67 TCIHSa
We express our agreement with the date-of-death valuation rule, made pursuant to
the ruling of the U.S. Supreme Court in Ithaca Trust Co. v. United States. 68 First. There is no
law, nor do we discern any legislative intent in our tax laws, which disregards the date-of-death
valuation principle and particularly provides that post-death developments must be considered
in determining the net value of the estate. It bears emphasis that tax burdens are not to be
imposed, nor presumed to be imposed, beyond what the statute expressly and clearly imports,
tax statutes being construed strictissimi juris against the government. 69 Any doubt on whether
a person, article or activity is taxable is generally resolved against taxation. 70 Second. Such
construction finds relevance and consistency in our Rules on Special Proceedings wherein the
term "claims" required to be presented against a decedent's estate is generally construed to
mean debts or demands of a pecuniary nature which could have been enforced against the
deceased in his lifetime, or liability contracted by the deceased before his death. 71 Therefore,
the claims existing at the time of death are significant to, and should be made the basis of, the
determination of allowable deductions. EHACcT
WHEREFORE, the instant Petition is GRANTED. Accordingly, the assailed Decision
dated April 30, 1999 and the Resolution dated November 3, 1999 of the Court of Appeals in CA-
G.R. S.P. No. 46947 are REVERSED and SET ASIDE. The Bureau of Internal Revenue's
deficiency estate tax assessment against the Estate of Jose P. Fernandez is hereby NULLIFIED.
No costs.
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Chico-Nazario and Reyes, JJ., concur.
||| (Dizon v. Court of Tax Appeals, G.R. No. 140944, [April 30, 2008], 576 PHIL 110-138)
FIRST DIVISION
[G.R. No. 152866. October 6, 2010.]
THE HEIRS OF ROMANA SAVES, namely: FIDELA ALMAIDA, EMILIANO
ALMAIDA, JESUS ALMAIDA, CATALINA ALMAIDA, ALFREDO RAMOS,
GINA RAMOS, LUZ ALMAIDA, ANITA ALMAIDA, PETRA GENERAL, EDNA
GENERAL, ESTHER ALMAIDA, DIONISIA ALMAIDA, CORNELIA
ALMAIDA, FELIMON ALMAIDA (represented by SINFROSA ALMAIDA);
THE HEIRS OF RAFAELA SAVES, namely: JULIANA DIZON, HILARIA
DIZON, JOVENCIO DIZON, MAURA DIZON, BABY DIZON & ULDARICO
AMISTOSO (represented by ULDARICO AMISTOSO); THE HEIRS OF
JANUARIA SAVES, namely: FELICIDAD MARTINEZ, MARLOU
MARTINEZ, ROWENA MARTINEZ, BABY LOU MARTINEZ, BOBERT
MARTINEZ, JERRY MARTINEZ (represented by FELICIDAD MARTINEZ);
THE HEIRS OF MAXIMO SAVES, namely: ELPIDIO AMIGO, CELESTINA
DEMETRIA AMIGO, MEREN (daughter of SEVERA SAVES), FRUTO
ROSARIO (represented by ELPIDIO AMIGO); THE HEIRS OF BENEDICTA
SAVES, namely: AUTEMIA JUCOM, CATALINA JUCOM, DOLORES
JUCOM, SERGIA JUCOM, BENEDICTA JUCOM, JOSEFINA JUCOM,
FLORDIVIDA REMETILLO, FELINA REMETILLO and ANNA MARIE
REMETILLO, (represented by AUTEMIA JUCOM), petitioners, vs. THE
HEIRS OF ESCOLASTICO SAVES, et. al., namely: REMEDIOS SAVES-
ADAMOS, LUZ SAVES-HERNANDEZ and DODONG SAVES, and
ENRIQUETA CHAVES-ABELLA, respondents.
LEONARDO-DE CASTRO, J p:
This is a petition for review on certiorari under Rule 45 of the Rules of Court from the
Decision 1 promulgated on June 28, 2001 by the Court of Appeals, in CA-G.R. CV No. 51058,
entitled "The Heirs of Romana Saves, et al. v. The Heirs of Escolastico Saves, et al.," reversing
the Decision 2 dated May 23, 1995 of the Regional Trial Court (RTC) of Dumaguete City, Branch
39 in Civil Case No. 7678, in favor of the petitioners.
The facts of this case as narrated in the assailed Court of Appeals' Decision are as
follows:
Sometime on January 1921, several persons filed their respective
claims before the then, Court of First Instance of the province of Oriental
Negros for the titling of the respective lots they occupy, among them were
Severo Chaves and Benedicta Chaves, who filed their claim for Lot No. 382,
to be titled in their names, together with Escolastico Saves, Maximo Saves,
Romana Saves, Rafaela Saves, and Januaria Saves, in Cadastral Case No.
15.
On April 22, 1921, a Decision was rendered by the court,
adjudicating several parcels of land to different claimants, among the lots
adjudicated, were as follows:
1. Lote No. 382 — Se adjudica pro indiviso y en partes iguales a los
hermanos Benedicta Saves, Escolastico Saves, Romana
Saves, finado Rafaela Saves, Januaria Saves y Maximo
Saves finado en la proindiviso de una sixta parte cada
uno. La parte que corresponde a los difuntos Romana
Saves y Maximo Saves perteneceran a sus hijos
respectivos;
2. Lote No. 383 — Se adjudica con las mejores existentes en el a la
acciedad conyugal formada por Escolastico Saves y
Gaudencia Valencia; DTAaCE
3. Lote No. 386 — Se adjudica con las mejoras ixistentes en el a la
acciedad conyugal formada por Escolastico Saves y
Gaudencia Valencia;
Also on April 22, 1921, Decree No. 177831 was issued by the
United States of America for the Court of First Instance of the Province of
Negros ordering the registration of Lot No. 382 in the names of Benedicta
Saves, Escolastica Saves, the sons of Romana Saves, deceased, Rafaela
Saves, Januaria Saves, and the sons of Maximo Saves, deceased.
Thereafter, Severo Saves died intestate, leaving his wife, Teresa
Ramirez, his four (4) surviving children, and the heirs of his two children who
predeceased him.
On June 21, 1941, Adelaida S. Martinez and Felicidad S. Martinez,
who were the heirs of Januaria Saves, who predeceased them, sold their 1/6
share in Lot No. 382 to a certain Gaudencia Valencia evidenced by a public
instrument, with Doc. No. 1029, Page 46, Book IV, Series of 1941, of the
notarial register, per allegation in a Motion for the Issuance of Transfer
Certificate of Title, filed by Gaudencia Valencia.
 On June 30, 1941, a Deed of Sale was executed by the heirs of
Romana Saves, namely: Sinforosa Alimayda, Juan Alimayda, Vicente
Alimayda, Felimon Alimayda and Porferia Alimayda; the sole heir of Rafaela
Saves, Pablo Saves Dizon; and the sole heir of Escolastico Saves, Teodoro
Saves, their respective 1/6 share in Lot No. 382, or 3/6 of the property, to
Gaudencia Valencia.
On June 6, 1947, Benedicta Saves and Marcela Saves, the sole
heir of Maximo Saves, sold their respective 1/6 share in Lot No. 382, also to
Gaudencia Valencia, or 2/6 of the property, as embodied in a Deed of
Absolute Sale.
Considering that all the 1/6 share, rights, and participation of each
co-owner in Lot No. 382 were already sold to Gaudencia Valencia, she
initiated the titling of the said property under her name in a Motion for
Issuance of Transfer Certificate of Title before the Court of First Instance of
Negros Oriental. Subsequently, Transfer Certificate of Title No. 148 was
issued by the Register of Deeds for Negros Oriental in the name of Gaudencia
Valencia.
Sometime in 1961, Gaudencia Valencia sold the entire property to
Enriqueta Chavez Abella, and Transfer Certificate of Title No. 110 was issued
in the name of Enriqueta Chavez, who was married to Charles Abella.
In 1979, Meleriana Saves, who was then residing in Cebu, wrote
her relatives in Negros Oriental, the herein appellees, asking them to verify
from the Register of Deeds information pertaining to Lot 382, as they were
among the heirs entitled to said property.
On March 17, 1981, a case for Reconveyance, Partition, and
Damages was filed before the Regional Trial Court of Negros Oriental by
plaintiffs-appellees, alleging, inter alia,that Lot No. 382 was fraudulently
acquired by Gaudencia Valencia, and that Gaudencia Valencia fictitiously sold
the lot to her grandchild Enriqueta Chaves Abella.
The complaint was amended twice by plaintiffs considering that
the original plaintiffs and defendants were all deceased.
The parties failed to arrive to an amicable settlement during the
pre-trial stage, but have agreed to exclude Lot 386 in the litigation and limited
the issues as to the ownership of lots 382 and 383, thus, trial
ensued. 3 (Citations omitted.)
The trial court rendered a Decision in favor of the petitioners, the dispositive portion of
which reads:
WHEREFORE, in view of the foregoing considerations, judgment is
rendered —
1. Dismissing defendants' counterclaim;
2. Declaring the Deed of Sale and Deed of Absolute Sale null and
void ab initio; and being derived from a polluted source,
whatever documents Gaudencia Valencia executed in
favor of defendant Enriquita Chavez Abella in relation to
Lot No. 382, Dumaguete Cadastre and the issuance of
TCT No. 110 covering said lot, suffers the same legal
infirmity that of a total nullity; EacHSA
3. Ordering defendant Enriquita Chavez Abella to convey and
deliver unto the plaintiffs their shares of Lot No. 382,
Dumaguete Cadastre in the proportion of their
respective rights and interests thereto which they are
entitled to participate and succeed from the shares of
their predecessors-in-interest who are the original
registered owners of the aforesaid lot; and after which,
the parties are ordered to effect physical division and
partition of the lot in question to avoid further animosity
between and among themselves;
4. Ordering defendant Enriquita Chavez Abella to pay plaintiffs
P6,000.00 as litigation expenses and P2,500.00 as
plaintiff's counsel court appearances as well as moral
damages in the sum of P120,000.00;
5. Dismissing plaintiff's claim of Lot No. 383, Dumaguete Cadastre,
for lack of merit, the same is originally titled in the name
of Escolastico Saves, married to Gaudencia Valencia;
and
6. Defendant Enriquita Chavez Abella is ordered to pay the
costs. 4 (Citations omitted.)
Respondents appealed the RTC Decision to the Court of Appeals which reversed and
set aside the same in the herein assailed Court of Appeals Decision, the dispositive portion of
which reads:
WHEREFORE, premises considered, the Decision dated, May 23,
1995 rendered by the Regional Trial Court of Negros Oriental, Branch 39, is
hereby REVERSED and SET ASIDE, and a new one entered, declaring
Transfer Certificate of Title No. 110 in the name of Enriqueta Chaves Abella as
valid and subsisting, and the complaint filed by the plaintiffs is DISMISSED for
lack of merit. 5
Petitioners filed a Motion for Reconsideration but this was denied by the Court of
Appeals in a Resolution 6 promulgated on March 7, 2002, the dispositive portion of which reads:
WHEREFORE, the foregoing premises considered, the Motion for
Reconsideration is DENIED for lack of merit. 7
Unperturbed by the adverse Court of Appeals Decision, petitioners come before this
Court and raise the following issues:
(a) Can the Court of Appeals, in the exercise of its appellate
jurisdiction, consider as evidence exhibits not formally offered as such by the
defendants (now respondents) in the trial court?
(b) Are exhibits (Exhibits "7", "8" and "13") not formally offered as
evidence by the defendants in the trial court subject to judicial notice by the
Court of Appeals for the purpose of utilizing the same as basis for the reversal
of the trial court's decision? cHCIEA
(c) Is it legally correct to consider a rule of evidence simply as a
rule of procedure? . . . . 8
Petitioners also put into issue the failure of the Court of Appeals to consider
respondent Enriquita Chaves-Abella (hereinafter "Abella") a purchaser and registrant in bad
faith 9 and the reasonableness of its declaration that, even if petitioners are indeed co-owners of
Lot No. 382, they are already barred due to the equitable principle of estoppel by laches in
asserting their rights over the same. 10
We find the instant petition to be without merit.
 The first three issues propounded by petitioners can be summed up into the question Q Why is it not true?
of whether or not the Court of Appeals can consider evidence not formally offered in the trial
court as basis for the herein assailed Court of Appeals ruling. A Because Maximo had two children, Sir.

Petitioners draw attention to the fact that respondents did not formally offer Exhibits Empleo
"7," "8" and "13" at the trial court proceedings. In accordance with Section 34, Rule 132 of
the Revised Rules of Court, 11 the trial court did not consider them as evidence. Despite this, We request that paragraph 3 be marked as Exhibit "I-3".
the Court of Appeals allegedly utilized the same as basis for reversing and setting aside the trial
court's decision. Court (to witness):

It is a basic procedural rule that the court shall consider no evidence which has not Who died ahead Severa or Maximo?
been formally offered. The purpose for which the evidence is offered must be specified. 12 A
formal offer is necessary because judges are mandated to rest their findings of facts and their A Maximo, Sir.
judgment only and strictly upon the evidence offered by the parties at the trial. Its function is to
Court
enable the trial judge to know the purpose or purposes for which the proponent is presenting the
evidence. On the other hand, this allows opposing parties to examine the evidence and object to Who died ahead Marcela or Severa?
its admissibility. Moreover, it facilitates review as the appellate court will not be required to
review documents not previously scrutinized by the trial court. 13 A Severa.
However, in People v. Napat-a, 14 citing People v. Mate, 15 we relaxed the foregoing Court SAHIDc
rule and allowed evidence not formally offered to be admitted and considered by the trial court
provided the following requirements are present, viz.: first, the same must have been duly Did Severa die before 1948?
identified by testimony duly recorded and, second, the same must have been incorporated in the
records of the case. 16 A No, Sir, because she died before the war; she died in 1940.

In the case at bar, the records would show that the above requisites have been Court
satisfactorily complied with respect to Exhibit "7."
So, when this motion for issuance of certificate of title was filed on
With regard to Exhibit "7," which is a document entitled "Motion for the Issuance of March 10, 1948, Severa had already died?
Transfer Certificate of Title" filed by Gaudencia Valencia (hereinafter "Valencia") in the same trial
court that led to the issuance of Transfer Certificate of Title (TCT) No. 148, the records would A Yes, Sir.
show that it is the same document that petitioners' witness Fruto Rosario identified in his March
5, 1984 testimony and marked as petitioner-plaintiffs' Exhibit "I." He testified as follows: cTDIaC Court

Empleo
Here is another document, Mr. Rosario, which appears to be a
motion for issuance of transfer certificate of title, dated March 9,
1948, in 3 pages. Will you please go over this certified true copy of
the motion in Cad. Case No. 1, GLRO Rec. No. 140, Lot 382, and
find out if these are among the documents which you have
obtained in connection with your verification?
A Yes, this is the one, these are among the documents.
Empleo
We request that this certified true copy of the motion for issuance
of transfer certificate of title in Cad. Case No. 1, GLRO Rec. No.
140, Lot 382, be marked as Exhibit "I" for page one; "I-1" for page
two and "I-2" for page 3.
Appearing on Exh. I is a third paragraph, which states, "that
Maximo Saves, owner of 1/6 of Lot 382 is now dead, upon his
death Marcela Saves is the only heiress and successor of his rights
and interest in and over 1/6 portion of said lot." Do you understand
that?
A Yes, Sir.
And when this motion was filed on March 10, 1948, Marcela was
still alive?
A Yes.
Court
That is why the motion and which resulted to a certificate of title
had only claim Marcela as a surviving heir of Maximo?
A That is not so, Sir, because what about us the children of Severa?
Court
ORDER
The hour of noon having come, continuance of the direct
examination of fifth plaintiffs' witness Fruto Rosario, as already
scheduled, will be done tomorrow at 10:30 a.m. 17
Verily, Exhibit "7" was incorporated and made part of the records of this case as a
common exhibit of the parties. 18 That only plaintiffs were able to formally offer the said motion
as Exhibit "I" most certainly does not mean that it can only be considered by the courts for the
evidentiary purpose offered by plaintiffs. It is well within the discretion of the courts to determine
whether an exhibit indeed serves the probative purpose for which it is offered.

Q Is it true that Maximo Saves left only one heir named Marcela Saves? Likewise, Exhibit "13," which is TCT No. 110 19 or the Torrens title that was issued to
respondent Abella after she bought Lot No. 382 from Valencia, complies with the requirements
A No, Sir, it is not true. enunciated in Napat-a and Mate.
 The records of the case bear out that Exhibit "13" was identified by respondent Abella
during the continuation of her direct examination on March 15, 1988. This much was noted even
by the trial court in its Decision dated May 23, 1995, to wit:
During the continuation of the direct examination, witness Enriquita
Chavez Abella testified and identified the TCT No. 110 of Lot No. 382
registered in the name of Enriquita Chavez which priorly reserved and now
marked Exh. "13." . . . . 20 (Emphasis supplied.) TcHEaI
Moreover, it cannot be denied that Exhibit "13" was included in the records that was elevated to
the Court of Appeals. 21 In fact, the Court of Appeals correctly noted Abella's testimony
regarding this document in resolving petitioners' motion for reconsideration. 22
It is likewise worth emphasizing that under the Revised Rules on Evidence, an
admission, verbal or written, made by a party in the course of the proceedings in the same case,
does not require proof — such admission may be contradicted only by showing that it is made
through palpable mistake or that no such admission was made. 23
The existence of Exhibit "13" was not only known to petitioners but it was expressly
alleged in their Appellees' Brief 24 filed with the Court of Appeals and their Petition for
Review 25 filed with this Court that Lot No. 382 is registered in the name of respondent Abella.
Indeed, petitioners did not merely acknowledge the existence of TCT No. 110
(respondents' Exhibit "13"), but in fact relied upon it in order to put forward their main theory that
the sale from Valencia to respondent Abella is fictitious or void because, according to
petitioners, it appears from the said title that respondent Abella was supposedly only nine years
old at the time of the transaction. Verily, it is inconsistent for petitioners to claim that Exhibit "13"
proves its theory and in the same breath assail it as inadmissible.
Lastly, petitioners' present objection to Exhibit "8" hardly deserves any credit. Exhibit
"8" is a rather innocuous document which has no bearing on any of the significant issues in this
case. Its existence was only referred to in the second paragraph of page 7 of the RTC Decision
wherein it is identified as an "Order of the Hon. Court dated May 11, 1948." 26 Though it never
formed part of the records of this case upon appeal, a careful perusal of the assailed Court of
Appeals' Decision would reveal that Exhibit "8" was not in any way used or referred to by the
Court of Appeals in arriving at the aforementioned ruling.
Anent the issue of whether or not the Court of Appeals erred in failing to consider that
respondent Abella is a purchaser in bad faith, petitioner insists that "for failing to exercise
prudent (sic) and caution in buying the property in question," 27 respondent Abella is a buyer in
bad faith. She did not investigate closely the basis of the ownership of Gaudencia Valencia, her
grandmother, over Lot No. 382 which a buyer in good faith should have done under the
circumstances. She did not even bother to know the persons from whom her grandmother
acquired the parcel in question. 28 CDHaET
Respondents argue that the issue of good faith or bad faith of Enriquita Chaves-
Abella was not raised in the Complaint filed by petitioners in the RTC. Petitioners' original theory
of the case is that the sale by Gaudencia Valencia to Enriquita Chaves-Abella was fictitious
because the latter was only nine years old at the time of the sale. However, during trial, it was
clearly established by common evidence that Enriquita was already married to Charles Abella
when she bought the lot in 1961, and, as a matter of fact, the purchase money was provided by
her husband, Charles. Confronted with the above situation which completely destroyed their
theory of the case, petitioners switched from their "fictitious sale to a 9-year old" theory to an
entirely different theory, to wit: that Enriquita Chaves-Abella is a purchaser in bad faith. 29
Despite this, the RTC declared that respondent Abella is a purchaser in bad faith
because "[s]he did not investigated (sic) closely the basis of the ownership of Gaudencia
Valencia over Lot No. 382 which a buyer in good faith should have done under the
circumstances." 30
The Court of Appeals reversed the above finding and ruled that respondent Abella is
an innocent purchaser for value and in good faith because the "[r]ecords reveal that appellant
derived her title of Lot No. 382 from the title of Gaudencia Valencia, who sold the entire property
to the former. Appellant relied on the face of Transfer Certificate of Title No. 148 in the name of
Gaudencia Valencia, which was free from any encumbrances or annotation." 31
We agree with the Court of Appeals' ruling in this regard.
It is a well-settled doctrine that one who deals with property registered under the
Torrens system need not go beyond the same, but only has to rely on the certificates of title. He
is charged with notice only of such burdens and claims as are annotated on the certificates. 32
In the case at bar, TCT No. 110, which represented proof of respondent Abella's
ownership of Lot No. 382, did not contain any encumbrance or annotation that was transferred
from its title of origin — TCT No. 148. It must be recalled that the plaintiffs called Abella as one
of their witnesses during the trial of this case. It is Abella's unrebutted testimony, elicited as a
hostile witness for the plaintiffs, that her predecessor-in-interest's (Valencia's) title was clean
when she (Abella) purchased the property. 33To be sure, the burden to prove that Abella had
notice of any defect in the title of her predecessor lies with the plaintiffs. Plaintiffs failed to
substantiate their contention. On the contrary, their own evidence tended to prove that Abella
was a purchaser in good faith of the property. HECaTD
Likewise, there is no cogent reason or legal compulsion for respondent Abella to
inquire beyond Valencia's title over the property at issue since the latter had been in possession
of Lot No. 382 prior to the sale. Settled is the rule that a buyer of real property in possession of
persons other than the seller must be wary and should investigate the rights of those in
possession, for without such inquiry the buyer can hardly be regarded as a buyer in good faith
and cannot have any right over the property. 34 As pointed out by the assailed Court of Appeals'
Decision, Valencia had been occupying the property prior to its sale to respondent Abella. Herein
petitioners were never in possession of the property from the very start, nor did they have any
idea that they were entitled to the fruits of the property not until co-petitioner Meleriana Saves
wrote her relatives, co-petitioners in this case, about the possibility of having a claim to the
property. 35
Neither does the plaintiffs' insistence that Exhibits "G" and "H" (the deeds of sale
executed in favor of Valencia) were void support their theory that Abella is a purchaser in bad
faith. To begin with, we agree with the Court of Appeals' ruling that the purported irregularities in
Exhibits "G" and "H" relied upon by the trial court hardly suffice to deem the said contracts as
null and void. There is no need to repeat the Court of Appeals' comprehensive and apt
discussions on this point here. What must be highlighted, however, is the fact that Abella had no
participation in the execution of Exhibits "G" and "H" which were signed by the parties thereto
when she was very young. Like any stranger to the said transactions, it was reasonable for
Abella to assume that these public documents were what they purport to be on their face in the
absence of any circumstance to lead her to believe otherwise.
A purchaser in good faith is one who buys property without notice that some other
person has a right to or interest in such property and pays its fair price before he has notice of
the adverse claims and interest of another person in the same property. 36 Clearly, the factual
circumstances surrounding respondent Abella's acquisition of Lot No. 382 makes her an
innocent purchaser for value or a purchaser in good faith.
Finally, on the issue of whether or not petitioners, in the remote possibility that they
are co-owners of Lot No. 382, are barred from asserting their claims over the same because of
estoppel by laches, petitioners argue that they are not guilty of unreasonable and unexplained
delay in asserting their rights, considering that they filed the action within a reasonable time after
their discovery of the allegedly fictitious deeds of sale, which evinced Lot No. 382's transfer of
ownership to Valencia, in 1980. They maintain that the delay in the discovery of the simulated
and fictitious deeds was due to the fact that Escolastico Saves with spouse Valencia committed
the acts surreptitiously by taking advantage of the lack of education of plaintiffs' ascendants. 37
Respondents counter petitioners' claims by underscoring the fact that, since the
1940's when their predecessors-in-interest sold their shares in and over Lot No. 382 up to the
filing of this case in 1981, petitioners had never taken possession of Lot No. 382 nor did they file
any claim adverse to the ownership of Gaudencia Valencia. Since the sale of Lot No. 382 by
Valencia to respondent Abella in 1961 up to 1981 when this case was filed, petitioners had
 continued to sleep on their professed rights. As found by the Court of Appeals, "[p]laintiffs were
never in possession of the property from the very start, nor did they have any inkling that they
were entitled to the fruits of the property, not until one of the plaintiffs wrote her relatives about
the possibility of being heirs to the property." 38 cEaSHC
On this issue, we again hold in favor of respondents.
Laches is defined as the failure to assert a right for an unreasonable and unexplained
length of time, warranting a presumption that the party entitled to assert it has either abandoned
or declined to assert it. 39 In the case at bar, plaintiffs, assuming that they or their predecessors-
in-interest had rights over the land in question, obviously neglected to exercise these rights by
failing to assert any adverse claim over the property or demand any share of its fruits for many
years. Not unlike their predecessors, petitioners never interposed any challenge to Valencia's
continued possession under title of ownership over Lot No. 382 ever since the entire property
was sold to her in 1947 which led to the issuance of TCT No. 148 in her name. Likewise,
petitioners and their predecessors-in-interest did not mount any opposition to the sale of Lot No.
382 by Valencia to respondent Abella in 1961 which prompted the issuance of TCT No. 110. It
was not only until 1981, or 34 years from Valencia's acquisition of the entire lot and 20 years
from the transfer of ownership over the same to respondent Abella, that petitioners decided to
assert their alleged rights over the property in a proper action in court.
Petitioners contend that the delay is attributable to the surreptitious manner by which
Valencia acquired Lot No. 382 from their predecessors-in-interest but, on this point, petitioner's
evidence gravely lacks credibility and weight as shown by the records. Instead, the evidence
thus presented by both parties, as found by the Court of Appeals, would lean towards the
conclusion that petitioners' inaction for the past so many years belies any present conviction on
their part that they have any existing interest over the property at all. Thus, even if we grant that
petitioners are co-owners of the property at issue, it is only fair and reasonable for this Court to
apply the equitable principle of estoppel by laches against them in order to avoid an injustice to
respondent Abella who is the innocent purchaser for value in this case. 40
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals, dated
June 28, 2001 in CA-G.R. CV No. 51058, is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Corona, C.J., Carpio Morales, * Del Castillo and Perez, JJ., concur.
||| (Heirs of Saves v. Heirs of Saves, G.R. No. 152866, [October 6, 2010], 646 PHIL 536-553)
EN BANC
[G.R. No. L-27950. July 29, 1971.]
TORIBIA LAMAGAN, petitioner-appellant, vs. HON. RAFAEL DE LA CRUZ,
as Judge of the Court of First Instance of Camarines Sur, and COSME O.
FOLLOSCO,respondents-appellees.
Moises C. Kallos for petitioner-appellant.
Reyes & Dy-Liacco for respondent-appellee Cosme O. Follosco.
SYLLABUS
TEEHANKEE, J p:
1. ID.; SPECIAL CIVIL ACTION; CERTIORARI; ERROR OF JURISDICTION,
DISTINGUISHED FROM ERROR OF JUDGMENT. — The true and special function of writ of
certiorari was defined by the Court in Fernando vs. Vasquez, thus: "A line must be drawn
between errors of judgment and errors of jurisdiction. An error of judgment is one which the
court may commit in the exercise of its jurisdiction. An error of jurisdiction renders an order or
judgment void or voidable. Errors of jurisdiction are reviewable on certiorari; errors of judgment,
only by appeal. Let us not lose sight of the true function of the writ if certiorari — 'to keep an
inferior court within the bounds of its jurisdiction or to prevent it from committing such a grave
abuse of discretion amounting to excess o jurisdiction.' And, abuse of discretion must be so
grave and patent to justify the issuance of the writ."
2. ID.; ID.; ID.; GENERALLY NOT AVAILABLE WHERE APPEAL IS PROPER REMEDY;
EXCEPTIONS. — The exceptional cases where certiorari had been entertained despite the
existence of the remedy of an appeal: "But in those cases, either public welfare and the
advancement of public policy so dictate, or the broader interests of justice so require, or the
orders complained of were found to be completely null and void, or appeal was not considered
the appropriate remedy, such as in appeals from orders of preliminary attachment or
appointment of receiver."
3. ID.; EVIDENCE; OFFER OF REJECTED OR EXCLUDED EVIDENCE, NECESSARY
TO ENABLE APPELLATE COURT TO EXAMINE THE SAME. — Assuming that the trial court
erred in rejecting petitioner's proffered evidence, petitioner's recourse is clear under the long
established rules, to wit, to make a formal offer of the evidence under Rule 132, Section 35,
stating on the record what a party or witness would have testified to were his testimony not
excluded, as well as attaching to the record any rejected exhibits. The Court has long noted that
"it is the better practice to unite with the record exhibits . . . which have been rejected" and that
such rejected or excluded exhibits "should have been permitted by the judge a quo to be
attached to the record even if not admitted in evidence, so that in case of an appeal . . . the
Court ad quem may thus be able to examine said exhibits and to judge whether or not their
rejection was erroneous."
4. ID.; ID.; ID.; TRIAL COURTS SHOULD BE LIBERAL IN ACCEPTING PROFERRED
EVIDENCE. — ". . . 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 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." (52
Phil. 807) In other words, where there is no indication of bad faith on the part of the party
offering the evidence or of a design to unduly prolong the trial, the Court has counselled trial
courts to be liberal in accepting proferred evidence, since even if they were to refuse to accept
the evidence, the affected party should nevertheless be allowed to spread the excluded
evidence on the record, for review on appeal.
5. ID.; ID.; ID.; SHOULD TRIAL COURT EXCLUDE EVIDENCE, IT SHOULD NOT
SUSPEND TRIAL PENDING THE OUTCOME OF ANY RECOURSE BY AFFECTED PARTY. — In
any event, should the trial court exclude evidence that it deems clearly irrelevant and
inadmissible, it should not — in the absence of an injunction order from the appellate courts or
of strong compelling reasons above indicated — order the suspension of the trial pending the
outcome of any recourse sought by the affected party from the higher courts but should
continue with the trial and render in due course its judgment, which may then be properly
appealed from. Needless delay in the trial and determination of the case would thus be avoided,
unlike in the case at bar where the trial court erroneously acceded to suspending the trial below
pending the outcome of this proceeding. It should be sufficient in such cases that the trial court
afford the affected party a reasonable period and opportunity to secure from the higher courts a
preliminary injunction order against the continuation of the trial, and thereafter proceed with the
trial and judgment of the case upon the party's failure to secure such injunctive order.
Appeal by certiorari from a resolution of the Court of Appeals dismissing the petition
for certiorari filed with said court by appellant seeking to set aside a formal ruling issued by the
Court of First Instance of Camarines Sur during the course of the trial of the ejectment case
below sustaining the adverse party's objection of evidence proferred* by appellant as defendant
therein and indicating the nature of evidence that would be deemed admissible and competent
against the adverse party's torrens title.
As narrated in the petition itself, a complaint for ejectment and damages was filed on
September 12, 1963 by respondent Cosme O. Follosco as plaintiff against petitioner Toribia
Lamagan and her husband Ambrosio Leonor (now deceased) as defendants in the lower court
presided by respondent judge. 1 Follosco prayed of the lower court that it order defendants to
vacate the 48-hectare portion of his land "illegally occupied" by them and to restore possession
thereof to him. The disputed portion of land is part of several lots totalling over 500 hectares, of
which Follosco is the registered owner by virtue of original certificate of title No. 178 issued by
the Camarines Sur register of deeds in April, 1950.
In answer to Follosco's complaint, petitioner Lamagan and her late husband as
defendants claimed that they and their predecessors-in-interest were in open and adverse
possession of the property since 1890; that Follosco's title was acquired through fraud and
deceit, and that the land should be deemed held in trust by Follosco for them, and that the suit
was brought by Follosco "only after many years since he obtained his title thereto to hide from
defendants' knowledge that the latter's land was in fact covered by (Follosco's) title." 2 As
counterclaim, defendants prayed for the reconveyance of the disputed land to them on the
theory that the same should be deemed as held in trust by Follosco for them.
The issues having been joined, Follosco as plaintiff presented through counsel his
evidence, oral and documentary, and closed his case. Defendants then presented as their first
witness petitioner's late husband in support of their defense and counterclaim for reconveyance.
In the course of his direct examination by petitioner's counsel, Follosco's counsel objected to a
question dealing with the ownership of the land and manifested a continuing objection to all
similar questions which would elicit evidence of alleged ownership of defendants, on the ground
that Follosco's title was already indefeasible and beyond judicial review.
The question was apparently extensively argued and respondent court adjourned the
trial at noon and issued his three-page written resolution of August 15, 1966, ruling that any
claims of defendants based on an alleged pre-existing right prior to the alleged fraudulent
issuance of the title in favor of Follosco was already barred under section 38 of Act 496 and that
since no petition to reopen and review the decree of registration on the ground of fraud had
been filed within one year from issuance of the decree, Follosco's title had become indefeasible
and could no longer be attacked collaterally. Respondent court therefore ruled that "the court so
resolves that all questions tending to elicit proof of ownership other than those which will prove a
better and earlier issued Torrens Title duly registered in favor of the defendants or any of the
defendants shall be barred and be not heard" and sustained Follosco's abjection to defendants'
line of questioning, holding that "(T)his court, without attempting to decide the ease at its
present stage, will, therefore, entertain from the defendants proofs and evidence which will
indomitably (sic) show a better and earlier Torrens Title issued to the defendants, if there is any."
Petitioner-defendant claims that the effect of respondent court's questioned
resolution was to totally prevent her from adducing at the trial any further evidence in support of
her defense to the action for ejectment and of her counterclaim for reconveyance of the disputed
land, such as her documentary evidence, allegedly consisting,inter alia, of a possessory
information title in the name of one Mariano Lamagan dated November 21, 1891, deed of sale by
Mariano Lamagan in favor of Nicolas Cambiado dated April 13, 1909, deed of sale by Nicolas
Cambiado in favor of Leoncio Lamagan (petitioner's father) dated August 7, 1913, tax
declarations, etc. Her motion for reconsideration having been denied by the trial court's order of
September 29, 1966, she asked respondent court to suspend further proceedings in the case
below pending her elevation of the disputed ruling for review by the appellate courts, and
respondent court acceded accordingly.
Petitioner accordingly filed her petition for certiorari with the Court of
Appeals, 3 which handed down its minute resolution of June 21, 1967, dismissing the same for
failure to state a sufficient cause of action for the following principal reasons: ". . . (b) in the
[respondent court's] resolution of August 15, 1966, the petitioner is permitted to present
evidence which will indubitably show a better right; and (c) the issue does not appear to be
within the ambit of a writ of certiorari." The appellate court in its August 2, 1967 resolution,
denying petitioner's motion for reconsideration of its dismissal order, further noted that "the
counterclaim for reconveyance has already prescribed (J. M. Tuason & Co., Inc. vs. Adolfo
Magangal, G.R. No. L-15539, January 30, 1962)."
Hence this appeal to which the Court gave due course on the strength of petitioner's
urgent plea for relief from the "virtual refusal of the trial court to hear defendants in their defense,
violative of due process."
The crux of the issues presented by petitioner-appellant in the appeal is basically
procedural with particular reference to the rules governing the admission or exclusion of
evidence: did the appellate court commit any grave error, correctable by certiorari, in refusing to
review on certiorari the trial court's disputed ruling in the case below rejecting petitioner's
contested evidence and dismissing the petition filed for the purpose, on the principal ground
that such ruling is an interlocutory matter and any question as to the correctness thereof does
not fall "within the ambit of a writ of certiorari" and may only be reviewed on appeal taken from a
decision rendered on the merits of the case.
The appellate court's dismissal of the petition was in full accord with the rules and
applicable jurisprudence of the Court and must be affirmed.
1. As petitioner-appellant concedes in her petition and brief, it is beyond question that
rulings of the trial court on procedural questions and on admissibility of evidence during the
course of the trial are interlocutory in nature and may not be the subject of separate appeal or
review on certiorari, but are to be assigned as errors and reviewed in the appeal properly taken
from the decision rendered by the trial court on the merits of the case. If the rule were otherwise,
there simply would be no end to the trial of cases, for any litigant, not satisfied with the trial
court's ruling admitting or excluding any proferred (sic) oral or documentary evidence, would
then indefinitely tie up the trial while elevating the ruling for review by the appellate court.
2. Neither has petitioner made out a case for her claim that she should be permitted
the special recourse of seeking a review of the trial court's ruling by certiorari, since it virtually
ruled out all her evidence in support of her defense to the ejectment and of her counterclaim for
reconveyance, and hence, appeal in due course was not an adequate remedy.
The true and special function of writ of certiorari was defined by the Court
in Fernando vs. Vasquez 4 thus: "A line must be drawn between errors of judgment and errors of
jurisdiction. An error of judgment is one which the court may commit in the exercise of its
jurisdiction. An error of jurisdiction renders an order or judgment void or voidable. Errors of
jurisdiction are reviewable on certiorari; errors of judgment, only by appeal. Let us not lose sight
of the true function of the writ of certiorari — 'to keep an inferior court within the bounds of its
jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to
excess of jurisdiction.' And, abuse of discretion must be so grave and patent to justify the
issuance of the writ."
The Court likewise cited therein the exceptional cases where certiorari had been
entertained despite the existence of the remedy of an appeal. "But in those cases, either public
welfare and the advancement of public policy so dictate, or the broader interests of justice so
require, or the orders complained of were found to be completely null and void, or appeal was
not considered the appropriate remedy, such as in appeals from orders of preliminary
attachment or appointment of receiver." 5 Thus, in People vs. Abalos, 6 the Court granted as an
exception a writ of certiorari against the trial court's ruling rejecting rebuttal evidence for the
prosecution, pointing out that "once the accused has been acquitted, there is no means to
secure a review by appeal, no matter how erroneous the action of the lower count may have
been." No equally compelling reason has been advanced by petitioner as would place her case
within the exceptions.
3. Petitioner may have reason in law to complain against the trial court's ruling that it
would admit from her only evidence of "a better and earlier issued torrens title duly registered in
favor of the defendants or any of (them)", since it merely held petitioner's one-year period to
reopen the decree in favor of respondent Follosco on the ground of fraud to have already
lapsed, but did not take into account petitioner's action in equity (by way of her counterclaim) for
the reconveyance of the land on the principle of constructive trust. Such an action precisely
concedes that the adverse party wrongfully succeeded in obtaining a torrens title but prays that
such title should be ordered cancelled and reconveyed in favor of the claimant as the true In any event, should the trial court exclude evidence that it deems clearly irrelevant
beneficiary rightfully entitled thereto. and inadmissible, it should not — in the absence of an injunction order from the appellate courts
or of strong compelling reasons above indicated — order the suspension of the trial pending the
Assuming that the trial court erred in rejecting petitioner's proferred (sic) evidence, outcome of any recourse sought by the affected party from the higher courts but should
petitioner's recourse is clear under the long established rules, to wit, to make a formal offer of continue with the trial and render in due course its judgment, which may then be properly
the evidence under Rule 132, section 35, stating on the record what a party or witness would appealed from. Needless delay in the trial and determination of the case would thus be avoided,
have testified to were his testimony not excluded, as well as attaching to the record any rejected unlike in the case at bar where the trial court erroneously acceded to suspending the trial below
exhibits. The Court has long noted that "it is the better practice to unite with the record exhibits . pending the outcome of this proceeding. It should be sufficient in such cases that the trial court
. . which have been rejected," 7 and that such rejected or excluded exhibits "should have been afford the affected party a reasonable period and opportunity to secure from the higher courts a
permitted by the judge a quo to be attached to the record even if not admitted in evidence, so preliminary injunction order against the continuation of the trial, and thereafter proceed with the
that in case of an appeal . . . the court ad quem may thus be able to examine said exhibits and to trial and judgment of the case upon the party's failure to secure such injunctive order.
judge whether or not their rejection was erroneous." 8
ACCORDINGLY, the resolution appealed from is hereby affirmed and the petition is
4. The validity of the cited rule, i.e. to bring up to the appellate court the rejected dismissed. With costs against petitioner.
exhibits upon a proper appeal from a decision on the merits of the case, enabling the appellate
court to examine all the exhibits and evidence of record and judge accordingly whether the trial Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Barredo,
court erred in rejecting the excluded exhibits was evident in the very case at bar. Here, petitioner Villamor and Makasiar, JJ., concur.
sought to attach to the records here the exhibits which she intended to present to the trial court
but were ruled out by it. Since there has been no decision rendered as yet by the trial court and Dizon and Castro, JJ., are on official leave.
respondent has denounced the proferred (sic) documents as "gross and careless ||| (Lamagan v. De la Cruz, G.R. No. L-27950, [July 29, 1971], 148-B PHIL 86-96)
forgery" 9 which should be passed upon by the trial court in the first instance, the Court had to
order said documents expunged from the records of the case at bar. 10
!
Again, respondent has cited the 1953 case of Follosco vs. Director of
Lands, 11 wherein the appeal of petitioner Lamagan and her other co-appellants (as homestead
claimants) from the lower court's order denying their petition to set aside its judgment of August
27, 1948 declaring respondent Follosco the owner of the land subject of the registration
proceedings was turned down by this Court. This fact places in grave doubt the veracity of
petitioner's allegation that Follosco had sought to hide from her the fact of his having secured
title to the land in question, and appears to provide ample justification for the appellate court's
pronouncement in its August 2, 1967 resolution as to her counterclaim for reconveyance having
"already prescribed."
At any rate, all these questions will have first to be necessarily passed upon and
resolved by the trial court in the decision that it has yet to render — which serves but to
demonstrate the impropriety and prematurity of petitioner's present action.

5. Finally, it seems in order, nevertheless, to reiterate the Court's admonitions to trial

courts, as in Abalos, 12 citing the 1929 case of Prats & Co. vs. Phoenix Insurance Co., 13 that
"(I)n the course of long experience we have observed that justice is most effectively and
expeditiously administered in the courts where trivial 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 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." In other words, where there is no indication of bad faith on the part of the party
offering the evidence or of a design to unduly prolong the trial, the Court has counselled trial
courts to be liberal in accepting proferred (sic) evidence, since even if they were to refuse to
accept the evidence, the affected party should nevertheless be allowed to spread the excluded
evidence on the record, for review on appeal, as indicated in paragraph 3 supra.
As pointed out in Prats, supra, "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 its 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."